1.1. OVERVIEW OF THE INDUSTRY
Life is very fragile and death is a certainty. We cannot control the uncertainties of life.
But, we can cover the risks surrounding us. Life insurance, simply put, is the cover for
the risks that we run during our lives. It protects us from the contingencies that could
affect us.
Life insurance is not for the person who passes away, it for those who survive. It is the
responsibility of every bread earner to guard against the events that could affect the
family in the unfortunate circumstance of his / her demise. Thus, having a life insurance
policy is very vital. Before going for a life insurance policy it is imperative that you know
about various types of life insurance policies.
Life insurance is an essential part of financial planning. The main purpose of purchasing
life insurance is to ensure that your dependents are financially protected in the event of
death. Life insurance is a way to plan for the future so you need to be sure that the
coverage you purchase fits your needs.
There are many options available to you when purchasing life insurance. Some policies
provide coverage for your lifetime and others provide coverage for a specific number of
years. With certain policies, you are able to combine different kinds of insurance and
even build up your cash value. Your choice should be based on your needs and what you
can afford.
Different Policies
Term Life Insurance
Term life insurance is an insurance policy that is in effect for a specific period of time. If
the insured dies within that timeframe, the beneficiary of the policy receives the death
payment. However, if the insured survives that period of time, the beneficiary receives
nothing and the policy is closed. Term life also provides the ability to convert to a
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permanent kind of coverage at a later time. The main reasons people buy term life
insurance include:
• Coverage for a specific amount of time until they are able to build up their assets.
• Coverage for the amount of time the mortgage is for so in the event of an
untimely death, the mortgage is taken care of.
• Coverage for those that cannot afford a permanent policy, especially newlyweds
and new parents.
Permanent Life Insurance
Permanent life insurance covers a longer period of time than term life or for the entire life
of the insured. This kind of insurance combines death benefits with a savings component.
The amount of money that is not used to cover the amount of the insurance is invested by
the company and builds up a cash value that may be used in a variety of ways. You may
borrow against a policy's cash value by taking a policy loan. If you don't pay back the
loan and the interest on it, the amount you owe will be subtracted from the benefits when
you die or from the cash value if you stop paying premiums and take out the remaining
cash value. The cash may also be used to increase your retirement income or to help pay
for needs such as a child's tuition without canceling the policy. However, to build up this
cash, you'll pay higher premiums. There are several types of permanent life insurance,
including whole, universal, variable universal, and survivorship universal.
Whole Life Insurance
A whole life insurance policy remains in full force and effect for the life of the insured,
with premium payments being made for the same period. Some whole life policies let
you pay premiums for a shorter period such as 20 years, or until age 65. Premiums for
these policies are higher since the premium payments are made during a shorter period of
time.
Universal Life Insurance
The premiums of a universal life insurance policy are split in two ways. The premium
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you pay goes toward covering the cost of the insurance policy and the remaining balance
is invested and earns interest on a tax deferred basis. With this type of life insurance you
also receive a guaranteed minimum interest rate on the balance that is invested.
Variable Iife Insurance
Variable life insurance is an investment-oriented whole life insurance policy that
provides a return linked to an underlying portfolio of securities. The portfolio is a group
of mutual funds including common stocks, bond funds, and money market funds. This
type of life insurance offers fixed premiums and a minimum death benefit. The better the
total return on the investment portfolio, the higher the death benefit or value of the
variable life policy.
Variable Universal Life Insurance
Variable universal life insurance is a combination of universal life insurance and variable
life insurance in that excess interest credited to the cash value account depends on
investment results of separate accounts (equities, bonds, real estate, etc.). You have a
choice as to how the cash value is invested -- stock and bond mutual funds. However,
there is no guaranteed minimum interest rate with a universal life insurance policy.
SURVIVORSHIP UNIVERSAL LIFE INSURANCE
Survivorship universal life insurance provides a policy in which two people are covered
on one policy. The death benefit is paid upon the second death. The premiums for this
joint life policy are significantly lower than a regular policy. Many people take this type
of life insurance to help pay estate taxes after the deaths of both a husband and wife.
A BRIEF HISTORY OF THE INSURANCE INDUSTRY
The origin of insurance is very old. The time when we were not even born; man has
sought some sort of protection from the unpredictable calamities of the nature. The basic
urge in man to secure himself against any form of risk and uncertainty led to the origin of
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insurance. The insurance came to India from UK; with the establishment of the Oriental
Life Insurance Corporation in 1818. The Indian life insurance company act 1912 was the
first statutory body that started to regulate the life insurance business in India. By 1956
about 154 Indian, 16 foreign and 75 provident firms been established in India. Then the
central government took over these companies and as a result the LIC was formed. Since
then LIC has worked towards spreading life insurance and building a wide network
across the length and the breadth of the country. The General insurance business in India,
on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first
general insurance company established in the year 1850 in Calcutta by the British. In
1957 General Insurance Council, a wing of the Insurance Association of India, frames a
code of conduct for ensuring fair conduct and sound business practices. In 1972 The
General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with the effect from 1st January 1973. it was after this that 107
insures amalgamated and grouped into four companies viz. the National Insurance
Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a
company.
LIFE INSURANCE BASICS
We buy life insurance because we want to make sure that our loved ones, especially
dependents, remain financially secure after we die. Income replacement is the number1
reason why people buy life insurance. Non-working caregivers also have an important,
and oft overlooked economic value that should be covered by life insurance. Life
insurance is also purchased by those interested in achieving specific business or estate
transfer goals.
There are several choices when it comes to buying life insurance and there are huge
pricing differences in the market among different companies offering identical coverage.
Policies are now available from more than 1,500 life insurance companies in the United
States. Most financial planners recommend that each family income provider carry no
less than ten times their annual income in life insurance.
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Here’s an orderly way to go about shopping for life insurance: 1) assess your life
insurance needs, 2) decide on the most appropriate policy type, 3) set high standards for
the financial stability ratings of your insurance company and, then 4) shop until you drop
to find the best price.
Life insurance is a long-term proposition, which means that you should pay particular
attention, at time of purchase and throughout the life of the policy, to the financial
stability ratings of your life insurance company. While the average U. S. adult shops for
life insurance once every seven years, it’s not uncommon for people to keep life policies
in force for decades.
ASSESSING YOUR LIFE INSURANCE NEEDS
The first step in life insurance planning is to analyze your life insurance needs or,
rather, the economic needs of the dependents left behind:
• Before purchasing a life insurance policy, you should consider your financial
situation and the standard of living you want to maintain for your dependents or
survivors. For example, who will be responsible for your final medical bills and funeral
costs? Would your family have to relocate or otherwise change their standard of living?
The assumption of immediate death is necessary to determine the current life insurance
needs for the family or individual.
• Beyond the initial readjustment period, consideration has to be given to the longer
term financial needs of the remaining family members. Items of consideration should
include dependency period income for children, income for the surviving spouse,
mortgage and other debt payoffs, college education funds and an additional emergency
fund.
Because life insurance needs change over time, your life insurance program
should be reevaluated periodically. We recommend a review at least once every five
years or whenever you experience a major life event such as change income or assets,
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marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a
house or business.
The Illinois Department of Insurance points out the reasons you might buy life insurance
will vary, depending on your age, financial situation and other factors. Listed below are
some examples:
Single person with no dependents: Funeral expenses; medical bills; debts, such as
credit cards or student loans; elderly parents who may be dependent upon you for
support. Note: Buying life insurance at a young age is cheaper. As you get older or
possibly incur a serious health condition, it will be more expensive or difficult to buy a
policy.
• Single person with dependents: Funeral expenses; medical bills; outstanding debts;
caretaker expenses for your surviving dependents; education costs for surviving children.
• Couple with no children: Funeral expenses; medical bills; outstanding debts, especially
mortgage or car payments.
•
• Couple with children: Funeral expenses; medical bills; outstanding debts, especially
mortgage payments; child-rearing expenses; education costs. Note: Even if one partner
does not work outside the home, you may want to consider life insurance to help pay for
childcare or other services performed by that partner.
•
• Older couple: Funeral expenses; medical bills; impact on spendable income; outstanding
debts, such as a new home, second vacation home, or recreational vehicle; impact on
assets you may want to leave for children or grandchildren
In theory, you should have a declining need for life insurance as you age because fewer
people remain dependent upon you for income support. Exception to this rule would be
for circumstances in which you want to protect a business entity or pay estate taxes for
heirs. If the purpose of buying life insurance is to pay estate taxes, then you’ll only want
coverage that is guaranteed for the remainder of your life and that of your spouse as well.
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1.2 PROFILE OF THE ORGANIZATION
Max New York Life Insurance Company Ltd. is a joint venture between New York Life,
a fortune 100 companies and Max India Ltd. one of India’s leading multi-business
corporations. 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 policy holder’s funds. The company’s paid
up capital is Rs. 587 crore, which is more than the norm laid 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 of four stages – screening, psychometric test, career seminar and final
interview. The agent advisors are trained in-house to ensure optical control on quality of
training.
201 agent’s 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 trust into additional distributions channels to further grow its
business. 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, banacassurance and corporate
alliances.
Max New York Life offers a suite of flexible products. It now has 22 life insurance
products and 8 riders that can be customized to over 400 combinations enabling
customers to choose the policy that best fits their need.
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8

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DIFFERENT INSURANCE PLAN
 Individual Insurance Plan
 Group Insurance Plan
 Others
INDIVIDUAL INSURANCE PLAN
 Protection
• Whole Life Participating Policy
• Life Protector Policy
• Life Protector Plus Policy
• Life Partner Plus Plan
 Savings
• Life Gain Endowment Policy
• Life Pay Money Back Plan(Participating) Policy
• Life Gain Endowment(Participating) Policy
• 20 year Endowment(Participating) Policy
 Unit Linked Plan
• Life Maker
 Children
• Children Endowment Policy 18 & 24
• Stepping Stones Child Money Back Plan(Participating) Policy
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 Retirement
• Easy Life Retirement Plan(Participating) Policy
 Riders
GROUP INSURANCE PLAN
 Group Term Life
 Employee Deposit Linked Insurance
 Group Gratuity
 Credit Shield
 Unit Linked Group Gratuity
OTHERS
 Rural
• Max Suraksha Policy
• Easy Term Policy
• Max Mangal Endowment(Participating) Policy
 Bancassurance
 Amsure
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• Amsure Bonus Builder Policy
• Amsure Business Builder Policy
• Amsure Family Money Back Policy
• Amsure Future Builder Policy
ACHIEVEMENTS
MAX New York Life is the first insurance company in india to be awarded the ISO 9001:
2000 certification.
Max New York Life was among the top 25 companies to work with in India, according to
2003 Business World magazine, “Great Workplaces in India”, Max New York Life was
ranked at the 20th position. This survey is the local version of the “Great Places to Work”
survey carried out every year in 22 countries.
With 201 agents becoming members of the MDRT in 2005, Max New York Life has
moved up in the top 50 MDRT global list.
VISION AND MISSION
Vision – To become the most trusted and reliable life insurance company in India.
Mission –
 Become one of the top quartile life insurance companies in India.
 Be a national player
 Be the brand of first choice
 Be the employer of choice
 Become principal of choice for agents
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SOCIAL RESPONSIBILITY
The company donates a part of the total money collected on all policies sold, to SOS
Children's Villages of India at the end of the year.
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MNYL employees at a painting competition at SOS
Village
Max New York Life employee visits to SOS Villages are
organized regularly to generate a sense of ownership and
involvement among employees.
Anuroop 'Tony' Singh, making an annual commitment to
SOS
Max New York Life has also instituted the David Allen
trophy for the Most Socially Responsible Student at SOS
Children's Villages. David Allen, an employee of New
York Life, has donated Rs. 50,000 towards the rolling
trophy, which will be awarded to a student, of the Herman
Gmeiner (SOS) School at Faridabad, who displays and
shows caring and a social responsibility towards his/her
schoolmates or on a larger stage.
Shortly after inception, Max New York Life saw Gujarat
being devastated by a ruinous earthquake. The Max India
Family and New York Life International contributed
Rs.86.25 lakh towards the permanent care of children
affected by the earthquakes in Gujarat.
Tsunami
More recently, in March 2005, New York Life made a
donation of Rs. 17 lakh to SOS Children’s Villages of
India for the long-term rehabilitation of survivors of the
Tsunami disaster in Tamil Nadu. The funds will be used by
SOS Children’s Villages of India for the reconstruction of
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permanent dwellings for fishing communities severely
affected by the Tsunami waves in December 2004. A few
weeks earlier, New York Life joined its joint venture
partner Max India in making a donation of Rs. 75 lakh to
the Prime Minister’s National Relief Fund. The Chairman
of Max New York Life, Analjit Singh, met Prime Minister
Manmohan Singh to personally hand over the cheque.
Shortly after inception, Max New York Life saw Gujarat
being devastated by a ruinous earthquake. The Max India
Family and New York Life International contributed
Rs.86.25 lakh towards the permanent care of children
affected by the earthquakes in Gujarat.
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BOARD OF DIRECTORS – MAX INDIA LIMITED
Dr. Bhai Mohan Singh Lifetime Chairman Emeritus, Max India
Mr. Analjit Singh Chairman, Max India
Dr. S S Baijal Former Chairman, ICI Ltd.
Mr. N C Singhal Former Vice Chairman & MD, SCICI
Mr. N Ranagachary Former Chairman, IRDA
Mr. Nitin Sibal Vice President, Warburg Pincus India Pvt.
Ltd.
Mr. Piyush Mankad Former Secy., Ministry of Finance, Govt.
of India
Mr. Ashwani Windlass Former Managing Director, Hutchison Max
Telecom Ltd.
Mr. Bharat Sahgal Managing Director, Warburg Pincus India
Pvt. Ltd.
Mr. B Anantharaman Jt. Managing Director, Max India
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NEW YORK LIFE INSURANCE COMPANY
A Fortune 100 company founded in 1845 is the largest mutual life insurance company in
the United States and one of the largest insurers in the world. Headquarter in New York
City, New York Life’s Family of companies offer Life Insurance, annuities and long –
term care insurance. New York Life Investment Management and retirement plan
services. Other New York Life affiliates provide an array of securities products and
services, as well as institutional and retail mutual funds.
The mission of New York Life is to maintain its superior ‘financial strength’, adhere to
the highest standards of ‘integrity’ and demonstrate ‘humanity’ by treating its customers,
agents and employees with compassion, consideration and respect.
New York Life is one of the largest and strongest life insurance companies in the world
with more than USD$215 billion assets under management and has received among the
highest ratings got financial strength from the Life Insurance industry’s principle rating
agencies: A.M. Best (AA+). Standard & Poor’s (AA+), Moody’s (Aa1), Fitch (AAA).
According to Moody’s, “New York Life’s rating reflects the company’s good quality
investment portfolio, ample liquidity, and sound capitalization, as well as the good
growth potential of its international business.”
As a leader in the insurance industry, New York Life continues to bring to its operations
new management concepts, advanced technologies, new distribution and training systems
and innovative insurance products.
QUALITY PORTFOLIO
Max New York Life aims to be a quality player selling true life insurance products in a
market where people are grossly under – insured and where life insurance has
traditionally been viewed as an investment and tax saving device. 96 % of the company’s
business portfolio is made up of Whole Life and long – term endowments. The average
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tenure of policies is over 30 years and the average age of people insured is around 28
years.
THE YEAR AHEAD
In 2005 – 2006, Max New York Life will further consolidate its market presence by
extending its reach to more cities and aggressively grow its agency operations and
diversify into alternative distribution channels. The company will continue top play a
thought leadership role in focusing attention on key industry issues. Max New York Life
will continue to espouse the cause of Indian Life insurers to move towards a maturity
level where self – regulation becomes possible. This, the company believes, will come if
all companies come together on a common platform to adopt best business practices
where the customer’s interest is paramount. The company will also continue to focus on
pensions, which are an extension of the financial relationship life insurance companies
have with customers. Max New York Life will further build on its present strengths and
will continue to map its progress according to stakeholder expectations. That is the way
to grow and continue the company’s journey towards becoming India’s most admired
life insurance company.
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1.3 PROBLEMS OF THE ORGANIZATION
CHALLENGES
The biggest challenge faced by the Government today is that of a regulator with the
prospect of about 30 or 40 players, each represented by thousands of agents, brokers and
intermediaries. To evolve a free and fair method of assessing the companies, to ensure
fair play between the competitors and to safeguard the interests of the largely uninformed
customers are the main tasks ahead. The other and equally serious aspect is to ensure that
the vast amounts collected by the insurance and pension funds are utilised for the welfare
of the people. Though the Government itself would not be the guarantor of the policy
monies, nevertheless, it is accountable through its regulatory mechanism, to put in place
prudential norms of investment and accounting, revenue recognition, fair valuation of
assets and liabilities, determining necessary margins towards any contingencies and
proper reserves for shrinkage of investments will have to be made. Nevertheless, care has
to be taken to see that there is not too much of control and regulation. A certain degree of
autonomy in the functioning of insurance companies has to be allowed so that they get
necessary freedom and space to perform and excel. The IRDA, along with the advisory
committee constituted recently, is eminently qualified to undertake these tasks. In
addition, a proposal has also been mooted to constitute a federation of insurance
companies analogous to the Indian Banks’ Association. Such an institution will provide
guiding principles, lay down a code of insurance ethics and generally act as a facilitator
for both the life and non-life industry.
As for the existing player, the public sector giant, the Life Insurance Corporation of
India, the challenge is one of sustaining the huge growths it has shown in the recent
times. It has to face competition for the first time in its history, particularly in the urban
centres. It has to manage its huge operations more efficiently than at any other time in the
past. It has to think of equipping its personnel (staff and agents) to face competitors and it
may have to think of diversifying its activities to achieve economies in some areas.
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As far as the prospective entrants are concerned, the greatest challenge is to establish
their presence in the minds of the public. Insurance, particularly life insurance, it is said,
is never bought but sold. To convince a large population, which is comparatively not well
informed about the intangible benefits of life insurance is indeed an onerous task. On top
of that, to establish the brand equity of a new name in a new field is quite a challenge.
The second most important challenge facing a new entrant is that of setting up
infrastructure and to reach out to as many areas as possible, since life insurance is based
on probability and the wider the spread, the greater are the chances of success in
maintaining the expense ratios at a reasonable level.
Modern life perhaps offers challenges that will be common to all the above.
Improvements in health and longevity, the recent breakthroughs in the mapping of the
human genome and the frequent changes in the economy may have far-reaching effects
on life and health insurance. Devising products that match the changing needs of the
people and managing the funds in a volatile scenario are two problems that will have to
be tackled by every player in the days to come.
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1.4 COMPETITION INFORMATION
Insurance Companies in India
Before insurance sector was opened to the private sector Life Insurance Corporation
(LIC) was the only insurance company in India. After the opening up of Insurance sector
in India there has been a glut of insurance companies in India. These companies have
come up with innovative and flexible insurance policies to cater to varying needs of the
individual. Opening up of the Insurance sector has also forced the Lic to tighten up its
belt and deliver better service. All in all it has been a bonanza for the consumer.
Major Life insurance Companies other than LIC in India are:
• Max New York Life Insurance
• Bajaj Allianz
• Aviva Life Insurance
• Birla S un Life Insurance
• HDFC Standard Life Insurance
• ICICI Prudential
• ING Vysya
• Kotak Mahindra
• Metlife India Insurance
• Max Life Insurance
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Bajaj Allianz General Insurance Company Limited
Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto
Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and
strength.
Bajaj Allianz General Insurance received the Insurance Regulatory and Development
Authority (IRDA) certificate of Registration (R3) on May 2nd, 2001 to conduct General
Insurance business (including Health Insurance business) in India. The Company has an
authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining
26% is held by Allianz, AG, Germany.
In its first year of operations, the company has acquired the No. 1 status among the
private non-life insurers. As on 31st March 2003, Bajaj Allianz General Insurance
maintained its leadership position by garnering a premium income of Rs.300 Crores.
Bajaj Allianz also became one of the few companies to make a profit in its first full year
of operations. Bajaj Allianz made a profit after tax of Rs.9.6 crores.
Aviva Life Insurance,India
Aviva Life Insurance Company India Pvt. Ltd. is a joint venture between Aviva of UK
and Dabur, one of India's leading producers of traditional healthcare products. Aviva
holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74
per cent share.
Aviva is UK's largest and the world's sixth largest insurance Group. It is one of the
leading providers of life and pensions products to Europe and has substantial businesses
elsewhere around the world.
Aviva pioneered the concept of Banc assurance in India. Currently, Aviva has Banc
assurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank,
Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 11
22

Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir and Maharashtra and one
regional Bank in Sikkim.
Aviva has 40 Branches in India (including rural branches) supporting its distribution
network. Through its Banc assurance partner locations, Aviva products are available in
378 towns and cities across India.
Aviva Life Insurance has also launched two individual products – Pension Plus and
Secure Life. Aviva is the fifth private insurance player to introduce a pension product.
Birla Sun Life Insurance
Birla Sun Life Insurance Company Limited is a joint venture between Aditya Birla Group
and Sun Life Financial of Canada. Aditya Birla Group is an Indian multinational
conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt,
Canada, Australia and China.
Sun Life Assurance, Sun Life Financial's primary insurance business, is one of the
leading insurance companies of the world and ranks amongst the largest international
financial services organizations in the world. The Group has presence in several countries
such as Canada, United States, Philippines, Japan, Indonesia, India and Bermuda.
HDFC Standard Life Insurance
HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life
insurance companies, which offers a range of individual and group insurance solutions. It
is a joint venture between Housing Development Finance Corporation Limited (HDFC
Ltd.), India’s leading housing finance institution and one of the subsidiaries of Standard
Life plc, leading providers of financial services in the United Kingdom. Both the
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promoters are well known for their ethical dealings and financial strength and are thus
committed to being a long-term player in the life insurance industry – all important
factors to consider when choosing your insurer
ICICI Prudential Life Insurance
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a
premier financial powerhouse and prudential plc, a leading international financial
services group headquartered in the United Kingdom.
ICICI was established in 1955 to lend money for industrial development. Today, it has
diversified into retail banking and is the largest private bank in the country. Prudential plc
was established in 1848 and is presently the largest life insurance company in the UK.
ICICI Prudential is currently the No. 1 private life insurer in the country. For the financial
year ended March 31, 2005, the company garnered Rs 1584 crore of new business
premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies.
ICICI Prudential has launched the unit-linked variant of its regular policy for children,
Smart Kid. It provides three scheme options: Maximiser, which has a skew towards
equities; Protector, which is biased towards debt; and Balancer, a blend of the Maximiser
and Protector. Withdrawals can be made after five policy years; a total of five
withdrawals can be made over the policy term. On the death of the parent, the sum
assured is paid out immediately; payment of all future premiums is waived and the policy
benefits remain in force.
ICICI Bank has decided to offer `Life Time Pension Triple Advantage' exclusively
designed life insurance product from ICICI Prudential Life Insurance to its high net-
worth credit cardholders across the country. The product is a flexible unit-linked pension
plan gives the customers the advantage of reducing their tax burden along with
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safeguarding their post-retirement years. Besides the tax advantage, the product also
offers to provide the cardholders regular pension, guaranteed for life.
ING Vysya Life Insurance
ING Vysya Life Insurance Company Limited is a joint venture between Vysya Bank and
ING Group of Holland, the world's 4th largest financial services group, with presence
across 50 countries, and a heritage of over 150 years.
ING Vysya Life Insurance Company Private Limited entered the private life insurance
industry in India in September 2001. With in a short span of time ING Vysya Life
Insurance has registered an impressive growth. The company currently has over 10,000
active advisors working from 75 branches (in 30 cities) across the country and over 2300
employees.
ING Vysya Life has launched "conquering life critical illness plan", a total protection
plan combining a term life cover and a unique critical illness benefit. It plan covers the
basic need for protection and also provides for cover against 10 major critical illnesses.
Kotak Mahindra Old Mutual Life Insurance Limited
Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak
Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra is one of India's
leading financial institutions and offers a range of financial services such as commercial
banking, stock broking, mutual funds, life insurance, and investment banking.
Old Mutual was established more than 150 years ago and offers a diverse range of
financial services in South Africa, the United States and the United Kingdom. The
company is listed on the London Stock Exchange with a market capitalization and has its
headquarters in London.
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OM Kotak Mahindra Life has launched an investment-cum-protection plan - the Kotak
Safe Investment Plan -- that offers safety of capital while permitting the policyholder to
benefit from investment opportunities in the equity, debt and money markets. This unit-
linked insurance plan is unique in that the various funds give the policyholder access to
growth markets while the plan guarantees the sum assured – on maturity or death —
regardless of the performance of the funds.
MetLife India Insurance
MetLife India Insurance Co. Pvt Ltd is a joint venture between MetLife Group and its
Indian partners. The Indian partners include J&K Bank, Dhanalakshmi Bank, Karnataka
Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu.
Met Life Group has presence in America and Asia and has an experience of over 137
years in providing financial services. The MetLife companies are the number one life
insurer in the U.S. with approximately US $2.8 trillion of life insurance in force. MetLife
serves 88 of the top one hundred FORTUNE 500 companies. MetLife entered Indian
insurance sector in 2001.
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1.5 S.W.O.T. ANALYSIS
Both Strengths and Weaknesses are inherent with the company while Opportunities and
Threats are usually outside factors, which affect the existence of the company at large.
Let us make the SWOT Analysis for Max New York Life Insurance Company:
STRENGTHS WEAKNESSES
Max New York Life is a young vibrant Max New York Life: Limited Pay
company proud of the excellent track Endowment Plan
record it has created for itself in a relatively
short period of time. MNYL has today MAX New York Life's new endowment
become one of the most aggressive players policy allows you to pay premiums for a
in the Insurance services domain. A key limited term and enjoy risk cover for the
factor in our success has been our ability to entire term. Moreover, it comes with a
attract some of the most talented people in built-in double risk cover and a guaranteed
any industry. addition of 10 per cent of the sum assured
on maturity, besides the regular non-
Excellence reversionary bonuses. You can choose a
"In every aspect of work. Ranging from the policy term of 20 or 25 years. The premium
in-house training institute to the detailed payment depends on the term chosen.
Personal Insurance Plan. Max New York Though premiums are paid for a limited
Life is focused on achieving the highest term, bonuses accrue for the full period.
standards of quality in every aspect of their
business".
Honesty
"Is the heart of the Life Insurance business.
Max New York believes that above all,
Life Insurance is based on trust.
Transparency, Dependability and Integrity
27

will form the cornerstones of the Max New
York Life experience."
Knowledge
"Is what makes experts. Max New York
Life is focused on the Life Insurance
business. Perfectly combining global
expertise with local knowledge, Max New
York Life is the Indian Life Insurance
specialist."
Caring
"For the customer. Max New York Life is
redefining the Life Insurance paradigm to
focus on the needs of the customers. The
Max New York service process is
responsive, personalized, humane and
empathetic."
OPPORTUNITIES THREATS
Recent experience has shown that
• Main threat is from LIC
wherever an industry has been thrown open
• As the number of agents are
to competition, the size of the market has
considerably huge, efficient
grown and the existing players have
management of all the field force
retained nearly 80% of the market share.
need greater strain and effort
The size of the insurable population in
• More and more companies are
India is indeed vast and the existing player
coming into the field and the
has managed to cover about one-fourth of
existing ones have to struggle hard
it. The opportunities before the players are
to keep the customers loyal and to
therefore aplenty in terms of target
get more customers
28

• Now as India is on the brim of
audience.
emerging out as an economic power
The falling interest rates, the collapse of center, stringent laws can be
many small-time financial institutions, the expected in the coming future.
scope for entering related areas like
banking and pensions in a bid for synergy
and the promise of e-commerce are some
of the other opportunities knocking at the
doors of the insurance majors.
There is a probability of a spurt in
employment opportunities. A number of
web-sites are coming up on insurance, a
few financial magazines exclusively
devoted to insurance and also a few
training institutes being set up hurriedly.
Many of the universities and management
institutes have already started or are
contemplating new courses in insurance. It
also augurs well for greater development of
professionalism of the trade and expansion
of opportunities for everyone concerned.
The pension market, which perhaps has not
been very vibrant in the country, is also
likely to witness a sea change with huge
expansion in terms of premium and number
of policies. Health insurance, which is still
in its infancy, is also likely to get a major
boost, ultimately leading to improvement
in the quality of medical treatment and
29

facilities in the country.
The opening of the insurance sector will
throw open a huge array of opportunities,
many of which will be in unrelated fields
and may give a bigger push to the
development of the national economy as a
whole.
Life insurance has today become a
mainstay of any market economy since it
offers plenty of scope for garnering large
sums of money for long periods of time. A
well-regulated life insurance industry
which moves with the times by offering its
customers tailor-made products to satisfy
their financial needs is, therefore, essential
if we desire to progress towards a worry-
free future. (PIB Features)
30

OBJECTIVE & METHODOLOGY
2.1 SIGNIFICANCE
The Max Life Insurance site is historically significant: It is the location of what may be
the first reported archaeological site in Indian, and it is certainly the site of the first
excavation in the state to collect archaeological materials. Moreover, the site is
archaeologically significant for the information it can yield about one of the four main
villages of the Caborn-Welborn culture, and about how inter-community relationships
may have changed over time.
For the long-range goal of understanding the development and decline of the Caborn-
Welborn culture, it is essential to know the site-specific characteristics of each of the
remaining main communities. Because the archaeological deposits at Max Life Insurance
sites retain integrity on both the ridge crest and in the buried midden deposits along the
swale and slough, we can recover some of the kinds of materials and associations needed
to characterize this community.
The key questions for Max Life Insurance are: What practices distinguished the Bone
Bank villagers from their contemporaries; did they decorate their pottery, or weave their
fabrics, in a distinctive manner, compared other villages? Or were the techniques, motifs
and embellishments common among most communities? What is the evidence for long
distance trade? Was Bone Bank a fortified village, as would be indicated if a stockade
wall is present around the remaining southeast village segment on the ridge crest?
31

2.2 MANAGERIAL USEFULNESS OF THE STUDY
• Helps to have sale experience
• Helps to deal with different customers
• Helps to overcome the objections of the customers
• Helps to understand the problems of agents in a broader prospect
• It provides a platform where managerial role can be played effectively and
efficiently
2.3 OBJECTIVES
The summer internship program was carried with two prime objectives in mind. The
entire internship program was divided into two parts,
 The recruitment of the insurance advisors
 A survey conducted on the agent advisors of Max New York Life.
The recruitment of agent advisors is the most important responsibility of a sales manager
in any insurance organization. If the manager is able to recruit quality agent advisors half
of his work is done then and there.
During this internship program I was involved in the recruitment of insurance agent and
the advisors under the supervision of the sales manager. This enabled me to get a first
hand experience and learning of this important function which will be very helpful in my
future.
The survey was conducted on the agent advisors of Max New York Life. The main
objective behind the survey was to find out the factors which motivated the advisors to
perform their maximum potential. The survey also aimed at finding the factors within the
organization which would help them work more efficiently.
32

2.4 SCOPE OF THE STUDY
1) To study the present recruitment and selection process in the organization at
various levels,
2) To find the awareness level of employees vis-à-vis recruitment and selection
policy and
3) To compare the company’s recruitment and selection policy with the best HR
practices in recruitment and selection process.
2.5 METHODOLOGY
THE RECRUITMENT FUNNEL
Names 60
Screening Interview 20
NAT/ARIF 16
Career seminar 8
P200 & market survey
6
Career interview 4
Agents 2
33

INITIAL SCREENING
It is the first interaction of the recruiter with the prospect agent and the first step towards
the entire interview process. There are primarily two objectives of the initial screening.
First: to literally screen the candidate and to determine whether to go ahead with the
other recruitment processes. If the candidate fits in the scheme of the things then the
second objective is to be achieved
Second: to inspire and motivate the candidate to consider this as a career option. Here
care has to be taken to maintain the interest of the candidate with the presentation. It is
important to maintain a right degree of professionalism and be well prepared for the
interview.
The Interview Structure
The meeting has three phases
1) The Introduction: this should be no more than 15 minutes and here the manager
should give the candidate enough opportunity to tell about himself.
2) Describe the opportunity: One the manger has enough information about the
candidates background he/she should briefly describe the opportunity.
3) Have the candidate complete the company profile.
1. The Introduction And Screening Question:
Here the manager should start by briefly describing the structure of the meeting, the
purpose of the interview and the process that would be followed and the payoff for both
the candidate and the company. Then the manager should ask general questions about the
candidate and listen to him carefully. This dialogue provides important information about
34

the candidate to the manager. The manager should use a structured series of questions
and record the answers in the candidates recruitment file.
Discussing The Career Opportunity:
The manager should take approximately 10 minutes to explain the career opportunity to
the candidate. And the manager should use the “push – pull” technique here. One should
avoid selling too much. Quality candidates will become suspicious about the standards if
the manager seems to hire the candidate on the spot.
The manager should also stat that it is an outstanding opportunity and the selection
process is a challenge that most candidate do not successfully complete. This way the
manager can make his/her presentation more attractive with the push pull technique. Also
this will help you avoid the following problem . if you have wasted too much time selling
the career and then the candidate fails the numerical ability test , you have wasted a lot of
your time. So during the initial screening interview, be professional, minimize
distractions, and use the push pull technique.
The career presentation should cover five areas.
 A brief discussion of the insurance industry
 The benefits of being associated with Max New York Life.
 The general benefits of a career in life insurance business, explaining the
opportunity of becoming sales managers or agency associates.
 The benefits of being associated with that particular General Office.
 The selection process.
Provide an overview of the steps of the process and clearly stat that our objective is to
encourage and promote only candidate with a strong probability of success.
35

Primary Objectives(s)
The primary objective is to study, understand and analyze various aspects related to
recruitment and selection procedure at Max Life Insurance.
Hypothesis and Research
 A research Methodology defines the purpose of the research, how it
proceeds, how to measure progress and what constitute success with respect
to the objectives determined for carrying out the research study.
The appropriate research design formulated is detailed below.
 Exploratory research: this kind of research has the primary objective of
development of insights into the problem. It studies the main area where the
problem lies and also tries to evaluate some appropriate courses of action.
 The research methodology for the present study has been adopted to reflect
these realties and help reach the logical conclusion in an objective and
scientific manner.
The present study contemplated an exploratory research
The methodology adopted in concluding this study was quite simple. First there was
collection of data from various sources including business and personal interview. Then
after scanning and properly and analyzing and interpretation the information available on
hand, a final report was prepared.
Sources of data
Data is collected from Primary as well as secondary source. For primary data customers
were personally intervened and for secondary data, journals, Internet and books.
36

a. PRIMARY DATA: Primary data was collected from the sample by a self-
administered questionnaire in presence of the interviewer.
b. SECONDARY DATA: The chief sources of secondary data were magazines,
newspapers, journals etc.
SAMPLE SIZE
The survey is conducted among 100 respondents.
37

CONCEPTUAL DISCUSSION
RECRUITMENT PROCESS
3.1 THE RECRUITMENT PROCESS
The insurance industry grows on the shoulders of the insurance agents and advisors. It is
because of this reason that recruitment of quality agent advisors becomes a prime job of a
sales manager which is the only possible means to ensure success on both personal level
and for the organization as a whole.
Max New York Life says managers are very important for company. As a manager they
will play a critical role in managerial corporate by means of recruiting quality agent
advisors and developing them to do their job effectively.
A key MAX New York Life objective is profitable growth at a competitive cost. To
achieve that goal the managers must continually select and develop high quality new
advisors while building, nurturing and supervision an established sales force. Success in
field management therefore requires an unusual blend of sills and talents –some of ethic
one may already have, and some which one will need to develop.
38

Recruitment Process Map
Initial screening Selection
Name
interview interview
gathering
Purpose: To build Purpose : Does he meet the Purpose : Testing the
steady pipeline initial target conviction & sustainability of
a career
Outcome : rule of 31 Outcome : fill in interview Outcome: short listing
file .sell the career
NAT & reference Career seminar
P-200
check
Purpose : screen the Purpose : evangelize Purpose : get him to feel
candidate and to fit him to insurance and sell it as a his initial market
the closest successful career
profile
Outcome : I want to do it Outcome: list of probable
Outcome : profile of the (higher conversion ration) buyers
candidate and list of probes
Evaluate P- Career interview
200/market
survey
Purpose : candidate to assess Purpose : review of all which
his market and get referred has been done and check on Application
leads motivation, dream & longevity
form
Outcome : readiness to accept Outcome: candidate ready to
this career join
39

3.2 What is a sales managers job.
As Max New York sales manager one will have to be an effective leader. This is a
challenging work. They find that recruiting is much more than selling a career
opportunity, it is a commitment to help new agents make good transition, new meeting
etc from the previous career to the profession of sales.
Throughout their work they will always lead by example .They cannot expect their agents
to meet high standards if they do not demand the same standards of themselves. Max
New York life expects that they will develop the knowledge and habits that had made
them successful in the past, and dwell upon the enhancement of the personal development
of the agent advisors with a personal dedication to self discipline and high standards of
ethics. They must ensure that the agent advisors realize that to succeed they must have a
passion for helping others, and an unwavering commitment to developing a winning
team.
This commitment will help them persevere in difficult circumstances and do the right
thing when tough decisions are required as a steward of the M N Y L, there will be an
obligation to generation of agents past, present and future.
There are tremendous and varied rewards to this work- emotional, financial and
professional. As a MNYL manager, the opportunities for emotional and financial rewards
are similar, but they will come from different sources for example they may derive
enjoyment as a manager from –
Leading and teaching :
Being a role model and a source of guidance for the people with whom you work. This
often includes helping people who are “under employed” reach their full potential by
your coaching and encouragement.
40

Team building :
Bringing together a group of individuals and molding them into a cohesive team that
provides mutual encouragements, support and achievements.
The sales manager’s role
There are two basic roles that need to be effectively full filled by a sales manager, viz,
recruitment of quality agent advisors and their development. While the recruitment
activity would be explained in greater detail in the later articles, the development part is
beyond the scope of this project.
It is because of the importance of this activity that a well defined process has been laid
down by the company. It is said that “Becoming an outstanding recruiter won’t guarantee
your success but not being able to recruit for whatever reason will definitely guarantee
failure.”
The fundamentals of recruiting involves having
 A philosophy of consistent and continual recruitment.
 An ideal candidate profile.
 A recruiting process
 Clearly defined goals
A sales manager’s primary objective is to master the art of prospecting new agents. Here
arises the question as to who are the quality agents. With years of experience and
expertise in the business the company has laid down that a quality agent advisor is one
who has
 A history of success pattern
41

 A well defined natural market
 An income history at a level equal to executive council or higher
 Work habits that indicate high energy and leadership potential
 Good self esteem and a competitive nature
 Adequate personal financial reserves.
Some demographic factors which must be considered while recruiting an insurance agent
advisor are
 Time in area
 Income history
 Education level
 Leadership experience
 Sales background
 Community involvement
 Employment background
 Professional background
Keeping in mind the above mentioned factors there are certain laid down by the company
which the sales manager has to abide by while recruiting an insurance advisor?
 The prospect should be above the age of 25
 The prospect should be a graduate
 The prospect should be living in the area for more than 5 year
 The prospect should be married
42

To be successful in his primary job a sales manager should follow the recruitment process
that has been laid down. Strict adherence to the process will definitely guarantee greater
success. The recruitment process is as follows.
Name gathering -------
Initial screening day 1
Test and reference check day 3
Career seminar/ administering P-200 day 6
Evaluation of P-200 and survey day 10
Career interview day 11
Additional interview day 12
NAME GATHERING
The importance of this activity cannot be said too often “prospecting is the single most
important skill required a manager’s future success”. If a manager is able to generate
enough quality candidate names, he/she will be able to select and hire top quality
candidates. Industry studies have proven the importance of prospecting. Studies of high
retention and high productivity agencies have found only one major discriminator
between these agencies and those with poor retention and productivity. That the
discriminator is simply that good offices interview more candidates per hire. “On an
average these agencies conduct 20 screening interview and administer 15 numerical
ability test for each agents hired. Conversely the low productivity and retention agencies
conduct only 12 screening interviews and administer 7 numerical tests per hire. Clearly
effective prospecting is the answer. A manager will be better able to select out unsuitable
candidate and to let go of agents who are not performing to standards. Without
confidence in his/her prospecting skills he/she will be inclined to appoint candidates who
are significantly less than ideal and to hang on to poor performers long after they should
have resigned.
43

EFFECTIVE SOURCES OF NAME GATHERING
The sources of name gathering can be broadly divided into two categories
a) primary sources
 Agent referrals
 Centre of Influences
 Nominators
 Personal Observations
 Policy Holders
 Friends and Family
b) supplement sources
 Newspaper Advertising
 Direct mail/ Pre-Approach Letters
 Employment news
 Seminars
 Campus Recruitments
 Personnel Directors.
AGENT REFERRAL PROGRAM ( ARP )
Agent Referral Program (ARP) is a unique tool in sourcing quality new names from
successful advisors. It can also act as an additional income opportunity for the advisors.
The existing agent advisors in the team are required to give references of prospective
names. As they are in the business they know the requirement better and so they are the
best source of quality names. In order to get quality names from the agent advisors the
sales manager should
 Ask for references in every Performance review and planning (RPP)
 Ask after every successful field demonstration
44

 Take Advisors out for dinner and use the opportunity to ask for referrals.
But in turn there is a need to reward and encourage the agent advisor so that this becomes
an ongoing habit.
Centre of Influence
A centre of influence can be defined as people with whom you already have an
established relationship for referrals as an agent. Your centers of influence for recruiting
will include friends business and civic contacts and your clients.
Because these people respect you as a professional they will want to help you succeed.
Ultimately they will most likely be your second most productive source of candidate
referrals. Referrals from agents have consistently proven to be the best source for quality
names. We begin with Centre Of Influence at this point because you will have few of
your own agents to ask.
To cultivate your Centers of Influence you will need a well organized presentation of the
career opportunity and a description of the type of candidate you seek. Your existing
Centre of Influence may be thinking of a very different profile or people that you have in
your mind. Therefore your presentation must direct their focus to a different set of
qualities and characteristics for agent’s candidate’s referrals.
NOMINATORS
A prominent people in the community who may be in a position to recommend
prospective agents. Development of nominator can be a very useful practice for sales
managers as they can also be a very good source of quality names. With constant
communication with the nominator he/she can be developed into a Centre of Influence.
So this practice if done religiously can be a very good source of quality names. For better
45

results the companies has laid down certain scripts which a sales manager should use
while communicating with the nominator.
While talking to a nominator a manager should keep in mind that he/she should always
take permission before speaking to the nominator and always insure that by helping
hi,/her the nominator would also help other people. Also the sales manager should not
forget to maintain regular contact and thank and acknowledge the efforts of the
nominator and develop him as a centre of influence.
WHAT SHOULD THE COMPANIES LOOK AT ?
The new companies have attempted appealing only to the middle, upper middle and elite
classes. Contrasted with Public sector insurance companies, with their offices across the
country, the new companies have miles to go before they reach anywhere. They must
overcome the mindset of the customer that life insurance is LIC and general insurance is
GIC if they hope to grow in the market.
Public Sector Companies Private Sector Companies
Identity is well established, but the Have to build their identity in a market
perception of “poor service providers" is where the public does not distinguish
a stigma. them.
Products are not attractive and flexible Remove the perception that anything
enough but expensive. that looks good is expensive.
To retain their creamy layer clientele Work against the people's mindset that
who are the most likely to be wooed by they are not here for the long term.
the new companies.
Retain and attract good intermediaries. Attract intermediaries especially agents
with the requisite qualifications and
attributes who can market the company
and the product.
Match the aura created by the new Run the risk of tapping an already
companies in the urban market. insured market for repeat insurance
46

instead of tapping new virgin pockets
in the market.
In this process all are targeting the same market --the existing pie is being cut up further,
but no attempt is being made to increase the size of the pie. For example, while attempts
are made to complete the quota of rural insurance in percentage terms, the rural market
potential is yet to be tapped, as the new insurers are not able to attract the right kind of
talent into their distribution force to address this. Intelligent segmentation of distribution
channels to match the market segmentation is what will help the companies to move in
this direction.
NUMERICAL APTITUDE TEST
This test focuses on the comfort level of the agents in simple mathematical calculations
and basic finance questions like simple interest , compound interest etc, as they would be
generating illustrations while they sell.
The numerical ability test has 20 questions each carrying 1 mark , there is negative
marking of 0.25 marks for every wrong answer. The time allowed for the test is 30
minutes. The agent has to obtain a minimum of 50% marks which is 10 marks to pass the
test. Calculators are not allowed. The test has to be administered and checked by the
agency coordinator and the results are published on the same day.
The room which is used to conduct the test will also make an impression on the
candidate. The managers should make sure that the room in which the test is being
conducted should be quite and free from all distractions. Borrowing an office , or putting
the candidate in an empty office may send the wrong signal to the potential peak
performer.
CAREER SEMINAR
47

So far in the recruitment process the manager has tried to access the ability of the
candidate. But the candidate should also be given an opportunity to know about the
company and the career opportunity; he/she should be able to access for himself/herself
the worth of the company and the opportunity given to him/her. In order to help the
candidate know about the company and the opportunity the company conducts a career
seminar every Friday in the evening. The career seminar is usually conducted by the
Partner/ Associate Partner or the
Sales Manager. In the seminar a very illustrative presentation is made. The candidates
who have been screened by the sales managers over the week are invited to attend the
seminar. In the seminar the presentation starts with a general description about the
insurance company followed by an introduction to Max New York Life, giving a lot of
emphasis on its reputation and credibility. The invitees are then informed about the nature
of the work which has been offered to then, the method in which the work has to be
carried out etc in great details. Also they are told about how they would earn in this
business and are given a brief illustration of how much they can earn in this business. The
presentation then has a guest speaker which is usually an exiting successful agent advisor
who discusses his success story with the invitees. This illustrative presentation then
draws a lot of attention and then the invitees clarify their doubts and ask any kind of
question they have. They person who is conducting the seminar is more that happy to
answer the question. In this manner the career seminar imprints an image of the
organization and the career opportunity in the minds of the prospects and they are now in
a better situation to take a decision about this offer.
48

EVALUATION OF P-200
After attending the career seminar the candidate is given a project called the P-200. in
this the candidate is required to write down the names of 200 people that he/she knows
along with some of their details. A sample copy of the P-200 is attached in the
appendices. Once they have filled the P-200 with the names, then an evaluation is done
on those names. This has a two fold benefit.
 The company would know about the natural market of the candidates which
would largely be responsible for his/her initial success.
 The candidate will have a database and can make an effective use of it.
In order to judge the natural market of the candidate , the manager picks up names
randomly form the P-200 list and call then. It is expected that the person who has been
called recognizes the candidate and give due attention to the call.
P-200 also helps a manager to categorize the natural market of the candidate under
various parameter like average annual income , age, etc. as insurance is sold as per the
needs and the spending ability of any individual, this categorization can help the
candidate in streamlining his approach while doing business.
The manager can also know if the market base of the candidate shows any tendency
towards any particular type of profession. The manager can also ask the candidate to
make calls to the names listed in the P-200 to try and sell them the product and evaluate
the candidate on this. This will help the manager is knowing the shortcomings which can
be eliminated later.
49

CAREER INTERVIEW
After the completion of the career seminar and the evaluation of P-200, the candidate and
the company know about each other and can make a call. Therefore the last part pf the
recruitment process is the career interview which is conducted by the Managing Partner/
Partner. The main purpose of this interview is to review all the previous activities of the
recruitment process, and top check the motivation level and the dreams and aspirations of
the candidate. The Managing Partner/ Partner would also look to know about the
expectations of the candidate and his intentions about a association with the company.
This ideally is the last past of the recruitment process after which the candidate is finally
invited to join the training program. But in case there is any disconnect between the
views of the sales manager and the MP/Partner, then there is another interview, the
additional interview to take a final call on this.
After completion of these rounds of interview and assessment the candidate is finally
invited to join the training program for a period of one month, during which he is
awarded the license to work with Max New York Life Insurance Company as an agent
advisor.
50

DATA ANALYSIS
4.1 PERSONAL OBSERVATION
It can be defined as a face to face contact made on an impromptu basis in order to secure
an appointment for a recruiting interview.
Effective recruiting requires consistent activity. Personal observation is a method of
prospecting that enables you to be always recruiting and taking advantage of every
opportunity that arises. These opportunities usually occur when you are in the midst of
some other activity or event. You may be having lunch with an agent attending a child’s
sporting event, working out in the gym or running errands on the weekends.
As you use personal observation, you will notice more and more the caliber of the
individual you meet daily. Ideal candidate are impressive people, and you will want to
approach them if you have not been introduced.
These are some of the most effective sources of gathering names. There are other very
important sources like newspaper advertisements, seminars, college interns etc. but these
sources should be used as supplementary means to the once discussed earlier for greater
result and consistency.
Once sufficient names have been gathered and after having qualified the names to suit the
requirement, the next obvious step is the initial screening.
The importance of name gathering can be seen form the recruitment funnel. The funnel
says that in order to recruit 2 quality agents the sales manager should have 60 qualified
names. Out of those 60 qualified names there should be at least 20 initial screening, and 8
career seminars and 4 career interview. This shows how important getting enough
51

qualified names is .also since the Max New York Life works on a quality model ,
therefore it is important to screen good number of well qualified names before recruiting
agents. It is because of this reason that M N Y L has a highly respect and efficient agent
advisors team amongst all other insurance companies in India
4.2 SURVEY
The aim of the survey was to find the out what are the factors that motivate an insurance
agent advisor and also to find out how the organization can help the agents in improving
their performance. The survey was carried out on a sample size of 30 agents advisors of
Max New York Life. It was questionnaire based survey in which I personally sat with
each and every sample and discussed the various question. This practice though time
consuming help me in bringing out the best results as I could not get the most intriguing
answers and also the agents and advisor felt more comfortable in giving their genuine
feedback and suggestions. The survey was carried over a period of one month and each
say was an enriching experience as each day the agent advisors had some enriching
experience to share. During the duration of one month I tried to cover agent advisors
from various demographics. For example I tried to cover equal number of tenured agents
and the newer once. I also made a point to cover the agents advisors of all age groups and
I was happy to observe that different age groups had different view about the various
aspects covered in the survey. The survey also gave me an opportunity to interact with a
good number of agent and advisors which was a very rewarding experience. In the
subsequent pages I will share with u the finding of the survey.
This survey revealed some interesting facts about the motivational needs and
expectations of the agent advisors. More than 60% of the advisors who work with
MNYL currently have their own business or other job and the primary reason why they
have joined MNYL is extra money.
52

Q. 1 Motivating factor which affects agent of Max New York Life
Insurance?
motivating factor
money
12
10 recognition
8
association with
6 an organisaation
4 influenced by
2 others success
had freet ime
0
From the graph it is evident that most of the agent advisors working with MNYL are
motivated by the kind of money that they can make in the business. The other factors
which motivate them are recognition and association with a multi national organization.
There are few who motivate themselves by the success of the other agents. A handful of
people do not actually have any thing to motivate them, they are working with MNYL to
spare time.
53

Q. 2 What factor should be considered while communicating with
potential customers?
The agents and advisors have also given some important feedback about the important
characteristics which an MNYL agent’s advisor should possess. The results are shown
with the help of a graph below.
characteristics
30%
25%
patience
20% comunication
15% relation building
10% persistence
5% hardworking
0%
1
The agents feel that communication is the most important characteristics that an advisor
should possess, followed by patience and the ability to work hard. Therefore the
management of MNYL should give emphasis on developing the communication skills of
the agents. Also as an advisor makes most of his appointments over the phone, there
should be greater emphasis on soft skill development in the training module.
Most of the MNYL agents advisor feel that they are growing with the as rate as which the
insurance industry is growing which is a very good sign, how ever there are a few
percentage who feel that they are not growing as fast as the industry is and they feel that
the reason for not growing is their lack of time devotion and hard work.
The feedback of the agent advisors regarding the recruitment interview has been very
positive with the majority of the agent advisors saying that they are very pleased with the
entire recruitment process.
54

Q. 3 What percentage of customers are satisfied with the service of
Max New York Life Insurance?
comfort with screening interview
80%
60%
40% comfortable
not comfortable
20%
0%
comfortable not
comfortable
Some of the agents felt that the presentation of the managers during the screening
interview is very impressive and that the way they project this career is very effective.
The fact that the manager had treated them like guests rather than an individual who is
seeking a work opportunity left a lasting impression. The advisors also feel that the career
seminar had helped in making up their mind to a great extent. However a good
Percentage of the agents surveyed had not attended the career seminar which means that a
number of prospect do not get an opportunity to attend the seminar and therefore the
company might lose a potential top performer.
55

Q. 4 What percentage of customers are influenced by the agent?
influence of the career seminar
70%
60%
50%
influenced
40%
not influenced
30%
did not attend
20%
10%
0%
1
Those there were mixed reaction about other things but a majority of the advisors had a
similar opinion about the training program. This can be seen in the graph given below.
56

Q. 5 What percentage of customers are satisfied by the training
programme of the agent?
satisfaction with training program
100%
80%
60% satisfied
40% unsatisfied
20%
0%
satisfied unsatisfied
The agent and advisors also feel that the success of the advisor in bringing good business
is also due to the world class training program. On a question regarding the product range
of MNYL, there was a mixed response from the advisors. Where 60% of the advisors feel
that the products are enough while he remaining 40% say that the products are not
enough.
57

FINDINGS AND RECOMMENDATION
5.1 FINDINGS
The greatest motivating factors for the agents and advisors are money followed by being
a part of a Multi national organization.
Most of the agent advisors feel that good communication is important to be successful in
this business and therefore the company should train them in developing good
communication skills.
The agents and advisors find that the career seminar is a very important tool in selling the
agency as a career and most of them have been influenced by this.
 The agents and advisors are very satisfied with the training program at
MNYL and believe that is it one of the reason for their success.
 A good number of agents feel that there should be more policies for the
children
 A good number of agents are not satisfied with the facilities provided by the
management. They would like the company to increase the number of
telephone in the agent area and also make the camp shop more efficient
 The agent advisors also felt that the y are not given regular updates on the
position of the application that they have submitted.
 The agents are happy with the kind of support they are getting from the
management, but some feel that the management should be more supportive
towards non productive agents.
58

5.2 RECOMMENDATIONS
The survey has made it evident that the agents and advisors are by and large satisfied
with the organization and are happy to be a part of this esteemed company. However
there are few areas where the agent advisors feel that there is some scope of
improvement.
Most of the agents and advisors feel that communication is the most important
characteristics that an advisor should possess. And as the agents take most of their
appointments over the phone, the training module should contain program which would
train them on soft skills and telephone etiquette.
Most of the agents and advisors are not satisfied with the working of the camp shop,
therefore some measures should be taken to make it more effective and spontaneous.
Since money is the most important motivating factor, the company should make regular
updates in the reward and recognition program, as many agents and advisors feel that the
rewards and recognition system are not enough remuneration for their hard work and
commitment.
There is a need for refreshment for the clients who visit the office. Unable to do so might
leave a bad impression in the minds of the client about the organization.
59

ANNEXURES
INVESTOR RELEASES
MAX NEW YORK LIFE INSURANCE
 Operating cash profit of Rs. 112.31 crore earned in FY 04-05 against Rs. 4.34
crore in FY 03-04.
 Annualized First Year Premium (AFYP - new sales) value at Rs. 241.51 crore for
the year ended March 2005, grows 65% year-on-year.
 Unit Link in place: contributes 32% of total sales for the company for the period
Jan – Apr 2005.
 Long tenor products and young customer base builds up strong business
fundamentals for MNYL. With clear focus on whole life segment the average age
of insured as well as the balance tenor of the policy is around 29 years.
 Average case size per active agent at Rs. 15976 for the quarter ended March 2005,
grows 68% from Rs. 9496 for quarter ended March 2004.
MAX NEW YORK LIFE INSURANCE
 MNYL maintains high agent productivity. Ranked No. 1 in annualized first year
premium (AFYP) per agent per month and Case Rate per agent.
 Number of policies sold during the year ended March 2005 increases to 216,671
from 145,582 in the previous year. Number of Individual policies in force
increases from 153,995 as of March 2004 to 375,085 as of March 2005.
 Sum assured in force increases 50% from Rs. 112 billion as of March 2004 to Rs.
167 billion as of March 2005.
60

 35% growth in agency force in FY 04-05, 1959 agents added in 12 months and
659 in quarter ended March 2005.
MAX NEW YORK LIFE INSURANCE
 MNYL maintains a persistency rate of around 80% throughout the year, higher
than the industry average of around 70%.
 Geographic coverage increases to 38 offices – future plans to cover 62 offices.
Corporate agent coverage extends to an additional 100 towns.
 Strong Co-operative Bank relationships created during the year, partnership from
inception with Yes Bank.
MAX NEW YORK LIFE INSURANCE
Key Business Driver Unit Quarter Ended Year Ended
Mar-05 Mar-04 Dec-04 Dec-03
a) Sales Value (Annualized first year Rs. crore 76.87 47.28 214.40 111.70
premium) zx
b) Average case size per active agent Rs. 15,976 9,496 1,224 1,185
c) Case rate per active agent per month No. 3.22 3.27 2.16 1.86
d) Number of agents No. 7,567 5,608 6,908 5,070
e) Net agents added No. 659 538 1,838 1,916
f) Overall persistency rate % 76.70 82.10 82.90 81.10
g) Gross written premium income Rs. crore
First year premium 56.85 39.88 192.40 95.30
Renewal premium 60.83 22.21 143.90 64.30
Single premium 15.81 2.28 16.70 12.50
Total 133.49 64.37 353.00 172.10
h) Number of Policies sold No. 62,647 54,224 214,34 113,287
7
h) Sum insured in force Rs. crore 16,711 11,162 15,244 9,805
Max India Limited Investor Release January 2006
61

MAX SPECIALITY PRODUCTS
 Substantial expansion plans approved in December 2005
– Addition of a new BOPP film manufacturing line with a capacity of 20,000
TPA.
– Addition of a new thermal lamination film line with a capacity of 120,000
KSM.
– Estimated project cost of Rs. 122 Crores – Debt-Equity mix of 1:1.
– Maintain leadership position in specialty plastic films segment.
 Generates revenue of Rs. 100 Crores, and PBT of Rs. 8 Crores for first nine
months ended Dec’05.
– MaxFoil achieves revenue growth of 49% year-on-year.
 100% capacity utilization – installed capacity 8,800 tons per annum.
 High production yield.
 Highest return on capital employed of Rs. 69 Crores – 21%, better than
competitors.
62

MAX SPECIALITY PRODUCTS
 Cash Profit of Rs. 157 Crores earned for the year ended Dec’05, grows 60% year-
on-year.
 Annualized First Year Premium (AFYP – new sales) value for the year ended
Dec’05 is Rs. 428 Crores, grows 100% year-on-year.
 Gross premium income of Rs. 635 Crores for the year ended Dec’05, grows 85%
year-on-year over previous year’s Rs. 343 Crores.
 Unit Linked products contribute 45% of total sales of the Company for the year
ended Dec’05.
– Top quartile investment performance by MNYL’s Unit Linked fund last year.
 Sum assured in force as at Dec’05 end over Rs. 235 billion ($ 5.2 billion).
MAX NEW YORK LIFE INSURANCE
 607,652 individual policies in force. New policies sold during the year ended
Dec’05 at 360,798, grows 68% year-on-year over 214,347 policies sold in the
corresponding previous year period.
 Overall Persistency rate of 75% as of Dec’05 end against 83% as of Dec’04 end.
Persistency rate is 80% for agency sales and 63% for sales through other
distribution channels.
 Agency force as at Dec’05 end at 12,575 agents grows 82% year-onyear. 5,667
net agents have been added in the year ended Dec’05. Number of agents in
Agency channel at 10,753 and in rural channel at 1,822. MAX NEW YORK LIFE
INSURANCE
63

 Average case size per agent at Rs. 15699 grows 28% over Rs. 12240 for the
corresponding previous year.
 Average case rate per agent per month is at 1.84 for the year ended Dec’05
against 1.76 for the previous year.
 MNYL maintains high agent productivity – Breaks into the top 50 global list of
MDRT (Million Dollar Round Table). The Company has 126 advisors qualifying
for MDRT for 2005.
– Ranked No. 1 in annualized first year premium (AFYP) per agent per month
and Case Rate per agent.
 Geographic coverage increases to 48 offices from 31 offices in Dec’04
– Future plans to cover 52 offices.
– Strengthen, build and grow Pan India presence.
MAX NEW YORK LIFE INSURANCE
Key Business Driver Unit Quarter Ended Year Ended YOY
Growth
Mar-05 Mar-04 Dec-04
a) Sales Value (Annualized Rs. 121.04 76.22 427.86 214.39 100%
first year premium) Crores
b) Average case size per Rs. 16,594 13,554 15,699 12,240 28%
agent
c) Case rate per agent per No. 2.29 2.14 1.84 1.76 5%
month
d) Number of agents No. 12,575 6,908 12,575 6,908 82%
e) Net agents added No. 1,908 353 5,667 1,838
f) Overall persistency rate % 75.20 82.90 75.20 82.90
g) Gross written premium Rs.
income Crores
First year premium 116.83 72.08 308.56 191.44 61%
Renewal premium 85.66 54.24 265.58 134.95 97%
Single premium 20.66 5.14 60.72 16.84 261%
h) Sum insured in force Rs. 23,524 15,244 23,524 15,244 54%
64

Crores
65

QUESTIONNARE
MAX NEW YORK LIFE INSURANCE COMPANY LIMITED
12th Floor, DLF Square, Jacaranda Marg, DLF City Phase II, Gurgaon-122002
FINANCIAL QUESTIONNARE
(Personal Covers)
Proposal no. :
Life to be Insured:
SECTION A
1 Please state your occupation
2 Are you (tick one)
a) Employed yes ( ) , no ( )
b) Self employed yes ( ) , no ( )
c) Share holding director (%of share holding) yes ( ) , no ( )
d) In partnership yes ( ) , no ( )
3 Please give details of any current policies that are with other life insurers
Insurers Sum Assured Reason for Cover Type/Term of
Policy
66

1 Please give details of Existing Policies in force for Life or Type/Term of Policy
Disability Benefits
Insurers Sum Assured Reason for Cover Type/Term of
Policy
2 Please state Earned Income in the last tax year (for self employed persons, state
personal earnings as assessed for income tax after deduction of allowable
business expenses.)
3 Please estimate the value of your Personal Assets and Liabilities.
Assets Liabilities
Property Mortgages
Investments Loans
Unquoted equities Others(please
specify)
Others(please
specify)
Total Total
4 Number and Age of Dependents
67

8 What is the reason for applying for this policy
(Please tick the appropriate one)
a) Family Protection ()
b) Personal Protection ()
c) Private Residential Loan Cover ( )
d) Others (please specify) ()
SECTION B
Please state:
1) Reason for Loan
2) Name of Lender
3) Name(S) of Borrower(S)
4) Amount of Loan
5) Term of Loan
6) Interest Rate
7) Repayment method (e.g. interest only, capital and interest)
I hereby declare and agree that the above particulars and answers are complete and true,
that I have not held back any relevant facts or details, and that the answers to
questionnaire will form part of the application for the desired insurance on my life.
Signature of Life to be Insured DATE:
68

QUESTIONNAIRE OF AGENTS
Q. 1 Motivating factor which affects agent of Max New York Life
Insurance?
• Money
• Recognition
• Assertion with an organization
• Influenced by others success
• Had free time
Q. 2 What factor should be considered while communicating with
potential customers?
• Patience
• Communication
• Relation building
• Persistence
• Hardworking
Q. 3 What percentage of customers are satisfied with the service of
Max New York Life Insurance?
• Comfortable
• Note comfortable
Q. 4 What percentage of customers are influenced by the agent?
• Influenced
• Not influenced
• did not attend
Q. 5 What percentage of customers are satisfied by the training
programme of the agent?
• Satisfied
• Unsatisfied
69

BIBLIOGRAPHY
1. Books
 Mishra.M.N ,Modern Concept of Insurance, Year 1999
 IC-02, IC-33 Insurance Institute Of India
 Kothari C.R , Resarch Methodolgy
 Gupta.S.L, Marketing Service
 Life Insurance Volume 1
- ICFAI Press
2. Newspapers and magazines:
 Insurance Chronical by ICFAI, Edn. June-2008
 Economic times, Edn. May-2008
 Times of India, Edn. 23, June-2008
3. Websites
 www.maxnewyorklife.com
 www.maxindia.com
 www.newyorklife.com
70

BIBLIOGRAPHY
1. Books
 Mishra.M.N ,Modern Concept of Insurance, Year 1999
 IC-02, IC-33 Insurance Institute Of India
 Kothari C.R , Resarch Methodolgy
 Gupta.S.L, Marketing Service
 Life Insurance Volume 1
- ICFAI Press
2. Newspapers and magazines:
 Insurance Chronical by ICFAI, Edn. June-2008
 Economic times, Edn. May-2008
 Times of India, Edn. 23, June-2008
3. Websites
 www.maxnewyorklife.com
 www.maxindia.com
 www.newyorklife.com
70