UNIVERSITY OF MUMBAI

PROJECT ON

CHALLENGES FACED BY RECRUITERS IN MAX LIFE INSURANCE

BACHELOR OF COMMERCE

(BANKING & INSURANCE)

SEMESTER – VI

(2017-18)

SUBMITTED BY

PRABHAT KUMAR PRAKASH CHANDRA SHARMA

ROLL NO. :1044

PROJECT GUIDE

PROF. (Mrs.) NANDINI JAGANNARAYAN

HINDI VIDYA PRACHAR SAMITI’S

RAMNIRANJAN JHUNJHUNWALA COLLEGE

GHATKOPAR (WEST) MUMBAI – 400 086

1
 CERTIFICATE

This is to certify that Mr.Prabhat Kumar Prakash Chandra Sharma of B.Com

Banking and Insurance Semester VI (2017-18) has successfully completed the

project on “Challenges faced by recruiters in max life insurance ” under the

guidance of Prof. (Mrs.) Nandini Jagannarayan .

Principal

Dr. Usha Mukundan Seal of the College

Project Guide / Internal Examiner

Prof. (Mrs.):

External Examiner

Prof.

Date:

2
 DECLARATION

I,Prabhat kumar sharma of the student of B.Com (Banking & Insurance) Sem. VI

(2017-18) hereby declare that have completed the project on “Challenges faced by

recriters in max life insurance ”.

The information submitted is true and original to the best of my knowledge.

Signature of Student

Name of the Student: Prabhat kumar sharma

Roll No. :1044

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 ACKNOWLEDGEMENT

I would like to express my sincere gratitude to the Almighty for having showered
his immense blessing on me and has enabled to complete this research work.

I would also like express my heartfelt gratitude to our Principal Dr. Usha
Mukundan, who has given me opportunity to conduct this study.

My guide, Prof. Nandini Jagannarayan also deserves sincere thanks that she has
given me her guidance throughout the project and made it a success.

My parents have been a backbone to me in completing this Project and my friends

who extended their constant support during my study also deserve heartfelt thanks.

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CHAPTER NO : 1

INTRODUCTION ABOUT INSURANCE

Insurance is a form of risk management which is used primarily to hedge against

the risk of a contingent, uncertain loss. Insurance is defined as the equitable
transfer of the risk of loss, from one entity to another, in exchange for payment.
Insurance is essentially an arrangement where the losses experienced by a few are
extended among many who are exposed to similar risks. It is a protection against
financial loss that may occur due to an unexpected event. The transaction involves
the insured assuming a guaranteed and known ,relatively small, loss in the form of
payment to the insurer in exchange for the insurer's promise to compensate or
indemnify the insured in the case of a large, possibly

devastating, loss. The insured receives a contract called an insurance policy which
details the conditions and circumstances under which the insured will be
compensated. Insurance can be classified broadly into:

(a) Life insurance, and

(b) General or non-life insurance.

(A) Life insurance or life assurance is a contract between the policy owner
and the insurer, where the insurer agrees to pay the designated beneficiary a
sum of money upon the occurrence of the insured individual’s death or other
event, such as terminal or critical illness. In return, the policy owner agrees

5
 to pay a stipulated amount at regular intervals or in lump sums. Life-based
contracts tend to fall into two major categories Protection policies: designed
to provide a benefit in case of a specified event, typically against lump sum
payment. A common form of this policy is term insurance.

Investment policies: the main objective is to facilitate the growth of capital by

single or regular premiums. The common forms in this category include whole life,
universal life and variable life policies.

(B) General insurance or non-life insurance policies, including automobile and

homeowners’policies, provide payments depending on the loss from a particular
financial event. General insurance typically comprises any insurance cover that is
not deemed to be life insurance. Some categories of general insurance policies are:
vehicle, home, health, property, accident, sickness and unemployment, casualty,
liability, and credit. The terms of insurance generally depend on the company
providing the cover.

The history of insurance explains the progress of modern business of insurance

against risks like life, property, cargo, health and accidents. The insurance industry
helps to reduce risks and spread of risks from the individual to the group of people.
This industry provides major sources of long-term finance for both private and
public sectors. The insurance business is now a profitable business and also
provides employment opportunities for a large number of persons with attractive
salary and other benefits.

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LIFE INSURANCE :

There are facts of life insurance in 16th century in London. A group of marine
under writers issued the first modern life insurance policy to Mr. William Gybbons
in 1536 for one year term in amount of £ 400 in London.

Unfortunately, Gybbons died within one year and the under writers paid the
amount of £ 400 to his family. The first modern life insurance company was the
amicable society for a Perpetual Assurance Office, a London based company and
this company was founded in 1706 by William Talbot and Sir Thomas Allen. For
the first plan of life insurance, it was decided that each member

would be paid a fixed annual premium according to per share with the condition
that each member age should be 12 to 55 year. This ‘Amicable Fund’ was divided
among the widows and orphans of deceased members, in the proportion of the
amount of shares paid by policy holders. In the beginning, about 2000 members
started this Amicable Society. Later, Edmund Halley prepared a mortality table in
1693, but in 1750, mathematical and statistical tools were also used for the growth
of life insurance. A new company was established by a mathematician and actuary,
James Dodson which presented premiums to cover the risks of life insurance for
long term, when Amicable Life Insurance Society

refused Dodson to cover his life insurance owing to his old age.

In 1762, his follower, Edward Rowe Mores introduced the ‘Equitable Society’ for
the Assurance of Life and Survivorship. He was the first mutual insurer who
innovated new premium schemes for life insurance that varied with the age of the

7
insured person and 2 became very successful and the pivot of modern life
insurance upon which all life insurance schemes were completely based.

Mores introduced new reference for the chief official of insurance who he called an
actuary. William Morgan was appointed as the first modern actuary in 1775 and he
served as actuary till 1830. The society evaluated the first actuarial liabilities in
1776 and allocated the first reversionary bonus (1781) and interim bonus (1809) to
its policyholders. Further, to protect the interest of policy holders, the directors of
the society tried to ensure that each member of society should be given a fair return
on their respective investment.

INSURANCE IN ANCIENT INDIA :

The origin of insurance in India has been lost in the ages. The earliest form, similar
to insurance was found in ‘Rigveda’, Yagnavalka, (Dhamasastra) and Kautilya
(Arthasastra). In Rigveda, the term ‘Yogakshema’ was used for the activity akin to
insurance more than five thousands year ago. In ‘Manu Smiriti’, Manu also
expressed that a special charge will be levied in carrying of goods from one place
to another to ensure their safe transport. Manu Smiriti says, ‘merchants should be
paid an amount of taxes or duties in account of purchase and sale of goods,
according to the distance of journey, chance of accident and risk’. Ancient India
was very famous for marine business.

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MODERN INSURANCE IN INDIA :

Insurance in its modern form was introduced in India by British insurance

company which established a life insurance company named ‘The Oriental Life
Insurance Company’ in 1818 in Calcutta. Finally this company failed in 1834 and
was converted into ‘New Oriental’. In 1823, Bombay Life Insurance Company in
Bombay, Madras Equitable Life Insurance Society in Madras in 1829 and Madras
Widows in1834 were introduced accordingly. A non- Life Insurance Company
named Triton Insurance Company was formed in Calcutta in 1850. During the
same period, many foreign insurance companies came to India, e.g., The Universal
Life Assurance Company opened its branch in 1840 and Standard Life Insurance
Company in 1846. The eminent social

reformer, Son of Bengal, Raja Ram Mohan Roy appealed the rich Hindus of
Calcutta to form a company for the life insurance of poor Hindu widows. During
this period discriminatory practices were adopted by foreign insurance companies
for Indians as 3 these companies did not provide life insurance for Indians and if
they covered life of Indians then an extra premium up to 15 to 20 per cent had been
charged. The Bombay Mutual Life Assurance Society, the first Indian life
insurance company formed in 1870, was the first one to sell life insurance policies
to Indians at normal rate.

Another company established in 1871 in Meerut was the Indian Life Insurance

9
Company. Pandit Ishwar Chandra Vidya Sagar also established a life insurance
company named the Hundu Family Annuity Fund in 1872 in Calcutta. In 1874, Mr.
D. M. Dastur, an Indian actuary, founded the Oriental Govt. Security Life
Assurance Company. In 1892, another notable company was ‘Indian Life’ which
was established by residents of Goa living in Karachi. During the period from 1876
to 1899 so many small society funds and provident societies were formed.

CONCEPT OF INSURANCE :

General insurance or non-life insurance policies, including automobile and

homeowners’ policies, provide payments depending on the loss from a particular
financial event. General insurance typically comprises any insurance cover that is
not deemed to be life insurance. Some categories of general insurance policies are:
vehicle, home, health, property, accident, sickness and unemployment, casualty,
liability, and credit. The terms of insurance generally depend on the company
providing the cover.

Life insurance is generally considered a means of protecting one’s family against

the unforeseeable circumstance of the death of an earning member. However, there
are a number of other benefits that are not apparent. Some

benefits accrue to the individuals and their families, while others assist economic
development. For instance, an insurance company takes the risk of large and
uncertain losses in exchange for small premiums. This gives a sense of confidence
and security to the insured individual through the protection of

insurance in the event of an unfortunate incident. In large sized commercial and

10
industrial organizations, it facilitates operations as many of the risks are transferred
to the insurer. Insurance, particularly life insurance, is one of the ways of providing
for the future. A life insurance policy which gives an annuity is a combination of
protection and investment. It increases the creditworthiness of the assured person
because it can provide funds for repayment in the event of death. It also reduces
losses owing to theft, robbery, fire accidents, etc. In addition, it serves as a solution
to social problems.

For instance, while compensation is available to victims of industrial injuries and

road accidents, financial difficulties on account of old age, disability or death is
minimised. Investment of accumulated resources by the insurer facilitates the
overall development of the country. Capital is usually risk averse, but if insurers
provide protection against risks, then several investors would come forward to
invest their funds. In many developed countries, citizens are to a certain extent
protected by social security schemes provided by the government. These schemes
offer financial aid to citizens who are eligible on grounds of unemployment, old
age, sickness, disability, etc.

The social security scenario in India is quite different, having traditionally been
the responsibility of the family or community. However, with industrialization,
urbanization, breakup of the joint family system and weakening of family bondage,
it has become necessary to provide social security arrangements that are
institutionalized and regulated by the state rather than the society. Issues relating to
social security are listed in the directive principles of state policy. While social
security and insurance, employment and unemployment form Item 23 of the
concurrent list, the welfare of labour including conditions of work, provident fund,
employee’s liability, workmen’s compensation, invalidity and old age pension and
maternity benefits form Item 24, also of the concurrent list. During the initial years

11
of development planning, it was believed that with the process of development, a
greater number of workers would join the organised sector and eventually get
covered by formal social security arrangements. However, the actual experience
has proved otherwise.

There is now almost a stagnation of employment in the organised sector with

increase in the inflow of workers into the informal sector. The unorganised
workforce is characterised by scattered and fragmented areas of employment,
seasonality, lack of job security and low legislative protection. Currently, out of an
estimated workforce of nearly 400 million, only less than 10 per cent have the
benefits of formal.

IMPORTANCE OF INSURANCE :

Social security protection. Although the government has a few centrally funded
social assistance programmes like National Old Age Schemes and National Family
Benefit Schemes, the number of people covered as well as the benefits is very
meagre.Further more, in a country like India, where there is no provision for
unemployment benefits, the concept of insurance becomes extremely important.
Maritime insurance is the oldest form of insurance and is followed by life
insurance and fire insurance. Insurance was prevalent in ancient Greece and among
the maritime peoples with whom the Greeks traded. It developed first as a means
of spreading the huge risks involved in early maritime enterprises, evolving much
later during the fourteenth century in the commercial cities of Italy.

This practice of marine insurance gradually spread to London during the sixteenth
century. The history of marine insurance is closely associated with the origin and

12
rise of Lloyd’s group of ship-owners. Today, Lloyd’s is considered the largest
underwriter in the world. In the USA, the first insurance company was established
by Benjamin Franklin in 1752. Since the mid nineteenth century, insurance has
developed significantly to cover other kinds of risks. In India, the history of life
insurance can be traced to 1818 when Anita Bhavsar started the Oriental Life
Insurance Company in Kolkata.

This organisation was basically founded to serve European clients and hence
Indians who opted for an insurance cover were charged a much higher premium.
The reason given was that Indians had a lower life expectancy on account of their
lifestyle, while in fact this was a planned effort to keep Indians out of any kind of
progress .The company failed in 1834.

Then, in 1870 the British Insurance Act was passed and the last three decades of
nineteenth century saw the emergence of the Bombay Mutual Life Assurance
Society (1871), which became the first organisation to charge the same premium
from all residents of India irrespective of their origin or nationality. The Oriental
(1874) and Empire of India (1897) insurance companies began their activities in
the Bombay Residency in the late nineteenth century. This period, however, was
dominated by foreign insurance offices such as Albert Life Assurance, Royal
Insurance, and Liverpool and London Globe Insurance, which did good business in
India.

The history of general insurance can be traced to the Industrial Revolution in the
West and the consequent growth of sea-faring trade and commerce. A legacy of
British rule, General Insurance in India has its roots in the establishment of Triton
Insurance Company Ltd in 1850 in Calcutta. Its first Indian counterpart, the Indian
Mercantile Insurance Ltd, which launched its operation in Bombay in 1907, was
the first company of its type to transact all general insurance business.

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Before deregulation in 1999, the insurance industry in India consisted of only two
state insurers, namely Life Insurance Corporation of India (LIC) for life insurance,
and General Insurance Corporation of India (GIC) with its four subsidiaries for
general insurance. According to the Insurance Regulatory and Development
Authority (IRDA), the insurance industry in India at present consists of 24 general
insurance companies including specialised insurers such as Export Credit
Guarantee Corporation of India and the Agricultural Insurance Corporation of
India, and 23 life insurance companies. Of the 22 insurers who set up operations in
life insurance after the industry was opened up for the private sector, 20 are joint
ventures with foreign companies. Similarly, of the 17 non-life insurers, including
health.

ORIGIN OF INSURANCE :

Insurers operating in the private sector, 16 are in collaboration with foreign

partners. Thus, 36 insurance companies in the private sector are operating in
collaboration with well-established foreign companies. Prior to the opening up of
insurance for the private sector, non-life products were limited and were classified
on the basis of their being regulated by tariffs or otherwise. Those such as fire
insurance, motor vehicle insurance, engineering insurance and worker’s
compensation came under tariff regulation while others such as burglary insurance,
mediclaim, and personal accident insurance did not. In addition, most specialised
insurance products, such as race horse insurance, did not fall under tariff
regulation. After the opening up of the sector to private players, new products were
introduced and these included products’ liability, corporate cover, professional
indemnity policies, weather insurance, credit
14
insurance and travel insurance. important developments in the history of the Indian
insurance industry.

For 2009, which is the latest year for which data are available, some pointers are:
(i) The share of the Indian life insurance sector in the global market was
2.45 per cent;
(ii) The share of Indian non-life insurance premium in the global non-life
premium was as low as 0.46 per cent;

IMPORTANT DEVELOPMENT IN THE HISTORY OF INDIAN

INSURANCE OF INDIA :

The insurance industry in India consisted of only two state insurers, namely Life
Insurance Corporation of India (LIC) for life insurance, and General Insurance
Corporation of India (GIC) with its four subsidiaries for general insurance.

According to the Insurance Regulatory and Development Authority (IRDA), the

insurance industry in India at present consists of 24 general Insurance companies
including specialized insurers such as Export Credit Guarantee

Corporation of India and the Agricultural Insurance Corporation of India, and 23

life insurance companies. Of the 22 insurers who set up operations in life insurance
after the industry was opened up for the private sector, 20 are joint ventures with
foreign companies. Similarly, of the 17 nonlife insurers, including health insurers
operating in the private sector, 16 are in collaboration with foreign partners. Thus,
36 insurance companies in the private sector are operating in collaboration with
well-established foreign companies. Prior to the opening up of insurance for the

15
private sector, non-life products were limited and were classified on the basis of
their being regulated by tariffs or otherwise. Those such as fire insurance, motor
vehicle insurance, engineering insurance and workers compensation came under
tariff regulation while others such as burglary insurance, mediclaim, and personal
accident insurance did not. In addition, most specialized insurance products, such
as race horse insurance, did not fall under tariff regulation. After the opening up of
the sector to private players, new products were introduced and these included
products’liability, corporate cover, professional indemnity policies, weather
insurance, credit insurance and travel insurance.

INSURANCE SCENARIO OF INDIA :

The insurance industry of India consists of 52 insurance companies of which 24 are

in life insurance business and 28 are non-life insurers. Among the life insurers,
Life Insurance Corporation (LIC) is the sole public sector company. Apart from
that, among the non-life insurers there are six public sector insurers. In addition to
these, there is sole national reinsurer, namely, General Insurance Corporation of
India. Other stakeholders in Indian Insurance market include agents (individual and
corporate), brokers, surveyors and third party administrators servicing health
insurance claims. Out of 28 non-life insurance companies, five private sector
insurers are registered to underwrite policies exclusively in health, personal
accident and travel insurance segments. They are

Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance
Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health
Insurance Company Ltd and Cigna TTK Health Insurance Company

16
Ltd.

There are two more specialized insurers belonging to public sector, namely, Export
Credit Guarantee Corporation of India for Credit Insurance and Agriculture
Insurance Company Ltd for crop insurance. India's life insurance sector is the
biggest in the world with about 36 crore policies which are expected to increase at
a compound annual growth rate (CAGR) of 12-15 per cent over the next five years.
The insurance industry plans to hike penetration levels to five per cent by 2020,
and could top the US$ 1 trillion mark in the

next seven years. The total market size of India's insurance sector is projected to
touch US$ 350-400 billion by 2020 from US$ 66.4 billion in FY13.The general
insurance business in India is currently at Rs 77,000 crore (US$ 12.41billion)
premium per annum industry and is growing at a healthy rate of 17 per cent.

The Rs 12,606 crore (US$ 2.03 billion) domestic health insurance business
accounts for about a quarter of the total non-life insurance business in the country.
Investment corpus in India's pension sector is anticipated to cross US$ 1 trillion by
2025, following the passage of the Pension Fund Regulatory and Development
Authority (PFRDA) Act 2013, according to a joint report by CII-EY on Pensions
Business in India. Indian insurance companies are expected to spend Rs 117 billion
(US$ 1.88 billion) on IT products and services in 2014, an increase of five per cent
from 2013, as per Gartner Inc. Also, insurance companies in the country could
spend Rs 4.1 billion (US$ 66.11 million) on mobile devices in 2014, a rise of 35
per cent from 2013

INSURANCE SCENARIO OF INDIA AND OTHER COUNTRIES:

17
The Life Insurance Companies Act was passed, making it mandatory for
companies to get their premium rate tables certified by an actuary.

The Insurance Act of 1938 became the first legislation governing all forms of
insurance to provide strict state control over insurance business. Life insurance in
India was completely nationalised on January 19 by means of the Life Insurance
Corporation Act. All 245 existing companies operating in the country were merged
into one entity, namely the Life Insurance Corporation of India (LIC).

The General Insurance Council, a wing of the Insurance Association of India, was
formed and framed a code of conduct for ensuring fair conduct and sound business
practices. The Insurance Act of 1938 was amended to regulate investments and set
minimum solvency margins. The Tariff Advisory Committee was also set up. The
General Insurance Business (Nationalisation) Act was passed. With effect from
January 1, 1973 107 companies were amalgamated and grouped into four
companies, namely National Insurance Company Ltd., Oriental Insurance
Company Ltd., New India Assurance Company Ltd and United India Insurance
Company Ltd.

The Government of India set up a committee under the chairmanship of RN

Malhotra, then Governor of the Reserve Bank of India, to propose
recommendations for reforms in the insurance sector that would complement the
reforms in the financial sector. The Amphora Committee submitted its report,
recommending that entry of the private sector be permitted in the insurance sector
and that foreign companies be allowed entry by floating Indian companies,
preferably as joint ventures with Indian partners. Following the recommendation of
the Malhotra Committee, an interim Insurance Regulatory Authority was set up.
The Insurance Regulatory and Development Authority (IRDA) was constituted as
an autonomous body to regulate and develop the insurance industry. The IRDA

18
was incorporated as a statutory body in April, 2000. The key objective of IRDA
includes promotion of competition in order to improve customer satisfaction
through increased customer choice and lower premiums, while ensuring the
financial security of the insurance market. The IRDA deregulated the insurance
sector and permitted the entry of private companies. Foreign investment was also
allowed and capped at 26 per cent holding in the Indian insurance companies. The
Actuaries Act was passed to give the profession statutory status on par with
chartered accountants, notaries, cost and works accountants, advocates, architects
and company secretaries.

Which mainly promoted LIC’s products as being tax saving tools for salaried
individuals. Although the level of penetration has increased after the entry of other
players, it is still low compared to other countries. According to consumer
feedback, the problem has been exacerbated due to:

• Agents’ inability to clearly explain the features of the products;

• Lengthy documents that are not user friendly;and

• The perception that agents are only concerned with their commissions.

The growing need for financial education for the families to take better financial
decision and to increase their economic security has been widely recognized. It is
felt that well informed and well educated customers can create economic ripples.
They make better financial decisions for themselves and their families, increasing
their economic security and well being. Secured families are more involved in their
communities as home owners and voters.

19
They are more involved as parents with their children’s schools and teachers,
enabling better educational and economic outcomes for their children. They
contribute to vital, thriving communities, further fostering community economic
development. Thus, being financially literate is not only important to the individual
household and family, it is also important to communities and societies. (Hogarth,
Jeanne M.,2006). Insurance companies can address the

problem of financial illiteracy of consumers by educating them. This point was

corroborated by the Max New York–NCAER survey (NCAER, 2008) which
showed that even though a majority of Indian households are good savers, they do
not undertake financial planning and are financially at risk. Households

need to understand the risk of both ‘living too long’ and ‘dying too young’.
Further, in urban India and amongst the salaried class, insurance is largely used as
a tax saving tool, rather than for protection against risk. There is need to

reorient the consumer about the benefits of life insurance for both financial
protection as well as for long-term wealth creation. The importance of insurance is
unquestionable in modern economies as it serves a broad public interest and is vital
to individuals’ security. Advocacy of insurance and risk issues is an important tool
that complements the insurance regulatory and supervisory framework. This is
particularly so given: (i) households’ growing risk exposures

and responsibility for covering them; (ii) increasing diversity and complexity of

insurance products; and (iii) heterogeneity of insurance providers and distribution

channels. Advocacy can typically: (i) heighten individuals’ awareness and
responsibility towards potential risks; (ii) enhance understanding of insurance
mechanisms.

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NEED OF INSURANCE IN INDIA :

The growing need for financial education for the families to take better financial
decision and to increase their economic security has been widely recognized. It is
felt that well informed and well educated customers can create economic

ripples. They make better financial decisions for themselves and their families,
increasing their economic security and wellbeing. Secured families are more
involved in their communities as home owners and voters. They are more involved
as parents with their children’s schools and teachers, enabling better educational
and economic outcomes for their children.

They contribute to vital, thriving communities, further fostering community

economic development. Thus, being financially literate is not only important to the
individual household and family, it is also important to communities and societies.
Insurance companies can address the problem of financial illiteracy of consumers
by educating them. This point was corroborated by the Max New York–NCAER
survey (NCAER, 2008) [3] which showed that even though a majority of Indian
households are good savers, they do not undertake financial planning and are
financially at risk. Households need to understand the risk of both ‘living too long’
and ‘dying too young’. Further, in urban India and amongst the salaried class,
insurance is largely used as a tax saving tool, rather than for protection against risk.

21
There is need to reorient the consumer about the benefits of life insurance for both
financial protection as well as for long-term wealth creation.

The importance of insurance is unquestionable in modern economies as it serves a

broad public interest and is vital to individuals’ security.

Advocacy of insurance and risk issues is an important tool that complements the
insurance regulatory and supervisory framework. This is particularly so given:
(i)Households’ growing risk exposures and responsibility for covering them;

(ii)Increasing diversity and complexity of insurance products;

(iii)Heterogeneity of insurance providers and distribution channels.

Advocacy can typically:

(i) Heighten individuals’ awareness and responsibility towards potential risks; (ii)
Enhance understanding of insurance mechanisms that can cover these risks;

(iii) Enable the development of consumers’ knowledge and capacity in order to

make informed decisions as regards insurance matters (OECD, 2006) [2].

Private insurers have introduced many innovative products and offer incentives on
policies in order to woo consumers. The market share of private insurers has
increased steadily on the basis of total premium from 14.25 per cent in 2005–06

to 29.90 per cent in 2009–10. In today’s context, though the customer has a variety
of products to choose from, wise choices are possible only with requisite
awareness. Besides, it is not enough for the customer to have knowledge only of

the various policies available. It is possible that a customer International Journal of

Applied Research has problems with a particular policy and should ideally be
22
aware of organizations that look into grievances and make prompt payment of
claims. The customer must also be informed about the lapse of policies, revival of
policies, and the value of a policy in case of surrender. Hence, the customer must
not only choose a product which is suitable, but also engage with a company in
which the agents provide correct information. The results of the Max New York
Life– NCAER Survey on India Financial Protection (NCAER,

2008) [3] indicates that awareness of life insurance stands at a high of 78 per cent
on an all-India level with more urban households (90%) aware of it than rural
households (73%). The level of awareness has increased with education, age and
income levels. However, ownership of insurance products was low at only 24 per
cent. Further, it was the salaried class that tended to buy insurance the most,
followed by businessmen.

23
 CHAPTER NO : 2

REVIEW OF LITERATURE

ORIGIN OF LIFE INSURANCE :

Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk
of the caravan trade by giving loans that had to be later repaid with interest when
the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status
to the practice. That, perhaps, was how insurance made its beginning.

Life insurance had its origins in ancient Rome, where citizens formed burial clubs
that would meet the funeral expenses of its members as well as help survivors by
making some payments.

As European civilization progressed, its social institutions and welfare practices

also got more and more refined. With the discovery of new lands, sea routes and
the consequent growth in trade, medieval guilds took it upon themselves to protect
their member traders from loss on account of fire, shipwrecks and the like.

24
Since most of the trade took place by sea, there was also the fear of pirates. So
these guilds even offered ransom for members held captive by pirates. Burial
expenses and support in times of sickness and poverty were other services offered.
Essentially, all these revolved around the concept of insurance or risk coverage.
That's how old these concepts are, really.

“In 1347, in Genoa, European maritime nations entered into the earliest
known insurance contract and decided to accept marine insurance as a
practice.”

The First Step :

Insurance as we know it today owes its existence to 17th century England. In fact,
it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee
House in London, where merchants, ship-owners and underwriters met to discuss
and transact business. By the end of the 18 th century, Lloyd's had brewed enough
business to become one of the first modern insurance companies.

Insurance and Myth... :

Back to the 17th century. In 1693, astronomer Edmond Halley constructed the first
mortality table to provide a link between the life insurance premium and the
average life spans based on statistical laws of mortality and compound interest. In
1756, Joseph Dodson reworked the table, linking premium rate to age.

Enter companies... :

25
The first stock companies to get into the business of insurance were chartered in
England in 1720. The year 1735 saw the birth of the first insurance company in the
American colonies in Charleston, SC. In 1759, the Presbyterian Synod of
Philadelphia sponsored the first life insurance corporation in America for the
benefit of ministers and their dependents. However, it was after 1840 that life
insurance really took off in a big way. The trigger: reducing opposition from
religious groups.

The growing years...:

The 19th century saw huge developments in the field of insurance, with newer
products being devised to meet the growing needs of urbanization and
industrialization.

In 1835, the infamous New York fire drew people's attention to the need to provide
for sudden and large losses. Two years later, Massachusetts became the first state
to require companies by law to maintain such reserves. The great Chicago fire of
1871 further emphasized how fires can cause huge losses in densely populated
modern cities. The practice of reinsurance, wherein the risks are spread among
several companies, was devised specifically for such situations.

There were more offshoots of the process of industrialization. In 1897, the British
government passed the Workmen's Compensation Act, which made it mandatory
for a company to insure its employees against industrial accidents.

26
With the advent of the automobile, public liability insurance, which first made its
appearance in the 1880s, gained importance and acceptance? In the 19th century,
many societies were founded to insure the life and health of their members, while
fraternal orders provided low-cost, members-only insurance.

Even today, such fraternal orders continue to provide insurance coverage to

members as do most labor organizations. Many employers sponsor group insurance
policies for their employees, providing not just life insurance, but sickness and
accident benefits and old-age pensions. Employees contribute a certain percentage
of the premium for these policies.

Markets :

In tune with the global stock markets that began to recover from the second half of
2003; Indian stock markets too witnessed rapid growth. India’s two leading
indices, the most popular BSE Sensex, and the one most used by the markets the
National Stock Exchanges’ S&P CNX Nifty rose to record levels. Both primary
and secondary market activity experienced sharp surge. Much progress was made
in further strengthening and streamlining risk management, market regulation and
supervision. A few aspects of the major developments in the India’s stock markets
are described below. And the insurance sector is also play an important role in the
growth of the financial market.

Market Structure :

Indian securities market is fairly large as compared to several other emerging

markets. There are 22 stock exchanges in the country, though the entire liquidity is
shared between the countries’ two national level exchanges namely, the National

27
Stock Exchange of India and the Bombay Stock Exchange Ltd. The regional stock
exchanges are in pursuit of business models that make them viable and vibrant.
Meanwhile, these exchanges have become members of the national level
exchanges through formationof subsidiaries whose business is showing continuous
growth and progress. The number of brokers in various stock exchanges rose from
6,711 in 1994-95 to 9,335 in FY06. The number of brokers in all the exchanges
together peaked to 10,213 in the year FY01 but gradually declined thereafter when
the regional stock exchanges began to lose business in the light of wide ranging
market structure reforms introduced since then. In FY01, when the markets were in
upswing, several regional stock exchanges were generating business owing to the
availability of deferral products, such Badla and different settlement calendars
prevailing at that time in these exchanges. For instance in FY01, the Delhi Stock
Exchange registered cash market turnover of Rs 838.71 bn; Uttar Pradesh Stock
Exchange, Rs 247.47 BN, Ludhiana Stock Exchange Rs 97.32 bn, Pune Stock
Exchange Rs 61.71 bn as against Rs 13,395.11 bn of the turnover at the National
Stock

Exchange and Rs 10,000.32 bn turnover at the Bombay Stock Exchange. With the
abolition of the deferral products and introduction of uniform T+2 settlement
cycle, the liquidity in these exchanges flowed to the national level system
consisting of NSE and BSE.

HISTORICAL PERSPECTIVE :
The history of life insurance in India dates back to 1818 when it was conceived as
a means to provide for English Widows. Interestingly in those days a higher
premium was charged for Indian lives than the non - Indian lives, as Indian lives
were considered more risky to cover. The Bombay Mutual Life Insurance Society
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started its business in 1870. It was the first company to charge the same premium
for both Indian and non-Indian lives.

The Oriental Assurance Company was established in 1880. The General insurance
business in India, on the other hand, can trace its roots to Triton Insurance
Company Limited, the first general insurance company established in the year
1850 in Calcutta by the British. Till the end of the nineteenth century insurance
business was almost entirely in the hands of overseas companies.

Insurance regulation formally began in India with the passing of the Life Insurance
Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during
the 1920's and 1930's sullied insurance business in India. By 1938 there were 176
insurance companies.

The first comprehensive legislation was introduced with the Insurance Act of 1938
that provided strict State Control over the insurance business. The insurance
business grew at a faster pace after independence. Indian companies strengthened
their hold on this business but despite the growth that was witnessed, insurance
remained an urban phenomenon.

The Government of India in 1956, brought together over 240 private life insurers
and provident societies under one nationalized monopoly corporation and Life
Insurance Corporation (LIC) was born. Nationalization was justified on the
grounds that it would create the much needed funds for rapid industrialization. This
was in conformity with the Government's chosen path of State led planning and
development.

The non-life insurance business continued to thrive with the private sector till
1972. Their operations were restricted to organized trade and industry in large
cities. The general insurance industry was nationalized in 1972. With this, nearly

29
107 insurers were amalgamated and grouped into four companies- National
Insurance Company, New India Assurance Company, Oriental Insurance Company
and United India Insurance Company. These were subsidiaries of the General
Insurance Company (GIC).

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 CHAPTER NO : 3

RESEARCH AND METHODOLOGY

Research objectives of the study

The objectives of undertaking the project are: -

PRIMARY OBJECTIVE- To study and analyze Life insurance, role of Reliance

life insurance, its present scenario and its emerging challenges.

SECONDARY OBJECTIVE- To analyze the impact of Reliance life insurance

products, its scope and opportunities in near future.

Other Objectives include: -

 Proper understanding and analysis of life insurance industry.
 To know about brand awareness of Reliance Life Insurance and
customer’s preference about Reliance Life Insurance.
 According the market survey come know about how much potential
of insurance market in our city.
 And base on analysis of the result thus obtained make a report on that
research.
 Training aims at recruiting maximum number of Life Advisors and to
Sell the maximum policies for the company and bring the business for
the company which ever is going at the particular point of time.
 As the Reliance Life Insurance well reputed company in India it’s
great chance for me to observed different products launch by other
competitor companies like ICICI prudential, Bajaj alliance ,LIC, Max

31
 New York life etc. In all, it is to understand the overall working of the
Life insurance sector.
 The objective behind the project is as follows:
 To find the right candidate.
 To about their family background, occupation, social relation,
Qualification, Age

OBJECTIVES OF STUDY
The main objective of the “Channel Development” is to recruit quality agent
advisors (AA) for the company for providing life Insurance solutions to the
customers. AA plays a vital role in the growth of company with respect of
company’s earnings as well as they create value for the organization after
achieving some milestones. AA are integral part of the team and sales manager
assigned to them help them to groom them in terms of personality development,
selling skills and handling objections of customers.

Insurance industry introduction.

Challenges while Recruiting

Strategies for recruitment.

Eligibility of recruitment and so on.

In this project I have tried to give attention to all the above topics and study them
in depth.

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 CHAPTER NO : 4

PROFILE OF THE COMPANY

Max Life Insurance Company Ltd. is a joint venture between New York Life
and Max India Limited.
The company has positioned itself on the quality platform.
It has developed a strong corporate governance model based on the core
values of excellence, honesty, knowledge, caring, integrity and teamwork.
The strategy is to establish itself as a trusted life insurance specialist through
a quality approach to business.
In line with its values of financial responsibility, Max Life Insurance has
adopted prudent financial practices to ensure safety of policyholder's funds.
The Company's paid up capital is Rs. 657 crore, which is more than the
norm laid down by IRDA.
Max Life Insurance has identified individual agents as its primary channel of
distribution.
The Company places a lot of emphasis on its selection process, which
comprises four stages –
Screening,
Psychometric test,
Career seminar
Final interview.
The agent advisors are trained in-house to ensure optimal control on quality
of training.
Max Life Insurance invests significantly in its training programme.

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Each agent is trained for 152 hours as opposed to the mandatory 100 hours
stipulated by the IRDA before beginning to sell in the marketplace.
Training is a continuous process for agents at Max Life Insurance and
ensures development of skills and knowledge through a structured
programme spread over 500 hours in two years.
This focus on continuous quality training has resulted in the company
having amongst the highest agent pass rate in IRDA examinations and the
agents have the highest productivity among private life insurers.
201 agent advisors have qualified for the Million Dollar Round Table
(MDRT) membership in 2005.
MDRT is an exclusive congregation of the world’s top selling insurance
agents and is internationally recognized as the standard of excellence in the
life insurance business.
Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further
grow its business.
The company is using a five-pronged strategy to pursue alternative channels
of distribution.
These include the franchisee model, rural business, direct sales force
involving group insurance and telemarketing opportunities and corporate
alliances.
Max Life Insurance offers a suite of flexible products.
It now has 26 life insurance products and 8 riders that can be customized to
have more than 400 products.

REWARD AND RECOGNITION

34
 C
E

MDRT

Ex. Council

Paul Colgan Trophy

Centurion

Agent of the Year

Paid Cases, FYC, Persistency, Rider,

Referral and CEIP Leader

Career Foundation Club

Career Producer Award

Career Success Award

Hi-Flier

Ten-A-Monther

Premium Leader

1) Premium Leader:-

35
 Qualifying Criteria- Rs. 1 Lakh AFYP in a month

2) Ten-A-Monther:-
Qualifying Criteria- 10 applications in a month and Rs. 30,000
AFYP

Reward and Recognition- MAX LIFE Crystal Glass

3) Hi-Flier:-
Qualifying Criteria- 20 applications in a month

Reward and Recognition- MAX LIFE Silver Medal, MAX LIFE Crystal
Glass

4) Career Success Award:-

Qualifying Criteria- 15 paid cases & Rs. 40,000 FYC at the end of

month 3

Reward and Recognition- Recognition Award

5) Career Producer Award:-

Qualifying Criteria- 25 paid cases & Rs. 80,000 FYC at the end of month 6

Reward and Recognition- Recognition Award

6) Career Foundation Club:-

36
 Qualifying Criteria- 50 paid cases & Rs. 1.8 lakhs FYC in July- June
for Recruits during this period.

Reward and Recognition- Attend CFC meeting to be held at Zone level

7) Paid Case, FYC, Persistency, Rider, Referral and CEIP

Leader:-
Qualifying Criteria- Top Agent in each category in each GO

Reward and Recognition- Recognition Plaque

8) Agent of the Year:-

Qualifying Criteria- Highest Points in each GO

Reward and Recognition- Recognition Award

9) Centurion:-
Qualifying Criteria- 100 net paid cases in a year

Reward and Recognition- Centurion Trophy

10) Paul Colgan Trophy:-

Qualifying Criteria- Highest FYC with 100 or more paid cases and

95% Or more 13th month persistency

Reward and Recognition- Recognition Trophy

37
11) Executive Council:-
1. Qualifying Criteria- July 2006 to June 2007: 4,30,000 Council
Credits

January 07 to June 07: 1,60,000 Council Credits

40 paid cases in the Council Period.

Reward and Recognition- Trip to Malaysia to attend the Executive

Council Meeting.

12) MDRT (Million Dollar Round Table):-

Qualifying Criteria- MDRT FYC Rs. 7,19,800 Premium Rs.14,39,600

Reward and Recognition- MDRT dues for all qualifiers. Top 35 by FYC
will

Bear domestic travel and visa costs. Next 15 will

bear Registration fees, domestic travel and visa

costs. Rest All will bear international airfare,

domestic travel and Visa costs.

13) CEO’S Council

38
 Qualifying Criteria- July 2006 to June 2007: 8,00,000 Council
Credits

Jan 2007 to June 2007: 3,20,000 Council Credits

Reward and Recognition- Trip to Amsterdam to attend the CEO Council

meeting.

PRODUCTS OF MAX LIFE INSURANCE

 Whole Life Plans

 Unit Linked Insurance Plans
 Endowment Plans
 Children Plan
 Money Back Plans
 Pension Plans
 Health & Accident Related Riders

Vision

To become the most admired life Insurance Company in India.

Mission

To become one of the top quartile life Insurance companies in India.

Be a national player.

39
 Be the brand of the first Choice.

Be the Employer of the Choice.

Become principal of choice for agents.

Values

This vision to become India's most admired life insurance company will be
realized through our unique set of values, which are as follows:

knowledge
Knowledge leads to expertise; and our expertise is in helping people protect themselves.
Perfectly combining global expertise with local knowledge, we are India's life insurance
specialist. Max New York Life believes that for knowledge to be of value it must be
focused, current, tested and shared.
Caring
Max New York Life is redefining the life insurance paradigm by focusing on customers
first. The service process is responsive, personalized, humane and empathetic. Every
individual who represents the company is for us our brand champion.
Honesty
Honesty is the heart of the life insurance business. It is all about trust. Transparency,
integrity and dependability form the cornerstones of the Max New York Life experience.
The company ensures that everyone who represents the brand carries a promise : we
care — in word as well as deed.
Excellence
Excellence at Max New York Life implies the ability to perform at a consistently high level.
Focused on the value of continuous improvement in people, processes and the
organization, the company strives for the highest standards of quality in every aspect of
its business.

Achievements
 First life insurance Company in India to have IS0 9001:2000 certifications.

 Top five most respected private life insurance in India according to Business
World survey.

40
  Continuous presence in Top 50 MDRT global list.

CSR

Max Life Insurance has been instrumental in changing the paradigm of life
insurance in India. It is the first life insurance company in India to introduce cause
related marketing.

Children are at the very heart of Max Life Insurance's strategy. SOS Children's
Villages of India is internationally recognized for its work in giving
underprivileged children a wholesome life. The mission of SOS is "to help
orphaned and abandoned children, by providing them with a family, a permanent
home, education and strong foundation for an independent life." It's mission ties in
with Max Life Insurance's philosophy of helping people secure the future of their
near and dear ones.

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.

Leadership Team

41
Analjit Singh
Chairman, Max India Limited
Gary R. Bennett
Managing Director and CEO,ML
Anuroop Singh
Vice Chairman,ML

42
 SWOT ANALYSIS OF MAX LIFE INSURANCE

Strength:-
1.Strong brand name and good financial position

2.Major life-insurance provider

3.Stable and growing revenue

Weakness:-
1.Direct access to equity-capital lacking

2.Lacking extensive global services

3.Limited global operations as compared to competitors

Opportunity:-
1.Expansion in other countries

2.Diversifying portfolios for customers

3.Asset management sector

4.New emerging markets

43
Threats:-
1.Changing govt regulations and financial crisis like recessions

2.Increase in insurance frauds

3.Stiff competition in the market

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 FINDINGS

Max Life Insurance as an insurance firm has a very strong presence in India and is
rapidly expanding its operations in India. After working on this project I feel that
following are some of the ways in which the company can improve the current
market base and selection procedure for AAs, the key revenue generating resource
for the company:

 Increase awareness among the general public:-

HEARD

KNOWN

EXPERIENCED

UNKNOWN.

In Collection of data I come to know only 5 % people are heard about

this company.

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 Only 10 % people known about this company. It shows less brand
image of company.

25% people experienced this company by taking policy.

But 60 % people are unaware about this company. It is because of

lack of advertisement.

 Highlight the core strengths of the company like oldest firm in insurance
sector, highest paid up capital, etc.

Very less people know about highlights of the company.

Firm is not well known though it is oldest firm.

No one knows positive points of the company, like registered under

companies act, six sigma and so on.

 Have a re-look at the existing product range and design products which can
attract masses rather than just serving only classes.

CONCLUSION
46
Insurance is a tool by which fatalities of a small number are compensated out of
funds collected from plenteous. Insurance is a safeguard against uncertain events
that may occur in the future. Company image is the highly important criteria that
consumers consider before taking up a life insurance. This is mainly because
people expect safety and secure for their money which they invest, followed by the
factor Premium which we pay to the insurer and then Bonus and Interest paid by
the company, services etc MAX LIFE dominates the Indian insurance industry. In
today’s competitive world, customer satisfaction has become an important aspect
to retain the customers, not only to grow but also to serve. Increased competition,
wide range of product offerings and multiple distribution channels cause
companies to value satisfied and highly profitable customers. Customer service is
the critical success factor in a company and providing top notch customer service
differentiates great customer service from indifferent customer service. The entry
of private sector insurance companies into the Indian insurance sector triggered off
a series of changes in the industry. Even with the stiff competition in the market
place, it is evident from the study that products offered by the MAX LIFE are
creative, innovative and of the liking of the customers, moreover they are satisfied
by the true knowledge provided by the company or agents and they are easily
accessible, Flexible payment schemes with no hidden cost, there is no undue delay
in claims settlement, customers are highly satisfied by the grievance redressal
mechanism, and in the near future if they will go for the policy they will stuck to
Max Life, which shows the great faith and positive perception of the customers
towards Max Life.

BIBLOGRAPHY

47
IC 33 book of Max Life Insurance.

Rule 31

www.maxlife.com

www.google.com

www.wikipedia.org

Insurance Administration 2nd Edition by Jane Light cap Brown

48