Mnyl Project..

THE INTERNATIONAL INSTITUTE OF PLANNING AND MANAGEMENT

SUMMER INTERNSHIP REPORT “MAX NEW YORK LIFE

SUBMITTED BY: FARAZ .A. MAKHANI PGP/SS/08 -10/HR ROLL NO. 14 IIPM CHENNAI

CHANNEL DEVELOPMENT AT MNYL.

“CHANNEL DEVELOPMENT AT MAX NEW YORK LIFE”

CHANNEL DEVELOPMENT AT MNYL.

CERTIFICTE OF APPROVAL

The following Internship Report Title “Channel Development at MNYL” is hereby approved as certificate studies in management carried out in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Post Graduate in Business Management for which they have been submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the summer Project only for the purpose it is submitted. Internship Report Examination Committee for evaluation of Internship Report.

Name 1. Faculty Examiner

_________________

_________________

2. PG Summer Project Co-coordinator___________________ ___________________

Signature

CHANNEL DEVELOPMENT AT MNYL.

CERTIFICATE FROM SUMMER INTERNSHIP GUIDE

This is to certify that Mr. FARAZ .A. MAKHANI a student of Post Graduate Degree in Business Management has worked under our guidance and supervision. This Summer Internship Report has the requisite standard and to the best of my knowledge it is his original work.

Project Guide

Date:

CHANNEL DEVELOPMENT AT MNYL.

ACKNOWLEDGEMENT It gives me great pleasure, having done a project on an interesting and knowledgeable topic like “Channel development at Max New York.” Marketing Management and Human resources are topics which demand for in depth study and a lot of dedication and hard work. This project has been a great experience. This project has immensely enlarged my knowledge as far as academics are concerned. There are many people associated with this project without which this project would not have reached its successful completion. I sincerely thank Prof. R. Krishnan (Dean, IIPM) who has given me an opportunity to show my skills and bag a great source of experience. A special thanks to Prof. Jimesh Gandhi (SMG Department, IIPM) who guided me to opt for MNYL. I would like to thank Mr. Jolly Jos (Branch Manager, MNYL) who permitted me to do this project in Max New York Life successfully. I would like to thank to Mr. Santhosh Pallikonda (Sales Manager, MNYL) for his inspiration, keen interest, constant supervision and ever willing help throughout the course of this study. I would also like to take this opportunity to thank all the people of the firm I contacted who took out valuable time to answer my queries and gave me full information about the insurance industry and Max New York Life. I extend my sincere gratitude towards my parents, who have always encouraged me and given great support. They have been a great source of motivation in the completion of my project. Above all I thank the almighty for my successful completion of this project.

CHANNEL DEVELOPMENT AT MNYL.

PREFACE Indian insurance industry is emerging rapidly after year 2000. To survive in this highly competitive scenario, managers are being pressured to improve

quality,

recruit

quality

and

skilled

people

and

eliminate

inefficiency. The collective efforts of the employer, managers and other relative people assume relevance in this context. And this is where marketing management and human resources play important role. Recruitment is very important in today’s scenario. But still it is ignored and considered as a secondary aspect. In case of insurance industry recruitment only decide success or failure of company. I have made an attempt to study this aspect of Insurance industry in my project. In this project, recruitment for developing channel at Max New York Life is considered. I have tried to find out how exactly recruitment is very important for this firm as well as this industry, which are the different strategies firm use to recruit quality people and so on. It is more qualitative rather than a quantitative data. To get knowledge of above question and to fulfill the requirements for my project on “Channel Development at Max New York Life”, I have worked in MNYL and searched some internet sites.

CHANNEL DEVELOPMENT AT MNYL.

TABLE OF CONTENTS Acknowledgement 5 Preface 6 Table of Contents 7 List of Abbreviations 9

CHANNEL DEVELOPMENT AT MNYL. SECTION A: INTRODUCTION 10 A.1 ABOUT INSURANCE INDUSTRY

11

A.2 ABOUT MAX NEW YORK LIFE

13

A.3 ABOUT PROJECT

23

SECTION B: CHANNEL DEVELOPMENT STRATEGIES

26

B.1 ELIGIBILITY MODEL

27

B.2 DEVELOPMENT STRATEGIES

32

SECTION C: CHANNEL DEVELOPMENT PROCESS

34

C.1 NAME GATHERING IN-P200

36

C.2 SHORTLISTING

36

C.3 APPROACHING

37

C.4 INITIAL SCREENING

37

C.5 NAT

37

C.6 CAREER SEMINAR

38

C.7 CAREER INTERVIEW

38

C.8 FCS

38

C.9 CONTRACT

38

SECTION D: CONCLUSION

39

D.1 KEY LEARNINGS 40 D.2 EXPERIENCE

41

D.3 CONLCLUSION

42

D.4 RECOMMENDATIONS

43

D.5 BIBLIOGRAPHY APPENDIX

CHANNEL DEVELOPMENT AT MNYL.

LIST OF ABBREVIATIONS

MNYL

Max New York Life

AA

Agent Advisor

PO

Personal Observation

NAT

Numerical Ability Test

IRDA

Insurance Regulatory & Development Authority

CoI

Centre of Influence

ATP

Annual Target Premium

MDRT

Million Dollar Round Table

CSR

Corporate Social Responsibility

FCS

Fundamental Career Seminar

SM

Sales Manager

CHANNEL DEVELOPMENT AT MNYL.

Section A INTRODUCTION

CHANNEL DEVELOPMENT AT MNYL.

A.1 About the Insurance Sector in India •

Insurance sector is an opportunity for India.

•

This business is growing at the rate of 18-22 per cent annually.

•

Presently it covers market of RS.450 billion.

•

Together with banking sector it contributes about

•

Gross premium collection is about

•

Still 80% of Indian population is without life insurance.

•

This is an indicator that growth potential for the insurance sector is

7% to GDP.

2% of GDP.

immense. There are two legislations that govern the sector-

The Insurance Act- 1938

The IRDA Act- 1999.

Table shows the current market players in the life Insurance Industry (Source IRDA). Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13

Name of the Company Bajaj Allianz Life Insurance Co. Limited Birla Sun Life Insurance Co. Ltd HDFC Standard Life Insurance Co. Ltd ICICI Prudential Life Insurance Co. Ltd ING Vysya Life Insurance Co. Ltd. Life Insurance Corporation of India Max New York Life Insurance Co. Ltd Met Life India Insurance Co. Pvt. Ltd. Kotak Mahindra Old Mutual Life Insurance Ltd. SBI Life Insurance Co. Ltd. Tata AIG Life Insurance Co. Ltd. Reliance Life Insurance Co. Ltd. Aviva Life Insurance Co. India Pvt. Ltd.

CHANNEL DEVELOPMENT AT MNYL. 14 Sahara India Life Insurance Co. Ltd. 15 Shriram Life Insurance Co. Ltd. 16 Bharti AXA Life Insurance Co. Ltd.

PREMIUM COLLECTIONS:

A.2 ABOUT MAX NEW YORK LIFE (COMPANY PROFILE) •

Max New York Life Insurance Company Ltd. is a joint venture between New York Life and Max India Limited.

•

New York Life is a Fortune 100 company and Max India Limited is one of India's leading multi-business corporations.

•

The company has positioned itself on the quality platform.

CHANNEL DEVELOPMENT AT MNYL. • It has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. •

The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business.

•

In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds.

• •

The Company's paid up capital is Rs. 657 crore, which is more than the norm laid down by IRDA.

•

Max New York Life has identified individual agents as its primary channel of distribution.

•

The Company places a lot of emphasis on its selection process, which comprises four stages – Screening, Psychometric test, Career seminar Final interview.

•

The agent advisors are trained in-house to ensure optimal control on quality of training.

•

Max New York Life invests significantly in its training programme.

•

Each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace.

•

Training is a continuous process for agents at Max New York Life and ensures development of skills and knowledge through a structured programme spread over 500 hours in two years.

CHANNEL DEVELOPMENT AT MNYL. • This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. •

It now has 26 life insurance products and 8 riders that can be customized to have more than 400 products.

•

201 agent advisors have qualified for the Million Dollar Round Table (MDRT) membership in 2005.

•

MDRT is an exclusive congregation of the world’s top selling insurance agents and is internationally recognized as the standard of excellence in the life insurance business.

Life @ MNYL

•

Max New York Life is a young and vibrant organization, proud of the excellent track record it has established in a relatively short span of time. We are one of the most ambitious and aggressive players in life insurance. A key factor in our success has been our ability to attract some of the most talented professionals from different industries.

CHANNEL DEVELOPMENT AT MNYL. • We pride ourselves on being a learning organization that encourages personal and professional development. We are serious about work and having fun. A dynamic, flexible and fast paced work environment brings out the best in each one of us. By developing structure, systems and a workplace culture that provides challenging jobs, rewards performance and delivers opportunities continuously, Max New York Life strives to get the best out of its most valuable asset - its people.

•

The knowledge and inputs given at MNYL is immensely useful to survive in the industry and also for other management areas.

REWARDS AND RECOGNITION

CHANNEL DEVELOPMENT AT MNYL.

C M DRT Ex. Council Paul Colgan Trophy Centurion Agent of the Year Paid Cases, FYC, Persistency, Rider, Referral and CEIP Leader Career Foundation Club Career Producer Award Career Success Award Hi-Flier Ten-A-Monther Premium Leader

CHANNEL DEVELOPMENT AT MNYL. PRODUCTS OF MNYL

•

Whole Life Plans

•

Unit Linked Insurance Plans

•

Endowment Plans

•

Children Plan

•

Money Back Plans

•

Pension Plans

•

Health & Accident Related Riders

Vision To become the most admired life Insurance Company in India.

CHANNEL DEVELOPMENT AT MNYL.

Mission To become one of the top quartile life Insurance companies in India. Be a national player. Be the brand of the first Choice. Be the Employer of the Choice. Become principal of choice for agents.

Values This vision to become India's most admired life insurance company will be realized through our unique set of values, which are as follows:

CHANNEL DEVELOPMENT AT MNYL.

Achievements

 First company to provide free look period of 15 days to the      

customer. This was later made mandatory by the regulator First company to start toll free line for agent services First and the only life insurance company in India to implement Lean methodology of service excellence in service industry First life insurance company in India to provide various services to the agents and customers over phone First Indian life insurance company to start service center at the regional level First life insurance company in India to be awarded ISO 9001:2000 certification Top five most respected private life insurance in India according to Business World survey.

 Continuous presence in Top 50 MDRT global list.

CHANNEL DEVELOPMENT AT MNYL.

CSR Max New York Life has been instrumental in changing the paradigm of life insurance in India. It is the first life insurance company in India to introduce cause related marketing. Children are at the very heart of Max New York Life's strategy. SOS Children's Villages of India is internationally recognized for its work in giving underprivileged children a wholesome life. The mission of SOS is "to help orphaned and abandoned children, by providing them with a family, a permanent home, education and strong foundation for an independent life." Its mission ties in with Max New York Life's philosophy of helping people secure the future of their near and dear ones. The company donates a part of the total money collected on all policies sold, to SOS Children's Villages of India at the end of the year.

MANAGEMENT HIERARCHY

CHANNEL DEVELOPMENT AT MNYL.

BOARD OF DIRECTORS Mr. Analjit Singh Chairman, Max India Limited

Mr. Anuroop (Tony) Singh Vice Chairman, Max New York Life Insurance

Mr. Rajesh Sud CEO & Managing Director, Max New York Life Insurance

Mr. Rajit Mehta Executive Director & Chief Operating Officer, Max New York Life Insurance

Mr. John Harrison Director, Max New York Life Insurance

Mr. Richard Mucci Director, Max New York Life Insurance

Dr. S. S. Baijal Director, Max New York Life Insurance

Dr. Omkar Goswami Director, Max New York Life Insurance

Mr. Rajesh Khanna Director, Max New York Life Insurance

CHANNEL DEVELOPMENT AT MNYL.

Management Team

Rajesh Sud Managing Director and CEO, Max New York Life Rajit Mehta Chief Operating Officer Anil Mehta Senior Director - New Markets SBU Sunil Kakar Senior Director & Chief Financial Officer Ajay Seth Senior Director- Legal & Compliance Debashis Sarkar Senior Director & Chief Marketing Officer John Poole Appointed Actuary

CHANNEL DEVELOPMENT AT MNYL.

A.3 ABOUT PROJECT The main objective of the “Channel Development” is to recruit quality agent advisors (AA) for the company for providing life Insurance solutions to the customers. AA plays a vital role in the growth of company with respect of company’s earnings as well as they create value for the organization after achieving some milestones. AA are integral part of the team and sales manager assigned to them help them to groom them in terms of personality development, selling skills and handling objections of customers. Benefits of Becoming AA for MNYL:

Company’s Expectation from AA:

CHANNEL DEVELOPMENT AT MNYL. • Regular input activity. •

Follow the sales process.

•

Achieve sales targets.

•

Attend training programme.

•

Participate in weekly reviews.

•

Follow the MNYL ethics and business standards policy.

JOB DESCRIPTION

CHANNEL DEVELOPMENT AT MNYL. I was placed in the recruitment section of channel development at MNYL. I had to recruit agent advisors for the organization by following the steps involved in the channel development process. I was paid a commission for every agent advisor who undergoes the screening process and clears the agent advisor examination. It was a pleasant job as it had no work pressure and extremely flexible working hours. I had a great sales manger to assist me all throughout. Following are the steps undergone in my job:  Making a list of known capable people and giving them a call over phone and fixing an appointment with a senior officer.  Taking further contacts from the call-list in the form of references.  Identification of potential candidates to be contracted as agent advisors.  Calling upon the potential candidates and explaining the business opportunity to them.  Enable the candidates to talk to a higher authority and undergo initial screening.  Get necessary forms filled by the candidates and collect supplementary documents like education proof, identity proof, date of birth proof etc.

CHANNEL DEVELOPMENT AT MNYL.

Section B CHANNEL DEVELOPMENT STRATEGIES

CHANNEL DEVELOPMENT AT MNYL.

B.1 ELIGIBILTY MODEL From this eligibility model company judge prospective person. The company follows unique eligibility criteria for AA selection by which company is able is to always justify its mission. The basic objective of having an eligibility model for recruitment is to have good retention and greater effectiveness in the delivery of service.

• Four criteria’s for AA selection 1. 25 plus years of age: This age shows attainment of maturity and responsibility. People are more consistent in this age. 2. Married: Married people have more eager to earn money. Family pressures increase responsibility and secondly customers are convinced more by the stability of a married AA. 3. Staying in the same city for more than 5 years: Person who stays more than 5 year has huge natural market which helps him to get more business in short period. 4. Graduate: Graduate people have basic skills like communication skills, numerical ability, I.P relation, convincing abilities etc. so it is easy to teach them further.

•

Other criteria for AA selection:

1. Financial stability:

CHANNEL DEVELOPMENT AT MNYL. MNYL is focuses on classes and not on masses thus they select strong agent advisors. 2. To have a rich and active social circle: It helps to get higher case rate and case size. Also the chances of policy lapsing can be less and renewals can be more. 3. Greed for money: Firm selects advisors who understand the language of commission. Because people who want fix amount as their earnings are not suitable for this business. 4. Independent: MNYL select people who want to be entrepreneur. Housewives or brokers who want flexible hours for work are prospective person for this business. 5. Persuasion: He should be persuasive in nature because the AA needs to follow up on regular basis with prospective and new clients without being a nuisance value. 6. Excellent interpersonal skills: Because developing and maintaining good relations can get policies. Secondly since most of the insurance companies provide a plethora of similar products, sales depend on the convincing ability of the AA and the rapport the AA is bale to build. Also results in C of I’s.

Work Profile This is an entrepreneurial opportunity with flexible working hours and the potential to earn unlimited income without any capital investment. As an agent with Max New York Life, you are a financial advisor,

CHANNEL DEVELOPMENT AT MNYL. businessperson and your own boss. The only limit to your growth is your own imagination and drive. The Role: • • • • •

Identify prospects and conduct need analysis Provide customized solutions for long term financial protection and wealth creation Close sales Deliver the policy Provide after sales service and build references for future sales

Benefits A career at Max New York Life has innumerable advantages. With low start up investment you can become a part of a world-class organization and make a positive difference to people’s lives. Our agents sell more policies and make more money than agents of any other life insurance company. The financial rewards are in the form of • • • • •

Commissions on new sales Ongoing renewal commissions Performance linked bonus Referral commissions Training reimbursement

CHANNEL DEVELOPMENT AT MNYL. The SIX Differentiators 1

Our Selection Process

Our selection process is designed to help the candidate and the organization make a decision in mutual best interest. The first step in the process is an initial interview followed by a test of numerical ability. Candidates who make the cut are invited to attend a career seminar. The procedure facilitates a process of discovery, as both sides develop an understanding of each other’s profile and requirements. The final stage in the selection process is an assessment of the candidate's natural market and potential for growth.

2

Our Training Program

Max New York Life has the finest training program for agents in the industry. We run training and development programs for agents throughout their career. The training consists of a two-year formal classroom based program. Max New York Life has two full-time professional trainers in each office whose sole job is to train and guide new agents. The success of our training programs owes a lot to the strength of our partner, New York Life. The training program developed by New York Life in the United States is widely recognized as the best in the insurance industry. We have customized this outstanding program for the Indian market. In the United States, New York Life had more members in the Million Dollar Round Table, the worldwide organization of top professionals in the insurance industry, for 50 consecutive years. Since 2001, Max New York Life has had more qualifiers for the prestigious Million Dollar Round Table than all the other private sector insurance companies taken together.

CHANNEL DEVELOPMENT AT MNYL. 5 The Agent's Contract

The Agent's Contract is designed to attract efficient professionals and retain them for a long time by compensating them generously. As an agent you can count on the support of Max New York Life at all times to help you earn a good income today and create a secure retirement for tomorrow.

B.2 DEVELOPMENT STRATEGIES Management team has developed certain strategies in order to expand channel distribution network. These models are followed across the country uniformly and top management feels that these rules are the building block of MNYL’s success in India as well as across the world. There are 2 basic principles that are required in order to execute these strategies such as 1) Prospecting: Identify the right person who fits in the eligibility model. 2) Selection: Select them for further plan of actions.

• RULE OF 31 Rule of 31 is associated with the daily activities which are followed to recruit quality advisors. It says that everyday collect at least 3 names of the prospective AA and do 1 screening every day.

CHANNEL DEVELOPMENT AT MNYL.

• Ways of Name Gathering There are several ways for gathering names in order to follow rule of 31. •

Natural Market

• Personal Observation •

Nominator Call

•

Centre of Influence (CoI) Call

CHANNEL DEVELOPMENT AT MNYL.

Section C CHANNEL DEVELOPMENT PROCESS

CHANNEL DEVELOPMENT AT MNYL. Flow Based approach to Channel Development Process Start Name Gathering in P200 Short listing Contacting NO Intereste d?

End YES

Initial Screening NAT Career Seminar & P200 NO Intereste d?

End YES

Career interview FCS

NOT CLEARED IC-33 ?

Reappear CLEARED

Contract with MNYL

C.1 NAME GATHERING IN P200

End

CHANNEL DEVELOPMENT AT MNYL. Name gathering in P200 consists of people whom you know from natural market and references you get from their sources. As a management trainee were given a task to gather 200 names. Figure shows the P200 format in which the database is created. •

Name of the prospective Agent

•

Address of Contact

•

Age

•

Marital Status

•

Qualification

•

No. of years in the City

•

Financial Status

•

Profession

•

Annual Income

•

Natural Market

•

Comments

C.2 SHORT LISTING Candidates are shortlisted from the P200 as per the eligibility criteria laid down by the company. Only eligible candidates are considered for the next process.

C.3 CONTACTING Candidates are called either as nominator, CoI, Prospective Agents and a meeting is fixed with them according to the convenience of both the party. Here script plays very important role in fixing appointment with the prospect. C.4 INITIAL SCREENING

CHANNEL DEVELOPMENT AT MNYL. Initial screening is taken if candidate is found eligible using 4 point model. In initial screening, a sales manager first gives the introduction about the company. Then several questions such as his family background, his natural market, traits for a sales person, and his present and past experiences of his jobs are questioned. Every candidate is required to get at least 3 points in eligibility model the company. The eligibility standards for AA selection are as follows. In case of score less than 3, special zonal head approval is required. FIVE POINT SYSTEM: Age 25 and over

1 point

Graduate

1 point

Married

1 point

Lived in city more than 5 years

1 point

NAT score

1 point (if passed)

C.5 NAT Numerical Ability test is taken. Passing Score is 50%. C.6 CAREER SEMINAR AND P200 All the prospects are required to attend career seminar at MNYL which provides broader aspects of growth as an Agent Advisor. P200 is a worksheet which is given to each prospect to judge his natural market. The prospects are required to mention at least 100 contacts from their natural market.

CHANNEL DEVELOPMENT AT MNYL. C.7 CAREER INTERVIEW P200 is evaluated in Career Interview. If candidate’s market is found worth, he is selected to attend training and Development programme. C.8 FCS All the selected candidates are required to attend 15 day training session for receiving the license from IRDA to become an Agent Advisor. C.9 CONTRACT All the successful candidates having legal license of IRDA are contracted with MNYL.

SECTION D

CHANNEL DEVELOPMENT AT MNYL.

CONCLUSION

CHANNEL DEVELOPMENT AT MNYL.

D.1 KEY LEARNINGS

•

Before this internship project my knowledge about the insurance industry was quite bleak. This internship in MNYL has immensely helped me in categorizing the different financial products.

•

Another of my crucial learning has been in the area of communication with the outside world. Finding a possible prospect and then giving them information about the opportunities available was a really tough challenge.

•

Majority of the population in Chennai have a negative perception about the insurance industry. Giving them appropriate information about the opportunity to earn in this field was a challenging task.

•

Along with the information on the job, the staff of MNYL also gave many inputs that would definitely help in the management field.

CHANNEL DEVELOPMENT AT MNYL.

D.2 EXPERIENCE My Experience with MNYL will always be grateful for me. I learned many things in MNYL. The very first thing I learned in MNYL is to handle objections from the customers. Different type of scripts of MNYL helps in this. Working on deadline for achieving target is most crucial process in this sector and I am thankful to my sales Manager who were always behind me to support during initial call and helps me to complete my training. The GO meet to reward successful AA and SM for the month is another example which clearly emphasizes that MNYL has strong belief in maintaining a healthy relationship with their stakeholders. Overall “Channel Development” was a fair attempt from me. During the internship I was able to make 175 names and recruited 3 out of that. My telephonic conversation with the prospect always gave me a positive direction to build my confidence and even in bad phase of response I learnt the art of making calmness. I shared a lot of activities with my colleagues. All the trainees from different background also remained a source of energy for my daily activities.

CHANNEL DEVELOPMENT AT MNYL. D.3 CONCLUSION

It has been a great experience working with Max New York Life. I have gained a lot of knowledge and improved immensely on my skills. I got the opportunity to meet and communicate with many people and undertake responsibility. I feel that MNYL is a great organization with plenty scope for growth. One of the main reasons in the success of this project was the constant appreciation and motivation from the staff of MNYL and also the staff of IIPM. The internship was both informative and also interactive.

CHANNEL DEVELOPMENT AT MNYL.

D.4 RECOMMENDATIONS Max New York Life as an insurance firm has a very strong presence in India and is rapidly expanding its operations in India. After working on this project I feel that following are some of the ways in which the company can improve the current market base and selection procedure for AAs, the key revenue generating resource for the company: •

Very few people in India are aware of the company and its products. The company should find more ways to market itself to the outside world and create awareness about its existence and the efficiencies of its varied excellent products.

•

Another suggestion to the company would be to reduce its timing for the training program for the agent advisors. Most of the people coming to MNYL are not satisfied with the timing of training and return dejected.

•

Have a re-look at the existing product range and design products which can attract masses rather than just serving only classes.

CHANNEL DEVELOPMENT AT MNYL.

D.5 BIBLIOGRAPHY

• IC 33 book of Max New York Life. •

www.maxnewyorklife.com

•

www.google.com

• Brochures • Face To Face Interaction With The Staff

CHANNEL DEVELOPMENT AT MNYL.

APPENDIX