Life Insurance Project On Sales

A STUDY ON “RECRUITMENT OF ADVISORS AND SALES OF FINANCIAL PRODUCTS THROUGH THEM AND COLLECTION OF DESIRABLE PREMIUM.”

SUBMITTED BY: AMIT KUMAR SUMAN ROLL NO: 7348 DUAL: C BIIB (ICIB) 2007-09 [email protected]

Balaji Institute of International Business (BIIB), Pune Survey No. 55/2-7, Tathawade, Opp. Wakad Police Station, Off Pune-Mumbai Highway, Pune - 411 033. (T): +91 - (020) - 6674 1081/ 83/ 84/ 85

Date: 22nd July, 2008

CONTENTS

ACKNOWLEDGEMNT PREFACE EXECUTIVE SUMMARY INTRODUCTION TO THE INDUSTRY INTRODUCTION TO THE COMPANY RECRUITMENT OF ADVISORS SALES AND DISCRIPTION OF THE FINANCIAL PRODUCT RECOMMENDATIONS CHALLENGES IN LIFE INSURANCE SECTOR BIBLIOGRAPHY

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TO WHOM IT MAY CONCERN This is to certify that Mr. Amit Kumar Suman of Balaji Institute Of International Business, Pune (PGBM in Marketing 2007-09 Batch) has completed his on-the-job two months summer training in Reliance Life Insurance Company Limited, Patna from 2 nd May 2008 to 30th June 2008, in connection to his course curriculum. Mr. Amit Kumar Suman was briefed about the work of recruiting ten financial advisors and getting policies for the company up to rs. 2 lakhs. He achieved the target and has proved his skills as a sales manager that was assigned to him as his project profile and we admire his talent. We put on record and appreciate the excellent conceptual abilities and communication skills of Mr. Amit Kumar Suman and wish him all the very best for a bright and promising career.

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ACKNOWLEDGEMENT First of all I would like to thank the Management at Reliance Life Insurance co.for giving me the opportunity to do my two-month project training in their esteemed organization. I am highly obliged to Ms.Rashmi Paul (Branch head) for granting me to undertake my training at Patna main branch (Exhibition road). I express my thanks to all Sales Managers under whose able guidance and direction specially Mr. Ranjeet kr. Malhotra(sales manager) who was my mentor and helped me alot,through which I was able to give shape to my training. Their constant review and excellent suggestions throughout the project are highly commendable. My heartfelt thanks go to all the executives who helped me gain knowledge about the actual working and the processes involved in various departments.

Thanking you…

Amit Kumar Suman

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PREFACE The liberalization of the Indian insurance sector has been the subject of much heated debate for some years. The policy makers where in the catch 22 situation wherein for one they wanted competition, development and growth of this insurance sector which is extremely essential for channeling the investments in to the infrastructure sector. At the other end the policy makers had the fears that the insurance premia, which are substantial, would seep out of the country; and wanted to have a cautious approach of opening for foreign participation in the sector. As one of the rare occurrences the entire debate was put on the back burner and the IRDA saw the day of the light thanks to the maturing polity emerging consensus among factions of different political parties. Though some changes and some restrictive clauses as regards to the foreign participation were included the IRDA has opened the doors for the private entry into insurance. Whether the insurer is old or new, private or public, expanding the market will present multitude of challenges and opportunities. But the key issues, possible trends, opportunities and challenges that insurance sector will have still remains under the realms of the possibilities and speculation. What is the likely impact of opening up India’s insurance sector? The large scale of operations, public sector bureaucracies and cumbersome procedures hampers nationalized insurers. Therefore, potential private entrants expect to score in the areas of customer service, speed and flexibility. They point out that their entry will mean better products and choice for the consumer. The critics counter that the benefit will be slim, because new players will concentrate on affluent, urban customers as foreign banks did until recently. This seems to be a logical strategy. Start-up costs-such as those of setting up a conventional distribution network-are large and high-end niches offer better returns. However, the middle-market segment too has great potential. Since insurance is a volumes game. Therefore, private insurers would be best served by a middle-market approach, targeting customer segments that are currently untapped 5

EXECUTIVE SUMMARY In today’s corporate and competitive world, I find that insurance sector has the maximum growth and potential as compared to the other sectors. Insurance has the maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential attracts me to enter in this sector and RELIANCE LIFE INSURANCE has given me the opportunity to work and get experience in highly competitive and enhancing sector. •

The success story of good market share of different market organizations depends upon the availability of the product and services near to the customer, which can be distributed through a distribution channel. In Insurance sector, distribution channel includes only agents or agency holders of the company. If a company like RELIANCE LIFE INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can capture big market as compared to the other companies.

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Agents are the only way for a company of Insurance sector through which policies and benefits of the company can be explained to the customer .

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INTRODUCTION TO THE INDUSTRY NEED OF LIFE INSURANCE .

The functions of Insurance can be bifurcated into two parts:

1. Primary Functions 2. Secondary Functions 3. Other Functions

The primary functions of insurance include the following: Provide Protection - The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk - Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also Provide Certainty - Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain. The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; 7

installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. Small capital to cover larger risks - Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of larger industries - Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. The other functions of insurance include the following: Means of savings and investment - Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange - Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover.

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THE HISTORY OF INDIAN INSURANCE INDUSTRY Life Insurance In 1818 the British established the first insurance company in India in Calcutta, the Oriental Life Insurance Company. First attempts at regulation of the industry were made with the introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to this Act were made until the Insurance Act was drawn up in 1938. Noteworthy features in the Act were the power given to the Government to collect statistical information about the insured and the high level of protection the Act gave to the public through regulation and control. When the Act was changed in 1950, this meant far reaching changes in the industry. The extra requirements included a statutory requirement of a certain level of equity capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the public from any adversarial policies from one single party), stricter control on investments and, generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life insurance companies. Business was heavily concentrated in urban areas and targeted the higher echelons of society. “Unethical practices adopted by some of the players against the interests of the consumers” then led the Indian government to nationalize the industry. In September 1956, nationalization was completed, merging all these companies into the so-called Life Insurance Corporation (LIC). It was felt that “nationalization has lent the industry fairness, solidity, growth and reach.” 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. 9

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: The market contained 154 Indian and 16 foreign life insurance companies.

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MAJOR PLAYERS IN THE LIFE INSURANCE INDUSTRY IN INDIA •

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise people’s savings for nation-building activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5 Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance cover to five million people living below the poverty line, with 50 per cent subsidy in the premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher than that of global average of 40 per cent. Compounded annual growth rate for Life insurance business has been 19.22 per cent per annum

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IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: The introduction of private players in the industry has added to the colors in the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in this sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining phase in its career. The market share was distributed among the private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95% (2002-03) to 70 %( 2007-08)

Insurance Companies in India

(April 2008)

Bajaj Allianz Life Insurance

AMP Sanmar Life Insurance

Birla Sun Life Insurance

Aviva Life Insurance

HDFC Life Insurance

ICICI Prudential Life Insurance

Max Newyork Life Insurance

Metlife India Insurance

Reliance Life Insurance

Shiram Life Insurance

Tata AIG Life Insurance

SBI Life Insurance

Bharti AXA Life Insurance

ING Vysya Life Insurance

Sahara Life Insurance

Kotak Mahindra Insurance

General Insurance Corporation India

Royal Sundaram Insurance

1. HDFC Standard Life Insurance Company Ltd. HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), India’s leading housing finance institution and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom. Their cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000 individuals out of which over 3,40,000 lives have been covered through our group business tie-ups. 12

2. Max New York Life Insurance Co. Ltd. Max New York Life Insurance Company Limited is a joint venture that brings together two large forces - Max India Limited, a multi-business corporate, together with New York Life International, a global expert in life insurance. With their various Products and Riders, there are more than 400 product combinations to choose from. They have a national presence with a network of 57 offices in 37 cities across India. 3. ICICI Prudential Life Insurance Company Ltd. ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudential plc, a leading international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. 4. Om Kotak Mahindra Life Insurance Co. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. 5.Birla Sun Life Insurance Company Ltd. Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and Sun Life financial Services of Canada. 6.SBI Life Insurance SBI Life Insurance is a joint venture between the State Bank of India and BNP Paribas Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 crores and a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP Paribas Assurance the remaining 26%. State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 14,500 branches across the country, arguably the largest in the world. BNP Paribas Assurance is the insurance arm of BNP Paribas - Euro Zone’s leading Bank. BNP Paribas, part of the world's top 10 13

group of banks by market value and part of Europe top 3 banking companies, is one of the oldest foreign banks with a presence in India dating back to 1860. BNP Paribas Assurance is the forth largest life insurance company in France, and a worldwide leader in Creditor insurance products offering protection to over 50 million clients. BNP Paribas Assurance operates in 42 countries mainly through the bancassurance and partnership model. SBI Life has a unique multi-distribution model encompassing Bancassurance, Agency and Group Corporates. SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI’s access to over 100 million accounts across the country provides a vibrant base for insurance penetration across every region and economic strata in the country ensuring true financial inclusion.

7. Allianz Bajaj Life Insurance Company Ltd. Bajaj Allianz Life Insurance Company Limited is a Union between Allianz SE, one of the world’s largest Life Insurance companies and Bajaj Auto, one of the biggest 2- &- 3 wheeler manufacturers in the world. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a Trillion Euros (Over R. 55,00,000 crores). Allianz SE has over 115 years of financial experience in over 70 countries. Bajaj Auto is one of the most trusted name is Indian auto for over 55 years. At Bajaj Allianz customer delight is our guiding principle. Ensuring world-class solutions by offering customized products with transparent benefits, supported by best technology is our business philosophy.

DATA ABOUT TOTAL REVENUE COLLECTIONS IN 2006-07 14

Accelerated Growth Fiscal Year

No. of policies sold in FY

New Business in FY(Rs. in cr.)

2001-2002(6 mths) 2002-2003

21,376 1,15,965

7 69

2003-2004 2004-2005

1,86,443 2,88,189

180 857

2005-2006 2006-2007

7,81,685 20,79,217

2717 4270

OTHER PLAYERS: 

Tata AIG Life Insurance Company Ltd

 ING Vysya Life Insurance Company Private Limited  Metlife India Insurance Company Pvt. Ltd.  AMP SANMAR Assurance Company Ltd. 

Dabur CGU Life Insurance Company Pvt. Ltd.

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Marketing of Insurance In India Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a sector, which leads to benefits across the full spectrum, from the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. In an under-insured economy, newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

Marketing Mix Policies Different companies can choose to position themselves differently and hence the Marketing Mix is different. However, there are certain common characteristics that one can cull out from the possible strategies that companies adopt. Product: The development of flexible products to suit individual requirements is what will differentiate the winners from the also-rans. The key to success is in providing insurance solutions, not standardized insurance products. The concept of riders/optional benefits has already been a huge innovation brought about by the new players, which has led to customization of products for individual needs. However, companies may differentiate themselves on the basis of product segments that they choose to focus on and excel in. Place: Different companies may however choose different channels and different geographies to focus on. The channel options are - tied agency force, corporate agents and brokers and this is an area where different companies will make different choices. Many companies like HDFC Standard Life are focusing on all channels whereas companies like Max New York Life are focusing on the tied agency force only. Customer interface will be a key challenge for life insurance companies and includes every that interaction that the customer has with the company, such as sales, new business underwriting, policy servicing, premium payments, claim processing and so on. Technology can play a crucial role in delivering the highest standards of service set by the company and it will be imperative for any serious player to excel in all of these. 16

Price: Price is a relevant differentiator only in two segments - pure term insurance and in pure annuities. Here too, service delivery and financial strength will need to be present at a minimum acceptable level for price to be a relevant differentiator. In case of savings oriented products, long-term returns generated are more relevant than just the price of the product. A focus on generating good investment performance and keeping a tight control on costs help in generating good long-term maturity value for customers. Norms have been laid down on all of these by IRDA and adhering to these while delivering good returns will be a challenge. Promotion and Advertising: The level of demand is latent and will have to be activated considerably. The market needs to be developed. Greater awareness of insurance and the need to have it as a protection tool rather than as a tax planning measure needs to be appreciated by the Indian people. Various communication tools including advertising, direct marketing and road shows contribute to all this and different companies take different approaches on these.

Process: Cashless settlement: One of the most defining and customer-friendly changes that we’ve seen in recent years relates to the way claims settlements are made. The advent of the third-party administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless settlement of health and auto insurance claims. TPAs are entities who process claims on behalf of insurers: the IRDA licenses them after it is satisfied that they have the financial strength, the trained manpower, the infrastructure and the skills to undertake this activity. Likewise, with auto insurance, the TPA ties up with garages and authorized service centers for cashless settlement of auto insurance claims. Lower premiums: The spirit of competition and the broadening of the risk experience of insurance companies have contributed to a fall in premiums over the years. That’s because, other things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an insurer who covers the lives of, say, 100 people. Further, a broader 17

base will provide greater efficiencies on costs such as distribution, management and claims. A broad basing of the mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums, and that trend is expected to continue. Premium payment flexibility: Insurers have imparted certain flexibility to premium payment options in order to address this concern. For instance, one now have the option to pay your premiums upfront, which is then carried forward for the tenure of the policy. The yearly premiums are drawn from the initial corpus. Insurers have also introduced the concept of ‘automatic cover maintenance’ to protect your policy from lapsing owing to your omission to pay your premium on time. Under this, in the event of your not paying the premium, the insurer dips into your investment account to the extent of the premium. Of course, this comes with an in-built drawback: your investment portion diminishes year on year to the extent of the amount paid to cover your risk. Physical Evidence: This can play a significant role for marketing in the Indian scenario. Since Internet users are comparatively lesser than countries such as US, the offline mode will be preferred in India. Although the distribution model is largely agent-based, wherever the customer is in contact with the company, this factor can play a significant role in luring the customer. People: The most important factor that materializes sales and maintains customer relationships on a long-term basis is this factor. No matter what distribution strategy a company adopts, customer relationship has to be taken care of in order to maintain the customer base on a long-term basis.

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INTRODUCTION TO COMPANY RELIANCE LIFE INSURANCE CO. LTD.

Our Founder Few men in history have made as dramatic a contribution to their country’s economic fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacy that is more enduring and timeless. •

As with all great pioneers, there is more than one unique way of describing the true genius of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader of men, the architect of India’s capital markets, the champion of shareholder interest.

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But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator. In one lifetime, he built, starting from the proverbial scratch, India’s largest private sector enterprise.

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When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this fledgling enterprise into a Rs 60,000 crore colossus—an achievement which earned Reliance a place on the global Fortune 500 list, the first ever Indian private company to do so.

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Dhirubhai is widely regarded as the father of India’s capital markets. In 1977, when Reliance Textile Industries Limited first went public, the Indian stock market was a place patronised by a small club of elite investors which dabbled in a handful of stocks.

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Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to participate in the unfolding Reliance story and put their hard-earned money in the Reliance Textile IPO, promising them, in exchange for their trust, substantial return on their investments. It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian markets. 19

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Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of the greatest growth stories in corporate history anywhere in the world, and went on to become India’s largest private sector enterprise.

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Through out this amazing journey, Dhirubhai always kept the interests of the ordinary shareholder uppermost in mind, in the process making millionaires out of many of the initial investors in the Reliance stock, and creating one of the world’s largest shareholder families.

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RELIANCE CAPITAL Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. •

Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934.

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Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services.

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Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporates.

Reliance capital entered into the life insurance business by acquiring AMP Sanmar in October 2005. The business was thereafter renamed Reliance Life Insurance. Today RLIC has over 20 products - 16 individual plans and 4 employee benefit plans including the two new innovative products – Connect to Life and Reliance Money Guarantee Plan - that were launched recently. Reliance Life Insurance Company (RLIC) has been accorded the ISO 9001-2000 certificate for its best-in-class management systems in Quality, Customer & Process orientation. With this, RLIC is one of the only two life insurance companies in India to get ISO 9001:2000 certification covering all functional areas. The scope of the certification covers the entire gamut of business processes ranging from product design, sales - front-end and back-end operations, customer care and investment, to all business support functions. The certification has been awarded by

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internationally acclaimed Bureau Veritas and is valid till 2010 subject to continued satisfactory operation of RLIC's Quality Management System. "This certification is a significant milestone in our continuous quest to offer innovative products, outstanding services and improved customer satisfaction. It indicates that we have been able to install systems, processes & performance measures that are in line with the best in the industry and will form the basis of

our business growth in future", said

P Nandagopal, CEO, Reliance Life Insurance Company. Reliance Life Insurance is the fastest growing life insurance company in India and has an incremental market share of 4 per cent amongst private insurers. The company has third largest distribution network in terms of number of agents operating out of 143 locations across the country.

CORPORATE OBJECTIVE At Reliance Life Insurance, we strongly believe that as life is different at every stage, life insurance must offer flexibility and choice to go with that stage. We are fully prepared and committed to guide you on insurance products and services through our well-trained advisors, backed by competent marketing and customer services, in the best possible way. •

It is our aim to become one of the top private life insurance companies in India and to become a cornerstone of RLI integrated financial services business in India.

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CORPORATE VISION AND MISSION Vision Empowering everyone live their dreams. Mission Create unmatched value for everyone through dependable, effective, transparent and profitable life insurance and pension plans. Our Goal Reliance Life Insurance would strive hard to achieve the 3 goals mentioned below: Emerge as transnational Life Insurer of global scale and standard Create best value for Customers, Shareholders and all Stake holders Achieve impeccable reputation and credentials through best business practices Achievements •

RLIC has been one of the fast gainers in market share in new business premium amongst the private players with an incremental market share of 4.1% in the Financial Year 2007-08 – from 3.9% in April 07 to 8% in Feb 08. ( Source: IRDA)

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Also continues to be amongst the fast growing Private Life Insurance Companies with a YOY growth of 195% in new business premium as of Mar’08.

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A Company that has crossed 1.7 Million policies in just 2 years of operation, post take over of AMP Sanmar business.

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Initiated Express Life – an Unique ’Over the Counter’ sales process for Unit Linked Insurance Policies in the Industry.

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Accomplished a large distribution ramp-up in the Industry in a short span of time by opening 600 branches in 10 months taking the overall branch network above 740.

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RLIC continues to be one of the two Life Insurance companies in India to be certified ISO 9001:2000 for all the processes.

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Awarded the Jamnalal Bajaj Uchit Vyavahar Puraskar 2007- Certificate of Merit in the Financial Services category by Council for Fair Business Practices (CFBP).

GROWTH OF RELIANCE LIFE INSURANCE SOME FACTS (MAY 2008) : HOW THEY STACK UP Premium income of life insurers in Rs crore

April - June LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Max New York Reliance Life Birla Sun Life Total Private Total Market

2007 8580.84 1056.45 731.85 426.39 355.93 289.74 204.10 174.63 3930.95 12511.80

2008 7524.56 1,590.27 829.24 1,148.67 490.40 501.16 557.33 501.53 6,795.64 14,320.20

Growth % -12 51 13 169 38 73 173 187 73 14

Total Share (%) 52.55 11.11 5.79 8.02 3.42 3.50 3.89 3.50 47.45 100.00

Reliance life expect to break even by 2010-11 and until then they may require an additional rs.700 cr. of capital. Around 97% of reliance life’s business comes from unit linked insurance plans. Average tenor of it’s ULIPs is 12.7 yrs and avg. ticket size of the policy stands around 21000/Alternate channel incl. corporate agents, broker, direct marketing brought in 25% of company’s business. This year company plan to reach out further to the rural areas and introduce MICROINSURANCE product. The company is planning to double its manpower base from the present level of 14000 employees. New business premium at rs.2754 cr in 2007-08 against 930 cr in the previous year. The company had add 600 more branches in the last year to expand its business network and now it has 744 branches.

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As only 30% of the business comes from the top 25 cities and the balance comes 70% comes through the other smaller towns, company has followed a conscious strategy to setup branches in smaller towns to tap the blue oceans.

RECRUITMENT OF ADVISORS Advisors are the backbone of any life insurance company.They play the most important and key role for company to cashing the revenue through selling the insurance policies. Some years ago Advisors were known as Agents but Reliance introduced them as Advisors which seems to be more appropriately. As a Reliance Life Insurance Advisor, the sky is not the limit—you can go beyond. 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 much-needed business to the company. At Reliance Life Insurance, you will not merely be an insurance agent—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 Reliance 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 Reliance - One of the strongest brands of the country. Capitalize on the growing Insurance market. Become a full time sales manager. 25

Benefits Available for Advisors 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 RLIC. Become an 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.

Number of Agents Number of Agents

Company Name

Dec 07 (Nos)

Aviva Life

31,390

Bajaj Allianz Life

273138

Bharti Axa

10016

Birla Sunlife

86264 0

Future Generali HDFC Std Life

132662

ICICI Prudential

262893

ING Vysya

48428

Kotak

34714 29,876

Max New York

32389

MetLife

157052

Reliance Life Sahara Life

12244

SBI Life

33969

Shriram Life

16521

TATA AIG

32528 1159586

LIC * The Figures are provisional and unaudited

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PRODUCTS OFFERED BY RELIANCE LIFE Reliance has number of insurance products in it’s Portfolio. It offers different products for different customer profile.It target its product according to the needs of people which make them its customer. Protection Plans In today’s uncertain world, there could be calamity at every step of the life. It is up to you to ensure that your family stays protected always. Reliance Protection Plans helps you do exactly the same. You have a wide range of options to choose a plan from. Right from limited period plans to lifetime protection plans, you can opt for the one that suits your lifestyle. While we understand that nothing can compensate for the loss of a life, we intend to provide you the peace of mind. Investing in Reliance Protection Plans would mean your family’s future is in safe hands. 1.Reliance Term Plan Invest in the Reliance Term Plan, a pure life insurance plan that offers you comprehensive and affordable coverage for a limited period of time to suit your needs. 2. Reliance Simple Term Plan Make a smart investment move by investing in the cost-effective Reliance Simple Term Plan, which offers you comprehensive coverage for a specified period of time to suit your need. 3. Reliance Special Term Plan Imagine a life insurance policy, which on maturity returns to you all the premiums you 27

had paid for your basic policy. The Reliance Special Term Plan offers that and much more. 4. Reliance Credit Guardian Plan The Reliance Credit Guardian Plan secures your family from any loan liabilities you have incurred in case of your untimely demise. On survival at maturity, you will be returned all the premiums paid for the basic policy. 5. Reliance Special Credit Guardian Plan Invest in the Reliance Special Credit Guardian Plan and protect your family from any loan liabilities you have incurred. On survival at maturity, all premiums paid for the basic policy will be returned to you. 6. Reliance Endowment Plan The Reliance Endowment Plan gives you financial independence by allowing you to decide the amount of Sum Assured based on your current financial position and expected future expenses… Dream!!.. 7. Reliance Special Endowment Plan Imagine an endowment plan that protects you for a certain period even after you have received your lump sum—that is exactly what the Reliance Special Endowment Plan offers you with other added benefits. 8. Reliance Connect 2 Life The Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keep pace with your changing lifestyle. As your income grows, your family will have sufficient cover. 9. Reliance Whole Life Plan Give your family a lifetime of timely financial support by investing in the Reliance Whole Life Plan. This will help you enjoy your life to the fullest.

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10. Reliance Wealth + Health Plan Invest in the Reliance Wealth Health Plan and balance your health needs and wealth needs, without compromising on either health or wealth.

11. Reliance Cash Flow Plan Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance plan and easy liquidity through lump sum cash, which means you can get a percentage of the Sum Assured at periodic intervals.

Savings & Investment Plans In life, you have always given your family whatever they have wanted. Yet, there are some promises you have to fulfil, such as taking your family for a vacation, or buying that dream house. Set aside some money to achieve these specific goals with the help of Reliance Savings & Investment Plans. The plan allows you to experience the joys of life and provide for your family’s needs. Enjoy life without worrying about the promises you have made—we are here to fulfil them. 1. Reliance Super Invest Assure Plan Reliance Super Invest Assure is a complete plan which addresses your vital needs like Flexibility, Security, Investment Return and Financial Planning. With all its key benefits, it is here to ensure that there will always be more than you can ask for! 2. Total Investment Plan I - Insurance Reliance TIPS -Series I- Insurance is a Unit Linked Investment + Insurance Plan that helps you meet all your financial needs, without the complexity of managing multiple products.

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3. Reliance Wealth + Health Plan Invest in the Reliance Wealth Health Plan and balance your health needs and wealth needs, without compromising on either health or wealth.

4. Reliance Automatic Investment Plan The Reliance Automatic Investment Plan is an enhanced unit linked plan that allows you to choose the right investment mix to reap maximum benefits. It also provides you with enhanced Life Cover. 5. Reliance Money Guarantee Plan To reap the benefits of a rising market and to protect yourself from any market decline, invest in the unit linked Reliance Money Guarantee plan that gives you the perfect balance between Protection and Savings. 6. Reliance Cash Flow Plan Invest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance plan and easy liquidity through lump sum cash, which means you can get a percentage of the Sum Assured at periodic intervals. 7. Reliance Market Return Plan The Reliance Market Return Plan gives you insurance protection and allows you to benefit from investment growth. It works through your life and meets the changing requirements you may have from time to time. 8. Reliance Endowment Plan The Reliance Endowment Plan gives you financial independence by allowing you to decide the amount of Sum Assured based on your current financial position and expected future expenses.

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9. Reliance Special Endowment Plan Imagine an endowment plan that protects you for a certain period even after you have received your lump sum—that is exactly what the Reliance Special Endowment Plan offers you with other added benefits.

10. Reliance Whole Life Plan Give your family a lifetime of timely financial support by investing in the Reliance Whole Life Plan. This will help you enjoy your life to the fullest. 11. Reliance Golden Years Plan The Reliance Golden Years Plan helps you save systematically and generate the muchneeded corpus to help you enjoy life after retirement. 12. Reliance Golden Years Plan Value Realise all your dreams of playing golf, or going for a world tour after retirement by investing in the Reliance Golden Years Plan Value, which helps you generate the amount you will need for the future. 13. Reliance GoldenYears Plan Plus Invest in the special Reliance Golden Years Plan Plus that not only helps you build the corpus you need after, but also collects a basic minimum amount in case something were to happen before you realise your dreams. 14. Reliance Connect 2 Life Plan The Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keep pace with your changing lifestyle. As your income grows, your family will have sufficient cover.

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Retirement Plans You are a young and earning individual. The income you earn allows you to enjoy life, your only worry being whether you will be able to continue the same lifestyle after retirement. A Reliance Retirement Plan will help you save money for your retirement. It ensures that you continue to get some income after retirement thereby ensuring that you do not have to depend on any other person or make any compromises to maintain the same lifestyle. Invest in a Reliance Retirement Plan today and enjoy life after retirement on your own terms. 1. Total Investment Plan II - Pension When you invest in the Reliance Total Investment Plan, you give yourself the assurance that you will make each one of your dreams come true!. 2. Reliance Golden Years Plan The Reliance Golden Years Plan helps you save systematically and generate the muchneeded corpus to help you enjoy life after retirement. 3. Reliance Money Guarantee Plan To reap the benefits of a rising market and to protect yourself from any market decline, invest in the unit linked Reliance Money Guarantee plan that gives you the perfect balance between Protection and Savings...

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Child Plans Being a parent is one of the joys of life. Your child looks up to you and depends on you for love, protection and support. You want to provide your child with the best in life. The Reliance Child Plan helps you save systematically so that you can secure your child’s future needs. Be it higher education, his or her first home or any other requirement, you will always be there for your child when he or she needs you. So, invest in a Reliance Child Plan right away—it is the best gift you could ever give your child. 1. Reliance Super InvestAssure Plan Reliance Super InvestAssure is a complete plan which addresses your vital needs like Flexibility, Security, Investment Return and Financial Planning. With all its key benefits, it is here to ensure that there will always be more than you can ask for! 2. Reliance Child Plan Save systematically and secure the financial future of your child by investing in the Reliance Child Plan and let your child enjoy today without worrying about tomorrow. 3. Reliance Secure Child Plan Reliance Life Insurance presents a unit linked insurance plan that secures your child’s financial future, leaving you free from worry. 4. Reliance Wealth + Health Plan Invest in the Reliance Wealth Health Plan and balance your health needs and wealth needs, without compromising on either health or wealth. 33

SOME LUCRATIVES PLANS WHICH RELIANCE OFFERS RELIANCE ENDOWMENT PLAN It takes a lot for a dream to become a reality. And money is surely an important part of it. Reliance Endowment Plan gives you just the financial independence to realise your dreams in the future. It lets you decide how much you would like to set as your Sum Assured based on your current financial position and your expected future expenses. So, go ahead... dream!!. Key Features 1 .On maturity receive Sum Assured plus bonuses 2. Wealth creation through bonus additions 3. More Value for your money by way of High Sum Assured Rebate 4. Choose to add the Benefit of three Riders-Reliance Term Life Insurance Benefit Rider, 5. Reliance Critical Conditions Rider and Reliance Accidental Death and Total and 6.Permanent Disablement Rider 7. Choose to avail of Policy Loan after three years CASH FLOW PLAN While most insurance plans block your money for a certain period of time, Reliance Cash Flow Plan gives you the double benefit of life insurance along with easy liquidity through lump sum cash. It provides money periodically when you need it. It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow by giving you the flexibility of receiving a specified percentage of the Sum Assured at specified intervals Key Features Easy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at the end of every three years Wealth creation through bonus additions On maturity, accumulated bonuses along lump sum payout receive with final 34

More value for your money by way of High Sum Assured Rebate Full Sum Assured plus bonuses in case of your unfortunate death. This is over and above the Survival Benefits already paid Option to add two Riders - Critical Illness Rider & Accidental Death Benefit and Total and Permanent Diablement Rider.

RELIANCE HEALTH + WEALTH PLAN UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. There are times when late working hours take precedence over your health check-ups. And there are times when a visit to the doctor seems more important than dividends on your shares. In the rat race to make money, we often forget to take care of ourselves. We understand this predicament. Here is a plan that will ensure that your wealth keeps increasing constantly and yet your health does not take a backseat. The Reliance Wealth+Health Plan. A plan that gives you the benefits of wealth bhi. health bhi. Life changes. And as it does, so do your priorities. After all, the circumstances of your life can determine the type of health coverage you need. India has made rapid strides in the health sector. Since Independence, life expectancy has gone up markedly and survival rates have also increased, still critical health issues remain. Infectious diseases continue to claim a large number of lives. Perhaps you're a freshly minted graduate, a joyful newlywed, retiring early or between jobs. Maybe you're running your own business or raising a family — or both. In any of the situations, GOOD or BAD, health cannot be taken for granted. All are affected by the rising costs of medical expenses. That’s why it is important to plan early and in advance. Reliance Wealth + Health Plan, a health insurance plan underwritten by Reliance Life Insurance Company Limited, is designed to work in conjunction with contributions towards savings. The uniqueness of this plan is that it not only provides benefits for covered injuries but also for other injuries by encashment from the unit fund. This plan from Reliance Life offers the Hospitalization and Surgical Benefits and also covers Critical Illnesses. In short this plan provides you with a personalised quality health cover that fits your lifestyle.

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Key Feature A Unit Linked plan with Unique Savings Component Twin benefit of market linked return and health protection Choose from two different plan options Flexibility to take care of your family’s health Flexibility to switch between funds / plan options Option to pay Top-ups Option to package with multiple riders Liquidity through partial withdrawals RELIANCE SUPERINVESTASSURE PLAN UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. You have always aspired for the best in life. And we help you achieve that. Here’s a unique plan which combines protection and savings. It also offers complete flexibility to gain control over your investments vis-à-vis your financial needs and risk appetite. We value your regular investments and thus reward you with guaranteed additions thus promising unmatched benefits. This plan also offers you a unique option of moving from a conservative fund to an aggressive fund systematically, to take advantage of the Rupee cost averaging model. A plan that promises you, what you ought to deserve as you reach greater heights in life. What more can you ask for except gifting yourself with Reliance Super InvestAssure Plan Key features – Reliance Super InvestAssure Plan Twin benefit of market linked return and insurance protection. 36

Guaranteed additions at the rate of 50% of your first year’s basic premium at interval of every 5 years from 10th year till policy is in force. Investment opportunity with flexibility -Choose from 8 pure investment fund options. Option to pay Top-up premium(s). Liquidity in the form of partial withdrawals. A host of optional rider benefits to enhance protection cover.

RELAINCE AUTOMATIC INVESTMENT PLAN UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PROTFOLIO IS BORNE BY THE POLICYHOLDER Life is indeed delightful if you have the freedom to make choices. The Reliance Automatic Investment Plan gives you just that ample freedom! And we make this freedom more enjoyable by giving you a sense of security. Whether it’s your insurance or investments, we let you make the choice and leave the rest to us. So allow us to take over and you can be rest assured, because for us your LIFE comes FIRST… always. This plan promise enhanced Life Cover, with complete flexibility to gain control over your investments in tune with your financial needs and your risk appetite. A plan that promises you what you deserve as you reach greater heights in life. For a select few like you, the Reliance Automatic Investment Plan is an enhanced Unit Linked plan addressing comprehensive needs to strike that perfect balance of protection and Savings with full flexibility as you grow in your career. The Reliance Automatic Investment Plan gives you full flexibility to choose just the right investment mix to reap higher benefits. Key Features Two plan option to choose from Ready-made and Tailor-made Life Stage asset allocation to ensure automatic change in investment patterns, under the Ready-made Plan option Freedom to decide your own fund mix based on your risk profile under the Tailor-made Plan Allows Systematic Transfer Plan to average out the cost of unit purchased in equality 37

Regular, limited, single premium paying options Unmatched flexibility through out ‘Exchange Option ‘ Liquidity in the form of partial withdrawal Option to avail of Accidental Death and Total & Permanent Disability and Term Insurance riders

RELAINCE TOTAL INVESTMENT PLAN SERIES -1 The journey of life, even though it may seem simple, comes with its own twists and turns, some good, some unfortunate. And along with these moments come new dreams. With every little twist, our dreams change and so do our ambitions. And most of all we desire a security that will help us follow our dreams, both financial and emotional. It is this security that Reliance Life Insurance Company Limited promises to bring to you with its Total Investment Plan Series I Insurance. To know more, read further… We value your dreams in this journey of life. Reliance Total Investment Plan Series I -Insurance (TIPS-I -Insurance) helps you bring them to reality. Your need for investment, protection and financial liquidity keeps changing at different stages of life. The birth of a child will require you to increase your insurance cover; a marriage in the family will require additional money. We provide you that kind of flexibility which suits you best at your convenience. Similarly on a promotion you may want to increase your investments to create a large kitty for future expenses. As you progress on this ladder of life we provide you the platform to increase your investment. Usually you would require multiple financial products to meet all your needs and would have to actively manage them. However with the Reliance TIPS-I -Insurance, Unit Linked Investment + Insurance Plan you can meet all your financial needs, without the complexity of managing multiple products Key Features This is a Single Premium unit linked savings life insurance plan with options to purchase the same plan with reduced allocation charges in subsequent policy years. Since more Premium is allocated towards investment due to lower allocation charges on subsequent 38

purchases, greater would be the returns. Purchasing the same plan in the subsequent years is an option. 1st purchase would be called as “Classic” 2nd purchase would be called as “Silver” 3rd purchase would be called as “Gold” 4th purchase would be called as “Diamond” 5th purchase would be called as “Platinum” Once you purchase the first policy there will full flexibility, as to when second and subsequent purchase can be made and how much Premium should be paid for each purchase subject to the following: The minimum Premium on each purchase should be at least Rs. 25000 for life assured aged up to 40 and Rs. 50000 for life assured aged 41 to 64. The maturity date on each purchase cannot exceed 70 years. All the polices should mature on maturity date of the first purchase. The term of the polices purchased during second, third, fourth and fifth policy years will be 9, 8, 7 and 6 respectively. New policy can be purchased only if all the previous polices are in force on the date of purchase of new policy. Plan Objective : The pace setter plan with protection to life which gives Tax benefit under Sec. 80C and Sec. 10(10D)* of Income Tax Act 1961 Investment opportunity with flexibility Life protection Control over your investments

Reliance Life Insurance launches “Express Life”, India's First retail policy initiative First-of-its-kind initiative in the sector offering life insurance cover almost instantly to customers Customers will be offered policy document “Over the counter” on completion of documentation, first “Express Life Policy” issued today 39

“Express Life” service will be available pan India across all Reliance Life Branch Offices Chandigarh, November 9, 2007: Reliance Life Insurance, one of the leading Life Insurance player in India, today launched ‘Express Life’ – an innovative and customer friendly service that assures fastest way of getting a life insurance cover. With this, Reliance Life Insurance becomes the first Life Insurance player in the country to offer this novel life insurance process to its customers for a cover of upto Rs 10 lakh.. This is the first of its kind initiative in the sector that would offer life insurance cover almost instantly to customers, without the hassles of long waiting period, follow-ups and medical checkups. Speaking on the launch of Express Life, Mr. P. Nandagopal, CEO, Reliance Life Insurance Company Limited, said, “This unique process will redefine the way insurance is bought and sold in India. Express Life is a testimony of our constant endeavor to delight our customers with innovative and need based solutions promptly”. Customers who fall between the age group of 18 to 45 years and fulfill the qualification criteria, can avail the benefits of, ‘Express Life’ service. It is customer friendly service wherein on submission of the duly filled application form, mandatory documents and the requisite premium cheque, customers are assured commencement of life insurance cover in 3 working days. The letter & the policy kit are handed to the customer over the counter. The company also issued its first policy under the “Express Life” initiative to its first customer in Chandigarh today. The Express Life service is available under the Reliance Life Insurance Automatic Investment Plan, Money Guarantee Plan, Market Return Plan and Golden Years Plan.

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SALES PROCESS WHICH I USED IN RELIANCE LIFE: Our sales process involved Personal selling. Our product being an intangible one, it needs the company personnel to go and persuade the customer via addressing to his doubts and concerns. We need to undergo requisite interaction with the prospective customers to gauge their mood with respect to different price levels. As the sales personnel are also aware of the competitors’ price and, based on the market reaction and customers’ sentiments, they can advise a more prudent price policy to the management. The sales person actually stimulates and generates enough interest in the customer and helps him make the final decision to buy the product. Steps in personal selling Personal selling involves six important steps –

Prospecting

Presentation

Preapproach

Approach

Follow-up

Closing

Prospecting Prospecting is the process of identifying the prospective buyers of the product. The prospects are those who have the need or will to buy and the power to pay. A prospect is 41

qualified if he has the authority, need, ability and eligibility to buy. In our context prospects used to be the owners in case of a small company and Promotions & Advertising head in that of a big organization.

Ways of identifying a prospect Acquaintance Reference: A satisfied customer can be a good source of information about the names, addresses and phone numbers of the prospects who may be among his acquaintances, relatives or family members. In addition we used to give reference of our other satisfied customer to motivate the prospect to buy, thus obtaining further references. Cold Calling: In this method we used to randomly call a customer without any reference, with an anticipation of converting the call into sale. This method is also called ‘random prospecting’. Centre of Influence Method: Using this approach, we obtained the references for prospects from eminent people of society. Using such references, the prospects are influenced to make a buying decision since the recommendations of eminent personalities are taken seriously. Direct Mail or Telephone Method: This was the most frequently used method by us. We used to contact the prospective buyer on the telephone and inform him about our product, price range, benefits etc. We also used to send mail/letters to our existing customers informing them about modifications made in the existing range. Company’s Record: We were provided contacts of the prospective customers from company’s own records. We need to follow up with them and get appointments and make sales therefore. 42

Pre – Approach Pre – Approach is the second step in the selling process which emphasizes that salesman should know, after identifying the prospects in the prospecting stage, the prospect’s likes and dislikes, his needs, preferences, habits, nature, behavior, economic and social status etc. Based on all this information, the salesman has the necessary tools to plan his visit/interview with the prospect and can give an effective sales presentation. This kind of preparation to meet the prospect is called the pre – approach. Because of pre-approach we gained ample knowledge about the prospect. This helped us in giving the presentation more efficiently, effectively and with confidence. Approaching In this stage the prospect and the salesman come in contact with each other face to face. Here the salesman has the opportunity to understand and interact with the prospect in a better way. Hence, the salesman should put forward his best efforts to make the best use of this opportunity in getting the attention of the prospect and to convince him to buy the product. Hence, getting the attention of the prospect and persuading him to buy are the two main objectives of a salesman. The importance of the approach cannot be overemphasized since it is only after the salesman starts interacting directly with the prospect that the latter decides within the first few minutes whether he needs to purchase or not. Similarly, the salesman has the opportunity to judge whether the prospect is in the mood to buy or not.

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We generally found it very difficult to approach the prospects owing to their busy schedule. Also sometimes they are not interested in proposal. Despite this major hurdle we kept on trying to obtain an appointment with the prospect. We need to be a little diplomatic and polite in our approach. Different ways in which we gained access to the prospects: Direct approach: We used to directly approach the prospect without any introduction whatsoever and conduct an interview. We stated the benefits of our product and tried to arouse interest of the prospect.

Advance Mailer: Another manner in which we used to seek an appointment with a prospect was by sending an advance mailer explaining our product and its benefits vis - a - vis our competitors. Such mailers were designed and written in a simple but attractive manner so as to arouse the interest of the prospect. Reference: This is the best method of securing an appointment with the prospect. References could be obtained from friend, relative, or business associate of the prospect. This not only facilitated the interview but also made the task of selling the product easier. Sale letters: These proved to be another kind of a door opener. Such letters provide ample detail about the product, benefits and schemes available with the product. Such letters signed by senior executives, when sent in advance, facilitated our entry. A successful approach enhances the sale and it is thus important for running of a business. A failed approach on the other hand gives an opportunity to the rival company. So a good approach goes a long way in building good relations with the prospect, while a bad one causes to lose the business & facilitates competitor’s entry. Presentation A good presentation is as important as a good product. The significance of a good presentation of the product can be gauged from the fact that many a time an attractively packed presentation is sufficient to sell the product.

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Requirements of a good presentation: We were required to explain the product with its features and price advantage to the customer in simple and easy terms. We ought to have thorough knowledge about our product and also other competitive products available in the market. This helps in satisfying all the queries of the customers and answers them satisfactorily. It is very important that customer be shown the kind of product he is looking for. This way not only his time is saved but also he tends to make a quick decision.

The Close This is the last stage of any sales presentation. The whole exercise becomes useless if the sale does not take place. Therefore it’s most crucial stage for any salesman. The main aim of the close is to convince the prospect to sign the contract form immediately rather than in future. For successfully closing the sale we needed to be attentive and open mind throughout so as to be able to listen patiently to the prospect, face objections and confidently answer any queries of them.

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Distribution Channels in Life Insurance Life insurance is always sold and seldom bought Tied Agency force nearly 11 lakh agents with LIC Constraints in terms of area, reach, resources which inhibit growth of business A multiple distribution channels supplementary to existing channel Bancassurance Corporate Agents Brokers Direct Marketing Net Marketing Telemarketing etc

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SOME GENERAL INFORMATION ABOUT LIFE INSURANCE IN INDIA:

 Life Insurance Sector in India  Significant channel for  household savings into capital  formation GDP penetration  of 4.1%  Statutory  requirements to  provide  reach   to rural areas

Life Insurance

Total Assets Under Management  of Life Insurance Cos. as on  March 31, 2008­ Rs. 8,50,000 

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2nd largest  financial service    in India after  Total number of  lives insured and  on books as on  March 31, 2008­  

HUGE POTENTIAL TO CATCH UP IN INDIA

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Per capita premium remains very low at Rs 1,408 indicating huge untapped potential McKinsey projects penetration to increase to between 5.1% - 6.2% of GDP by 2012

Demographic profile to witness favourable trends •

Proportion of working age group to gradually increase to 68% 49

•

Dependency ratio to fall from current level of 62% to 54% by 2011

•

Improving old age group mortality trend-Composition to double to 8.2% –

increasing need for innovative annuity products

India's projected demographic profile Population  profile (m) Under 15 15­65 65 and over Total

2001 363 622 42 1,027

Composition Under 15 15­65 65 and over Total

35.3% 33.7% 32.3% 60.6% 61.6% 63.0% 4.1% 4.7% 4.7% 100.0% 100.0% 100.0%

Dependencyratio 65.1%

2005 368 673 51 1,092

62.3%

2006 360 702 52 1,114

58.7%

PRODUCT MIX

50

2011 351 780 66 1,197

2016 343 854 78 1,275

2021 337 916 94 1,347

2026 328 967 115 1,410

29.3% 65.2% 5.5% 100.0%

26.9% 67.0% 6.1% 100.0%

25.0% 68.0% 7.0% 100.0%

23.3% 68.5% 8.2% 100.0%

53.5%

49.3%

47.1% 45.9%

New Business Index by Product m ix 100%

11%

12%

6%

4%

80%

60%

40% 64%

40%

20%

43% 19%

0% Apr-06 to Mar-07 Non-Linked Individual Life



Apr-07 to Sep-07

Linked Individual Life

Group

A nnuity

P ension

Health

Unit-linked products introduced for the first time in 2002. Sale of unit linked products increased to 64% in first half of 2007-08 from nil in 1999-00



Pension accumulation products promoted in a big way and gaining large market share from near 0% share in 1999-00



Health products being introduced by life insurers

ROLE IN BHARAT NIRMAN 51

•

Supplementing Government in social protection measures

•

Huge distribution presence right across India o Significant channel of household savings to capital markets

•

Increasing number of foreign JVs o Infusion of foreign capital and technology

•

Obligation to be present in Rural and Social sectors o Extension of micro insurance on the back of microfinance

•

Substantial funds raised with long term horizon o Large long term investment in capital markets – projected $20bn infusion in 2008-09 o Ideal provider of funds to Infrastructure – Approx $25bn invested already

•

Creation of Jobs o

Direct employment to 200,000

o

Advisor force of 1.6 mn

o

Indirect employment through brokers, corporate agents etc.

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CUSTOMER FOCUS… •

Competitive environment with the entry of private players o Spread of customer centricity o Availability of more product lines – ULIP in particular o Spread of term insurance culture o Increased use of local language in transactions o Focus on reaching out to customers in their neighbourhood

•

Product innovation o Increasing importance of OTC products o Customised solutions to cater to lifestage needs o Flexible payment options o Riders - critical illness, hospital cash etc o Health products – covering specific illnesses

•

Spread of equity culture o Education of “Asset allocation” concept o Large scale participation in equity – share in India growth story o Use of Alternative Channels like Banks and Corporate agents o Increased accessibility o Use of technology o Web-based customer service tools o Faster turn around times for complaint resolution o Enablement of real time fund switching options 53

o ULIP – the game changer o Complete insurance package – with insurance, wealth management, asset allocation, saving for specific need o Competitive investment product for the long-term o Flexibility and transparency packed in o Catering to varied risk appetites with a range of fund and switch options.

CHALLENGES…IN LIFE INSURANCE •

Training to large sales force o Increased focus on need-based selling

o Persistency - Product o Depends upon need-based selling and long-term focus o Need to develop easier payment options •

Persistency – Sales Force o Large part-time sales force

•

Reaching the masses o Micro insurance is yet to become popular o Life insurance is yet to be accepted as an investment tool

•

Rising cost of insurance operations – distribution, salary and occupancy costs

•

Regulatory - higher solvency margins, service tax on ULIP – increasing cost for consumer

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BIBLIOGRAPHY 1.

BOOKS/MAGAZINES REFFERED:  STUDY

GUIDE-

PRINCILES

&

PRACTICES

OF

GENERALINSURANCE, by AIMA.

BOOKS PUBLISHED BY INSURANCE INSTITUTE OF INDIA  SALES MANEGEMENT BY S.L.GUPTA  LIFE-INSURANCE, by Mc GILL  INSURANCEWATCH.  MONEYOUTLOOK. 2.

WEBSITES REFFERED:  WWW.RELIANCELIFE.CO.IN 55

LIFE

/

WWW.CIFAINSURANCE.COM WWW.MONEYOUTLOOK.COM WWW.INSURANCE.IND.COM  WWW.IRDA.COM 3.

REPORTS/ARTICLES REFFERED: REPORT: ISSUES & CHALLENGES FACING THE INSURANCE INDUSTRY…. Dec2005. BRIEF PROFILE OF LIC, INDIA…Dec 2006. REPORT: COPING WITH COMPETITION…Jan2007

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