Ramarao Modi 090709

PRE LICENSING OF LIFE ADVISORS

A Project Report on

A STUDY ON PRE LICENCING LIFE ADVISORS IN BHRATI-AXA LIFE INSURANCE COMPANY LIMITED VIJAYAWADA

Submitted to the

In partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATIOIN Submitted by

V. RAMA RAO CY084023

Under the Esteemed Guidance of

K.J.SUMITHA (M.B.A., Ph.D.) 1

PRE LICENSING OF LIFE ADVISORS

DECLARATION I Mr.V. Rama Rao (CY084023) undersigned, hereby declare that this project entitled “Pre-Licensing process of Life advisors at Bharti AXA Life Insurance Company.,

Vijayawada is written and submitted by me to

“Cygmax Institute Of Management Studies” in partial fulfillment of the requirements for the award of POST GRADUATE DIPLOMA OF MANAGEMENT

under

the

guidance

of

my

Faculty

Guide

Mrs.K.J.Sumitha and my Company Guide Mr. Sundar Pulavarthi. This report neither full nor in part has ever been submitted for award of any other course of either this Institute or any other Institute.

Place: Vijayawada

(RAMARAO.V)

Date:

CY084023.

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PRE LICENSING OF LIFE ADVISORS

ACKNOWLEDGEMENT I express my profound thanks from bottom of my heart to my project guide Mrs. K.J. SUMITHA and Company guide “SUNDAR PULAVARTHI” for the guiding & suggesting in completing this

project. I take immense pleasure in thanking her for the freedom of thought and action, which I have enjoyed during the course of my project work. I would like to express my profuse gratitude to my beloved Principal Prof. N.J.S. Rao, Cygmax Institute of Management Studies, Vijayawada, for his encouragement and constant support to accomplish my project efficaciously.

Signature of the Student.

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PRE LICENSING OF LIFE ADVISORS

CERTIFICATION This is to certify that the Project Report title “PRE LICINCING LIFE ADVISORS”, at Bhrati –Axa Life Insurance Company in partial

fulfillment for the award of MBA programme of Department of Business Management, CIMS-Vijayawada, was carried out by Mr.V.Rama Rao, under my guidance. This has not been submitted to any

other

University

or

Institution

for

the

award

of

any

degree/diploma/certificate.

Place: Date:

Signature of the Guide

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PRE LICENSING OF LIFE ADVISORS

EXECUTIVE SUMMARY The project is about pre licensing life advisors and development of Life advisors. The project was undertaken by 2 members teem and the entire task was divided into subtasks. The process started from identifying the need, then advertising the same to prospective individuals by distribution of pamphlets, holding various activities in residential areas etc. then individuals were surveyed. The questionnaire was designed in such a manner that it gave a general idea about the ability and capability of respondent as a prospective life insurance advisor. Certain scores were allotted depending on the answers given by the respondent. Those who were high on the scores were motivated to visit the office for conduction of their interview. After the successful completion of interview individuals were informed if they were selected for training of Life advisors. They were asked to fill the NAAF form and a fee was collected from them along with their photographs. After successful completion of training an exam was conducted and those who qualified the exam were selected as life advisors. The project report submitted here covers theory on pre licensing life advisors and development, flowchart of activities undertaken for life advisors and development, data analysis of the survey and a list of suggestions and recommendations for the company at the end of the entire study. During the process of summer project we conducted activities in Residential colonies in “Vijayawada” The samples of the pamphlets that were distributed for such activities have been given in the annexure.

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PRE LICENSING OF LIFE ADVISORS

CHAPTER 1 INTRODUCTION TO THE PROJECT

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PRE LICENSING OF LIFE ADVISORS

INTRODUCTION TO PROJECT PURPOSE OF THE PROJECT The purpose of the company project study was to: •

Get hands on experience of recruitment in Insurance sector.

•

Understand the external recruitment process of Life advisors.

•

Applying theoretical knowledge to the recruitment practices at Bharti AXA.

SIGNIFICANCE AND IMPORTANCE OF THE PROJECT In the last few years, the job market has undergone some fundamental changes in terms of technologies, sources of recruitment, competition in the market etc. In an already saturated job market, where the practices like poaching and raiding are gaining momentum, HR professionals are constantly facing new challenges in one of their most important function- recruitment. They have to face and conquer various challenges to find the best candidates for their organizations. The project focuses on the challenges facing the HR department in the growing insurance industry in India. Problems caused by the lack of skilled personnel and the increasing demand for skilled employees are also discussed in the project. In addition, challenges regarding the recruitment and retention of employees are examined. The project throws light on various measures taken by HR departments in insurance organizations to improve the work environment and the productivity of employees.

OBJECTIVES OF THE PROJECT The objectives should be SMART objectives. S- Specific M- Measurable A- Achievable R- Relevant T- Time bound 7

PRE LICENSING OF LIFE ADVISORS

Team objective: To recruit more than 10 Life advisors during two months in Vijayawada region. Individual objective: To interview prospective candidates to be recruited as LA and to assist in their training.

SCOPE OF THE PROJECT The project involved recruiting life advisors for Bharti AXA Life insurance in Vijayawada region. The task was taken up by an 2 members team and the entire process of recruitment was divided into sub- tasks. To further it, the project also involved arranging for preliminary training of Life advisors. The process of recruiting and training Life advisors can be broken into the following steps: •

Identifying individuals who are willing to solicit insurance business as a life advisor of the company.

•

Assisting in scheduling the training and examination of the life advisors.

•

Assisting and coordinating with Agency Development Manager of the company for licensing and coding of Life Advisors.

THEORY ON RECRUITMENT & TRAINING The Recruitment Process: Recruitment refers to the process of sourcing, screening, and selecting people for a job or vacancy within an organization. Though individuals can undertake individual components of the recruitment process, mid- and large-size organizations generally retain professional recruiters. These are the main stages in recruitment. Sourcing: Sourcing involves 1) Advertising a common part of the recruiting process, often encompassing multiple media, such as the Internet, general newspapers, job ad newspapers, professional

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PRE LICENSING OF LIFE ADVISORS publications, window advertisements, job centers, and campus graduate recruitment programs; and 2) Recruiting research, which is the proactive identification of relevant talent who may not respond to job postings and other recruitment advertising methods done in #1. This initial research for so-called passive prospects, also called name-generation, results in a list of prospects who can then be contacted to solicit interest, obtain a resume/CV, and be screened (see below). Screening & selection: Suitability for a job is typically assessed by looking for skills, e.g. communication, typing, and computer skills. Qualifications may be shown through résumés, job applications, interviews, educational or professional experience, the testimony of references, or in-house testing, such as for software knowledge, typing skills, numeracy, and literacy, through psychological tests or employment testing. In some countries, employers are legally mandated to provide equal opportunity in hiring. On boarding A well-planned introduction helps new employees become fully operational quickly and is often integrated with the recruitment process.

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PRE LICENSING OF LIFE ADVISORS

Sources of recruitment

The major challenges faced by the HR in recruitment are: •

Adaptability to globalization – The HR professionals are expected and required to keep in tune with the changing times, i.e. the changes taking place across the globe. HR should maintain the timeliness of the process

•

Lack of motivation – Recruitment is considered to be a thankless job. Even if the organization is achieving results, HR department or professionals are not thanked for recruiting the right employees and performers.

•

Process analysis – The immediacy and speed of the recruitment process are the main concerns of the HR in recruitment. The process should be flexible, adaptive and responsive to the immediate requirements. The recruitment process should also be cost effective.

•

Strategic prioritization – The emerging new systems are both an opportunity as well as a challenge for the HR professionals. Therefore, reviewing staffing needs

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PRE LICENSING OF LIFE ADVISORS and prioritizing the tasks to meet the changes in the market has become a challenge for the recruitment professionals. Training and development: In organizational development, the related field of training and development (T & D) deals with the design and delivery of learning to improve performance, skills, or knowledge within organizations. In some organizations the term Learning and Development is used instead of Training and Development in order to emphasise the importance of learning for the individual and the organization. In other organizations, the term Human Resource Development is used. Types of T & D 1.

Coaching

2.

Continuing Professional Development or CPD

3.

E-learning aka Online Learning, Distance Learning, Web-Based Learning

4.

Executive education

5.

Executive development

6.

Leadership development

7.

Instructional Animation

8.

Instructional Design

9.

Instructional Strategies

10.

Knowledge Management

11.

Organizational Learning

12.

Organizational knowledge

13.

Mentoring

14.

Teaching Method

15.

Blended learning

16.

Outbound Management Development Programmes

17.

Performance Management

The various forms of Training and development are explained below.

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PRE LICENSING OF LIFE ADVISORS 1. Coaching is a method of directing, instructing and training a person or group of people, with the aim to achieve some goal or develop specific skills. There are many ways to coach, types of coaching and methods to coaching. Direction may include motivational speaking. Training may include seminars, workshops, and supervised practice. 2. Continuing Professional Development (CPD) or Continuing Professional Education (CPE) is the means by which members of professional associations maintain, improve and broaden their knowledge and skills and develop the personal qualities required in their professional lives.CPD is defined as the holistic commitment to structured skills enhancement and personal or professional competence. 3. Electronic learning (or e-Learning or eLearning) is a type of education where the medium of instruction is computer technology. No in-person interaction may take place in some instances. E-learning is used interchangeably in a wide variety of contexts. In companies, it refers to the strategies that use the company network to deliver training courses to employees. In the USA, it is defined as a planned teaching/learning experience that uses a wide spectrum of technologies, mainly Internet or computer-based, to reach learners at a distance. Lately in most Universities, e-learning is used to define a specific mode to attend a course or programmes of study where the students rarely, if ever, attend face-to-face for oncampus access to educational facilities, because they study online. 4. Executive Education is the term used for programs at graduate-level business schools that aim to give classes for Chief Executives and other top managers or entrepreneurs. These programs do not usually end in a degree, although there is an ever-growing number of Executive MBA programs that are very similar and offer a Masters of Business Administration upon completion of the coursework. 5. Executive development is the whole of activities aimed at developing the skills and competencies of those that (will) have executive positions in organisations. While "executive" and "manager" and "leader" are often used interchangeably, "executive" is commonly used to signify the top 5% to 10% of the organization. Similarly, "development" and "training" and "education" are often used as

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PRE LICENSING OF LIFE ADVISORS synonyms, however "development" is generally seen as the more encompassing of the three in terms of activities that build skills and competencies. 6. Leadership development: Leadership development refers to any activity that enhances the quality of leadership within an individual or organization. These activities have ranged from MBA style programs offered at university business schools to high-ropes courses and executive retreats. 7. Instructional Animations are animations that are used either to provide instructions for immediate performance of a task or to support more permanent learning of subject matter. While both of these uses can be described as instructional animations, when the goal is to support learning, the term educational animation may be preferred. 8. Instructional Design is the practice of arranging media (communication technology) and content to help learners and teachers transfer knowledge most effectively. The process consists broadly of determining the current state of learner understanding, defining the end goal of instruction, and creating some media-based "intervention" to assist in the transition. Ideally the process is informed by pedagogically tested theories of learning and may take place in student-only, teacher-led or community-based settings. The outcome of this instruction may be directly observable and scientifically measured or completely hidden and assumed. 9. Knowledge Management ('KM') comprises a range of practices used by organisations to identify, create, represent, distribute and enable adoption of what it knows, and how it knows it. It has been an established discipline since 1995 with a body of university courses and both professional and academic journals dedicated to it. Many large companies have resources dedicated to Knowledge Management, often as a part of 'Information Technology', 'Human Resource Management' or Business strategy departments. Knowledge Management is a multi-billion dollar world-wide market. 10. Organizational learning is an area of knowledge within organizational theory that studies models and theories about the way an organization learns and adapts. In Organizational development (OD), learning is a characteristic of an adaptive

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PRE LICENSING OF LIFE ADVISORS organization, i.e., an organization that is able to sense changes in signals from its environment (both internal and external) and adapt accordingly. OD specialists endeavor to assist their clients to learn from experience and incorporate the learning as feedback into the planning process. 11. Organizational knowledge: What is the nature of knowledge created, traded and used in organizations? Some of this knowledge can be termed technical – knowing the meaning of technical words and phrases, being able to read and make sense of economic data and being able to act on the basis of law-like generalizations. Scientific knowledge is ‘propositional’; it takes the form of causal generalizations – whenever A, then B. For example, whenever water reaches the temperature of 100 degrees, it boils; whenever it boils, it turns into steam; steam generates pressure when in an enclosed space; pressure drives engines. And so forth. 12. Mentorship refers to a developmental relationship between a more experienced mentor and a less experienced partner referred to as a protégé, mentor, or (person) being mentored—a person guided and protected by a more prominent person. 13. Teaching methods are best articulated by answering the questions, "What is the purpose of education?" and "What are the best ways of achieving these purposes?". For much of prehistory, educational methods were largely informal, and consisted of children imitating or modeling their behavior on that of their elders, learning through observation and play. In this sense the children are the students, and the elder is the teacher. A teacher creates the course materials to be taught and then enforces it. 14. Blended Learning is the combination of multiple approaches to learning. Blended learning can be accomplished through the use of 'blended' virtual and physical resources. A typical example of this would be a combination of technology-based materials and face-to-face sessions used together to deliver instruction. In the strictest sense, blended learning is when an instructor combines two methods of delivery of instruction. However, this term most often applies to the use of technology on instruction. A good example of blended learning would

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PRE LICENSING OF LIFE ADVISORS be to give a well-structured introductory lesson in the classroom, and then to provide follow-up materials online. 15. Outbound Management Development Programmes are a training method for enhancing organizational performance through experiential learning. These programmes generally revolve around activities designed to improve leadership, communication skills, planning, change management, delegation, teamwork, and motivation. Participants are divided into teams and assigned tasks or activities for completion in a specified time. Achievement and performance during these activities is reviewed in group discussions to identify behaviours that enhance performance or lead to failure or decreased performance. 16. Performance measurement is the process of assessing progress toward achieving predetermined goals. 17. Performance management is building on that process, adding the relevant communication and action on the progress achieved against these predetermined goals. •

In network performance management

(a) A set of functions that evaluate and report the behavior of telecommunications equipment and the effectiveness of the network or network element and (b) a set of various sub-functions, such as gathering statistical information, maintaining and examining historical logs, determining system performance under natural and artificial conditions, and altering system modes of operation. •

In organizational development (OD), performance can be thought of as

Actual Results vs Desired Results. Any discrepancy, where Actual is less than Desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle: 1. Performance planning where goals and objectives are established 2. Performance coaching where a manager intervenes to give feedback and adjust performance

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PRE LICENSING OF LIFE ADVISORS 3. Performance appraisal: where individual performance is formally documented and feedback delivered A performance problem is any gap between Desired Results and Actual Results. Performance improvement is any effort targeted at closing the gap between Actual Results and Desired Results.

LIMITATIONS OF THE PROJECT Following are some reasons that demotivate and demoralize people from becoming Life advisors. I came across the following obstacles that arose in the process of recruitment: Lack of awareness among the people – This is the biggest limitation found in this sector. Most of the people are not aware about the importance and the necessity of the insurance in their life. They are not aware how useful life insurance can be for their family members if something happens to them. Perception of the people towards Insurance sector – People still consider insurance just as a Tax saving device. So today also there is always a rush to buy an Insurance Policy only at the end of the financial year like January, February and March making the other 9 months dry for this business. Insurance does not give good returns – Still today people think that Insurance does not give good returns. They are not aware of the modern Unit Linked Insurance Plans which are offered by most of the Private sector players. They are still under the perception that if they take Insurance they will get only 5-6% returns which is not true nowadays. Lack of awareness about the earning opportunity in the Insurance sector – People still today are not aware about the earning opportunity that the Insurance sector gives. After the privatization of the insurance sector many private giants have entered the insurance sector. These private companies in order to beat the competition and to increase their Insurance Advisors to increase their reach to the customers are giving very high commission rates but people are not aware of that. Increased competition – Today the competition in the Insurance sector has became very stiff. Currently there are 14 Life Insurance companies working in India including the LIC

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PRE LICENSING OF LIFE ADVISORS (life insurance Corporation of India). Today each and every company is trying to increase their Insurance Advisors so that they can increase their reach in the market.

This situation has created a scenario in which to recruit Life insurance Advisors and to sell life Insurance Policy has became very-very difficult. BRIEF HISTORY OF THE INSURANCE SECTOR IN INDIA The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. The story of insurance is probably as old as the story of mankind. The same instinct that prompts modern businessmen today to secure themselves against loss and disaster existed in primitive men also. They too sought to avert the evil consequences of fire and flood and loss of life and were willing to make some sort of sacrifice in order to achieve security. Though the concept of insurance is largely a development of the recent past, particularly after the industrial era – past few centuries – yet its beginnings date back almost 6000 years. Life Insurance in its modern form came to India from England in the year 1818. Oriental Life Insurance Company started by Europeans in Calcutta was the first life insurance company on Indian Soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of European community and these companies were not insuring Indian natives. •

Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and covered Indian lives at normal rates.

•

Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The Swadeshi movement of 1905-1907 gave rise to more insurance companies.

•

The United India in Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore were established in 1906.

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PRE LICENSING OF LIFE ADVISORS •

In 1907, Hindustan Co-operative Insurance Company took its birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta.

•

The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period.

The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956, and the Life Insurance Corporation of India was created on 1st September, In 1956, with the objective of spreading life insurance much more widely and in particular to the rural areas with a view to reach all insurable persons in the country, providing them adequate financial cover at a reasonable cost. Some of the important milestones in the life insurance business in India are:  1850 Non life insurance debuts with triton insurance company.  1870 Bombay mutual life assurance society is the first Indian owned life insurer.  The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.  The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.  Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.  1956, 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 Crore from the Government of India.

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PRE LICENSING OF LIFE ADVISORS Insurance sector reforms In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at “creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms…”. The Insurance Regulatory and Development Authority (IRDA) The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to act as a strong and powerful supervisory and regulatory authority for insurance. Post nationalization, the role of Controller of Insurance diminished considerably in significance since the Government owned the insurance companies. But the scenario changed with the private and foreign companies foraying in to the insurance sector. This necessitated the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a Government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation. The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries (for general insurance business).

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PRE LICENSING OF LIFE ADVISORS

CHAPTER 2 PROFILE OF ORGANIZATION

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

The Joint Venture BHARTI and AXA BHARTI Bharti Enterprises is one of India’s leading business groups with interests in telecom, agri business, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is one of India’s leading private sector providers of telecommunications services with an aggregate of 60 million customers, spanning mobile, fixed line, broadband and enterprise services. Bharti Airtel was ranked amongst the best performing companies in the world in the BusinessWeek IT 100 list 2007. Bharti Teletech is the country’s largest manufacturer and exporter of telephone terminals. Bharti has a joint venture with ELRo Holdings India Ltd. – ‘FieldFresh Foods Pvt. Ltd’ - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - ‘Bharti AXA Life Insurance Company Ltd.’ - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture – ‘Bharti Wal-Mart Private

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PRE LICENSING OF LIFE ADVISORS Limited’ – with Wal-Mart, for wholesale cash-and-carry and back-end supply chain management operations.

AXA Group AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying earnings amounted to Euro 4,010 million and IFRS adjusted earnings to Euro 5,140 million. The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA.

Bharti AXA Life Insurance Vision To be a leader and the preferred company for financial protection and wealth management in India.

Values •

Professionalism

•

Innovation

•

Team Spirit

•

Pragmatism

•

Integrity

Strategy •

To achieve a top 5 market position in India through a multi-distribution, multiproduct platform

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To adapt AXA's best practice blueprints as a sound platform for profitable growth

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PRE LICENSING OF LIFE ADVISORS •

To leverage Bharti's local knowledge, infrastructure and customer base

•

To deliver high levels of shareholder return

•

To build long term value with our business partners by enhancing the proposition to their customers

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To be the employer of choice to attract and retain the best talent in India

•

To be recognised as being close and qualified by our customers

Good HR practices The guiding Human Resources principles at Bharti AXA are: 1.

Clearly define scope of responsibilities and empower people to deliver

2.

Provide people with the means to develop their competencies

3.

Consider individual training and development a priority investment

4.

Build organizations that are conducive to teamwork and that involve everyone

5.

Promote ongoing dialogue between managers and the people who report to them

6.

Make cultural difference a key source of strength

Strategic differentiators •

Strong partner Bharti - provides access to customer base of more than 20 million.

•

Multi channel execution capability.

•

Current Asia product range which is a strong match to products sold to the mass and mass affluent.

•

Global scale providing cost effective and speedy re-use of systems, products and business capability.

•

Strong AXA and Bharti brands which can be leveraged to attract and retain a high quality management team.

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Insurance Products of Bharti AXA Life insurance products for individuals:

Bharti AXA Dream Life Pension A Unit Linked Pension Product Dream Life Pension, Bharti AXA Life Insurance’s unique pension product ensures that your retirement life is your Dream Life. Bharti AXA Life AspireLife Unit Linked Endowment Product. Aspire Life helps you create a pool of wealth to meet your long-term needs, while also providing you adequate protection in case the need arises. Bharti AXA Life Invest Confident Unit Linked Single Premium Product. You have always strived hard to achieve the best for you and your loved ones, so when it comes to making an investment decision, we know that you would expect the best from it too. Bharti AXA Life Wealth Confident A unit-linked investment cum protection policy. Your wealth, your status ensures that you get preferential status wherever you go. So why shouldn't your money get the same? Bharti AXA Life Future Confident A unit-linked policy which offers comprehensive protection along with wealth creation in the long term. Bharti AXA Life Future Confident II A unit-linked product which offers enhanced protection along with wealth creation in the long term. Bharti AXA Life Save Confident Traditional money back insurance product for long term savings. Your changing lifestages decide your financial milestone planning. When you foresee intermittent financial requirements in the years to come, like

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PRE LICENSING OF LIFE ADVISORS regular expenses related to your child’s education, liquidity becomes a key aspect of your planning along with long term savings, and protection for your family. Bharti AXA Life Secure Confident A Long Term Life Insurance. All of us desire to maximise the happiness for our family at all times, irrespective of the circumstances. The thought of unfortunate events befalling us may cause us anxiety about providing a secured happiness to our loved ones. Disclaimer: Tax benefits are subject to change in tax laws. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.

Life insurance products for Group Insurance: Bharti AXA Life Mortgage Credit Shield Mortgage Credit Shield is a Group Product that provides coverage to people who have availed of a Mortgage\ Home loan\ Home equity loan from an Institution/Bank. Bharti AXA Life Credit Shield Credit Shield is a Group Product that provides coverage to people who have availed of a loan for 1 to 5 years from Group Policyholder. Disclaimer : •

Tax benefits are subject to change in tax laws.

•

For more details on risk factors, terms and conditions please read sales

brochure carefully before concluding a sale

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PRE LICENSING OF LIFE ADVISORS

CHAPTER 3 RESEARCH DESIGN AND METHODOLOGY

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REASEARCH METHDOLOGY Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done. We can say that research methodology has many dimensions and research methods do constitute a part of the research methodology. The study of research methodology gives the student the necessary training in gathering material and arranging or car-indexing them, participation in field work when required, and also training in techniques for the collection of data appropriate to particular problem, in the use of statistics, questionnaires and controlled experimentation and in recording evidences, sorting it out and interpreting it. Knowledge of research methodology plays a key role in project work. It consists of series of actions or steps necessary to effectively carry out research and the desired sequencing of these steps. Data Collection Method Data can be collected by Primary as well as secondary method. Primary Data Sources Questionnaire methods and discussions with the HR and the employees were used to collect data.

Questionnaire Designed: Questionnaire was used for the survey. Secondary Data Sources The secondary data sources were collected from the company manuals, handbooks, and management books and are edited to suite the purpose.

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PRE LICENSING OF LIFE ADVISORS RESEARCH DESIGN Exploratory type of research designs adopted because sources of information are relatively few and the purpose is merely to find and to understand the possible actions. The major purposes of exploratory study are:  Identification of problem  The precise formulation of problems including the identification of variables  Formulation of alternative course of action An exploratory research is often the first in the series of projects that culminates in one concerned with the drawing of inferences that are used as a basis of monetary action. Exploratory study is often used as a introductory phase of a larger study and results are used in developing specific technique for larger study. SAMPLE DESIGN Sampling technique: Stratified sampling technique is adopted to conduct the research. Stratified purposive sapling is a selection method for achieving a greater degree of representatives, therefore decreasing the probable sampling error. It is based on the concept that a homogeneous population produces samples with smaller sampling errors than does a heterogeneous population. Stratified sampling is accomplished by placing all the members of the population into groups according to some characteristics that is common among them, that is homogeneous subsets of the population. Then specified number of unit is chosen from each of the groups or strata by purposive means. Sampling Plans The sampling plan consists of sampling units, e.g. from functional departments namely Marketing, Commercial, Technical and Human Resource. These employees constitute the manpower in the company who are engaged in the day to day functioning of the company, thus it is very important for them to understand the various aspects of the

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PRE LICENSING OF LIFE ADVISORS entire selection process and also the importance of performance appraisal system. Therefore, they had been selected for the project sampling Sample Size:Sample size was taken 250 to undertake the survey. The Recruitment Process flowchart:Following is the flowchart of steps followed in recruitment of Life advisors:

Identifying Vacancy & advertising it ↓ Prepare Job Description and person Specification ↓ Short-listing on the basis of ‘Q’ scores ↓ Conduction of interview ↓ Filling up the compulsory IRDA form ↓ Scheduling the training ↓ Conduction of examination ↓ Final selection as LA The elaboration on all the steps given in the flow chart above is given in the following pages.

Identifying vacancy and advertising it: the following changes in the scenario led to the increasing vacancy for life advisors in Bharti AXA Vijayawada. Expansion of business as well as market. Growing competition. 29

PRE LICENSING OF LIFE ADVISORS Change in demographics. After the identification of vacancy pamphlets containing the details were prepared and were distributed. The pamphlets used by us have been provided as Annexure 1, 2 and 3.

Preparing job description and person specification: Career Bandwidth as a Life advisor at Bharti AXA: As a Life Advisor at Bharti AXA, there is only one way to grow. And that’s by meeting and exceeding your targets. As a good performer, you stand to get promoted from Bronze to Diamond Club and enjoy special remuneration benefits. As a Life Advisor, you can get appointed as an Agency Manager within a span of just 9 months to 1 year. As a Life Advisor, you also get to participate in various business related projects and committees. Compensation As a Life Advisor, you have the opportunity to create attractive earnings for the first year and for the long term through payouts. Higher the business you generate in the first year, higher the income you stand to earn year after year. Get rewarded through Best in Class Rewards and Recognition programs including overseas conventions.

Support All Bharti AXA branches have HR services for support on all matters related to compensation and career so you can redress your concerns immediately. State-of-the-art Distribution Training support.

30

PRE LICENSING OF LIFE ADVISORS Comprehensive marketing support in terms of brochures, illustrations etc. Sales Management Support for on the job training and business closure. Infrastructure & Technology support through dedicated Life Advisor’s bay equipped with telephones, computers and internet at Bharti AXA premises. Customer Service and operations support. The details about the rewards and recognition are given in Annexure 4.

Short Listing on the basis of Q scores: The five Qs- The Qs are 5 different criteria where the candidates are to be analyzed. Q1- The candidate should have been a resident of Vijayawada for at least five years. Q2- He/ She should be married. Q3- His/ Her annual income should be at least 1.2 to 1.5 Lakhs. Q4- He/ She should be a graduate. Q5- Minimum age to be eligible for being a life advisor is 24. The significance of Qs A high Q score implies possibility of better performance by the candidate as a life advisor (meaning better revenue generation ability). On an average only a candidate with a score of Q4 or Q5 was interviewed. A low Q score implies lesser possibility of such performance. Conduction of interview: Pre- interview: Preparation of recruitment /selection document for Advertising. Preparing advertisement Media selection Positioning Response handling Initial interview online or telephone Short-listing for interviews

31

PRE LICENSING OF LIFE ADVISORS Interview arrangement Sending emails or calling short listed candidates Interview details to the short listed candidates During Interview HR interview Technical interview Conducting tests [Aptitude / Mathematical / Analytical etc.] Initial final list of candidates Reference check (if required) Post interview Email or Telephone call to unsuccessful candidates. Technical Manager approval for a start up date. Email or Telephone call to successful candidates. HRM prepares a letter of appointment. Selection Process Starts with the preliminary interview. Ends with contract of employment. Different process for different organization. Different process for different job in same organization. Selection easy for shop floor workers. Selection of managers are crucial. Affected by internal & external environment. Mutual decision making.

Filling up of compulsory IRDA form: a NAAF (New advisor application form) is to be filled up by the candidate. Provided as annexure.

32

PRE LICENSING OF LIFE ADVISORS Scheduling of the training: Guidelines as per provisions of IRDA Act for training of life advisors (effective from 31st October 2004). The training duration should be minimum 18 working days excluding Sundays and holidays. No product training/market survey should be included into this hundred 100 hours training. The product training, if any, to be given by the insurance company should be over and above the minimum training hours prescribed by the Authority The attendance record of the trainees should be maintained at the Institute for necessary inspection at any given point of time. In case of short-fall of attendance, extra class may be permitted but the extra hours may be specified separately with proper attendance and details of faculty. Every Institute should have at least one qualified permanent faculty who is an Associate or Fellow from the Insurance Institute of India for each stream i.e. for Life and Non-Life. The attendance register of the faculty members should be maintained at the training institutes. The record of the payment made to faculty should be maintained at the training institute i.e. batch-wise payment detail should be maintained. The faculty should provide details of the other Institutes with whom they have been empanelled as part-time/guest faculty. Register should be maintained at the training institute giving details of batches completed, strength of the each batch, number of candidates decertified, name of the sponsored insurer and details of faculty who imparted the training with dates. The seating capacity of each class-room should not exceed 40. The fresh accreditation will be given on need basis after assessing the needs of the particular city/town.

33

PRE LICENSING OF LIFE ADVISORS The initial approval will be for a period of 3 years and consideration of further renewal up to 3 years would depend on the satisfactory compliance of requirements of accreditation. The insurance companies would regularly send their officials to oversee the proper conduct of the training at the institutes and would not sponsor candidates to those institutes that are not maintaining the required standards of and facilities for the training. The training institute must display the certificate of accreditation to impart training issued by the Authority at the training institute. The Institute should not allow a franchisee to conduct courses on its behalf even if the faculty is that of the Institute. The Institute should conduct the training on its own premises or hired premises with proper infrastructure. No marketing fee/consultancy fee payment is permitted for getting the training batches. It will be the responsibility of the Insurance Company to check the status of the institute before sponsoring any candidates for training. In case of mofussil areas or the cities where there are no accredited institutes and an insurance company intends to appoint agents, it will be the responsibility of the insurance company to conduct training. The Institutes must keep with them one set of records of the training at the place where the training is being imparted. The Institute should confine its activities only to the place/city for which it has been given the approval. No training outside the said place/city is permitted. The Institutes must submit a copy of the lease deed/rent agreement at the time of seeking fresh accreditation/renewal/change of address of the institute. On successful completion of training the candidates get COT i.e. the Completion of Training Certificate by Bharti AXA. 1. Conduction of examination: 7.1

Syllabus: the syllabus prescribed by the authority for life insurance agents is given in annexure 6. it is indicative and not exhaustive. The self study course

34

PRE LICENSING OF LIFE ADVISORS material developed by institute in book form only the broad basis of examination which is available for sale with the institute and its associated institutes. A candidate is expected to study the course material in depth and also assimilate general information relevant to the subject. Candidate is also expected to know up-to-date developments in the insurance industry. 7.2

Pattern of examination: normally objective type multiple choice questions are asked. A candidate is required to indicate the correct alternative. A candidate is required to secure at least 50% marks to be declared successful. But the institute reserves the right to change, the pattern of question paper for the examinations without notice to anyone to test the knowledge of the candidate as it deems fit.

7.3

Mode of examination: The test can be taken up in either of the two modesonline or offline. Depending on the mode of testing the training is also arranged. For online mode the training is also done online whereas in offline mode the training is done in the class room format of. The duration of classroom training is 6+2 days. Where 6 days are reserved for compulsory IRDA training and the remaining 2 days are for product based training.

7.4

Admission card: No candidate will be allowed to appear for the examination unless he/ she produces the admission card. The admission card will be issued by Bharti AXA. Besides admission card candidate must possess COT issued by Bharti AXA.

7.5

Sample questions: a list of sample questions is given as annexure.

2. Final selection as Life Advisor: the final selection as Life advisor is communicated to the candidate.

SURVEY QUESTIONNAIRE 1. Name: 2. Age: 3. Sex:

Male

4. Occupation:

35

Female

PRE LICENSING OF LIFE ADVISORS •

Government Employee

•

Private Employee

•

Student

•

Proprietor

•

Others

5. Number of Years spent in Vijayawada •

Less than 1 year

•

1-2 Years

•

2-3 Years

•

4-5 Years

6. Marital Status:

Married

Unmarried

7. Do you live in joint family?

Yes

No

8. If married do you have children, how many? •

1 child

•

2 children

•

3 children

•

4 children

9. Which is your biggest concern for future? •

Child education

•

Retirement

•

Child’s marriage

•

Medical illness

10. Have you made provision for future liabilities? •

Yes

•

No

11. Given a chance would you like to make extra money? 36

PRE LICENSING OF LIFE ADVISORS •

Yes

•

No

37

PRE LICENSING OF LIFE ADVISORS

CHAPTER 4 DATA PRESENTATION, ANALYSIS AND INTERPRETATION

38

PRE LICENSING OF LIFE ADVISORS Analysis 1 Age of respondents: the following is the distribution of age of the respondents. Age Number of individuals

<25 Years 85

25-35 Years 66

35-45 Years >45 Years 54 45

Age of responses 90 80 70 60 50 40 30 20 10 0

85 66 54 45

<25 Years

25-35 Years

35-45 Years

>45 Years

Less than 25 years of age individuals constitute 42% of sample size. Whereas individuals with more than 45 years of age constitute only 22%. Interpretation: sample which has been surveyed is dominated by younger individuals. Analysis 2 Sex of respondents Sex of Respondent male

female

Female 56%3

male, 193.4%

Interpretation: Sample is dominated by males which constitute 97% of total size.

39

PRE LICENSING OF LIFE ADVISORS Analysis 3 Occupation of Respondents Occupation Number

Student

Pvt.

Govt.

Employee 52

88

Proprietor

Others

Employee 50

30

30

Occupation of Responses

12% 12%

35%

20% 21%

Student

Pvt. Employee

Proprietor

Others

Govt. Employee

Interpretation: Sample is dominated by students and Private Employees (26%). Analysis 4 Number of Years spent in VIJAYAWADA Number of years spent in VIJAYAWADA

num ber of year s

4-5 years

55

2-3 years

65

30

1-2 years

100

less than 1 year 0

50

100

150

200

250

300

350

400

450

500

number of individuals

Interpretation: Most of the individuals (less than 1 yr) have come to Vijayawada to study or work. The individuals with 4-5 years spent in Vijayawada or more are basically localities.

40

PRE LICENSING OF LIFE ADVISORS Analysis 5 Marital status: Marital Status

22%

78%

Married

Unmarried

Interpretation: two thirds of the sample size is Unmarried people. Analysis 6 Question: Do you stay in a joint family in Vijayawada? Yes – 36

No- 214 Joint Family responses

250 200 150 214 100 50 0

36 Yes

No

Interpretation: Almost 65% of Individuals are staying either alone or in a nuclear family. They are basically students or individuals who have come to Vijayawada for job opportunities.

41

PRE LICENSING OF LIFE ADVISORS Analysis 7 Question: If you are married, do you have any children? How many? Number of children Number of individuals

1 child 97

2 children 72

3 children 48

4 children 33

No.of Children, If married 100

97

80

72

60

48 33

40 20 0

1 child

2 children 3 children 4 children Number of individuals

Interpretation: Only 185 respondents have children, of which 50% have only one child. Analysis 8 Question: What is your biggest concern for future?

Biggest concern for future

medical illness, 87, 32%

child's marriage, 33, 9%

child education, 110 , 39%

child education retirement, , 20%

retirement child's marriage medical illness

42

PRE LICENSING OF LIFE ADVISORS Interpretation: medical illness (43.5%) & child education (55.39%) are major concern for future. Analysis 9 Question: Have you made provision for future liabilities? Yes: 56

No: 194 Have you made provision for future liabilities

200 150 194

100 50 0

56 Yes

No Series1

Interpretation: 97% of the individuals have made no provision for the future liabilities. Analysis 10 Question: Given a chance would you like to make extra money? Yes: 225

No: 25 Given a chance would you like to make extra money

250 200 150

225

100 50 0

25 Yes

No Series1

Interpretation: 111.5% of the individuals would like to make extra money. Such individuals are identified and then they are motivated become Life advisors for an extra source of income.

43

PRE LICENSING OF LIFE ADVISORS

•

After undertaking the entire process of questionnaire survey, individuals were analysed on the basis of their Q scores.

•

Those individuals whose Q score was greater than 3 were considered better prospects to be Life advisors.

•

55 individuals were Inter viewed.

•

30 individuals were selected for IRDA training.

•

15 individuals successfully completed the training and passed the Exam and were Finally selected as Life advisors at Bharti AXA Life Insurance, Individuals Surveyed Indivduals Willing To Make Extra Money INdividuals With Q Score Greater Than 5 Individuals Interviewed Individuals Selected For IRDA Training Individuals Finally Selected As Life Advisors

Individuals Finally Selected As Life Advisors

15

Individuals Selected For IRDA Training

30

Individuals Interviewed

55

INdividuals With Q Score Greater Than 5

26

Indivduals Willing To Make Extra Money

124 250

Individuals Surveyed 0

50

100 150 200 250 300

44

250 124 26 55 30 15

PRE LICENSING OF LIFE ADVISORS

CHAPTER 5 FINDINGS AND SUGGESTIONS

45

PRE LICENSING OF LIFE ADVISORS

FINDINGS The findings are based on the survey undertaken and interview of individuals for the procurement of life advisors.

Finally selected Life advisors

15 Individuals selected for IRDA training

30 Among the Individuals with scores > than Q3, those interviewed-

55

Among the individuals who were willing to make extra money, those with Q score greater than 3- 26

Among the individuals surveyed, the individuals who were willing to make extra money-

124

Total number of Individuals surveyed -250

The major findings are: 1. The Individuals finally selected as Life advisors constitute 3.28% of Sample size. 2. 76.36% of the Individuals who underwent the training cleared the exam. 3. 5.04% of the individuals who wanted to make extra money could finally be selected for the Job.

46

PRE LICENSING OF LIFE ADVISORS

SUGGESTIONS •

The fee charged from candidates as application money should be waved off. It should rather be paid by the Insurance Company.

•

The strict training schedule should be made flexible. For a person who is Q4 or Q5 on score it is difficult for him/ her to be able to come for training especially in case when he/ she is already working.

•

The incentive system should be more attractive to motivate more and more people for becoming Life Advisors.

•

More and more promotional activities should be held for enhanced brand building which will facilitate revenue generation and increased satisfaction leading to customer retention in the long run.

•

There is need to have in place a properly managed performance appraisal system even for life advisors that would contribute to effective retention of personnel.

47

PRE LICENSING OF LIFE ADVISORS

CONCLUSION For the purpose of this report, it was found that the questionnaire and interview questions, employee manual were sufficient to obtain the information required to analyze the process of requirement and selection within the organization. It has been found that the organization has a sound understanding of what process need to be used in order to achieve effective recruitment and selection of Life advisors. In addition to this, there are several recommendations for the organization. For any firm to be successful the main objectives should be: •

Sustainable long-term growth,

•

Stable income and

•

Asset preservation;

•

Need to emphasize quality and diversification in both equity and fixed income asset classes.

•

Focus should be on long-term consistent investment performance.

•

Emphasis towards training and enhancing skills of recruiter needs to be more.

•

Invest more in current staff than in Recruitment:

•

Conduct internal audit.

•

Be Creative

•

Understand and manage salary:

. The general perception of life insurance has to change in India before progress is made in this field.

48

PRE LICENSING OF LIFE ADVISORS

BIBLIOGRAPHY: •

www.irdaindia.org

•

www.bharti-axalife.com

•

www.wikipedia.org

•

www.ibef.org

•

www.pdfcoke.com

•

NAAF

•

General Books

•

Life insurance Reference books

Indian brand equity forum

49

PRE LICENSING OF LIFE ADVISORS

Annexure 1

PERSONAL DETAIL FORM DATE: NAME:

CONTACT NUMBER:

FATHER’S NAME: AGE:

D.O.B:

OCCUPATION: ADDRESS:

FAMILY HISTORY: NAME

AGE

FATHER: MOTHER: BROTHER: SISTER:

E-MAIL:-

50

OCCUPATION

PRE LICENSING OF LIFE ADVISORS

Annexure 2 Broad syllabus for pre- recruitment exam for life insurance agent: 1. Introduction to insurance: •

What is insurance

•

Purpose and need of insurance

•

Classification of risk

•

The human asset

•

Insurance as a social security tool

•

Role of insurance in economic development

2. Principles of life assurance: •

life insurance contracts

•

principle of utmost good faith

•

insurable interest

•

principle of indemnity

•

different risks

3. Premium and bonus •

what is premium?

•

Premium calculation

•

Life fund

•

Actuarial valuation

•

Bonus

4. life insurance products •

basic elements

•

some popular plans

•

variable insurance plans

•

salary saving schemes

•

riders

•

annuities

51

PRE LICENSING OF LIFE ADVISORS •

group insurance

5. underwriting •

introduction

•

classification of risk

•

financial underwriting

•

assessing risk

•

adverse selection

•

non medical underwriting

•

recent rends

6. insurance documents •

proposal form and personal statements

•

first/ renewal payment receipt

•

policy document

•

endorsement

•

prospectus

7. policy conditions •

age, days of grace

•

lapse and non- forfeiture

•

paid up value

•

revival

•

assignment, nomination

•

surrenders and loan

•

foreclosure

•

alterations

•

married women’s property act policy

8. claims •

maturity claims

•

survival benefit payments

•

death claims

52

PRE LICENSING OF LIFE ADVISORS •

accident and disability benefits

•

claims concessions.

9. unit linked life insurance products •

what is linked policy

•

option of funds

•

net asset value (NAV)

•

flexibility

•

lock in

•

charges

•

ULIP and traditional insurance

•

Annuities and pensions

10. insurance agency •

definition of an agent

•

agents’ regulation

•

procedure for becoming an agent

•

methods of remunerating agents

•

agency as a profession

•

functions of agents

•

responsibilities of an agent

•

pre requisites for success

•

ethical behavior

11. law and regulations •

insurance act 1938

•

LIC act 1956

•

IRDA act 1999

•

Consumer protection act 1986 (COPA)

•

Ombudsman

•

Income tax act

•

MWP act

53

PRE LICENSING OF LIFE ADVISORS •

Rural and social sector

•

Micro insurance

54