SUMMER TRAINING REPORT

ON
STUDY OF RECRUITMENT PROCESS OF
HDFC-SLIC AND RECURITMENT OF THE
FINANCIAL CONSULTANT
(HDFC-SLIC)
BADDI (H.P)

A Training Report Submitted In the partial Fulfillment of the

Requirement of the Degree of “Masters of Business
Administration”
YEAR 2007-08

Submitted To: Submitted By:

Punjab Technical University ABHISHEK TESSU
Jalandhar Roll No. 632222313

RIMT- Institute of Management & Computer

Technology, Mandi Gobindgarh

1
 ACKNOWLEDGEMENT

“If words are considered as symbol of Approval and Taken of

appreciation then let the words play the heralding role of expressing my
sincere gratitude and thanks”.

Any accomplishment requires the effort of many people and this work
is no different. I am indebted to MR. TEJPARKASH THAKUR (Sales
Development Manager), HDFC Standard Life Insurance, BADDI (H.P) but
for whose guidance and patience I would have not been able to accomplish
this task.

I also owe a great thanks to him for providing me an opportunity to

go through summer training, and providing me this golden opportunity to be
a part of the said esteemed company and letting me work on this project.

I also owe a great thanks to all the staff members of CHANDIGARH

branch of HDFC Standard Life Insurance, who helped me in the best
possible way to complete this summer training and this report.

ABHISHEK TESSU

2
 PREFACE

Risks and uncertainties are part of life's great adventure- accidents,

illness, theft, Natural disasters- they are all built into working of the universe
waiting to happen. So far that there is a solution - insurance and to provide
with the knowledge of this insurance benefits to the customers, the HDFC
standard life insurance co. plays an important role in this field.
To overcome these risks and uncertainties this project describes
about various insurance plans. How these companies provide benefits to
policy holders is well explained in this project. Now a day a lot is being
done to create awareness among the insuring Public about the need and
importance of insurance in the field of human being.

.In this direction IRDA has planned to create awareness through

electronic and print media. This project basically describes the products of
HDFC-SLIC.

3
 CONTENTS

• ACKNOWLEDGEMENT
• PREFACE
• INTRODUCTION
• INSURANCE: DEFINITION
• INSURANCE IN India
• A BRIEF HISTORY OF INSURANCE SECTOR
• INSURANCE SECTOR REFORMS
• IRDA
• INSURANCE COMPANIES
• LIC
o BENEFITS OF INSURANCE
• ELIGIBILITY TO BUY A POLICY
• HDFC-SLIC
• INTRODUCTION OF HDFC CO. LTD.
o HDFC GROUP
o SUBSIDIARY COMPANIES
 HDFC STANDARD LIFE INSURANCE
 HDFC DEVELOPMENT LIMITED
 HDFC INVESTED LIMITED
 ASSOCIATED COMPANIES
• HDFC STANDARD LIFE
o PARTNERSHIP
o MISSION

• THE RETAIL SALES HIERARCHY OF HDFC STANDARD LIFE INS.

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• HDFC STANDARD LIFE INS. CO. PROFILE
• ROLE OF AN INSURANCE AGENT
o INTRODUCTION
o APPOINTMENT OF FINANCIAL CONSULTANT
o PRE-REQUISITIES FOR SUCCESS
o SELLING LIFE INSURANCE
o PRE-APPROACH
o INTERVIEW/APPROACH
o APPROACH
• USEFUL IDEAS THROWN UP
• CERTIFIED FINANCIAL – A CARIEER IN INS. CO. LTD.
• AGENTS ARE CERTIFIED AS FINANCIAL CONSULTANT
• ROLE IN HDFC-SL CERTIFIED FINANCIAL CONSULTANT
• PRE-RECRUITMENT EXAMINATION FOR INS. AGENTS
• SELECTION PROCEDURE IN HDFC-SLIC
• RESEACH METHODOLOGY-AN OVERVIEW
o SAMPLE DESIGN
o DATA COLLECTION METHOD
o DATA ANALOGY
• OBJECTIVE OF THE STUDY
• QUESTIONNAIRE FOR DOOR-TO-DOOR ACTIVITY FOR FINANCIAL
CONSULTANT RECRUITMENT
• DATA ANALYSIS AND FINDINGS
• S.W.O.T. ANALYSIS
• SUGGESTIONS
• SUMMARY
• BIBLIOGRAPHY

5
 INTRODUCTION

Insurance is basically risk management device. The losses to assets

resulting from natural calamities like fire; flood, earthquake, accident etc. are met
out of the common pool contributed by large number of persons who are
exposed to similar risks. This contribution of many is used to pay the looses
suffered by unfortunate few. However the basic principle is that loss should occur
as a result of natural calamities or unexpected events, which are beyond the
human control. Secondly insured person should not make any gains out of
insurance.

It is natural to think of insurance of physical assets such as motor car

insurance or fire insurance but often be forget that creator all these assets is the
human being whose effort have gone along way in building up to assets. In that
scene human life is a unique income generating assets. Unlike physical assets,
which decrease with the passage of time, the individual become more
experienced and mature as he advances in age. This raises his earning capacity
and the purpose of life insurance is to protect the income to individual and
provide financial security to his family, which is dependent on his income in the
event of his pre-mature death. The individual also himself also needs financial
security for the old age or on his becoming permanently disabled when his
income will stop. Insurance also has an element of saving in certain cases.

Insurance is rupees 400 billion business in India and yet its spread in the
country is relatively thin. Insurance as a concept has not being able to make
headway in India. Presently LIC enjoys a monopoly in Life Insurance business
while GIC enjoys it in general insurance business. There has been very little
option before the customer to decide the insurer. A successful passage of the

6
IRA bill has clear the way of private sector operators in collaboration with their
overseas partners. It is likely to bring in a more professional and focused
approach. More over the foreign players would bring sophisticated actuarial
techniques with them, which would facilitate the insurer to effectively price the
product. It is very important that the trained marketing professionals who are able
to communicate specific features of the policy should sell the policy. In the next
millennium all these activities would play a crucial role in the overall development
and maturity of the insurance industry.

DEFINITION GENERAL DEFINITION: -

In the words of John Magee, “Insurance is a plan by which large numbers

of people associate themselves and transfers to the shoulders of all risks that
attach to individuals”

FUNDAMENTAL DEFINITION: -

In the words of D S Hansell, “Insurance may be defined as a social device

providing financial compensation for the effects of misfortune, the payments
being made from the accumulated contributions of all participating in the
scheme.”

7
 INSURANCE IN INDIA

The insurance sector in India has come a full circle from being an open
competitive market to nationalization and back to a liberalized market again.
Tracking the developments in the Indian Insurance sector reveals the 360 degree
turn witnessed over a period of almost two centuries.

A BRIEF HISTORY OF THE INSURANCE SECTOR

Life Insurance in its existing form came to India from the United Kingdom
with the establishment of a British firm Oriental Life Insurance Company in
Calcutta in 1818 followed by Bombay Life Assurance Company in 1823.
Some of the important milestones in the life insurance business in India are:

 1912: The Indian Life Assurance Companies Act enacted as the first statute
to regulate the life insurance business.
 1928: The Indian Insurance Companies Act enacted to enable the
government to collect statically information about both life and non-life
insurance businesses.
 1938: Earlier legislation consolidated and amended to by the Insurance Act
with the objective of protecting the interests of the insuring public.
 1956: 245 Indian and foreign insurers and provident societies taken over by
the central government and nationalized. LIC formed by and Act of
Parliament, viz, LIC Act, 1956, with a capital contribution of Rs. 5 Crore from
the Government of India.

8
 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 1950 in Calcutta by the British.
 1907: The Indian Mercantile Insurance Ltd. Set up, the first company to
transact all classes of general insurance business.
 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.
 1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
 1972: The General Insurance Business (Nationalization) Act, 1972
nationalized the general insurance business in India with effect from 1 st
January, 1973.

9
 INSURANCE SECTOR REFORMS

In 1993, Malhotra Committee, headed by former Finance Secretary and

RBI Governor R.N. Malhotra, was formed to evaluate the Indian insurance
industry and recommend its future direction. The Malhotra committee was set up
with the objective of complimenting the reforms initiated in the financial sector.

The reforms were aimed at “creating a more efficient and competitive

financial system suitable for the requirements of the economy keeping in mind
the structural changes currently underway and recognizing that insurance is an
important part of the overall financial system where it was necessary to address
the need for similar reforms”. In 1999, the committee submitted the report and
some of the key recommendations included:

 Structure

 Government stake in the insurance Companies to be brought down

to 50%
 Government should take over the holdings of GIC and its subsidiaries so
that these subsidiaries can act as independent corporations.
 All the insurances companies should be given greater freedom to operate.

 Competition

10
  Private Companies with a minimum paid up capital of Rs. 1 bn should be
allowed to enter the industry.
 No Company should deal in both Life and General Insurance through a
single entity.
 Foreign companies may be allowed to enter the industry in collaboration
with the domestic companies.
 Postal Life Insurance should be allowed to operate in the rural market.
 Only one State Level Life Company should be allowed to operate in
each state.

 Regulatory Body

 The Insurance Act should be changed

 An Insurance Regulatory body should be set up
 Controller of Insurance (Currently a part from the Finance Ministry) should
be made independent.

 Investments

 Mandatory Investments of LIC Life Fund in government securities to be

reduced from 75% to 50%
 GIC and its subsidiaries are not to hold more than 5% in any
company( there current holdings to be brought down to this level over a
period of time)

 Customer Service

 LIC should pay interest on delays in payments

beyond 30 days

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  Insurance companies must be encouraged to
set up unit linked pension plans
 Computerization of operations and updating of
technology to be carried out in the insurance industry.

INSURANCE REGULATORY DEVELOPMENT

AUTHORITY (IRDA)

INTRODUCTION

The Insurance Regulatory and Development Authority was established on

19th April, 2000 under Insurance Regulatory and Development Authority Act,
1999 with its headquarter at New Delhi. The Authority has changed its
headquarters to Hyderabad in December 2001. The Audit of the accounts of the
Authority has been entrusted under Section 19 (2) of the Comptroller & Auditor
General" (Duties, Power & Conditions of Service) Act, 1971. The Authority was to
consist of a Chairman, five full time Members and four Part-time Members. As on
date the Authority has one chairman, two full time and four part time members.
There is an Insurance Advisory Committee, which helps the Authority in making
its Rules and Regulations for proper discharge of its activities.

MISSION OF IRDA

12
To protect the interests of the policyholders, to regulate, promote and ensure
orderly growth of the insurance industry and for matters connected therewith or
incidental thereto.

POWERS AND FUNCTIONS:

The main powers and functions of the Authority are as under:

 Protect the interest of and secure fair treatment to policyholders;
 Bring about speedy and orderly growth of the insurance industry
(including annuity and superannuation payments), for the benefit of the
common man, and to provide long term funds for accelerating growth of the
economy;
 Set, promote, monitor and enforce high standards of integrity, financial
soundness, fair dealing and competence of those it regulates;
 Ensure that insurance customers receive precise, clear and correct
information about products and services and make them aware of their
responsibilities and duties in this regard;
 Ensure speedy settlement of genuine claims, to prevent insurance frauds and
other malpractices and put in place effective grievance redressal machinery;
 Promote fairness, transparency and orderly conduct in financial markets
dealing with insurance and build a reliable management information system to
enforce high standards of financial soundness amongst market players;
 Take action where such 'standards are inadequate or ineffectively enforced;
 Bring about optimum amount of self-regulations in day to day working of the
industry consistent with the requirements of prudential regulation.

SOURCES OF RECEIPTS

During 2001-02, the Authority's receipts were Rs.42.17 crores as against

its expenditure of Rs.5.89 crores. The receipts mainly consisted of fees received

13
from various Insurance companies operating in India on account of their
Registration and Renewal charges.

FUNDS

The funds of the authority are being retained by itself despite directions of
the Ministry to house the funds in Public Account of India as non-interest bearing
funds. As on 31st March 2002, the Authority continues to house its funds
amounting to Rs. 57.42 Crore in interest bearing deposits of banks and other
financial institutions.

PLAYERS THAT IRDA WILL GOVERN

The table below is the list of the likely players in the Indian insurance sector,
apart from Reliance, who has applied for both Life and Non-Life insurance
license; all have gone in with a foreign partner. The idea is that the foreign
partner will bring in expertise of global nature with products that are India
specific. And the Indian partner will bring in the distribution network and more
significantly the required 74% of the equity.

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 Life Insurance Non-Life Insurance

Reliance Life Insurance Reliance General Insurance

Kotak Mahindra-Old Mutual ICICI—Lombard Insurance
Max India—New York Life Wadia—Commercial Union
Prudential—ICICI Cholamandalam—Axa
HDFC—Standard Life M A Chidambaram—MetLife
Aditya Birla—Sun Life Insurance Sanmar Group—GIO
C K Birla—Zurich Insurance Tata Teleservices—AIG
Hindustan Times—Commercial Union 20th Century Finance—Guardian
Group
Centurion Bank—Canada Life Punjab National Bank, Vijaya
Bank, Allahabad Bank, and Bank
of India—Yasuda Fire and
Marine.
Vyasa Bank—ING IFFCO—Tokyo Fire & Marine
Apollo Hospitals—Aetna Sundaram Finance—Royal & Sun
Alliance
Bank of Baroda & Punjab National Bank—
Foreign partner

INSURANCE COMPANIES

IRDA has so far granted registration to 12 private life insurance

companies and 9 general insurance companies. If the existing public sector
insurance companies are included, there are currently 13 insurance companies
in the life side and 13 companies operating in general insurance business.
General Insurance Corporation has been approved as the "Indian reinsures" for
underwriting only reinsurance business. Particulars of the life insurance
companies and general insurance companies including their web address are
given below:

LIFE INSURERS Websites

Public Sector

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1. Life Insurance Corporation of India www.licindia.com

Private Sector

2. Allianz Bajaj Life Insurance Company www.allianzbajaj.co.in

Limited

3. Birla Sun-Life Insurance Company www.birlasunlife.com

Limited

4. HDFC Standard Life Insurance Co. www.hdfcinsurance.com

Limited

5. ICICI Prudential Life Insurance Co. www.iciciprulife.com

Limited

6. ING Vysya Life Insurance Company www.ingvysayalife.com

Limited

7. Max New York Life Insurance Co. www.maxnewyorklife.com

Limited

8. MetLife Insurance Company Limited www.metlife.com

9. Om Kotak Mahindra Life Insurance www.omkotakmahnidra.com

Co. Ltd.

10. SBI Life Insurance Company www.sbilife.co.in

Limited

11. TATA AIG Life Insurance Company www.tata-aig.com

Limited

12. AMP Sanmar Assurance Company www.ampsanmar.com

Limited

13. Dabur CGU Life Insurance Co. Pvt. www.avivaindia.com

Limited

GENERAL INSURERS

Public Sector

1. National Insurance Company Limited www.nationalinsuranceindia.com

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2. New India Assurance Company www.niacl.com
Limited

3. Oriental Insurance Company Limited www.orientalinsurance.nic.in

4. United India Insurance Company www.uiic.co.in

Limited

Private Sector

5. Bajaj Allianz General Insurance Co. www.bajajallianz.co.in

Limited

6. ICICI Lombard General Insurance www.icicilombard.com

Co. Ltd.

7. IFFCO-Tokyo General Insurance Co. www.itgi.co.in

Ltd.

8. Reliance General Insurance Co. www.ril.com

Limited

9. Royal Sundaram Alliance Insurance www.royalsun.com

Co. Ltd.

10. TATA AIG General Insurance Co. www.tata-aig.com

Limited

11. Cholamandalam General Insurance www.cholainsurance.com

Co. Ltd.

12. Export Credit Guarantee www.ecgcindia.com

Corporation

13. HDFC Chubb General Insurance

Co. Ltd.

REINSURER

1. General Insurance Corporation of www.gicindia.com

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India

18
 LIFE INSURANCE

Life insurance in India made its debut well over 100 years ago.
In our country, which is one of the most populated in the world, the prominence
of insurance is not as widely understood, as it ought to be. What follows is an
attempt to acquaint readers with some of the concepts of life insurance, with
special reference to LIC.

It should, however, be clearly understood that the following content is by no

means an exhaustive description of the terms and conditions of an LIC policy or
its benefits or privileges.

DEFINITION

Life insurance is a contract that pledges payment of an amount to the

person assured (or his nominee) on the happening of the event insured against.
The contract is valid for payment of the insured amount during:

 The date of maturity, or

 Specified dates at periodic intervals, or
 Unfortunate death, if it occurs earlier.

Among other things, the contract also provides for the payment of
premium periodically to the Corporation by the policyholder. Life insurance is
universally acknowledged to be an institution, which eliminates 'risk', substituting
certainty for uncertainty and comes to the timely aid of the family in the
unfortunate event Of death of the breadwinner
By and large, life insurance is civilization’s partial solution to the problems

19
caused by death. Life insurance, in short, is concerned with two hazards that
stand across the life-path of every person:

 That of dying prematurely leaves a dependent family to fend for itself.

 That of living till old age without visible means of support.

BENEFITS OF LIFE INSURANCE

 Contract of Insurance:

A contract of insurance is a contract of utmost good faith technically known as

uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the
proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.

 Protection:

Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.

 Aid to Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments

can be made effortlessly because of the 'easy installment' facility built into the

20
scheme. (Premium payment for insurance is monthly, quarterly, half yearly or
yearly).
For example: The Salary Saving Scheme popularly known as SSS provides a
convenient method of paying premium each month by deduction from one’s
salary. In this case employer directly pays the deducted premium to LIC. The
Salary Saving Scheme is ideal for any institution or establishment subject to
specified terms and conditions.

 Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any policy
that has acquired loan value. Besides, a life insurance policy is also generally
accepted as security, even for a commercial loan.

 Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force.
Assesses can also avail of provisions in the law for tax relief. In such cases the
assured in effect pays a lower premium for insurance than otherwise.

 Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can be
effectively used to meet certain monetary needs that may arise from time-to-time.
Children's education, start-in-life or marriage provision or even periodical needs for
cash over a stretch of time can be less stressful with the help of these policies.
Alternatively, policy money can be made available at the time of one's retirement from
service and used for any specific purpose, such as, purchase of a house or for other

21
investments. Also, loans are granted to policyholders for house building or for purchase
of flats (subject to certain con
 Contract of Insurance:

A contract of insurance is a contract of utmost good faith technically known as

uberrima fides. The doctrine of disclosing all material facts is embodied in this
important principle, which applies to all forms of insurance.
At the time of taking a policy, policyholder should ensure that all questions in the
proposal form are correctly answered. Any misrepresentation, non-disclosure or
fraud in any document leading to the acceptance of the risk would render the
insurance contract null and void.

 Protection:

Savings through life insurance guarantee full protection against risk of death of
the saver. Also, in case of demise, life insurance assures payment of the entire
amount assured (with bonuses wherever applicable) whereas in other savings
schemes, only the amount saved (with interest) is payable.

 Aid to Thrift:

Life insurance encourages 'thrift'. It allows long-term savings since payments

can be made effortlessly because of the 'easy installment' facility built into the
scheme. (Premium payment for insurance is monthly, quarterly, half yearly or
yearly).
For example: The Salary Saving Scheme popularly known as SSS provides a
convenient method of paying premium each month by deduction from one’s
salary. In this case employer directly pays the deducted premium to LIC. The
Salary Saving Scheme is ideal for any institution or establishment subject to
specified terms and conditions.

22
 Liquidity:

In case of insurance, it is easy to acquire loans on the sole security of any policy
that has acquired loan value. Besides, a life insurance policy is also generally
accepted as security, even for a commercial loan.

 Tax Relief:

Life Insurance is the best way to enjoy tax deductions on income tax and wealth
tax. This is available for amounts paid by way of premium for life insurance
subject to income tax rates in force.
Assesses can also avail of provisions in the law for tax relief. In such cases the
assured in effect pays a lower premium for insurance than otherwise.

 Money When You Need It:

A policy that has a suitable insurance plan or a combination of different plans can
be effectively used to meet certain monetary needs that may arise from time-to-
time.
Children's education, start-in-life or marriage provision or even periodical needs
for cash over a stretch of time can be less stressful with the help of these
policies.
Alternatively, policy money can be made available at the time of one's retirement
from service and used for any specific purpose, such as, purchase of a house or
for other investments. Also, loans are grantditions).

23
 ELIGIBILITY TO BUY A POLICY

Any person who has attained majority and is eligible to enter into a valid contract
can insure himself/herself and those in whom he/she has insurable interest.

Policies can also be taken, subject to certain conditions, on the life of one's
spouse or children. While underwriting proposals, certain factors such as the
policyholder’s state of health, the proponent's income and other relevant factors
are considered by the Corporation.

24
25
INTRODUCTION TO HDFC-SLIC

THE HDFC GROUP

HDFC commenced operations as a mortgage bank; it raised large wholesale

resources (domestic and international) and lent primarily to individual
households. In mid 1991, HDFC entered the retail deposit market by offering
savings and investment opportunities to households.

Incorporated in 1977 with a share capital of Rs. 10 Crores, HDFC has since
emerged as the largest residential mortgage finance institution in the country.
The corporation has had a series of share issues raising its capital to Rs. 120
Crores. The net worth of the corporation is Rs. 28,000 Crores.

SUBSIDIARY COMPANIES:

HDFC STANDARD LIFE INSURANCE

HDFC Standard Life Insurance Company is a joint venture between India’s

largest housing finance provider, HDFC, and the Europe’s largest mutual life
assurance company, the Standard Life Assurance Company (U.K.).

HDFC DEVELOPERS LIMITED

HDFC promoted a wholly owned subsidiary company; HDFC Developers Limited,

to undertake housing projects on a selected basis in various regions of the
country. HDFC Developers Limited has also undertaken a number of projects for

26
the office premises of the corporation. It is also being engages as a consultant to
a number of residential and commercial projects.

HDFC Investments Limited

HDFC promoted a wholly owned subsidiary company; HDFC Investments

Limited (HIL), to undertake investments in stocks, shares, debentures, and other
securities. The Reserve Bank of India under the category of investment
Company has registered HIL as a Non-Banking Insurance Company (NBFC). HIL
was set-up with an intention of being the investment arm of HDFC.
 HDFC Realty Limited
 HDFC Holding Limited
 HDFC Asset Management Company Limited
 HDFC Trustee Company Limited
 HDFC Finance Limited

ASSOCIATES COMPANIES

HDFC has broadened its service range by entering into strategic associations
with some of the best organizations, both Indian and international, which include:

 HDFC Bank Limited: Initially promoted in strategic alliance with NatWest

Group, UK. With Nat West diver sting it’s holding. HDFC Bank has signed a
MoU for strategic business collaboration with the Chase Manhattan Bank.
Chase Capital Partners through their various investment funds in India have
acquired 15% in HDFC Bank.

 The Housing Developing Finance Corporation and HDFC Bank have

promoted HDFC SECURITIES LIMITED. HDFC Securities has already
acquired BSE and NSE membership.

27
 Infrastructure Leasing and Financial Services Limited: Co-promoted jointly
with the Unit Trust of India and Central Bank of India.

 Maruti Countrywide Auto Financial Service Limited: In Alliance with Maruti

Udyog Limited and GE Capital India Limited.

 Colliers Jardine India Property Service Limited: Co-promoted jointly with

infrastructure leasing and Financial Services Limited and Colliers Jardine
Asia Pacific Limited.

 GRUH Finance Limited: Established with support from the international

Finance Corporation, the Aga Khan Fund for Economic Development and
Government of Gujarat.

 SBI Home Finance Limited: Co-promoted jointly with SBI Capital Markets
Limited.

 Can Fin Homes Limited: Co-promoted jointly with Canara Bank and Asian
Development Bank.

 GIC Housing Finance Limited: Co-promoted jointly with the General

Insurance Corporation.

28
 HDFC STANDARD LIFE
The Partnership:

HDFC and Standard Life first came together for a possible joint venture, to enter
the Life Insurance market, in January 1995. At the outset it was clear that both
companies shared similar values and beliefs and a strong relationship quickly
formed. In October 1995 the companies signed a 3 year joint venture agreement.
Around this time Standard Life purchased a 5% stake in HDFC, further
strengthening the relationship. The next three years were filled with uncertainty,
due to changes in government and ongoing delays in getting the IRDA
(Insurance Regulatory and Development authority) Act passed in parliament.
Despite this both companies remained firmly committed to the venture.
In October 1998, the joint venture agreement was renewed and additional
resource made available. Around this time Standard Life purchased 2% of
Infrastructure Development Finance Company Ltd. (IDFC). Standard Life also
started to use the services of the HDFC Treasury department to advise them
upon their investments in India.

Towards the end of 1999, the opening of the market looked very promising and
both companies agreed the time was right to move the operation to the next
level. Therefore, in January 2000 an expert team from the UK joined a hand
picked team from HDFC to form the core project team, based in Mumbai.
Around this time Standard Life purchased a further 5% stake in HDFC and a 5%
stake in HDFC Bank. In a further development Standard Life agreed to
participate in the Asset Management Company promoted by HDFC to enter the
mutual fund market. The Mutual Fund was launched on 20th July 2000.
The company was incorporated on 14th August 2000 under the name: HDFC
Standard Life Insurance Company Limited.

29
Their ambition from as far back as October 1995 was to be the first private
company to re-enter the life insurance market in India. On the 23rd of October
2000, this ambition was realized when HDFC Standard Life was the only life
company to be granted a certificate of registration.
HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while
Standard Life owns 18.6%. HDFC and Standard Life have a long and close
relationship built upon shared values and trust. The ambition of HDFC Standard
Life is to mirror the success of the parent companies and be the yardstick by
which all other insurance companies in India are measured. HDFC Standard Life
Insurance Company has been signed on by Blue Star to provide insurance cover
to its 1,805 employees across India and overseas.

HDFC Standard Life Insurance is one of the leading players in the group
insurance segment of the life insurance business. Its group business has grown
significantly since inception and now covers over 25,000 lives, across the entire
industry spectrum including software, FMCG, pharmaceuticals, banking,
consultancy, BPOs, retailing, and consumer electronics.

Mission:

To be the top new Life Insurance company in the market. It does not just mean
being the largest or the most productive company in the market, rather it is a
combination of several things like-

1. Customer service of the highest order

2. Value for money for customers
3. Professionalism in carrying out business
4. Innovative products to cater to different needs of different customers
5. Use of technology to improve service standards

30
6. Increasing market share

Incorporation of HDFC standard Life

Insurance

Company Limited

The company was incorporated on 14th August 2000 under the name of the
HDFC Standard Life Insurance Company Limited. On the 23rd of October 2000,
HDFC Standard Life was the only life company to be granted a certificate of
registration.

HDFC are the main shareholders in HDFC Standard Life, with 81.4%, while
Standard Life owns 18.6. Given Standard Life’s exiting investment in the HDFC
Group, this is the maximum investment allowed under current regulations.

31
The Retail Sales Hierarchy of HDFC Standard
Life Insurance
General Manager

Head Retail Sales

Zonal Manager

Branch Manager

Resident Manager

Assistant Sales Manager

Business Development Manager

Sales Development Manager

Financial Planner

Certificate Financial Consultants

32
 HFDC Standard Life Insurance

Company’s Profile

Incorporated in 1977 with a share capital of Rs. 10 Crores. HDFC has since
emerged as the largest residential mortgage finance institution in the country.
The net worth of the corporation is Rs. 28,000 Crores, HDFC manager’s assets.

Standard Life is Europe’s largest mutual life insurance company and specializes
in a wide range of other services like health care. Pension and annuities market
with a global presence. The company has Assets under management at US$ 119
billion.

33
 ROLE OF FINANCIAL CONSULTANTS

INTRODUCTION

Insurance companies may designate their agent as consultants, advisors or by any

other name. A person requires license under Insurance Act to be able to functions
as an insurance agent.

An insurance agent is an important component of distribution channel for life

insurance business. He is required to solicit and procure new insurance business
in a manner consistent with interests of the policyholders and his insurance
company. To achieve this, he is required:-
 Meet prospect, analyze their financial needs, and persuade them to buy a
product, which provides solution.
 Arrange completion of all essential requirement for the underwriter viz. filling
of proposal form, collection of premium, medical examination, age proof of
income (if required) or other medical reports.

After the proposal results into a policy, it is the interest of the life assured, the
agent and the insurer that the business is conserved and it continues, without a
lapse, till it result in to a claim. Therefore, the agent has to:-

 Remain in
contact with the policyholders and ensure that renewal premiums are paid on
time.

34
  Take care
that nomination is made under the policy and is changed under
circumstances.
 Provides
help to the claimants to complete necessary forms and comply with other
requirements relating to claim settlement.
The agent has also to assist the policyholder in situation like – the policyholder
needs loan under the policy or wants to make an assignment. Providing services
such as these help the agent in strengthening bonds of relationship with the
policyholders.

Appointment of Financial Consultant

1. This Agreement shall come into force on the date of the license to act an
insurance agent.
2. The Company hereby appoints the Agent as Financial Consultant of the
Company.
3. To the extent not provided herein, the appointment of the financial consultant
shall be governed by the provisions of the Applicable Law as govern the
appointment and functioning of insurance agents.
4. The Financial Consultant shall at all times fulfill the minimum performance
requirements in terms of new business, premium income, number of
proposals, number of lives insured or on any other relevant count stipulated
by the Company from time to time. (Hereinafter to as the “Minimum
Performance Requirements”). It shall be opened to the Company to stipules
the minimum Performance Requirements or a specified period or period or to
specify the Insurance Product or Products which the Financial Consultant
Shall solicit and procure or the Company.

35
5. With prejudice to the generality of the application of the provisions Applicable
Law, the Financial Consultant shall scrupulously follow, adhere to and comply
with the code to conduct prescribed by the Insurance Regulatory and
Development Authority (Licensing to Insurance Agents) Regulations,
2000(hereinafter referred to as the “Code of conduct”) as through the said
Code of Conduct has been set out in and forms part of this agreement.

a. The Financial Consultant shall not allow offer to allow, either directly or
indirectly, as an inducement, to a prospect or a policyholder, to take
out or renew or continue a policy, any rebate to the premium payable
under the policy or to the commissions payable to him; nor shall be
offered any other rates, advantages, terms or conditions than those
offered by the company.
b. The Financial Consultant shall be wholly responsible for the accuracy,
truthfulness and completeness of the information furnished in the
Agent’s Confidential Report submitted by him with the proposal or
otherwise made available to the company.
c. The Financial Consultant shall, promptly and in any Caesar not later
than the times stipulated by the company in that behalf transmit to the
concerned office of the company all proposals for the insurance and all
other document procured or received by or called for from him.
d. The Financial Consultant shall not accept any money, in case, demand
draft or in any other manner, from a prospect or a policyholder in
relation to a proposal for insurance or under a policy or revival a policy
and in all cases of tender of any money by 3 prospect or a policyholder
direct him to the appropriate office of the Company for payment or
advise him of the permissible modes of payment of the company.
Without prejudice to the provisions of any other clause in this
Agreement providing for indemnified during the period this Agreement
is in force and at any time thereafter or not, of the provisions of this
clause.

36
e. The Financial Consultant shall attend all meetings, conferences and
briefings conducted by or on behalf of the company to acquaint the
sales force with the Insurance Products, business plans and policies to
the company to acquaint the sales force with the insurance Products,
business plans and policies to the Company and any other matter of
relevance to them of which reasonable notice has been given to the
Financial Consultant.
f. Where the Financial Consultant intends to bring out or publish any
material in any form or through any medium, concerning the company,
its business or its Financial Consultant shall obtain prior written
approval of the company. Further, he shall observe and comply with
the provisions of the Insurance Regulatory and Development Authority
(Insurance Advertisements and Disclosure) Regulations, 2000.
g. The Financial Consultant shall solicit and procure life insurance
business for the company and discharge his obligations under this
Agreement in accordance with the Company’s corporate objectives
with particular regard to the Company’s image and standing in the
industry and in the community.
h. The Financial Consultant shall observe, follow and comply with all the
directions and instructions given by the company from time to time,
either generally or with particular reference to the Financial Consultant.
i. The Financial Consultant shall familiarize himself with the applicable
law as in force from time to time and which has a bearing on the
obligations as an insurance agent; provided that in the event of any
change in the Applicable Law resulting in a dilution or abrogation of his
obligations under this Agreement, to the extent not provided otherwise,
the Financial Consultant shall continue to be bound by the obligations
as were existent prior to such changes, unless expressly approved in
writing by the company.

37
 PREREQUISITES FOR SUCCESS

An agent has to be familiar with the following so that he may perform his role
well.
 Various
plans offered by his manner, their benefits and restrictions.
 Office procedures for various matter as also the forms and documents
required An insurance agent is an agent of the prospect also. At time the
prospect requires advice on certain matter from a person whom he considers
knowledgeable and whom he can trust. To; come up to the expectation of his
prospects, the agent must be familiar with the:-
 Other Financial instruments, suitable for savings and investment, available in
the market and their benefits and advantages.
 Law, particulars, the taxations aspects relating to these instruments.
As many instruments are available in the market, it is difficult for the agent to
master the details of all. If an agent, who does not have the necessary
knowledge, gives answers on the basis of guesswork or hearsay, it will be non-
professional. It is a better course if the agent admits that he does not have a
ready answer and would come with complete detail the next day.

38
 SELLING LIFE INSURANCE
First step is to prepare a regularly growing list of prospects. A prospect is a
person who can be approached for insurance ‘Prospecting’ is the process of
finding more and more potential customers (i.e. prospectus).

Sources of Prospecting are:-

 Friends, acquaintances, neighbors etc.
 Newspapers, bulletins, directories etc.
 Social, official and religious meeting etc.

Other Specific Sources are:-

 Nests: Business houses, factories, schools, hotels, colleges, offices etc.
 Centers of Influence: Leaders, elders, teachers, Panchayat members,
professional, astrologers etc.
 Referred Lead: Through existing customers—a chain
 Orphaned policyholders
 Claimants: Helps in settling claims.
 Cold Canvassing: Finding prospects amongst strangers.
Next step for the agent is to ‘quality’ these names. A qualified “PROSPECT” is
one who

39
a. has a need for insurance
b. has a capacity to pay
c. is approachable and
d. is acceptable to insurer (i.e. has an insurability)

Getting this information is called “Qualifying”. A qualified prospectus is the

target person for insurance sales.
The salesman should try to collect as much information as possible about family,
income, interest, hobbies etc of the prospect. It is necessary to keep a record of
this information. It is called inventory of prospectus. He should also formulate
the types of plans to be offered.
After prospectus is ‘qualified’ the salesman meets him. A sales takes place when
a prospect buys a product. In between this simple transaction, the salesman has
to take along the prospectus with through the well-defined steps, which are not
separate and exclusive but blended into one integrated process. There are no
hared and fast rules in blending these steps together at various stages to obtain
the desired results. These steps are:-
 Pre-approach
 Interview / approach
 Approach
 Objections

PRE-APPROACH
Pre-approach is what a salesman does between the time a prospect is chosen
and the time he meets him in person.
A. Preparation is needed as to
 What to offered
 When and where to meet
 Whether a reference is required
B. For the above preparation basic information if income, health, habits,
family history, interest, saving capacity, etc of the prospect will be required.

40
 This information will have to be gathered from different source. A personal
call on the prospect may also be requires to persuade him in taking a positive
decision.
C. This will help him have fruitful talk. It also enables them to come to the
quickly without waste of time. Preparing a presentation is the best line of
action. It helps make an organized discussion.
D. As proposal for insurance has not yet been made, ‘pre-approach’ call
should be used for suggesting proposals unless the discussion develops
further and leads to the agent completing the proposals paper and collecting
cheque.
E. Brief letter or cards can be sent for introducing oneself and informing to
call in a short time. This will lead to creating a congenial atmosphere. In order
to make the approach more effective, the salesman should have some key
words in mind for opening sentences.
F. It is also necessary to keep all the requirements ready for effecting a sale.
You should have your tools –all the relevant forms, calculations, charts,
pamphlets, brochures etc. – ready to strike when the iron is hot.
G. It is advisable to make a written proposal which has the following
advantages:
• Neither the agent nor the proposal misses any detail
• More lasting impression is created
• Prospect can take his own time to understand it.
• Once can stop at any point, clarify it and continue the discussion
thereafter without losing the track.
H. When you visit a prospect, you should look your best, wearing a smile.

INTERVIEW APPROACH
This is a stage when the salesman and the prospect are face to face. There is
direct interaction between the two. Inform the prospect that you are calling on
him for life insurance – there is no need to feel hesitant or defensive. The agent
should carry a firm conviction in his mind that insurance provides financial

41
 security to the prospect and his family. The agent must have rehearsed well so
as to start his talk in a manner that arouses interest otherwise no attention will be
paid to his proposals.
In order to have a favorable hearing and his acceptability, the salesman should
give due consideration to:
 The time of approach/ interview
 The Place and the method of greeting
It is here that stories can AROUSE THE CURIOSITY of the prospect.
 The importance of the selected time and place lies in the fact where the
prospect does not resent presence of the salesman. The prospect is not
preoccupied and he is not disturbed.

Generally, meeting in office, or certain morning and evening hours at home are
not likely by the prospects. As such it sis always advisable to fix the time and
place at pre-approach stage.
 A single interview is not likely to bring he desired result. Sometimes the home
work done at pre-approach stage may prove to be different from he actual
situation. This being the first contact, at least a favorable impression should be
created in the mind of the prospect.
 If the prospect is a referred lead, a direct reference of the reference can be
made and it can be made clear you sell insurance. (Such reference can result
in endless chain.)
 During interviews a sales story can be more effective because it conveys the
idea and information necessary to arouse prospect’s interest in a short time.

A planned and duly rehearsed presentation with proper sequence of ideas is vital
in the art of persuasion. The purpose of selling interview is to enhance the
interest in the plan of insurance. The next step is to:
a. Uncover the need
b. Emphasize upon the need and
c. Accentuate the need

42
 Approach
It means the presence of the salesman with prospect at a convenient place and
appointed time so that the two can talk freely.
A. The agent should follow some rules during the interview such as:-
•Talk to the point- do not talk more than necessary
•Make conversion interactive – ask question that make the prospect talk
•Arouse curiosity in the mind of the prospect so tat he asks questions
•For their clarifications
• Listen to the prospect carefully
•Do not interrupt, contradict or argue
•Make the talk interesting through pictorial presentation
• Agent’s advice should be in the best interest of the prospect – it should not be in
the interest of the agent.

B. When the talks begins and the interview starts

 A well prepared presentation is quite useful and true life stories relating to what
insurance has done are more effective. These arouse the curiosity and interest
of the prospect and help him arrived at the decision. The sequence is which
ideas are presented is very significant in the art of persuasion.
 Take care, that is not only you who is interviewing the prospect but vice-versa,
it is also true. You have to be ready with all the answers that can satisfy the
prospect. It is the interview that is being sold. If you are able to sell the
interviews that is being sold. If you are able to sell the interview which also
means selling yourself ‘CLOSE OF THE SALE’ is very close. Planned
presentation also covers inquire about the earliest insurance and or other
saving plans.
 While appreciating this, the salesman should be able to find snags in such
programmes and make the prospect to realize the need for its cover up. Then

43
 the presence is plan and shows how it can fully meet such needs. And finally it
is accepted by the prospect.

IDEAS TO MOTIVATE A GOOD CANDIDATE

TO BECOME FINANCIAL CONSULTANT

The typical reasons for opposition / reluctance form prospective FCs is:
They look down upon becoming “commission-based” wage-earners.
The points that were thrown up that could effectively tackle this resistance were:
i) This is one of the few professions where the employee gets to choose his
own timings for working
ii) This is one of the few professions where the employee gets to choose the
customers which he wishes to serve.
iii) This is one of the few professions where there is unlimited opportunity to
earn- there is no upper limit.
iv) This is the only profession where there are definite benefits derived for
today’s work for the next 10-40 years.
v) This is the only profession which gives up to 40% gross margin without
any capital investment in the business.

44
vi) This is a profession which bestows upon the person the status of an “expert”
– hence he can derive satisfaction form the fact that hundreds of people
actually benefit form his advice, thereby generating tremendous goodwill.

2. Alternate channel for prospective good Insurance Salesman

There would still be good people out there who do not agree to become
commission-based FCs. The solution here could be to set up an in-house
distribution subsidiary which
• will have contract-based employees working full time on their rolls
• these employees will draw a package which will have a fixed component
(salary/ stipend/fixed allowance) and a variable component linked to each
proposal (commission – e.g. half that of an FC)
• There would need to be clear exit clauses over time to ensure that the
company does not end up endlessly investing in unproductive resources.
• There could be an option where these employees over time build
confidence and move to the fully –variable FC model
3. Make efforts to get this vocation public recognition and approval
This could be done enough
Presentations to opinion leaders – club members/ residential societies/
placements consultants
Generating positive endorsements by opinion leaders about this vocation

45
 ALTERNATIVE IDEAS TO RECRUIT

GOOD FINANCIAL CONSULTANTS

BACKGROUND
This idea was chosen as it uppermost on most of the BM’s minds as one of the
most important issues concerning their jobs at work. At most of the branches, the
traditional routes of recruiting FC’s (Advertising in mainline newspapers and
scouting for FCs through traditional databases like CAS, Stock Exchanges, Post
Offices, etc., are dying up.

Problems faced by the BM were

 Not able to enough good FCs through these traditional routes/ in these
traditional segments.
 Difficult to excite/ motivate good FCs to join us when they find them (as good
candidates reluctant to take up commission-based jobs.)
The objective of the exercise was to throw up new ideas which could then be
implemented if found useful.

46
 USEFUL IDEAS THROWN UP

A. Alternative routes to locate prospective Financial Consultants

I.A Targeting New segments for prospective FCs

The new segments that the brainstorming session threw up were:-

i. Members of multilevel Marketing chains (Amway’s, Modicare, Tupperware,
Aviance, etc.)They have good contact bases.
ii. Secretaries/Chairmen of Housing Societies- these are local opinion leaders.
iii. Secretaries/Chairmen of local community groups- these are local opinion leaders
iv. Accounts/HR/Purchase personnel in companies-these are opinion leaders/ in-
house tax experts
v. Ration Shop/Karyana Shops merchants-these are local opinion leaders
vi. Partners/Employees of DSAs/DMAs-they have good contract bases.
vii. Placement Consultants-they have good database
viii. Leading Members of Clubs like Rotary, Lions, Jaycee, etc.—local opinion
leaders.
ix. Leading members of trade unions—opinion leaders
x. Student leaders in Universities—opinion leaders

47
 xi. Medical representatives—they have good contact bases
xii. Socially—active Housewives(located through mahilla samitis/kitty parties)—
opinion leaders, have good contact bases
xiii. Family members of employees in the IT department—opinion leaders
xiv. STD booth owners—have good contact bases
xv. Employees in telecom companies—good contact bases
xvi. Hoteliers/Caterers –good contact bases
xvii. LPG dealers – good contact bases
xviii. Bank tellers—good contact bases
xix. Doctors—opinion leaders, good contact bases
xx. Company employees—brand ambassadors/exerts
xxi. People in Financial trouble (locate NPAs of housing loan companies)—alternate
vocation for these people
xxii. Relatives of Sarpanches/-Gram Sewaks/Agri Samiti Members (for rural FCs)—
local opinion leaders.
xxiii. Members of NGOs/ Social activists (for rural FCs –local opinion leaders have
good contact bases.
xxiv. Sales staff/distributors of Fertilizer companies (for rural FCs) have good contacts
bases.
xxv. Family members of postal staff (for rural FCs)—local opinion leaders.

I.B Product specific FCs

Our current FC is a “general” expert, who needs to satisfy over time the needs
of an 18 year old to 60 years old. This could be one of the barriers in locating
good FCs. An interesting thought that came up is that we could have FCs who is
specialized in product lines and these FCs could have different profiles.

 FCs who specialize in selling Pensions

i. A person who sells deposits/Postal Products
ii. has conduct base in the older age group

48
 iii. employees in co-operative banks (which give higher FD rates
for senior citizens)

 FCs who specializes in selling LCTA/Term

i. a person who sells liabilities/home loans

ii. real estate agents/employees in real estate firms
iii. has a contact base in the younger age group

 FCs who specializes in selling SPWL

i. A person who sells other
investment products like mutual
funds, etc.
ii. stock brokers/ sub-brokers
iii. Has an investment – savvy
contact base.

I.C Referral Programmes

i. Incentives FC get FCs programmes.
ii. Incentives Employee get FC Programmes
iii. Incentives “other brand ambassador (like group company
customers)” get FC programme

I.D Education programmes

i. “Every family/society should have an Insurance Expert”—Using forums like
GBMs of residential societies to propagate this idea
ii. “Every company should have an insurance expert” – Using forums like
cafeterias/canteens of companies to propagate this idea

2. Ideas to motivate good candidates to become Insurance salesman

2. A the pitch to be taken for prospective FCs

49
 The typical reasons for opposition/reluctance from prospective FCs are:
i. They look down upon becoming “commission-based” wage-earners
ii. They think a job means-being a full-time employee on the rolls of a company-
hence a less lucrative offer but which has the “security” of being on the rolls
attracts them more
iii. Insurance selling is difficult.

The points that were thrown up that could effectively tackle this resistance were
1. This is one of the few professions where the employee gets to choose his
own timings for working.
2. This is one of the few professions where the employee gets to choose the
customers which he wishes to serve.
3. This is one of the few professions where there is unlimited opportunity to
earn. - There is no upper limit.
4. This is the ONLY profession which gives up to 40% gross margin without
any capital investment in the business.
5. This is the ONLY profession where there are definite benefits derived for
today’s work for the next 10-40years.
6. This is a profession which bestows upon the person the status of an “expert”
–hence he can derive satisfaction from the fact that hundreds of people
actually benefit from his advice, thereby generating tremendous goodwill.

2. B Alternative channel for prospective good Insurance Salesman

There would still be good people out there who do not agree to become
commission-based FCs. The solution here could be to set up an in-house
distribution subsidiary which
 will have contract-based employees working full time on their rolls
 these employees will draw a package which will have a fixed
component( salary/stipend/fixed allowance) and a variable component
linked to each proposal(commission-eg.half that of an FC)

50
  There would need to be clear exit clauses over time to ensure that the
company does not end up endlessly investing in unproductive resource.
 There could be an option where these employees over time build
confidence and move to the fully-variable FC model.

2. C Make efforts to get this vocation public recognition and approval.

This could be done through
i. Presentations to opinion leaders-club members/residential societies/placement
consultants.
ii. Generating positive endorsements by opinion leaders about this vocation.

ADVISOR ROLE
• To provide ongoing Financial advice for his/her clients:
Identify future clients:
o Making appointments
o Conduct Financial review meetings with prospects/ clients
o Close sale
o Get referrals
o Provide service to clients
• Follows internal sales and reporting system

WORKING ENVIRNOMENT
o To be part of world class sales team
o Work form your own office and residence

51
 o Work fulltime and part time
o Earn commission, bonus & incentives
o No upper limits on earnings

YOUR OPPORTUNITY
No start up capital required
Flexible working environment
Be your own boss
Unlimited earning potential
To be part of world class team

YOUR POSSESS
o Confidence
o Self motivation
o Persuasion
o Urge to be financially independent
o Relationship skills

CERTIFIED Financial Consultant’ –A

CAREER IN INSURANCE COMPANY LIMITED

HDFC Standard Life Insurance Company Limited is a joint venture between

HDFC, India’s largest housing financial institution and Standard Life Assurance
Company, Europe’s largest mutual life company. HDFC and Standard Life are
Companies with tremendous financial strength as endorsed by credit rating
agencies. Both enjoy an excellent reputation in terms of goodwill and efficient
customer service. Sales training imparted to our consultants will be based on the
finest international practices. HDFC manages Rs. 21450 crores in assets and
Standard Life manages US$121 billion in assets.

52
Both the promoters are well known for their ethical dealings, their Financial
strength and their commitment to be a long term player in the life insurance
industry—all important factors to consider when choosing your insurer

Agents as Certified Financial

Consultant

People associate agents as middle-men, between the customer and the

company. We see our representatives as much more than this. We see our
representatives as professional and skilled advisors who are able to recommend
the best solutions based upon the individual customer’s needs. Furthermore, with
the imminent entry of new players and products in the market, we believe
products will become more complex, and customer expectations of financial
advisors will increase. The need for a consultant who will provide a customer-
centric solution in insurance is inevitable. Given this environment we believe that

53
the successful advisor/agents will have to assume the responsibility of a
“Certified Financial Consultant”. The title Consultant therefore reflects the image
we wish to develop and advocate in the market.

Role in HDFC SL ‘Certified Financial Consultant

He/she would analyze the customers’ financial requirements and recommend

appropriate life insurance and pension solution, so that the customer is able to
meet his/her Financial objectives in the most optimum manner. He/she shall
provide support to customers on an ongoing basis.

54
 Making a Financial Consultant
The company would support you by providing the required training and regular
coaching. We also provide information in the form of sales aids etc. so that you
are able to provide the best service to customers. One of the principal
responsibilities of our Business Development Manager (BDM) is to insure that
each Financial Consultant is supported at all times.

Career with HDFC SL as a Certified

Financial Consultant

This is one of the few professions where the employee gets to choose his own
timings for working. This is one of the few professions where the employee gets
to choose the customers which he wishes to serve.
This is one of the few professions where there is unlimited opportunity to earn—
there is no upper limit. This is only profession where there are definite benefits
derived for today’s work for the next 10-40 years. This is only profession which
gives up to 40% gross margin without any capital investment in the business.
This is a profession which bestows upon the person the status of an “expert” –
hence he can derive satisfaction from the fact that hundreds of people actually
benefit from his advice, thereby generating tremendous goodwill.

Pre-recruitment examination for financial

consultant

55
 This examination is called pre-recruitment examination for Insurance Agents. It
is administered separately for Life Insurance Agents and Generals Insurance
Agents, manually by the Institute and electronically by authorized ‘On-Line’
Examination Institutes. The examinations are called as follows:
i. Pre-recruitment Examination for Life Insurance Agents, and
ii. Pre-recruitment Examination for General Insurance Agents,

Eligibility
 18+years of age/10+2 passed
 Willing to undergo 100 hrs. IRDA mandatory training
 Has no agency with any Life Insurance Company

According to regulation 5 of the Regulations, the person desiring to obtain or

renew a license to act as an agent is required to:
1. Complete from an approved institution, at least, one hundred hours’
practical training in life or general insurance business, as the case may
be, which may be spread over three to four weeks, where such person is
seeking license for the first time to act as insurance agent and
2. Complete from an approved institution, at least one hundred fifty hours’
practical training in life and general insurance business, which may be
spread over six to eight weeks, where such applicant is seeking license for
the first time to act as a composite insurance agent.
A person taking examination is required to satisfy the requirements of regulations
4 & 5 of the regulations, as explained above.

Eligibility (Preferred by HDFC-Standard Life

Insurance Co. Ltd.

56
  Candidate referred should score high in values and ethics and should be a
match with HDFC SL Values.
 Ambitious, self motivated, should be able commit time and wants to make
serious money.
 The referred should preferably not be from a 9 to 5 job or else should be in
a position to dedicate at least 5 to 6 hours per day as an FC.

Overall Purpose of the Role

 To sell the products of the company in a professional ethical manner

.
 To set, monitor and achieve sales targets for self.

 To positively promote the company’s brand, its mission, aims and values.

Required Knowledge & Skills

 Product range and features market-industry, competitors

 Company Sales Process
 Company Organization Structure
 Sales Skills

Selection procedure in HDFC SLIC

57
  Filling of the Agency Application form

 Selection Test

 Initial screening by BDM

 Interview by Branch/Resident Manager with the help of the Business

Development Manager.

 Acceptance of training cum Performance deposit.

 Recommendation for IRDA training.

RESEARCH METHODOLOGY
A systematic Research reduces the uncertainly in the decision making process
management. Properly conducted marketing research is an indispensable tool for
top mgt. in marketing decision.
Marketing Research is defined as systematic design, collection analysis and
reporting of data and findings relevant to a specific marketing situation facing the
company.
In order to conduct a useful and objective marketing research. A research
methodology has to be adopted, became only then the studies conducted can be
properly elaborated & commented up.

58
 So, I have to conduct Research in fur sub groups.

 Sample design
 Data Collection Method
 Data Analysis

1. Sample Design
In the SAMPLING PLAN the basic and important question is WHO IS TO BE
SURVEYED? Since it is not possible to question every Person in the market, the
only one of the best alternative is to resort to SAMPLING TEACHNIQUE and is
also true for the present study as well. I was conducting RANDOM SURVEY.
A. SAMPLE SIZE=100
B. SAMPLING TECHNIQUE=Convenience Sampling

2. Data Collection Method

After the sample has been selected, next step is to collect data, which is vital
step since the accuracy of data collected defends upon the DATA COLLECTION
METHOD. So, I have chosen two types of Data Collection Method. There are:-

 Primary Data

 Secondary Data

59
For the purpose of the study, primary data is collected by direct personal
interview and in the secondary data; I collect Data from the magazines, internet &
etc.

Data Analysis

After the data collection it is time for Data Tabulation. The data is tabulated
properly so as to interpret it with a view to arrive at logical and meaningful
comprehensible.

One of the important feature of this study is the to recruit the Financial
Consultant. So, I make use of charts, tables etc with a view to present data
punctually, precisely and to make the study more interesting and early
comprehensible.

OBJECTIVE OF THE STUDY

• To know about the habit of people in the region of BADDI(H.P)

• To know what the people think about the Financial Consultant in the
insurance sector.

• To know about the views of people regarding various in insurance companies.

60
• To know the main consideration of the people while joining as the Financial
Consultant.

• Awareness about the new incentive schemes provided to the Financial

Consultant.

• Position of the insurance company in the mind of people.

• To know about the competition regarding various insurance companies

• To find out the position of the company in the market.

PROCESS TO BE FOLLOWED FOR FC

RECURITMENT

 Identifying areas to conduct survey so that we can get maximum of “Likely

Financial Consultant”.
 Identifying whether the prospect fits our profile of “Likely Financial
Consultant”-by administering Questionnaire.

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  Ensuring that the prospects who are interested are given to the branch to
convert.

Target Segment Mandatory Parameters Optional

Parameter
s
Males, Age:25-35, Does not already have a life Experience
in selling,
HSC/ GRADUATE insurance agency, Has social
Single-
contact base of more than 50
income
family,
people, has a telephone

Number of
number (preferably not pp)
dependents

Males, Age:35-55, Doesn’t already have a life Experience

in selling,
Graduate/Postgraduate Insurance agency,
Single-
Has social contacts base of
income
family,
More than50 people, has a

Number of
Telephone number(preferably
dependents
Not pp)
Females, Age:25-45, Doesn’t already have a life Experience
in selling,
Graduate/postgraduate Insurance agency,
Single-
Has social contacts base of
income

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 More than50 people, has a family,

Telephone number(preferably Number of

dependents
Not pp)

Note: Prospect can be said to fit our profile of “likely Financial Consultant” if

1. He/she matches Target Segment

2. He/she satisfies all Mandatory Parameters
3. He/she satisfies at least 1 out of the 3 optional parameters defined.

DATA ANALYSIS AND FINDINGS

Q1- Any there insurance companies’ which you are aware?

PARTICULAR RESPONSE
ICICI 20
BAJAJ ALLIANZ 5

63
 LIC 60
BIRLA PLUS 5
HDFC-SLIC 10

70
60
50

40
Series1
30
20
10
0
ICICI BAJAJ LIC BIRLA HDFC-
SLIC

Q2-What is the main source from which persons know about companies?

PARTICULAR RESPONSE
NEWSPAPER 23
ADVERTISEMENT 47
MEGAZINE 12
FRIENDS & PEER GROUPS 18

64
 50
45
40
35
30
25 Series1
20
15
10
5
0

$
NE
R

EN

S
E

ND
AP

AZ
M
SE

EG

IE
SP

FR
TI
W

M
R
NE

VE
AD

Q3-What attributes attracts a person to work as a financial consultant?

PARTICULAR RESPONSE
PART TIME JOB 37
EXTRA INCOME 26
WORK FROM OWN OFFICE 13
TO BE A PART OF WORLD SALES 24

65
 40
35
30
25
20 Series1
15
10
5
0
PART TIME EXTRA OWN OFFICE WORLD
INCOME SALES

Q4-What respondents see while becomes financial consultant?

PARTICULAR RESPONSE
GOODWILL OF COMPANY 56
ADVERTISEMENT GIVEN BY 23
COMPANY
BETTER COMMISSION 21

66
 60

50

40

30 Series1

20

10

0
GOODWILL ADVERTISEMENT COMMISSION

Q5- Do you know HDFC-SLIC?

PARTICULAR RESPONSE
YES 38
NO 62

67
 YES
NO

Q6- Do you currently have an agency for any life insurance company?

PARTICULAR RESPONSE
YES 23
NO 77

68
 YES
NO

Q7- Do you have any selling experience?

69
 PARTICULAR RESPONSE
YES 13
NO 87

YES
NO

S.W.O.T ANALYSIS
 Strengths:
 Strong tie-up

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With HDFC being major Housing Financial Institution and Standard Life being
major player in insurance Sector.
 Brand Equity
HDFC being major brand in India and Standard Life being major brand
worldwide.
 Strong Network
• HDFC’s Strong presence and awareness in the Indian Market.
• Huge Customer Database

 Weaknesses:
 Low customer awareness
 Less promotion

 Opportunities:
 32 Crore uninsured population
 Network building
 Targeting the rural segment

 Threats:
LIC and other aggressive new entrants.

SUGGESTIONS

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 • The people in the rural areas should be taped and brought under the life
policies.
• More and more advertising should be used to tap the customers. More
awareness campaign should be under taken so that people can relay on
the company.
• Life insurance policies should be made compulsory to all the earning
individual.
• Short term policies should be advertised heavily as it is still unknown area
from most of the people.
• Services should be improved procedure to get life insurance policy should
be made easily assessable.
• More and more of bonus and extra benefit should be given.
• Investment plans should be made to as suitable to individual need.
• Investment plans suitable to eh female population (female child) should be
brought in the market with minimum premium and additional benefit.
• As from the research the premium following in the segment of Rs.2500 to
Rs. 5000 should be encouraged. Policies having premium of less than
2500 can be increased or additional features can be added to this
segment of policy.
• Life insurance should be customized as the requirement of the customer.
• More and more benefits should be added to children segment since they are the
most untapped segment. Secondly, policy should be designed in such a way that they
cover both major as well the minor in a single policy.
• Benefits from the investment in insurance should be increased as compare to
provident fund.
• Financial Consultant should be provided training so that they are updated about
the latest trends and policies in the company.

72
 SUMMARY
 Insurance agent is an important component of distribution channel for life
insurance products. He is required to procure new insurance business in a
manner consistent with the interest of the policyholders and his company.

 It is the interest of the life assured, the insurer and the agent that the business
is conserved without lapse and for that the agent has to remain in contact with
the life assured, render proper service and help at the time of claim.

 Through knowledge about the company’s products and office procedures are
the pre-requisites for success of an agent. The agent is also a financial
advisor of the prospect and, therefore, must be familiar with other financial
instruments and law relating to tax matters.

 Selling process includes six main steps: pre-approach, approach, interview,

objections, motivation and closing.

A prospect decides to buy because he has a need, he finds a product for

need, and price is commensurate with the satisfaction he wants. For life
insurance, need arousal becomes necessary.

A life insurance contract may fail to perform as expected. The reasons for
such a failure may be: failure on the part of the policyholder, failure in
arranging for proof of title, defective records of the insurance company and
breach of utmost food faith. Agent’s role is significant in avoiding such a
failure.

 Servicing the policy is an important as selling it. Service means continuity of

contacts with the customer to ensure that the performance of the product is in
conformity with the expectations of the customer. Keeping in touch by way of
service calls also helps further selling.

73
 Bibliography

www.hdfc.standardlife.com
www.licindia.com
www.irda.com
www.google.com

74
STUDY OF RECRUITMENT PROCESS OF HDFC SLIC AND RECRUITMENT
OF THE FINANCIAL CONSULTANT
=============================================================

QUESTIONNAIRE

Name:

Age:

Occupation:

Phone No. :

Address:

1) What is your Educational Qualification? (please tick appropriate)

a. 10th pass:
b. 10+2/ stream:
c. Graduate/stream:
d. Post Graduate (specify):
2) What is your current Occupation? (please tick)

a. Salaried:
b. Self-employed:
c. Student (specify):

75
3) Any there insurance companies’ which you are aware?

a. ICICI
b. HDFC-SLIC
c. BAJAJ ALLIANZ
d. LIC
e. BIRLA PLUS

4) What is the main source from which persons know about companies?

a. News paper
b. Advertisement
c. Magazine
d. Friends & peer groups

5) What attributes attracts a person to work as a financial consultant?

a. Part time job

b. Extra income
c. Work from own office and residence
d. To be a part of world sales

6) What respondents see while becomes financial consultant?

a. Goodwill of the company

b. Advertisement given by the company
c. Better commission

7) Do you know HDFC-SLIC?

a. Yes
b. No

76
8) Do you currently have an agency for any life insurance company?

a. Yes
b. No
c. If yes, which company?

9) Do you have any selling experience?

a. Yes

b. No

10) Any suggestion recommended by you?

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[We thank you for your kind cooperation, valuable inputs and time]
RIMT-IMCT, MANDI GOBINDGARH ================================

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