Designing training program for max new york life


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Designing training program for max new york life

  1. 1. Designing a Training Program for “MAX NEW YORK LIFE” [Type the document subtitle] The Project includes information about the insurance sector in India, also about various Insurance companies in India. The Entire focus of this project was to understand the various Training Programs in the Company & accordingly design a new Training Program for the Firm. Prepared By :- Akash Khetpal 9/14/2008
  2. 2. Preface Indian insurance industry is emerging rapidly after year 2000. To survive in this highly competitive scenario, managers are being pressured to improve quality, recruit quality and skilled people and eliminate inefficiency. The collective efforts of the employer, managers and other relative people assume relevance in this context. And this is where marketing management and human resources play important role. Recruitment is very important in today’s scenario. But still it is ignored and considered as a secondary aspect. In case of insurance industry recruitment only decide success or failure of company. I have made an attempt to study this aspect of Insurance industry in my project. In this project, recruitment & developing a new training program at Max New York Life is considered. I have tried to find out how exactly recruitment is very important for this firm as well as this industry, which are the different strategies firm use to recruit quality people and so on. It is more qualitative rather than a quantitative data. To know a more about insurance in India I have included few topics :- • Insurance industry introduction. • Strategies for recruitment. • Eligibility of recruitment and so on. 2 | P a g e
  3. 3. About The Insurance Sector In India • Insurance sector is an opportunity for India. • This business is growing at the rate of 18-22 % annually. • Presently it covers market of RS.450 billion. • Together with banking sector it contributes about 7% to GDP. • Gross premium collection is about 2% of GDP. • Still 80% of Indian population is without life insurance. • This is an indicator that growth potential for the insurance sector is immense. • Insurance sector contribute a lot in economic development. • It provides long term fund for infrastructure development. • It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. • The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. There are two legislations that govern the sector- The Insurance Act- 1938 The IRDA Act- 1999. 3 | P a g e
  4. 4. 4 | P a g e
  5. 5. Historical Perspective • In 1818 it was conceived as a means to provide for English Widows. • The Bombay Mutual Life Insurance Society started its business in 1870. • It was the first company to charge same premium for both Indian and non-Indian lives. • The Oriental Assurance Company was established in 1880. • Till the end of nineteenth century insurance business was almost entirely in the hands of overseas companies. • Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912. • Several frauds during 20's and 30's sullied insurance business in India. • By 1938 there were 176 insurance companies. • The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over insurance business. • The insurance business grew at a faster pace after independence. • The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. • Nationalization was justified on the grounds that it would create much needed funds for rapid industrialization. 5 | P a g e
  6. 6. Important Milestones In The Life Insurance Business In India: 6 | P a g e
  7. 7. Present Scenario The Government of India liberalised the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 15 life insurance companies have been registered. A host of private Insurance companies operating in life segments have started selling their insurance policies since 2001. Table shows the current market players in the life Insurance Industry (Source IRDA). Sr. No. Name of the Company 1 Bajaj Allianz Life Insurance Co. Limited 2 Birla Sun Life Insurance Co. Ltd 3 HDFC Standard Life Insurance Co. Ltd 4 ICICI Prudential Life Insurance Co. Ltd 5 ING Vysya Life Insurance Co. Ltd. 6 Life Insurance Corporation of India 7 Max New York Life Insurance Co. Ltd 8 Met Life India Insurance Co. Pvt. Ltd. 9 Kotak Mahindra Old Mutual Life Insurance Ltd. 7 | P a g e
  8. 8. 10 SBI Life Insurance Co. Ltd. 11 Tata AIG Life Insurance Co. Ltd. 12 Reliance Life Insurance Co. Ltd. 13 Aviva Life Insurance Co. India Pvt. Ltd. 14 Sahara India Life Insurance Co. Ltd. 15 Shriram Life Insurance Co. Ltd. 16 Bharti AXA Life Insurance Co. Ltd. Life Insurance Market Growth The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 22 percent of the total 400 million of the insurable population. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. Life insurance business in terms of first year premium has shown a growth of more than 95% over the previous year and non life, or general insurance, is not far behind either, growing at 22% during 2006-07.The 15 private insurers in the life insurance market have already grabbed nearly 24 percent of the market in terms of premium income. The new business premium of the 15 private players has tripled over last year. Meanwhile, state owned LIC's new premium business has fallen. Figure shows comparison between premiums being collected by private and public limited players in year 2006 and 2007. 8 | P a g e
  9. 9. Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before 9 | P a g e
  10. 10. privatization was around Rs 50,000. That has risen to about Rs 80,000. But a rejuvenated LIC is also trying to fight back to persuade new customers. 10 | P a g e
  11. 11. About Max New York Life • Max New York Life Insurance Company Ltd. is a joint venture between New York Life and Max India Limited. • New York Life is a Fortune 100 company and Max India Limited is one of India's leading multi-business corporations. • The company has positioned itself on the quality platform. • It has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. • The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business. • In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. • The Company's paid up capital is Rs. 657 crore, which is more than the norm laid down by IRDA. • Max New York Life has identified individual agents as its primary channel of distribution. • The Company places a lot of emphasis on its selection process, which comprises four stages – Screening, Psychometric test, 11 | P a g e
  12. 12. Career seminar Final interview. • The agent advisors are trained in-house to ensure optimal control on quality of training. • Max New York Life invests significantly in its training programme. • Each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. • Training is a continuous process for agents at Max New York Life and ensures development of skills and knowledge through a structured programme spread over 500 hours in two years. • This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. • 201 agent advisors have qualified for the Million Dollar Round Table (MDRT) membership in 2005. • MDRT is an exclusive congregation of the world’s top selling insurance agents and is internationally recognized as the standard of excellence in the life insurance business. • Having set a best in class agency distribution model in place, the company is spearheading a major thrust into additional distribution channels to further grow its business. 12 | P a g e
  13. 13. • The company is using a five-pronged strategy to pursue alternative channels of distribution. • These include the franchisee model, rural business, direct sales force involving group insurance and telemarketing opportunities and corporate alliances. • Max New York Life offers a suite of flexible products. • It now has 30 life insurance products and 8 riders that can be customized to have more than 400 products. Various Plans held by the Company Max New York has various plans & has divided the insurance plans into single & Group Insurance. It now has 30 life insurance products and 8 riders that can be customized to over 800 combinations enabling customers to choose the policy or plan that best fits their need. • Individual Insurance Plans: These plans include various saving, protection & unit linked plans that help the company to target individual customers. • Group Insurance The company in this case targets the groups & has various plans such as, Group Term Life, Group Gratuity, Employee Deposit Linked Insurance, Credit Shield, etc. • Rural Insurance 13 | P a g e
  14. 14. The company keeping the major factors that India being a developing country, which has 70% of its population in rural areas, hence the company has various plans for rural areas like, Max Suraksha, Easy Term, Max Mangle Endowment. Etc. • Others The company also deals in other non insurance factors such as “Mutual Funds”. The company is well diverse and knows how to target the Indian Market. The other products held by the company are:- • Whole Life Plans • Unit Linked Insurance Plans • Endowment Plans • Children Plan • Money Back Plans • Pension Plans • Health & Accident Related Riders Training & Development at Max New York Life Insurance. If we just talk about a company which has more than 2, 00,000 employees just as agents, How big & tuff is it going to be to design a training program for the firm? A company that has more than 30 insurance plans, & 8 riders, which customize & give more than 400 products, how is the training going to be? The answer is simple the company has a very well planned & Established training program that meets the requirement of each & every individual, that make the firm a strong & powerful insurance company. A person who would like to join the company as an agent goes under several training programs that go on for about 2 years, when an agent is on his job. The 14 | P a g e
  15. 15. training sessions are both off job & on job training, which gives the best Agent Advisors to the Industry. We completely know that MNYL does not have shops or agencies that sell insurance. The company basically operates through its Head Office in New Delhi & other Regional offices across India. Hence accordingly, the best & only way of company selling Insurance is by appointing agents and according to the above listed programmes it become difficult to train the employees. Hence the company has various training programs that help the employees to get the best for the company. Every new candidate that joins Max New York goes through a 2 week or 152 hours of induction training. This training Program is called the NEO i.e. New Employee Orientation. 15 | P a g e
  16. 16. New Employee Orientation (NEO) The NEO program is conducted for all the new joinees of MAX. It is basically a 2 week program which includes Day 1 as HR Session, Day 2 Quality and Personality Development, Day3 & 4 - Products and Riders of MAX (Insurance Plans sold by MAX) Day5 & 6 - Insurance Concepts Day 7 & 8 - Functional training, a SPOC from all departments come and deliver a session on how their respective department works Day 9 & 10 - System Training, i.e. to make them aware of MAX core and satellite systems. The other Training programs carried out by the company are • HR Training – HR Training takes care of your MDP's - Management Development Program. It also takes care of the Behavioral concepts of training. • Agency Training- Agency Training takes care of training for Sales Manager and Agents. • System Training- Systems Training takes care of training on Max New York life's Core and support system • Operations Training- 16 | P a g e
  17. 17. Operations Training takes care of NEO - New Employee Orientation program. Agency Training A department or well qualified & managed trainers are in charge of training the Agents regarding the products & day to day conducts of job. The department is specially designed to take care of Training needs of the agents. There are various training programs under agency training. This training plans an very important role for MYNL, as it takes care of the training of Sales managers & Agent Advisors. According to this department when a candidate is cleared he is not just an agent or an advisor, He is called as a “Financial Advisor”. He/she once done is a vital asset for the company. The recruitment process of the firm is very tuff, & there are various parameters that to select a candidate. The company uses 9 point criteria to select the candidates. These are based on various factors such as age, sex, experience, maturity, etc. From this model the company judges a prospective person. The company follows unique eligibility criteria for Agent Advisors selection by which company is able is to always justify its mission. The basic objective of having an eligibility model for recruitment is to have good retention and greater effectiveness in the delivery of service. 1. 18 plus years of age: This age shows attainment of maturity and responsibility. People are more consistent in this age. A person is said to be mature at this point of age. 2. Married: Married people have more eager to earn money. Family pressures increase responsibility and secondly customers are convinced more by the stability of a married Agent Advisor. 3. Staying in the same city for more than 5 years: 17 | P a g e
  18. 18. Person who stays more than 5 year has huge natural market which helps him to get more business in short period. It also affects because he/she may have a huge social group in the city. 4. Graduate: Graduate people have basic skills like communication skills, numerical ability, I.P relation, convincing abilities etc. so it is easy to teach them further. 5. Financial stability: MNYL is focuses on classes and not on masses thus they select strong agent advisors. 6. To have a rich and active social circle: It helps to get higher case rate and case size. Also the chances of policy lapsing can be less and renewals can be more. 7. Greed for money: Firm selects advisors who understand the language of commission. Because people who want fix amount as their earnings are not suitable for this business. 8. Independent: MNYL select people who want to be entrepreneur. Housewives or brokers who want flexible hours for work are prospective person for this business. 9. Persuasion: He should be persuasive in nature because the Agent Advisor needs to follow up on regular basis with prospective and new clients without being a nuisance value. 10. Excellent interpersonal skills: Because developing and maintaining good relations can get policies. Secondly since most of the insurance companies provide a plethora of similar products, sales depend on the 18 | P a g e
  19. 19. convincing ability of the Agent Advisor and the rapport the Agent Advisor is bale to build. Also results in C of I’s. Desirable Candidates 1) Housewives. 2) Employees having VRS. 3) CA’s. 4) Mutual Fund Brokers. 5) NSC brokers. 6) Tax Consultants. 7) Businessman. 8) Doctors. 9) Travel agents. 10) Lawyers. 11) Diamond merchants. 12) Social workers. 19 | P a g e
  20. 20. Types of Agency Training. Since the company is so huge & it has a large number of products to its shell. It may physically not be possible for each Agent Advisor to know all. Hence the company has various programs for certain specialization, in which an Agent can have deep & through knowledge of the products. The Training Process begins with a Note Book IC33, which is issued by the Insurance Institute of India (III). The book gives a brief about insurance & insurance policies, some products of the companies. It basically covers the basic aspects of Insurance & gives a insider of the overall industry to the candidate. The next process is the training program conducted by the company. Basic Career School:- As the name says it all, this training program gives a Basic look into the insurance sector. It talks about the various products into the company. It is basically a 15 day or 50 hour session, it is an off job training program & classroom sessions are conducted for the candidates & both board & audio – vision methods are used. Basic Career School 2:- If the above mentioned program talks about the basic insurance products, this training program gives them the complete in & out of insurance. Every minute detail is explained during these sessions. This is also the phase where the candidates are not put on job or advising services. The program talks about the company policies of the company, how to attract candidates & many such factors. This program goes for around 2-3 months. 20 | P a g e
  21. 21. Intermediate Career School:- Once the candidate is through with the Basic Career School, he/she undergoes a written exam & if he scores above 60, he is entitled to attend the Intermediate Career School Training Program. This training program gives an idea about the competitors, their products or even their strategies. It also gives the candidates ample information about the market. The trend prevailing in the market & how to deal with such kind of situations. This program lasts for long as it’s a 6 months training Program & training takes place once the candidates are put on the job floor. Advanced Career School:- Once the Candidates successfully clear the above mentioned training program, he goes through the final stage of his/her training program. The name of the program clearly states is objective, & it give the very minute details of the Financial Markets, the changing trends, how to help our customers understand the complicated market & how to guide the customer in the right direction. As this course covers every minute detail, it takes around 12 months for every candidate to finish this training. Once the candidates are through with the entire training programs, they are termed as “Financial Advisors” of the firm & are invited in the company as “Agent Advisors”. Each candidate has to go through several exams to reach this level, & in every exam he should pass out with above 60%, but according to the company, an agent should score above 80% as he should be aware of all the details, hence he could guide his customers is a safe direction & it would not harm the company in any sense. Since the Training program of the company is very rigorous & lengthy, the company uses various motivation techniques to motivate its Advisors to perform better on day to day basis. Various Motivation Techniques would be as follows. 21 | P a g e
  22. 22. Reward and Recognition 22 | P a g e
  23. 23. 1) Premium Leader 23 | P a g e
  24. 24. Qualifying Criteria- Rs. 1 Lakh AFYP in a month Reward and Recognition- Mention in leaders Report, Lunch 2) Ten-A-Monther Qualifying Criteria- 10 applications in a month and Rs. 30,000 AFYP Reward and Recognition- MNYL Crystal Glass, mention in Leaders Report, Lunch. 3) Hi-Flier Qualifying Criteria- 20 applications in a month Reward and Recognition- MNYL Silver Medal, MNYL Crystal Glass, Mention in leaders Report, Lunch 4) Career Success Award Qualifying Criteria- 15 paid cases & Rs. 40,000 FYC at the end of month 3. Reward and Recognition- Recognition Award 5) Career Producer Award Qualifying Criteria- 25 paid cases & Rs. 80,000 FYC at the end of month 6. Reward and Recognition- Recognition Award 6) Career Foundation Club Qualifying Criteria- 50 paid cases & Rs. 1.8 lakhs FYC in July- June for Recruits during this period. Reward and Recognition- Attend CFC meeting to be held at Zone level. 7) Paid Case, FYC, Persistency, rider, Referral and CEIP Leader Qualifying Criteria- Top Agent in each category in each GO. Reward and Recognition- Recognition Plaque 8) Agent of the Year 24 | P a g e
  25. 25. Qualifying Criteria- Highest Points in each GO Reward and Recognition- Recognition Award 9) Centurion Qualifying Criteria- 100 net paid cases in a year. Reward and Recognition- Centurion Trophy 10) Paul Colgan Trophy Qualifying Criteria- Highest FYC with 100 or more paid cases and 95% Or more 13th month persistency. Reward and Recognition- Recognition Trophy 11) Executive Council Qualifying Criteria- July 2006 to June 2007: 4, 30,000 Council Credits January 07 to June 07: 1, 60,000 Council Credits 40 paid cases in the Council Period. Reward and Recognition- Trip to Malaysia to attend the Executive Council Meeting. 12) MDRT (Million Dollar Round Table) Qualifying Criteria- MDRT FYC Rs. 7, 19,800 Premium Rs.14, 39,600 Reward and Recognition- MDRT dues for all qualifiers. Top 35 by FYC will Bear domestic travel and visa costs. Next 15 will bear Registration fees, domestic travel and visa costs. Rest All will bear international airfare, domestic travel and Visa costs. 13) CEO’S Council Qualifying Criteria- July 2006 to June 2007: 8, 00,000 Council Credits Jan 2007 to June 2007: 3, 20,000 Council Credits Reward and Recognition- Trip to Amsterdam to attend the CEO Council meeting. 25 | P a g e
  26. 26. Designing a Training Program for MNYL As seen above, MNYL is a company that has a well established & strong training program, hence It is very difficult for anyone to find a scope of improvement in the above mentioned programs, but after going through all the above training Programs, one program could still be added that is not added above. Taking it ahead, I would like to add & design a new training Program for this company. First let’s see how a Training Program is designed. 26 | P a g e
  27. 27. 1) Training Need Analysis:- A huge & tremendous work for any candidate/employee, who would be studding the entire training process/program of MNYL. Since the Company is into so many types of training & it makes sure that every candidate goes through each of the above mentioned training programs. IF we go through the Agency Program, we can find various types of training programs that help the candidate to reach to the position of an Agent Advisor. But somehow if we go through deeply we can see that a candidate can be selected if he is just “12th ” Pass, not even a graduate, some places house wives are also preferred. So is it necessary that they may know proper ENGLISH, they may stammer while speaking, or even may not much focus on this language, but in the corporate world, ENGLISH plays a vital role, & every candidate must know it, hence “I would like to focus on training the employees on their communication skills, the command of English Language & the way they present them self.” 2) Develop Training Objectives:- According to the new training program that has to be added there is only one clear objective, i.e. “To make sure that the candidate makes a good impression in the eyes of the client” IF the candidate presents him well & speaks a professional language, any client would be impressed & he/she would refer to or more clients for the company. In any way it would be word to word promotions, an indirect way of advertising, hence cost cutting & benefit to the company. 27 | P a g e
  28. 28. 3) Review Available Training Methods:- There are many ways to train a candidate for an English speaking course. Few available options could be classroom session, book reading, audio- vision, live cases of improvement from the past experiences. At the end of the session a candidate must know what he has learnt & how he should go about it. Some easy learning & humor cases are to be remembered for a longer duration; hence such incidences could be included. 4) Design or Select Training Methods:- For making it easier to the candidates I would use the class room session & it would be an off-job training method. Reading Material would be provided & with the use of live cases & audio- vision methods I would teach the candidates. The program is going to be a 15 hour or 2 days training program, where in the 1st day the candidates would know about the aspects of English, Grammar, easy way to communicate, etc. on the second day of the program, 1st half would be covered by English & the second half on the dressing sense, respect & loyalty to the customer & the major fact of always serve with the smile. Usually Light color of clothing is advisable, for boys or men, a light colored shirt & a dark pant is advisable, & for girls/women, “Salwar Kameez” of light color, or a saree, or even formal, with white shirts & black pants is advisable. 5) Design Training Evaluation Approach:- Since the program is just a 2 day training program and candidates can easily learn the lessons, for to know whether the candidate has learnt & grabbed what has been done in the training, a test has to be conducted at the month end of the training program; hence the candidate could also read the reading material given to them. If a candidate fails to clear the exam & does 28 | P a g e
  29. 29. not score more than 60% marks, she shall be seated again for the program, & his suggestions would be taken for what else could be done to make it an interesting course. 6) Implement Training Program:- Once we have been through with all the above mentioned efforts, it’s now time to implement and see if the program really works. If it works successfully, we can carry on with the same kind of training program for the new batches that come & teach them as the importance to good communication & Good personality. 7) Measuring Training Results:- If in any case if the training program does not work successfully of there is some gap between the communication of the candidates & the trainers, it would be advisable to work all over again on the program & make sure that all the problems in the earlier have been solved & hence forth no problem would take place. As mentioned earlier if the planned program goes good, & according all the candidates could understand what is been though in the class the program would continue as it is, but if in any case it does not meet the objective, a new plan has to be drafted & according with some changes in the program, the new program could be implemented. 29 | P a g e
  30. 30. Conclusion Life insurance business in terms of first year premium has shown a growth of more than 95% over the previous year and non life, or general insurance, is not far behind either, growing at 22% during 2006-07. In this market, competitive edge provided by product innovation can sustain only for a couple of months, since products can easily be cloned. Hence “Training & Development” is one of the important process through which an insurer can have an EDGE over other competitor. According to a survey, there are rarely a couple of people who actually know about this company, hence it is quite important for the firm to have a strong advertising background & to make as much as use of advertisement for more cliental base. The results of the Survey are as follows:- Increase awareness among the general public 30 | P a g e
  31. 31. Bibliography • • • Training in Organization – by Irwin L Goldstein. • Approaches to Training & Development – by laird 31 | P a g e
  32. 32. • Training For Organizational transformation – by Lynton & Pareek. • Tanya Keswani from Max New York Life. • Garima Gulati from Max New York Life. 32 | P a g e