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  3. 3. PREFACEThe liberalization of the Indian insurance sector has been the subject of much heateddebate for some years. The policy makers where in the catch 22 situation wherein forone they wanted competition, development and growth of this insurance sector whichis extremely essential for channeling the investments in to the infrastructure sector. Atthe other end the policy makers had the fears that the insurance premia, which aresubstantial, would seep out of the country; and wanted to have a cautious approach ofopening for foreign participation in the sector.As one of the rare occurrences the entire debate was put on the back burner and theIRDA saw the day of the light thanks to the maturing polity emerging consensus amongfactions of different political parties. Though some changes and some restrictive clausesas regards to the foreign participation were included the IRDA has opened the doors forthe private entry into insurance.Whether the insurer is old or new, private or public, expanding the market will presentmultitude of challenges and opportunities. But the key issues, possible trends,opportunities and challenges that insurance sector will have still remains under therealms of the possibilities and speculation. What is the likely impact of opening upIndia’s insurance sector?The large scale of operations, public sector bureaucracies and cumbersome procedureshampers nationalized insurers. Therefore, potential private entrants expect to score inthe areas of customer service, speed and flexibility. They point out that their entry willmean better products and choice for the consumer. The critics counter that the benefitwill be slim, because new players will concentrate on affluent, urban customers asforeign banks did until recently. This seems to be a logical strategy. Start-up costs-suchas those of setting up a conventional distribution network-are large and high-endniches offer better returns. However, the middle-market segment too has greatpotential. Since insurance is a volumes game. Therefore, private insurers would be bestserved by a middle-market approach, targeting customer segments that are currentlyuntapped 3
  4. 4. EXECUTIVE SUMMARYIn today’s corporate and competitive world, I find that insurance sector has themaximum growth and potential as compared to the other sectors. Insurance has themaximum growth rate of 70-80% while as FMCG sector has maximum 12-15% ofgrowth rate. This growth potential attracts me to enter in this sector and RELIANCELIFE INSURANCE has given me the opportunity to work and get experience in highlycompetitive 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. • 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 . 4
  5. 5. INTRODUCTION TO THE INDUSTRYNEED OF LIFE INSURANCE. The functions of Insurance can be bifurcated into two parts:1. Primary Functions2. Secondary Functions3. Other FunctionsThe primary functions of insurance include the following:Provide Protection - The primary function of insurance is to provide protection againstfuture 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 againsteconomic loss, by sharing the risk with others.Collective bearing of risk - Insurance is a device to share the financial loss of few amongmany others. Insurance is a mean by which few losses are shared among larger numberof people. All the insured contribute the premiums towards a fund and out of which thepersons exposed to a particular risk is paid.Assessment of risk - Insurance determines the probable volume of risk by evaluatingvarious factors that give rise to risk. Risk is the basis for determining the premium ratealsoProvide Certainty - Insurance is a device, which helps to change from uncertainty tocertainty. 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 suitabledevice to prevent unfortunate consequences of risk by observing safety instructions; 5
  6. 6. installation of automatic sparkler or alarm systems, etc. Prevention of losses cause lesserpayment to the assured by the insurer and this will encourage for more savings by way ofpremium. Reduced rate of premiums stimulate for more business and better protection tothe insured.Small capital to cover larger risks - Insurance relieves the businessmen from securityinvestments, by paying small amount of premium against larger risks and uncertainty.Contributes towards the development of larger industries - Insurance providesdevelopment 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 unitswhich 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, insuranceis a compulsory way of savings and it restricts the unnecessary expenses by the insuredsFor the purpose of availing income-tax exemptions also, people invest in insurance.Source of earning foreign exchange - Insurance is an international business. The countrycan earn foreign exchange by way of issue of marine insurance policies and various otherways.Risk Free trade - Insurance promotes exports insurance, which makes the foreign traderisk free with the help of different types of policies under marine insurance cover. 6
  7. 7. THE HISTORY OF INDIAN INSURANCE INDUSTRYLife InsuranceIn 1818 the British established the first insurance company in India in Calcutta, theOriental Life Insurance Company. First attempts at regulation of the industry were madewith the introduction of the Indian Life Assurance Companies Act in 1912. A number ofamendments 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 collectstatistical information about the insured and the high level of protection the Act gave tothe public through regulation and control. When the Act was changed in 1950, this meantfar reaching changes in the industry. The extra requirements included a statutoryrequirement of a certain level of equity capital, a ceiling on share holdings in suchcompanies to prevent dominant control (to protect the public from any adversarialpolicies from one single party), stricter control on investments and, generally, muchtighter control. In 1956, the market contained 154 Indian and 16 foreign life insurancecompanies. Business was heavily concentrated in urban areas and targeted the higherechelons of society. “Unethical practices adopted by some of the players against theinterests of the consumers” then led the Indian government to nationalize the industry. InSeptember 1956, nationalization was completed, merging all these companies into theso-called Life Insurance Corporation (LIC). It was felt that “nationalization has lent theindustry 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 regulatethe life insurance business.1928: The Indian Insurance Companies Act enacted to enable the government to collectstatistical information about both life and non-life insurance businesses.1938: Earlier legislation consolidated and amended to by the Insurance Act with theobjective of protecting the interests of the insuring public.1956: The market contained 154 Indian and 16 foreign life insurance companies. 7
  8. 8. 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 tospread the message of life insurance in the country and mobilise people’s savings fornation-building activities. LIC with its central office in Mumbai and seven zonal officesat Mumbai, Calcutta, Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through100 divisional offices in important cities and 2,048 branch offices. LIC has 5.59 lakhactive agents spread over the country.The Corporation also transacts business abroad and has offices in Fiji, Mauritius andUnited Kingdom. LIC is associated with joint ventures abroad in the field of insurance,namely, Ken-India Assurance Company Limited, Nairobi; United Oriental AssuranceCompany 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 unitlinked life insurance and pension policies in U.K.In 1995-96, LIC had a total income from premium and investments of $ 5 Billion whileGIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LICs incomegrew at a healthy average of 10 per cent as against the industrys 6.7 per cent growth inthe 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 povertyline, with 50 per cent subsidy in the premium rates. LICs claims settlement ratio at 95per cent and GICs 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 perannum 8
  9. 9. IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVEBEEN PERMITTED TO ENTER INTO INSURANCE BUSINESS: -The introduction of private players in the industry has added to the colors in the dullindustry. The initiatives taken by the private players are very competitive and have givenimmense competition to the on time monopoly of the market LIC. Since the advent of theprivate players in the market the industry has seen new and innovative steps taken by theplayers in this sector. The new players have improved the service quality of theinsurance. 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 the75% of the insurance sector but the upcoming natures of these private players are enoughto give more competition to LIC in the near future. LIC market share has decreased from95% (2002-03) to 70 %( 2007-08) Insurance Companies in India (April 2008)Bajaj Allianz Life AMP Sanmar Life Insurance Birla Sun Life InsuranceInsuranceAviva Life Insurance HDFC Life Insurance ICICI Prudential Life InsuranceMax Newyork Life Metlife India Insurance Reliance Life InsuranceInsuranceShiram Life Insurance Tata AIG Life Insurance SBI Life InsuranceBharti AXA Life ING Vysya Life Insurance Sahara Life InsuranceInsuranceKotak Mahindra General Insurance Royal SundaramInsurance Corporation India Insurance1. HDFC Standard Life Insurance Company Ltd.HDFC Standard Life Insurance Company Ltd. is one of India’s leading private lifeinsurance companies, which offers a range of individual and group insurance solutions. Itis a joint venture between Housing Development Finance Corporation Limited (HDFCLtd.), India’s leading housing finance institution and The Standard Life AssuranceCompany, a leading provider of financial services from the United Kingdom. Theircumulative premium income, including the first year premiums and renewal premiums isRs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over11,00,000 individuals out of which over 3,40,000 lives have been covered through ourgroup business tie-ups. 9
  10. 10. 2. Max New York Life Insurance Co. Ltd.Max New York Life Insurance Company Limited is a joint venture that brings togethertwo large forces - Max India Limited, a multi-business corporate, together with NewYork Life International, a global expert in life insurance. With their various Products andRiders, there are more than 400 product combinations to choose from. They have anational 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, apremier financial powerhouse and Prudential plc, a leading international financialservices group headquartered in the United Kingdom. ICICI Prudential was amongst thefirst private sector insurance companies to begin operations in December 2000 afterreceiving approval from Insurance Regulatory Development Authority (IRDA). Thecompany has a network of about 56,000 advisors; as well as 7 bancassurance and 150corporate agent tie-ups.4. Om Kotak Mahindra Life Insurance Co. Ltd.Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between KotakMahindra 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 andSun Life financial Services of Canada.6.SBI Life InsuranceSBI Life Insurance is a joint venture between the State Bank of India and BNP ParibasAssurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 croresand a Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNPParibas Assurance the remaining 26%.State Bank of India enjoys the largest banking franchise in India. Along with its 7Associate Banks, SBI Group has the unrivalled strength of over 14,500 branches acrossthe country, arguably the largest in the world. BNP Paribas Assurance is the insurancearm of BNP Paribas - Euro Zone’s leading Bank. BNP Paribas, part of the worlds top 10 10
  11. 11. group of banks by market value and part of Europe top 3 banking companies, is one ofthe oldest foreign banks with a presence in India dating back to 1860. BNP ParibasAssurance is the forth largest life insurance company in France, and a worldwide leaderin Creditor insurance products offering protection to over 50 million clients. BNPParibas Assurance operates in 42 countries mainly through the bancassurance andpartnership model.SBI Life has a unique multi-distribution model encompassing Bancassurance, Agencyand Group Corporates.SBI Life extensively leverages the SBI Group as a platform for cross-selling insuranceproducts along with its numerous banking product packages such as housing loans andpersonal loans. SBI’s access to over 100 million accounts across the country provides avibrant base for insurance penetration across every region and economic strata in thecountry ensuring true financial inclusion.7. Allianz Bajaj Life Insurance Company Ltd.Bajaj Allianz Life Insurance Company Limited is a Union between Allianz SE, one ofthe world’s largest Life Insurance companies and Bajaj Auto, one of the biggest 2- &- 3wheeler manufacturers in the world.Allianz SE is a leading insurance conglomerate globally and one of the largest assetmanagers in the world, managing assets worth over a Trillion Euros (Over R. 55,00,000crores). 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 BajajAllianz customer delight is our guiding principle. Ensuring world-class solutions byoffering customized products with transparent benefits, supported by best technology isour business philosophy.DATA ABOUT TOTAL REVENUE COLLECTIONS IN 2006-07 11
  12. 12. Accelerated Growth Fiscal Year No. of policies sold in FY New Business in FY(Rs. in cr.) 2001-2002(6 mths) 21,376 7 2002-2003 1,15,965 69 2003-2004 1,86,443 180 2004-2005 2,88,189 857 2005-2006 7,81,685 2717 2006-2007 20,79,217 4270OTHER 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. 12
  13. 13. Marketing of Insurance In IndiaInsurance is in a manner of speaking the last frontier in the financial sector to open. It isalso a sector, which leads to benefits across the full spectrum, from the individual whonow have wider choices, to the economy, which see increased savings, to theinfrastructure sector, which can look forward to long term funding being available. In anunder-insured economy, newer channels of distribution have to be utilized to intensifythe reach of insurance both in urban and rural markets. This will create huge employmentopportunities not only within insurance companies but also as agents and consultants ofinsurance companies.Marketing Mix PoliciesDifferent companies can choose to position themselves differently and hence theMarketing Mix is different. However, there are certain common characteristics that onecan cull out from the possible strategies that companies adopt.Product:The development of flexible products to suit individual requirements is what willdifferentiate the winners from the also-rans. The key to success is in providing insurancesolutions, not standardized insurance products. The concept of riders/optional benefitshas already been a huge innovation brought about by the new players, which has led tocustomization of products for individual needs. However, companies may differentiatethemselves 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 tofocus on. The channel options are - tied agency force, corporate agents and brokers andthis is an area where different companies will make different choices. Many companieslike HDFC Standard Life are focusing on all channels whereas companies like Max NewYork Life are focusing on the tied agency force only. Customer interface will be a keychallenge for life insurance companies and includes every that interaction that thecustomer has with the company, such as sales, new business underwriting, policyservicing, premium payments, claim processing and so on. Technology can play a crucialrole in delivering the highest standards of service set by the company and it will beimperative for any serious player to excel in all of these. 13
  14. 14. Price:Price is a relevant differentiator only in two segments - pure term insurance and in pureannuities. Here too, service delivery and financial strength will need to be present at aminimum acceptable level for price to be a relevant differentiator. In case of savingsoriented products, long-term returns generated are more relevant than just the price of theproduct. A focus on generating good investment performance and keeping a tight controlon costs help in generating good long-term maturity value for customers. Norms havebeen laid down on all of these by IRDA and adhering to these while delivering goodreturns will be a challenge.Promotion and Advertising:The level of demand is latent and will have to be activated considerably. The marketneeds to be developed. Greater awareness of insurance and the need to have it as aprotection tool rather than as a tax planning measure needs to be appreciated by theIndian people. Various communication tools including advertising, direct marketing androad shows contribute to all this and different companies take different approaches onthese.Process:Cashless settlement: One of the most defining and customer-friendly changes thatwe’ve seen in recent years relates to the way claims settlements are made. The advent ofthe third-party administrator (TPA) regime has facilitated the transition to the hugelyconvenient era of cashless settlement of health and auto insurance claims. TPAs areentities who process claims on behalf of insurers: the IRDA licenses them after it issatisfied that they have the financial strength, the trained manpower, the infrastructureand the skills to undertake this activity.Likewise, with auto insurance, the TPA ties up with garages and authorized servicecenters for cashless settlement of auto insurance claims.Lower premiums: The spirit of competition and the broadening of the risk experience ofinsurance companies have contributed to a fall in premiums over the years. That’sbecause, other things being equal, an insurer who covers the lives just of 10 people bearsa higher risk than an insurer who covers the lives of, say, 100 people. Further, a broader 14
  15. 15. base will provide greater efficiencies on costs such as distribution, management andclaims. A broad basing of the mortality experience, therefore, gives insurers theelbowroom to compete by lowering premiums, and that trend is expected to continue.Premium payment flexibility: Insurers have imparted certain flexibility to premiumpayment options in order to address this concern. For instance, one now have the optionto 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 theconcept of ‘automatic cover maintenance’ to protect your policy from lapsing owing toyour omission to pay your premium on time. Under this, in the event of your not payingthe 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 diminishesyear 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 usersare comparatively lesser than countries such as US, the offline mode will be preferred inIndia. Although the distribution model is largely agent-based, wherever the customer isin 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 relationshipson a long-term basis is this factor. No matter what distribution strategy a companyadopts, customer relationship has to be taken care of in order to maintain the customerbase on a long-term basis. 15
  16. 16. INTRODUCTION TO COMPANYRELIANCE LIFE INSURANCE CO. LTD.Our FounderFew men in history have made as dramatic a contribution to their country’s economicfortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have leftbehind 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.• 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.• 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.• 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.• 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. 16
  17. 17. • 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.• 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. 17
  18. 18. RELIANCE CAPITAL Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of theReliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of India’s leadingprivate sector financial services companies, and ranks among the top 3 private sectorfinancial services and banking companies, in terms of net worth. Reliance Capital hasinterests in asset management and mutual funds, stock broking, life and generalinsurance, proprietary investments, private equity and other activities in financialservices.• 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.• 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.• 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 inOctober 2005. The business was thereafter renamed Reliance Life Insurance. TodayRLIC has over 20 products - 16 individual plans and 4 employee benefit plans -including the two new innovative products – Connect to Life and Reliance MoneyGuarantee Plan - that were launched recently.Reliance Life Insurance Company (RLIC) has been accorded the ISO 9001-2000certificate for its best-in-class management systems in Quality, Customer & Processorientation.With this, RLIC is one of the only two life insurance companies in India to get ISO9001:2000 certification covering all functional areas.The scope of the certification covers the entire gamut of business processes rangingfrom product design, sales - front-end and back-end operations, customer care andinvestment, to all business support functions. The certification has been awarded by 18
  19. 19. internationally acclaimed Bureau Veritas and is valid till 2010 subject to continuedsatisfactory operation of RLICs Quality Management System."This certification is a significant milestone in our continuous quest to offer innovativeproducts, outstanding services and improved customer satisfaction. It indicates that wehave been able to install systems, processes & performance measures that are in line withthe best in the industry and will form the basis of our business growth in future", saidP Nandagopal, CEO, Reliance Life Insurance Company.Reliance Life Insurance is the fastest growing life insurance company in India and hasan incremental market share of 4 per cent amongst private insurers. The company hasthird largest distribution network in terms of number of agents operating out of 143locations across the country.CORPORATE OBJECTIVEAt Reliance Life Insurance, we strongly believe that as life is different at every stage, lifeinsurance must offer flexibility and choice to go with that stage. We are fully preparedand committed to guide you on insurance products and services through our well-trainedadvisors, backed by competent marketing and customer services, in the best possibleway. • 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. 19
  20. 20. CORPORATE VISION AND MISSIONVisionEmpowering everyone live their dreams.MissionCreate unmatched value for everyone through dependable, effective, transparent andprofitable life insurance and pension plans.Our GoalReliance Life Insurance would strive hard to achieve the 3 goals mentioned below:Emerge as transnational Life Insurer of global scale and standardCreate best value for Customers, Shareholders and all Stake holdersAchieve impeccable reputation and credentials through best business practicesAchievements • 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) • 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. • A Company that has crossed 1.7 Million policies in just 2 years of operation, post take over of AMP Sanmar business. • Initiated Express Life – an Unique ’Over the Counter’ sales process for Unit Linked Insurance Policies in the Industry. • 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. • RLIC continues to be one of the two Life Insurance companies in India to be certified ISO 9001:2000 for all the processes. 20
  21. 21. • 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 Total Share Growth % 2007 2008 (%) LIC 8580.84 7524.56 -12 52.55 ICICI Prudential 1056.45 1,590.27 51 11.11 Bajaj Allianz 731.85 829.24 13 5.79 SBI Life 426.39 1,148.67 169 8.02 HDFC Standard 355.93 490.40 38 3.42 Max New York 289.74 501.16 73 3.50 Reliance Life 204.10 557.33 173 3.89 Birla Sun Life 174.63 501.53 187 3.50 Total Private 3930.95 6,795.64 73 47.45 Total Market 12511.80 14,320.20 14 100.00Reliance life expect to break even by 2010-11 and until then they may require anadditional 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 standsaround 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 introduceMICROINSURANCE product.The company is planning to double its manpower base from the present level of14000 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 businessnetwork and now it has 744 branches. 21
  22. 22. As only 30% of the business comes from the top 25 cities and the balance comes70% comes through the other smaller towns, company has followed a consciousstrategy to setup branches in smaller towns to tap the blue oceans. RECRUITMENT OF ADVISORSAdvisors are the backbone of any life insurance company.They play the most importantand 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 asAdvisors 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 insurancecompanies have become limitless. To tap this opportunity, they require insurance agentsbecause agents are one of the most significant modes of bringing in much-neededbusiness to the company.At Reliance Life Insurance, you will not merely be an insurance agent—you will be aFinancial Advisor. You will have an important role to play because you have to givevaluable 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. 22
  23. 23. Benefits Available for AdvisorsApart from being remunerated well, Advisors get a lot of recognition and can win awardsby 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 globetrot is to become an advisors with RLIC.Become an Advisor to really see the benefits. It is told that "seeing is believing . We areahead and we say "experiencing is believing" are you ready to experiment.Number of Agents Number of AgentsCompany Name Dec 07 (Nos)Aviva Life 31,390Bajaj Allianz Life 273138Bharti Axa 10016Birla Sunlife 86264Future Generali 0HDFC Std Life 132662ICICI Prudential 262893ING Vysya 48428Kotak 34714Max New York 29,876MetLife 32389Reliance Life 157052Sahara Life 12244SBI Life 33969Shriram Life 16521TATA AIG 32528LIC 1159586* The Figures are provisional and unaudited 23
  24. 24. PRODUCTS OFFERED BY RELIANCELIFEReliance has number of insurance products in it’s Portfolio. It offers different productsfor different customer profile.It target its product according to the needs of people whichmake them its customer.Protection PlansIn today’s uncertain world, there could be calamity at every step of the life. It is up toyou to ensure that your family stays protected always.Reliance Protection Plans helps you do exactly the same. You have a wide range ofoptions to choose a plan from. Right from limited period plans to lifetime protectionplans, 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 toprovide you the peace of mind. Investing in Reliance Protection Plans would mean yourfamily’s future is in safe hands.1.Reliance Term PlanInvest in the Reliance Term Plan, a pure life insurance plan that offers youcomprehensive and affordable coverage for a limited period of time to suit your needs.2. Reliance Simple Term PlanMake a smart investment move by investing in the cost-effective Reliance Simple TermPlan, which offers you comprehensive coverage for a specified period of time to suityour need.3. Reliance Special Term PlanImagine a life insurance policy, which on maturity returns to you all the premiums youhad paid for your basic policy. The Reliance Special Term Plan offers that and muchmore. 24
  25. 25. 4. Reliance Credit Guardian PlanThe Reliance Credit Guardian Plan secures your family from any loan liabilities youhave incurred in case of your untimely demise. On survival at maturity, you will bereturned all the premiums paid for the basic policy.5. Reliance Special Credit Guardian PlanInvest in the Reliance Special Credit Guardian Plan and protect your family from anyloan liabilities you have incurred. On survival at maturity, all premiums paid for thebasic policy will be returned to you.6. Reliance Endowment PlanThe Reliance Endowment Plan gives you financial independence by allowing you todecide the amount of Sum Assured based on your current financial position and expectedfuture expenses… Dream!!..7. Reliance Special Endowment PlanImagine an endowment plan that protects you for a certain period even after you havereceived your lump sum—that is exactly what the Reliance Special Endowment Planoffers you with other added benefits.8. Reliance Connect 2 LifeThe Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keeppace with your changing lifestyle. As your income grows, your family will havesufficient cover.9. Reliance Whole Life PlanGive your family a lifetime of timely financial support by investing in the RelianceWhole Life Plan. This will help you enjoy your life to the fullest.10. Reliance Wealth + Health PlanInvest in the Reliance Wealth Health Plan and balance your health needs and wealthneeds, without compromising on either health or wealth. 25
  26. 26. 11. Reliance Cash Flow PlanInvest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance planand easy liquidity through lump sum cash, which means you can get a percentage of theSum Assured at periodic intervals.Savings & Investment PlansIn life, you have always given your family whatever they have wanted. Yet, there aresome promises you have to fulfil, such as taking your family for a vacation, or buyingthat 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 foryour family’s needs.Enjoy life without worrying about the promises you have made—we are here to fulfilthem.1. Reliance Super Invest Assure PlanReliance Super Invest Assure is a complete plan which addresses your vital needs likeFlexibility, 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 - InsuranceReliance TIPS -Series I- Insurance is a Unit Linked Investment + Insurance Plan thathelps you meet all your financial needs, without the complexity of managing multipleproducts.3. Reliance Wealth + Health PlanInvest in the Reliance Wealth Health Plan and balance your health needs and wealthneeds, without compromising on either health or wealth. 26
  27. 27. 4. Reliance Automatic Investment PlanThe Reliance Automatic Investment Plan is an enhanced unit linked plan that allows youto choose the right investment mix to reap maximum benefits. It also provides you withenhanced Life Cover.5. Reliance Money Guarantee PlanTo 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 perfectbalance between Protection and Savings.6. Reliance Cash Flow PlanInvest in the Reliance Cash Flow Plan and reap the dual benefits of a life insurance planand easy liquidity through lump sum cash, which means you can get a percentage of theSum Assured at periodic intervals.7. Reliance Market Return PlanThe Reliance Market Return Plan gives you insurance protection and allows you tobenefit from investment growth. It works through your life and meets the changingrequirements you may have from time to time.8. Reliance Endowment PlanThe Reliance Endowment Plan gives you financial independence by allowing you todecide the amount of Sum Assured based on your current financial position and expectedfuture expenses.9. Reliance Special Endowment PlanImagine an endowment plan that protects you for a certain period even after you havereceived your lump sum—that is exactly what the Reliance Special Endowment Planoffers you with other added benefits. 27
  28. 28. 10. Reliance Whole Life PlanGive your family a lifetime of timely financial support by investing in the RelianceWhole Life Plan. This will help you enjoy your life to the fullest.11. Reliance Golden Years PlanThe Reliance Golden Years Plan helps you save systematically and generate the much-needed corpus to help you enjoy life after retirement.12. Reliance Golden Years Plan ValueRealise all your dreams of playing golf, or going for a world tour after retirement byinvesting in the Reliance Golden Years Plan Value, which helps you generate the amountyou will need for the future.13. Reliance GoldenYears Plan PlusInvest in the special Reliance Golden Years Plan Plus that not only helps you build thecorpus you need after, but also collects a basic minimum amount in case something wereto happen before you realise your dreams.14. Reliance Connect 2 Life PlanThe Reliance Connect 2 Life Plan gives you the option to upgrade your life cover to keeppace with your changing lifestyle. As your income grows, your family will havesufficient cover. 28
  29. 29. Retirement PlansYou 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 afterretirement.A Reliance Retirement Plan will help you save money for your retirement. It ensures thatyou continue to get some income after retirement thereby ensuring that you do not haveto 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 ownterms.1. Total Investment Plan II - PensionWhen you invest in the Reliance Total Investment Plan, you give yourself the assurancethat you will make each one of your dreams come true!.2. Reliance Golden Years PlanThe Reliance Golden Years Plan helps you save systematically and generate the much-needed corpus to help you enjoy life after retirement.3. Reliance Money Guarantee PlanTo 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 perfectbalance between Protection and Savings...Child Plans 29
  30. 30. Being a parent is one of the joys of life. Your child looks up to you and depends on youfor 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 yourchild’s future needs. Be it higher education, his or her first home or any otherrequirement, 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 giveyour child.1. Reliance Super InvestAssure PlanReliance Super InvestAssure is a complete plan which addresses your vital needs likeFlexibility, 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 PlanSave systematically and secure the financial future of your child by investing in theReliance Child Plan and let your child enjoy today without worrying about tomorrow.3. Reliance Secure Child PlanReliance Life Insurance presents a unit linked insurance plan that secures your child’sfinancial future, leaving you free from worry.4. Reliance Wealth + Health PlanInvest in the Reliance Wealth Health Plan and balance your health needs and wealthneeds, without compromising on either health or wealth.SOME LUCRATIVES PLANS WHICH RELIANCE OFFERSRELIANCE ENDOWMENT PLANIt takes a lot for a dream to become a reality. And money is surely an important part of it. 30
  31. 31. Reliance Endowment Plan gives you just the financial independence to realise yourdreams in the future. It lets you decide how much you would like to set as your SumAssured based on your current financial position and your expected future expenses.So, go ahead... dream!!.Key Features1 .On maturity receive Sum Assured plus bonuses2. Wealth creation through bonus additions3. More Value for your money by way of High Sum Assured Rebate4. 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 and6.Permanent Disablement Rider7. Choose to avail of Policy Loan after three yearsCASH FLOW PLANWhile most insurance plans block your money for a certain period of time, RelianceCash Flow Plan gives you the double benefit of life insurance along with easy liquiditythrough 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 fortomorrow by giving you the flexibility of receiving a specified percentage of the SumAssured at specified intervalsKey FeaturesEasy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at theend of every three yearsWealth creation through bonus additionsOn maturity, accumulated bonuses along lump sum payout receive with finalMore value for your money by way of High Sum Assured RebateFull Sum Assured plus bonuses in case of your unfortunate death. This isover and above the Survival Benefits already paidOption to add two Riders - Critical Illness Rider & Accidental Death Benefit and Totaland Permanent Diablement Rider.RELIANCE HEALTH + WEALTH PLAN 31
  32. 32. UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENTPORTFOLIO 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 onyour 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 keepsincreasing constantly and yet your health does not take a backseat. The RelianceWealth+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 yourlife can determine the type of health coverage you need.India has made rapid strides in the health sector. Since Independence, life expectancy hasgone up markedly and survival rates have also increased, still critical health issuesremain. Infectious diseases continue to claim a large number of lives.Perhaps youre a freshly minted graduate, a joyful newlywed, retiring early or betweenjobs. Maybe youre running your own business or raising a family — or both. In any ofthe situations, GOOD or BAD, health cannot be taken for granted. All are affected by therising 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 LifeInsurance Company Limited, is designed to work in conjunction with contributionstowards savings. The uniqueness of this plan is that it not only provides benefits forcovered injuries but also for other injuries by encashment from the unit fund. This planfrom Reliance Life offers the Hospitalization and Surgical Benefits and also coversCritical Illnesses. In short this plan provides you with a personalised quality health coverthat fits your lifestyle. 32
  33. 33. Key FeatureA Unit Linked plan with Unique Savings ComponentTwin benefit of market linked return and health protectionChoose from two different plan optionsFlexibility to take care of your family’s healthFlexibility to switch between funds / plan optionsOption to pay Top-upsOption to package with multiple ridersLiquidity through partial withdrawalsRELIANCE SUPERINVESTASSURE PLANUNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENTPORTFOLIO 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 completeflexibility to gain control over your investments vis-à-vis your financial needs and riskappetite.We value your regular investments and thus reward you with guaranteed additions thuspromising unmatched benefits. This plan also offers you a unique option of moving froma conservative fund to an aggressive fund systematically, to take advantage of the Rupeecost 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 InvestAssurePlanKey features – Reliance Super InvestAssure PlanTwin benefit of market linked return and insurance protection.Guaranteed additions at the rate of 50% of your first year’s basic premium at interval ofevery 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. 33
  34. 34. RELAINCE AUTOMATIC INVESTMENT PLANUNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENTPROTFOLIO IS BORNE BY THE POLICYHOLDERLife is indeed delightful if you have the freedom to make choices. The RelianceAutomatic Investment Plan gives you just that ample freedom! And we make thisfreedom more enjoyable by giving you a sense of security. Whether it’s your insuranceor 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 comesFIRST… always.This plan promise enhanced Life Cover, with complete flexibility to gain control overyour 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 UnitLinked plan addressing comprehensive needs to strike that perfect balance of protectionand Savings with full flexibility as you grow in your career. The Reliance AutomaticInvestment Plan gives you full flexibility to choose just the right investment mix to reaphigher benefits.Key FeaturesTwo plan option to choose from Ready-made and Tailor-madeLife Stage asset allocation to ensure automatic change in investment patterns, under theReady-made Plan optionFreedom to decide your own fund mix based on your risk profile under the Tailor-madePlanAllows Systematic Transfer Plan to average out the cost of unit purchased in equalityRegular, limited, single premium paying optionsUnmatched flexibility through out ‘Exchange Option ‘Liquidity in the form of partial withdrawalOption to avail of Accidental Death and Total & Permanent Disability and TermInsurance riders 34
  35. 35. RELAINCE TOTAL INVESTMENT PLAN SERIES -1The journey of life, even though it may seem simple, comes with its own twists andturns, 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 wedesire a security that will help us follow our dreams, both financial and emotional. It isthis security that Reliance Life Insurance Company Limited promises to bring to youwith 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 forinvestment, 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 thefamily will require additional money. We provide you that kind of flexibility which suitsyou best at your convenience. Similarly on a promotion you may want to increase yourinvestments to create a large kitty for future expenses. As you progress on this ladder oflife we provide you the platform to increase your investment. Usually you would requiremultiple financial products to meet all your needs and would have to actively managethem. However with the Reliance TIPS-I -Insurance, Unit Linked Investment +Insurance Plan you can meet all your financial needs, without the complexity ofmanaging multiple productsKey FeaturesThis is a Single Premium unit linked savings life insurance plan with options to purchasethe same plan with reduced allocation charges in subsequent policy years. Since morePremium is allocated towards investment due to lower allocation charges on subsequentpurchases, greater would be the returns. Purchasing the same plan in the subsequentyears 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” 35
  36. 36. Once you purchase the first policy there will full flexibility, as to when second andsubsequent purchase can be made and how much Premium should be paid for eachpurchase subject to the following:The minimum Premium on each purchase should be at least Rs. 25000 for life assuredaged 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 willbe 9, 8, 7 and 6 respectively.New policy can be purchased only if all the previous polices are in force on the date ofpurchase of new policy.Plan Objective :The pace setter plan with protection to life which givesTax benefit under Sec. 80C and Sec. 10(10D)* of Income Tax Act 1961Investment opportunity with flexibilityLife protectionControl over your investmentsReliance Life Insurance launches “Express Life”, Indias First retail policyinitiativeFirst-of-its-kind initiative in the sector offering life insurance cover almost instantly tocustomersCustomers will be offered policy document “Over the counter” on completion ofdocumentation, first “Express Life Policy” issued today“Express Life” service will be available pan India across all Reliance Life BranchOfficesChandigarh, November 9, 2007: Reliance Life Insurance, one of the leading LifeInsurance player in India, today launched ‘Express Life’ – an innovative and customerfriendly service that assures fastest way of getting a life insurance cover.With this, Reliance Life Insurance becomes the first Life Insurance player in the countryto offer this novel life insurance process to its customers for a cover of upto Rs 10 lakh.. 36
  37. 37. This is the first of its kind initiative in the sector that would offer life insurance coveralmost instantly to customers, without the hassles of long waiting period, follow-ups andmedical checkups.Speaking on the launch of Express Life, Mr. P. Nandagopal, CEO, Reliance LifeInsurance Company Limited, said, “This unique process will redefine the way insuranceis bought and sold in India. Express Life is a testimony of our constant endeavor todelight our customers with innovative and need based solutions promptly”.Customers who fall between the age group of 18 to 45 years and fulfill the qualificationcriteria, can avail the benefits of, ‘Express Life’ service. It is customer friendly servicewherein on submission of the duly filled application form, mandatory documents and therequisite premium cheque, customers are assured commencement of life insurance coverin 3 working days. The letter & the policy kit are handed to the customer over thecounter.The company also issued its first policy under the “Express Life” initiative to its firstcustomer in Chandigarh today. The Express Life service is available under the RelianceLife Insurance Automatic Investment Plan, Money Guarantee Plan, Market Return Planand Golden Years Plan. 37
  38. 38. SALES PROCESS WHICH I USED INRELIANCE LIFE: Our sales process involved Personal selling. Our product being an intangibleone, it needs the company personnel to go and persuade the customer via addressing tohis doubts and concerns. We need to undergo requisite interaction with the prospectivecustomers to gauge their mood with respect to different price levels. As the salespersonnel are also aware of the competitors’ price and, based on the market reaction andcustomers’ sentiments, they can advise a more prudent price policy to the management. The sales person actually stimulates and generates enough interest in the customerand helps him make the final decision to buy the product.Steps in personal sellingPersonal selling involves six important steps –Prospecting Preapproach Approach Follow-upPresentation ClosingProspecting Prospecting is the process of identifying the prospective buyers of the product. Theprospects are those who have the need or will to buy and the power to pay. A prospect isqualified if he has the authority, need, ability and eligibility to buy. In our contextprospects used to be the owners in case of a small company and Promotions &Advertising head in that of a big organization. 38
  39. 39. Ways of identifying a prospectAcquaintance Reference: A satisfied customer can be a good source of informationabout the names, addresses and phone numbers of the prospects who may be among hisacquaintances, relatives or family members. In addition we used to give reference of ourother satisfied customer to motivate the prospect to buy, thus obtaining furtherreferences.Cold Calling: In this method we used to randomly call a customer without anyreference, 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 forprospects from eminent people of society. Using such references, the prospects areinfluenced to make a buying decision since the recommendations of eminentpersonalities 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 ourproduct, price range, benefits etc. We also used to send mail/letters to our existingcustomers informing them about modifications made in the existing range.Company’s Record: We were provided contacts of the prospective customers fromcompany’s own records. We need to follow up with them and get appointments andmake sales therefore. 39
  40. 40. Pre – Approach Pre – Approach is the second step in the selling process which emphasizes thatsalesman should know, after identifying the prospects in the prospecting stage, theprospect’s likes and dislikes, his needs, preferences, habits, nature, behavior, economicand social status etc. Based on all this information, the salesman has the necessary toolsto 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 usin 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 toface. Here the salesman has the opportunity to understand and interact with the prospectin a better way. Hence, the salesman should put forward his best efforts to make the bestuse of this opportunity in getting the attention of the prospect and to convince him to buythe product. Hence, getting the attention of the prospect and persuading him to buy are the twomain objectives of a salesman. The importance of the approach cannot beoveremphasized since it is only after the salesman starts interacting directly with theprospect that the latter decides within the first few minutes whether he needs to purchaseor not. Similarly, the salesman has the opportunity to judge whether the prospect is in themood to buy or not. We generally found it very difficult to approach the prospects owing to their busyschedule. Also sometimes they are not interested in proposal. Despite this major hurdlewe kept on trying to obtain an appointment with the prospect. We need to be a littlediplomatic and polite in our approach.Different ways in which we gained access to the prospects: 40
  41. 41. Direct approach: We used to directly approach the prospect without any introductionwhatsoever and conduct an interview. We stated the benefits of our product and tried toarouse interest of the prospect.Advance Mailer: Another manner in which we used to seek an appointment with aprospect 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 attractivemanner 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 provideample detail about the product, benefits and schemes available with the product. Suchletters 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 abusiness. 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 abad 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 goodpresentation of the product can be gauged from the fact that many a time an attractivelypacked presentation is sufficient to sell the product.Requirements of a good presentation:We were required to explain the product with its features and price advantage to thecustomer in simple and easy terms. We ought to have thorough knowledge about ourproduct and also other competitive products available in the market. This helps insatisfying all the queries of the customers and answers them satisfactorily. 41
  42. 42. It is very important that customer be shown the kind of product he is looking for. Thisway 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 uselessif the sale does not take place. Therefore it’s most crucial stage for any salesman. Themain aim of the close is to convince the prospect to sign the contract form immediatelyrather than in future. For successfully closing the sale we needed to be attentive and open mindthroughout so as to be able to listen patiently to the prospect, face objections andconfidently answer any queries of them. 42
  43. 43. Distribution Channels in Life InsuranceLife insurance is always sold and seldom boughtTied Agency force nearly 11 lakh agents with LICConstraints in terms of area, reach, resources whichinhibit growth of businessA multiple distribution channels supplementary toexisting channel BancassuranceB Corporate AgentsC BrokersB Direct MarketingD Net MarketingN Telemarketing etc 43
  44. 44. SOME GENERAL INFORMATION ABOUT LIFEINSURANCE IN INDIA: Life Insurance Sector in India Significant channel for household savings into capital formation 2nd largestGDP penetration financial service of 4.1% in India after banking Life Insurance Total number of Statutoryrequirements to lives insured andprovide reach on books as on to rural areas March 31, 2008- 22 Crs Total Assets Under Management of Life Insurance Cos. as on March 31, 2008- Rs. 8,50,000 crores 44
  45. 45. HUGE POTENTIAL TO CATCH UP IN INDIAPer capita premium remains very low at Rs 1,408 indicating huge untapped potentialMcKinsey projects penetration to increase to between 5.1% - 6.2% of GDP by 2012 45
  46. 46. Demographic profile to witness favourable trends • Proportion of working age group to gradually increase to 68% • 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 productsIndia s proje cte d de m ogra phic profileP opula tionprofile (m ) 2001 2005 2006 2011 2016 2021 2026Under 15 363 368 360 351 343 337 32815-65 622 673 702 780 854 916 96765 and over 42 51 52 66 78 94 115Total 1,027 1,092 1,114 1,197 1,275 1,347 1,410Com positionUnder 15 35.3% 33.7% 32.3% 29.3% 26.9% 25.0% 23.3%15-65 60.6% 61.6% 63.0% 65.2% 67.0% 68.0% 68.5%65 and over 4.1% 4.7% 4.7% 5.5% 6.1% 7.0% 8.2%Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%De pe nde ncyra tio 65.1% 62.3% 58.7% 53.5% 49.3% 47.1% 45.9% 46
  47. 47. PRODUCT MIX New Business Index by Product m ix100% 11% 12% 6% 4% 80% 60% 40% 64% 40% 20% 43% 19% 0% Apr-06 to M ar-07 Apr-07 to S ep-07 N o n-Link e d Ind ivid u al Life Link e d Ind ivid u al Life G ro u p Annu ity P e ns io n H e alth  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 47
  48. 48. ROLE IN BHARAT NIRMAN• 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. 48
  49. 49. 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 o ULIP – the game changer 49
  50. 50. 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 50