PROJECT REPORT

ON

Sales Process of Life Insurance

SUBMITTED BY

B. Aparna

G. Monika

G. S. Nagendra Rao

Swathi Thumula

R. Krishna Chaitanya

OF

HYDERABAD

INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

HYDERABAD

UNDER THE GUIDANCE OF

Mrs Naaz Ansari

(Sales Manager – Metlife India Insurance)

ACKNOWLEDGEMENT

We give my most sincere thanks to METLIFE INDIA INSURANCE, Hyderabad for

giving an opportunity to work in this organization.

We would like to express my deepest gratitude and sincere thanks to my Company

Project Guide Mr. Naaz Ansari for his valuable suggestions, scholarly guidance, constructive

criticism, and constant encouragement at every step of the project

We give my sincere thanks to the Dean Mrs. Shirani Nayar. I am particularly indebted

greatly to her.

We feel immense pleasure to thank IIPM Hyderabad for providing a platform to enrich

my experience by giving me an opportunity to work on this project.

Finally we would like to thank my family and friends for their loving support and

encouragement. We would like to express my deep appreciation for their unstinting patience and

understanding.

DECLARATION

We hereby declare that all the information that have been collected, analysed and

documented for the project is entirely my authentic possessions. We would like to categorically

mention that the work here is not purchased nor acquired by any other unfair means or from any

external source. The data and information presented in this report are accurate and updated to the

current data, to the best of my knowledge.

However for the purpose of my project, information already computed in many sources

has been utilized

* Cover page

*Preface

*Acknowledgement:

*Undertakings

*Contents

*Executive summary

*Introduction to Topic

Aim of Study

Theoretical overview

*About organization

Methodology

Data Presentation & observations

Conclusion & data Analysis

Recommendations

Limitations

*Bibliography

*Annexure

PREFACE

The liberalization of the Indian insurance sector has been the subject of much heated

debate for some years. The policy makers where in the catch 22 situation wherein for one they

wanted competition, development and growth of this insurance sector which is extremely

essential for channeling the investments in to the infrastructure sector. At the other end the policy

makers had the fears that the insurance premia, which are substantial, would seep out of the

country; and wanted to have a cautious approach of opening for foreign participation in the

sector. As one of the rare occurrences the entire debate was put on the back burner and the IRDA

saw the day of the light thanks to the maturing polity emerging consensus among factions of

different political parties. Though some changes and some restrictive clauses as regards to the

foreign participation were included the IRDA has opened the doors for the private entry into

insurance. Whether the insurer is old or new, private or public, expanding the market will present

multitude of challenges and opportunities. But the key issues, possible trends, opportunities and

challenges that insurance sector will have still remains under the realms of the possibilities and

speculation. What is the likely impact of opening up India‘s insurance sector?

The large scale of operations, public sector bureaucracies and cumbersome procedures

hampers nationalized insurers. Therefore, potential private entrants expect to score in the areas of

customer service, speed and flexibility. They point out that their entry will mean better products

and choice for the consumer. The critics counter that the benefit will be slim, because new

players will concentrate on affluent, urban customers as foreign banks did until recently. This

seems to be a logical strategy. Start-up costs-such as those of setting up a conventional

distribution network-are large and high-end niches offer better returns. However, the middle-

market segment too has great potential. Since insurance is a volumes game. Therefore, private

insurers would be best served by a middle-market approach, targeting customer segments that are

currently untapped

EXECUTIVE SUMMARY

In today‘s corporate and competitive world, we found that insurance sector has the maximum

growth and potential as compared to the other sectors. Insurance has the maximum growth rate

of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth potential

attracts me to enter in this sector and METLIFE INDIA INSURANCE has given me the

opportunity to work and get experience in highly competitive and enhancing sector.

The success story of good market share of different market organizations depends upon

the availability of the product and services near to the customer, which can be distributed

through a distribution channel. In Insurance sector, distribution channel includes only

agents or agency holders of the company. If a company like METLIFE INDIA

INSURANCE, TATA AIG, MAX etc have adequate agents in the market they can

capture big market as compared to the other companies.

Agents are the only way for a company of Insurance sector through which policies and

benefits of the company can be explained to the customer.

INTRODUCTION TO TOPIC

NEED OF LIFE INSURANCE

The functions of Insurance can be bifurcated into two parts:

1. Primary Functions

2. Secondary Functions

3. Other Functions

The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection against

future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can

certainly provide for the losses of risk. Insurance is actually a protection against economic loss,

by sharing the risk with others. Collective bearing of risk - Insurance is a device to share the

financial loss of few among many others. Insurance is a mean by which few losses are shared

among larger number of people. All the insured contribute the premiums towards a fund and out

of which the persons exposed to a particular risk is paid. Assessment of risk - Insurance

determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is

the basis for determining the premium rate also Provide Certainty - Insurance is a device, which

helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks

may be made more certain.

The secondary functions of insurance include the following:

Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable device

to prevent unfortunate consequences of risk by observing safety instructions, installation of

automatic sparkler or alarm systems, etc. Prevention of losses cause lesser payment to the

assured by the insurer and this will encourage for more savings by way of premium. Reduced

rate of premiums stimulate for more business and better protection to the insured. Small capital

to cover larger risks - Insurance relieves the businessmen from security investments, by paying

small amount of premium against larger risks and uncertainty. Contributes towards the

development of larger industries - Insurance provides development opportunity to those larger

industries having more risks in their setting up. Even the financial institutions may be prepared to

give credit to sick industrial units which have insured their assets including plant and machinery.

The other functions of insurance include the following: Means of savings and investment -

Insurance serves as savings and investment, insurance is a compulsory way of savings and it

restricts the unnecessary expenses by the insured's. For the purpose of availing income-tax

exemptions also, people invest in insurance. Source of earning foreign exchange - Insurance is an

international business. The country can earn foreign exchange by way of issue of marine

insurance policies and various other ways.

Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade risk free

with the help of different types of policies under marine insurance cover.

THE HISTORY OF INDIAN INSURANCE INDUSTRY

Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the

Oriental Life Insurance Company. First attempts at regulation of the industry were made with the

introduction of the Indian Life Assurance Companies Act in 1912. A number of amendments to

this Act were made until the Insurance Act was drawn up in 1938.

Noteworthy features in the Act were the power given to the Government to collect statistical

information about the insured and the high level of protection the Act gave to the public through

regulation and control. When the Act was changed in 1950, this meant far reaching changes in

the industry. The extra requirements included a statutory requirement of a certain level of equity

capital, a ceiling on share holdings in such companies to prevent dominant control (to protect the

public from any adversarial policies from one single party), stricter control on investments and,

generally, much tighter control. In 1956, the market contained 154 Indian and 16 foreign life

insurance companies. Business was heavily concentrated in urban areas and targeted the higher

echelons of society. ―Unethical practices adopted by some of the players against the interests of

the consumers‖ then led the Indian government to nationalize the industry. In September 1956,

nationalization was completed, merging all these companies into the so-called Life Insurance

Corporation (LIC). It was felt that ―nationalization has lent the industry fairness, solidity, growth

and reach.‖

Some of the important milestones in the life insurance business in India are:

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life

insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect

statistical 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: The market contained 154 Indian and 16 foreign life insurance companies.

MAJOR PLAYERS IN THE LIFE

INSURANCE INDUSTRY IN INDIA

Life Insurance Corporation of India (LIC)

Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the

message of life insurance in the country and mobilise people‘s savings for nation-building

activities. LIC with its central office in Mumbai and seven zonal offices at Mumbai, Calcutta,

Delhi, Chennai, Hyderabad, Kanpur and Bhopal, operates through 100 divisional offices in

important cities and 2,048 branch offices. LIC has 5.59 lakh active agents spread over the

country. The Corporation also transacts business abroad and has offices in Fiji, Mauritius and

United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely,

Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited,

Kuala Lumpur; and Life Insurance Corporation (International), E.C. Bahrain. It has also entered

into an agreement with the Sun Life (UK) for marketing unit linked life insurance and pension

policies in U.K. In 1995-96, LIC had a total income from premium and investments of $ 5

Billion while GIC recorded a net premium of $ 1.3 Billion. During the last 15 years, LIC's

income grew at a healthy average of 10 per cent as against the industry's 6.7 per cent growth in

the rest of Asia (3.4 per cent in Europe, 1.4 per cent in the US). LIC has even provided insurance

cover to five million people living below the poverty line, with 50 per cent subsidy in the

premium rates. LIC's claims settlement ratio at 95 per cent and GIC's at 74 per cent are higher

than that of global average of 40 per cent compounded annual growth rate for Life insurance

business has been 19.22 per cent per annum.

IN ADDITION TO ABOVE STATE INSURERS THE FOLLOWING HAVE BEEN

PERMITTED TO ENTER INTO INSURANCE BUSINESS: -

The introduction of private players in the industry has added to the colors in the dull industry.

The initiatives taken by the private players are very competitive and have given immense

competition to the on time monopoly of the market LIC. Since the advent of the private players

in the market the industry has seen new and innovative steps taken by the players in this sector.

The new players have improved the service quality of the insurance. As a result LIC down the

years have seen the declining phase in its career. The market share was distributed among the

private players. Though LIC still holds the 75% of the insurance sector but the upcoming natures

of these private players are enough to give more competition to LIC in the near future. LIC

market share has decreased from 95% (2002-03) to 70 %( 2007-08)

Insurance Companies in India (April 2008)

Bajaj Allianz Life

Insurance

AMP Sanmar Life Insurance Birla Sun Life Insurance

Aviva Life Insurance HDFC Life Insurance ICICI Prudential Life

Insurance

Max Newyork Life

Insurance

Metlife India Insurance Reliance Life Insurance

Shiram Life Insurance Tata AIG Life Insurance SBI Life Insurance

Bharti AXA Life

Insurance

ING Vysya Life Insurance Sahara Life Insurance

Kotak Mahindra

Insurance

General Insurance

Corporation India

Royal Sundaram

Insurance

HDFC Standard Life Insurance Company Ltd.

HDFC Standard Life Insurance Company Ltd. is one of India‘s leading private life insurance

companies, which offers a range of individual and group insurance solutions. It is a joint venture

between Housing Development Finance Corporation Limited (HDFC

Ltd.), India‘s leading housing finance institution and The Standard Life Assurance Company, a

leading provider of financial services from the United Kingdom. Their cumulative premium

income, including the first year premiums and renewal premiums is

Rs. 672.3 for the financial year, Apr-Nov 2005. They have managed to cover over 11,00,000

individuals out of which over 3,40,000 lives have been covered through our group business tie-

ups.

Max New York Life Insurance Co. Ltd.

Max New York Life Insurance Company Limited is a joint venture that brings together two large

forces - Max India Limited, a multi-business corporate, together with New

York Life International, a global expert in life insurance. With their various Products and

Riders, there are more than 400 product combinations to choose from. They have a national

presence with a network of 57 offices in 37 cities across India.

ICICI Prudential Life Insurance Company Ltd.

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier

financial powerhouse and Prudential plc, a leading international financial services group

headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector

insurance companies to begin operations in December 2000 after receiving approval from

Insurance Regulatory Development Authority (IRDA). The company has a network of about

56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups.

Om Kotak Mahindra Life Insurance Co. Ltd.

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak

Mahindra Bank Ltd. (KMBL), and Old Mutual plc.

Birla Sun Life Insurance Company Ltd.

Birla Sun Life Insurance Company is a joint venture between Aditya Birla Group and

Sun Life financial Services of Canada.

SBI Life Insurance

SBI Life Insurance is a joint venture between the State Bank of India and BNP Paribas

Assurance. SBI Life Insurance is registered with an authorized capital of Rs 2000 crores and a

Paid-up capital of Rs 1000 Crores. SBI owns 74% of the total capital and BNP

Paribas Assurance the remaining 26%. State Bank of India enjoys the largest banking franchise

in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 14,500

branches across the country, arguably the largest in the world. BNP Paribas Assurance is the

insurance arm of BNP Paribas - Euro Zone‘s leading Bank. BNP Paribas, part of the world's top

10 group of banks by market value and part of Europe top 3 banking companies, is one of the

oldest foreign banks with a presence in India dating back to 1860. BNP Paribas Assurance is the

forth largest life insurance company in France, and a worldwide leader in Creditor insurance

products offering protection to over 50 million clients. BNP Paribas Assurance operates in 42

countries mainly through the bancassurance and partnership model. SBI Life has a unique multi-

distribution model encompassing Bancassurance, Agency and Group Corporates.

SBI Life extensively leverages the SBI Group as a platform for cross-selling insurance products

along with its numerous banking product packages such as housing loans and personal loans.

SBI‘s access to over 100 million accounts across the country provides a vibrant base for

insurance penetration across every region and economic strata in the country ensuring true

financial inclusion.

Allianz Bajaj Life Insurance Company Ltd.

Bajaj Allianz Life Insurance Company Limited is a Union between Allianz SE, one of the

world‘s largest Life Insurance companies and Bajaj Auto, one of the biggest 2- &- 3 wheeler

manufacturers in the world. Allianz SE is a leading insurance conglomerate globally and one of

the largest asset managers in the world, managing assets worth over a Trillion Euros (Over R.

55,00,000 crores). Allianz SE has over 115 years of financial experience in over 70 countries

Bajaj Auto is one of the most trusted name is Indian auto for over 55 years. At Bajaj Allianz

customer delight is our guiding principle. Ensuring world-class solutions by offering customized

products with transparent benefits, supported by best technology is our business philosophy.

OTHER PLAYERS:

Tata AIG Life Insurance Company Ltd

ING Vysya Life Insurance Company Private Limited

AMP SANMAR Assurance Company Ltd.

Dabur CGU Life Insurance Company Pvt. Ltd.

Marketing of Insurance In India

Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a

sector, which leads to benefits across the full spectrum, from the individual who now have wider

choices, to the economy, which see increased savings, to the infrastructure sector, which can

look forward to long term funding being available. In an under-insured economy, newer channels

of distribution have to be utilized to intensify the reach of insurance both in urban and rural

markets. This will create huge employment opportunities not only within insurance companies

but also as agents and consultants of insurance companies.

Marketing Mix Policies

Different companies can choose to position themselves differently and hence the Marketing Mix

is different. However, there are certain common characteristics that one can cull out from the

possible strategies that companies adopt.

Product:

The development of flexible products to suit individual requirements is what will differentiate

the winners from the also-rans. The key to success is in providing insurance solutions, not

standardized insurance products. The concept of riders/optional benefits has already been a huge

innovation brought about by the new players, which has led to customization of products for

individual needs. However, companies may differentiate themselves on the basis of product

segments that they choose to focus on and excel in.

Place:

Different companies may however choose different channels and different geographies to focus

on. The channel options are - tied agency force, corporate agents and brokers and this is an area

where different companies will make different choices. Many companies like HDFC Standard

Life are focusing on all channels whereas companies like Max New York Life are focusing on

the tied agency force only. Customer interface will be a key challenge for life insurance

companies and includes every that interaction that the customer has with the company, such as

sales, new business underwriting, policy servicing, premium payments, claim processing and so

on. Technology can play a crucial role in delivering the highest standards of service set by the

company and it will be imperative for any serious player to excel in all of these.

Price:

Price is a relevant differentiator only in two segments - pure term insurance and in pure

annuities. Here too, service delivery and financial strength will need to be present at a minimum

acceptable level for price to be a relevant differentiator. In case of savings oriented products,

long-term returns generated are more relevant than just the price of the product. A focus on

generating good investment performance and keeping a tight control on costs help in generating

good long-term maturity value for customers. Norms have been laid down on all of these by

IRDA and adhering to these while delivering good returns will be a challenge.

Promotion and Advertising:

The level of demand is latent and will have to be activated considerably. The market needs to be

developed. Greater awareness of insurance and the need to have it as a protection tool rather than

as a tax planning measure needs to be appreciated by the Indian people. Various communication

tools including advertising, direct marketing and road shows contribute to all this and different

companies take different approaches on these.

Process:

Cashless settlement: One of the most defining and customer-friendly changes that we‘ve seen in

recent years relates to the way claims settlements are made. The advent of the third-party

administrator (TPA) regime has facilitated the transition to the hugely convenient era of cashless

settlement of health and auto insurance claims. TPAs are entities who process claims on behalf

of insurers: the IRDA licenses them after it is satisfied that they have the financial strength, the

trained manpower, the infrastructure and the skills to undertake this activity. Likewise, with auto

insurance, the TPA ties up with garages and authorized service centers for cashless settlement of

auto insurance claims.

Lower premiums: The spirit of competition and the broadening of the risk experience of

insurance companies have contributed to a fall in premiums over the years. That‘s because, other

things being equal, an insurer who covers the lives just of 10 people bears a higher risk than an

insurer who covers the lives of, say, 100 people. Further, a broader base will provide greater

efficiencies on costs such as distribution, management and claims. A broad basing of the

mortality experience, therefore, gives insurers the elbowroom to compete by lowering premiums,

and that trend is expected to continue.

Premium payment flexibility: Insurers have imparted certain flexibility to premium payment

options in order to address this concern. For instance, one now have the option to pay your

premiums upfront, which is then carried forward for the tenure of the policy. The yearly

premiums are drawn from the initial corpus. Insurers have also introduced the concept of

‗automatic cover maintenance‘ to protect your policy from lapsing owing to your omission to

pay your premium on time. Under this, in the event of our not paying the premium, the insurer

dips into your investment account to the extent of the premium. Of course, this comes with an in-

built drawback: your investment portion diminishes year on year to the extent of the amount paid

to cover your risk.

Physical Evidence:

This can play a significant role for marketing in the Indian scenario. Since Internet users are

comparatively lesser than countries such as US, the offline mode will be preferred in

India. Although the distribution model is largely agent-based, wherever the customer is in

contact with the company, this factor can play a significant role in luring the customer.

People:

The most important factor that materializes sales and maintains customer relationships on a long-

term basis is this factor. No matter what distribution strategy a company adopts, customer

relationship has to be taken care of in order to maintain the customer base on a long-term basis.

INTRODUCTION TO COMPANY

MetLife, Inc. is a leading global provider of insurance, annuities and employee benefit programs,

serving 90 million customers in over 60 countries. Through its subsidiaries and affiliates,

MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific,

Europe and the Middle East.

For 140 years, MetLife has been insuring the lives of the people who depend on us. Our success

is based on our long history of social responsibility, strong leadership, sound investments, and

innovative products and services.

The origins of Metropolitan Life Insurance Company (MetLife) go back to 1863, when a group

of New York City businessmen raised $100,000 to found the National Union Life and Limb

Insurance Company.

The new company insured Civil War sailors and soldiers against disabilities due to wartime

wounds, accidents, and sickness. In 1868, after several reorganizations and five difficult years,

the company decided to focus on the life insurance business. A new company was chartered to

sell "ordinary" insurance to the middle class. The founders chose the name because they had

been most successful in New York City, or the "Metropolitan" District.

This new venture also faced difficulties. A severe business depression that began in the early

1870s rapidly put half of the 70 life insurance companies operating in New York State out of

business. Only very large, long-established ordinary life insurance companies remained strong.

Policy lapses over successive years forced the company to contract until it reached its lowest

point in the late 1870s.

In 1879, MetLife President Joseph F. Knapp turned his attention to England, where "industrial"

or "workingmen's" insurance programs were widely successful. American companies had not

bothered to pursue industrial insurance up to that time because of the expense involved in

building and sustaining an agency force to sell policies door to door and to make the weekly

collection of five- or ten-cent premiums.

By importing English agents to train an American agency force, MetLife quickly transferred

successful British methods for use in the United States. By 1880, the company was signing up

700 new industrial policies a day. Rapidly increasing volume quickly drove down distribution

costs, and the new program proved immediately successful.

The MetLife agent became an important person in the lives of these striving families. Manuals

instructed agents to call at a home at the same time each week to ensure familiarity and contact.

In the process of collecting premiums, insurance agents listened to the problems, concerns, and

hopes of their clients. So successful was this approach that by 1909, MetLife became the nation's

largest life insurer in terms of insurance in force, a leadership position we continue to hold today

in North America

MetLife‘s corporate vision – to build financial freedom for everyone – guides the company‘s

response to people‘s growing need for first-rate financial products and services through various

life stages and economic cycles. MetLife‘s trusted brand, capital strength, and existing

relationships with millions of individual and institutional customers around the globe uniquely

position MetLife among its competitors.

The "everyone" in MetLife‘s vision took on added meaning in 2000 as the company welcomed

an important new constituency: shareholders. MetLife transformed itself from mutual to stock

ownership in April of that year through a demutualization and initial public offering that was

completed in just 18 months after Board authorization.

The year 2001 was a true test of the qualities that define MetLife. The company‘s core values,

brought to life in what MetLife does every day, were no more evident than in MetLife‘s response

to the tragic events that shook our nation on September 11. MetLife responded quickly. The

company served its customers, communities and employees during this difficult time. At the

same time, MetLife invested $1 billion in a broad array of publicly-traded common stocks.

In 2001, MetLife was the first insurance company to establish a financial holding company with

a nationally chartered bank. Leveraging its unparalleled distribution channels, MetLife entered

the retail-banking arena with the launch of MetLife Bank, making it an easy and convenient way

for MetLife‘s customers to realize their financial goals.

MetLife announced in 2002 that it would be continuing its long-standing relationship with

Snoopy and the rest of the PEANUTS® characters. The company signed a new contract that

would allow the characters to appear in MetLife‘s domestic and international advertising for the

next 10 years.

The sale of State Street Research & Management Company to BlackRock, Inc. was announced in

2004. In line with MetLife‘s strategy to focus on core business growth, the sale benefited many

of the company‘s Individual and Institutional Business clients who held investments through

State Street Research, as it became part of one of the largest publicly traded investment

management firms in the U.S.

The company‘s stated long-term goal is to become the recognized leader throughout the world

for relationship building, connectedness and caring in financial services – in the "giant league"

with over 100 million people as MetLife customers by the year 2010.

MetLife took a major step toward realizing this goal in 2005, when it acquired Travelers Life &

Annuity and substantially all of Citigroup‘s international insurance businesses for $12 billion.

Completed on July 1, 2005, the Travelers acquisition made MetLife the largest individual life

insurer in North America based on sales, the second largest provider of retail annuities and the

largest provider of institutional annuities.

Working Mother magazine honored MetLife in 2005 by naming the company one of the "100

Best Companies for Working Mothers," for the seventh consecutive year. In 2005, the company

was named to DiversityInc.‘s list of the Top 50 Companies for Diversity. In early 2006, MetLife

was also named to the National Association for Female Executives‘ annual list of Top 30

Companies for Executive Women.

In 2006, MetLife appointed C. Robert (Rob) Henrikson chairman of the board of directors,

president and chief executive officer of MetLife, Inc. Henrikson was appointed CEO on March

1, 2006 and chairman of the board on April 25, 2006.

Henrikson has been the architect of an aggressive growth strategy that included double-digit

organic growth, the divestiture of non-core businesses, and an M&A strategy which resulted in

market leadership in MetLife‘s core product lines. Before it was commonly talked about,

Henrikson recognized the opportunities presented by the changing demographics in a global

marketplace and set the company on a course for continued success by developing innovative

products and services and strengthening the company‘s distribution power in the U.S., Japan,

Latin America, Asia Pacific, Europe and the Middle East.

Today, a time when consumers are feeling a greater financial burden than ever before, MetLife is

helping millions of customers create their own personal safety net. At no time in the company‘s

history has MetLife been as well positioned to capitalize on its history, its reputation for security

and stability, and its innovative products and services as it is today.

In the future, MetLife will continue to grow its business with focus, innovation and profitability.

This will be accomplished by drawing on the reservoir of history that has produced an enduring

set of corporate values based on more than 140 years of integrity, social responsibility, strong

leadership and financial strength.

Metlife India:

MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was

incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and

Kashmir Bank, M. Pallonji and Co. Private Limited and other private investors. MetLife is one

of the fastest growing life insurance companies in the country. It serves its customers by offering

a range of innovative products to individuals and group customers at more than 600 locations

through its bank partners and company-owned offices. MetLife has more than 50,000 Financial

Advisors, who help customers achieve peace of mind across the length and breadth of the

country.

MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas,

Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life

insurer in the United States (based on life insurance inforce), with over 140 years of experience

and relationships with more than 90 of the top one hundred FORTUNE 500® companies. The

MetLife companies offer life insurance, annuities, automobile and home insurance, retail

banking and other financial services to individuals, as well as group insurance, reinsurance and

retirement and savings products and services to corporations and other institutions.

MetLife, Inc. is a leading provider of insurance and financial services with operations throughout

the United States and the Latin America, Europe, and Asia Pacific regions. Through its domestic

and international subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million

customers around the world and MetLife is the largest life insurer in the United States (based on

life insurance in-force).

The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking

and other financial services to individuals, as well as group insurance and retirement & savings

products and services to corporations and other institutions.

Partners:

MetLife’s Functional Structure : - MetLife’s sales function is divided into two functional structures within the organization. These two Structures are: Bancassurance Agency Both types of structures are described as follows: BANCASSURANCE OR BANCA : - MetLife is a pioneer in offering life insurance solutions through banks and alliances. Within a short span of two years, and with nearly a large number of partners, B & A has emerged as a vital component of the company’s sales and distribution strategy, contributing to approximately one third of company’s totalbusiness. The business philosophy at B&A is to leverage distribution synergies with there partners and add value to its customers as well as the partners. Flexibility adaptation and experimenting with new ideas are the hallmarks of this channel. The business philosophy at B&A is to leverage distribution synergies with its partners and add value to the business of both. Bancassurance Team include

Banks :- The Jammu and Kashmir Bank Axis Bank Dhanalakshmi Bank Karnataka Bank

Corporate Agents :- Karvy Consultants Limited Geojit Securities Way2wealth Consultancy Mini Muthoottu Bank AGENCY :-

Agency is the largest distribution channel of MetLife comprising a large advisor force that targets various customer segments. The strength of agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, agency has emerged as a robust, predictable and sustainable business model. Generally this advisors works under the leadership of sales manager, Who motivate them in every step by providing training and guidance to them, usually each sales manager have 20 to 30 advisors under them.

Branch Sales Manager (BSM)/ Area manager

Agency Manager(AM) Sales Manager (SM) Advisors:- Advisors are the people who are the regular or non-

regular employees of the METLIFE, [Commissioned agents are also a part of agency but they are not the regular employees of the company and are being paid for insuring peoples with Metlife’s traditional and non traditional insurance policy.]

Market Share Of METLIFE INDIA:

Market Share

74%

3%

8%

5%

10% LIC

MetLife

ICICIPrudential

Bajaj Allianz

Others

Organization Chart of the company

RECRUITMENT OF ADVISORS

Advisors are the backbone of any life insurance company. They play the most important

and key role for company to cashing the revenue through selling the insurance policies.

Some years ago Advisors were known as Agents but Reliance introduced them as Advisors

which seems to be more appropriately.

As a Reliance Life Insurance Advisor, the sky is not the limit—you can go beyond.

In India, ever since the insurance industry has opened up, opportunities for insurance companies

have become limitless. To tap this opportunity, they require insurance agents because agents are

one of the most significant modes of bringing in much-needed business to the company. At

Reliance Life Insurance, you will not merely be an insurance agent—you will be a Financial

Advisor. You will have an important role to play because you have to give valuable advice to

prospective customers about their financial planning.

Opportunities for Metlife Advisors

Make a good profit without a heavy investment.

Enjoy the benefit of residual income.

Maintain flexible work hours.

Earn attractive commissions.

Participate in exciting recognition programs.

Capitalize on the growing Insurance market.

Become a full time sales manager.

Benefits Available for Advisors

Apart from being remunerated well, Advisors get a lot of recognition and can win awards by

participating in the monthly, quarterly, half yearly, yearly business competition. These business

reviews can fetch foreign tours and travel free of cost. Easy way to globe trot is to become an

advisors with Metlife. Become an Advisor to really see the benefits. It is told that "seeing is

believing '. We are ahead and we say "experiencing is believing" are you ready to experiment.

Training of Advisory Agents in Met Life Insurance

The training program of the insurance agents in Met Life Insurance is called Pathshala and is divided into four modules which are as follows:

CST (Compliance and Sales Training)

PAP (Professional Advisory Program)

EAP (Expert Advisory Program)

MAP (Master Advisory Program)

CST Training Program: CST Program also known as Compliance and Sales Training program is the first module in the training program that Is designed specifically to enhance the functioning of the agents. Attending this program is important for the growth of the agent and is a prerequisite for the Trigger and Eagle awards. Module Overview:- Duration: 3 days of 8 hours each. Purpose: The purpose of this module is to induct the agent into the life insurance professional sales career.

Learning Objective:

Understand & relate to MetLife

Comprehensive understanding of the products Understanding and practice basic script for an effective sales process in the natural market Through understanding of various processes including underwriting, claims.

Understanding and relate to MetLife:

Under this part the agents are introduced to the company so that they could come to know about the history of the company, the values that the company holds and culture that is being followed in the company so that they could easily relate themselves to the company.

Comprehensive understanding of the products:

Under this part the agents are introduced to the different products that the company is offering which help them to gain sufficient knowledge about the product portfolio. They come to know about the different types of the different types of the products (e.g. Met Suvidha , Met Bhavishya , ULIP etc. ), the benefits they are providing, the target market of the product (e.g Met Suvidha is target mainly the married/unmarried peoples, people with family and children, key persons of the organization etc. while Met Bhavishya mainly target the childrens) ,the Premiums of different products. Understanding and practice basic script for an effective sales process in the natural market:

Under this part the agents are trained how to start their business in their known market(natural market) by automatically creating a relationship between them and the prospect for a personal reason. They are also taught the benefits that are associated with the natural market, from where to start and what should be their expected results.

PAP Training Program: PAP Program also known as Professional Advisory Program is the second module of the training program. Module Overview

Duration: 3 days 8 hours Learning Objective:

Understanding taxation for the current financial year How to sell problems through illustrations Objection handling Building business on Referral Model.

EAP Training Program:

EAP Program also known as Expert Advisory Program is the third module of the training program. This course will work wonders for the agents, provided that they work the course well. Module overview: Duration: 2 days 8 hours each Purpose: The purpose of this module is to enable the agents to sell in referral market professionally. Learning Objectives:

At the end of this module the agents will be able to understand:

MetLife Sales Process

How to migrate to referral market

How to do need based selling to achieve higher average premiums and more closing Goal setting

Sales Process In this part the agents are introduced about their customers. They follow an outline called sales Turbine and practiced it week after week until it becomes natural to them. The outline is as follows PROSPECTING Prospecting is the first step of the sales process which means to prospector different customers through personal contacts or from any other source. We can also prospect a customer by taking referrals from our old customers. APPROACH Approach is the process after prospecting a customer in which we have to make an approach to the customer for an appointment at his/her convenient time and introduce your company and its service. FACT FINDING In this process we have to find out the need of a customer in order to provide a suitable product. This is done by explaining the financial securities three corner i.e. protection, accumulation and retirement. SOLUTION This is the step in which we have to find out the perfect product which will solve the requirement of the customer CLOSING

This is the last step of the complete sales process in which we assist the customer in underwriting process. This policy takes the agents to the next level by giving them insight into the advanced concepts of life insurance advisory that will enable them to reach greater levels of success. The program discusses critical subjects such as persistency and case rate and also some important traditional products. It also

puts lights on important topic of retirement planning, which is an integral part of financial planning for all their clients.

MAP Training Program MAP program also known as the Master Advisory program is the forthand the final module of the MetLife sales training program. MetLife training goes hand in hand with the field achievements of the agents. This is a two day program which is offered as a commitment to the development of the agents that will give them the skills that will directly translated into more business. During this 2 days program the agents goes through some technical subject areas which are important for the growth in the profession. Purpose: Learning objectives Module Overview: Duration:

2 day 8 hours each.

By the end of this 2 day MAP Module the agents should be able to Understand Financial Markets and their working Understand Estate Planning especially how it relates to insurance Aspire for international recognition with MDRT Understand claims and Reinsurance process Set Goals to achieve your dreams. Understanding Financial Markets In this part the agents are introduced to the financial markets, it’s type i.e. classification of the financial market etc, mutual funds etc. Understanding Estate Planning especially how it relates to insurance

In this part the agents are introduced to estate planning, different methods of transferring the ownership, procedure to make a gift, what is a trust, what is the importance of will, what are procedures involved in the transfer of property based on a will.

MDRT MDRT stands for Million Dollar Round Table is the Primer Association of Financial Professionals. It is an international , independent association of more than 35,000 members , or less than 1%, of the world’s most successful life insurance and financial services professionals from 476 companies in 76 nations and territories. MDRT members demonstrate exceptional professional knowledge , strict ethical conduct and outstanding client service. MDRT membership is recognized internationally as the standard of sales excellence in the life insurance and financial services business. It is started in 1972 by 32 extraordinary life insurance producers as a forum in order to foster a high standard, professional approach to life insurance sales and service.

Purpose of MDRT: To provide incentives for all insurance and financial servicesprofessionals and advisors to reach their full potential in theprofessional development , technical competence and salesperformance. To evaluate professional standard and prestige of insurance and financial services of the professionals and advisors.

Mission Statement: The mission of the MDRT is to be valued , member-driven international network of leading insurance and investment financial service professionals/advisors who serve their clients by exemplary performance and the highest standards of ethics, knowledge, service and productivity. Code of Ethics:

MDRT members should be ever mindful that complete compliance with and observance of the Code of Ethics of the Million Dollar Round Table shall serve to promote the highest quality standards of membership. These standards will be beneficial to the public, and the insurance and financial service profession.

Annual Meeting of MDRT: A gathering of more than 6,000 of the world’s top financial services professionals in the world. Exposure to the finest and most innovative sales ideas in the life insurance-based, financial services business. Motivational and educational presentations by about 100 speakers.

A unique opportunity to network with other top financial service professionals from around the world.

The MDRT Annual Meeting is an opportunity for the agents to:

Celebrate being among the most elite financial professionals in the world; Learn cutting-edge ideas and concepts from the industry experts; Connect to other industry leaders- professionally and personally; Recharge yourself and let MDRT motivate you to have best year, every year; Grow through the life- and career-changing experience. The advisory training is also provided to the commissioned agents. The Commissioned agents are not the regular employees of the company. But they undergo the same training as that of the advisory agents. The commissioned agents are required to cross each training module to get the specified incentives. The advisory agents after crossing all the four modules of training program are then placed in different branches of Metlife India

Management Functions

OPERATION DEPARTMENT

There is various operational functions that are performed by this insurance

industry.

These works are as follows:

WORK OF OPERATION MANAGER IN METLIFE INSURANCE:

1. Login the policy.

2. Recruit the advisor.

3. Collection of premium through cash, DD, and cheque.

4. Collection of renewal premium.

5. Managing the policy document.

6. Managing the queries of customer.

7. Maintenance of attendance registers

8. Handling the various receipt

9. Keeping the track of all the stationary items, proposed

forms (policy document, advisor recruitment form).

10. Update the record of the entire sales manager.

11. Scanning the entire document of the login policy and sending to the head office.

HUMAN RESOURCE DEPARTMENT

(a) RECRUITMENT PROCESS OF SALES MANAGER

There were certain criteria on which recruitment of Sales managers was done

These criteria were:

Confidence

Contacts

Experience

Procedures

Must have a bike and mobile

Good communication skill

Presentation skill

Recruitment is also done on then basis of references and campus

selection.

JOB PROFILE OF SALES MANAGER:

Recruitment and training of advisors

Monitoring the work of advisors

Create club membership, advisors and business

(b) RECRUITMENT OF ADVISORS

ELIGIBILITY:

Age: above 18 years.

Education qualification: minimum 12th standard(PUC)

Good contact no.

DOCUMENT NEED FOR ADVISORS:

Age proof

Driving license

Pan card

Passport

Address proof

Bank a/c detail

BENEFITS TO THE ADVISORS:

Commission: 2-40 % on premium.

Contest: every month.

COMPENSATION STRUCTURE OF SALES MANAGER:

It is based on two parts:

Fixed salary

Variables

Fixed salary depends upon the designation, experience, and profile of the

employee.

Variables include incentives, performance bonus, allowances etc.

INDUCTION AND TRAINING OF SALES MANAGER:

Training is done once a month

Problems regarding their work is discussed

New issues are informed to working people

Latest way of performing task is provided to

the managers

SALES PROCESS WHICH We USED IN METLIFE INDIA:

Sales process involved Personal selling. Product being an intangible one, it needs the

company personnel to go and persuade the customer via addressing to his doubts and concerns.

We need to undergo requisite interaction with the prospective customers to gauge their mood

with respect to different price levels. As the sales personnel are also aware of the competitors‘

price and, based on the market reaction and customers‘ sentiments, they can advise a more

prudent price policy to the management.

The sales person actually stimulates and generates enough interest in the customer and helps him

make the final decision to buy the product.

Steps in personal selling

Personal selling involves six important steps –

Prospecting

Prospecting is the process of identifying the prospective buyers of the product. The prospects are

those who have the need or will to buy and the power to pay. A prospect is qualified if he has the

authority, need, ability and eligibility to buy. In our context prospects used to be the owners in

case of a small company and Promotions & Advertising head in that of a big organization.

Ways of identifying a prospect

Acquaintance Reference: A satisfied customer can be a good source of information about the

names, addresses and phone numbers of the prospects who may be among his acquaintances,

relatives or family members. In addition we used to give reference of our other satisfied

customer to motivate the prospect to buy, thus obtaining further references.

Cold Calling: In this method we used to randomly call a customer without any reference, with

an anticipation of converting the call into sale. This method is also called ‗random prospecting‘.

Centre of Influence Method: Using this approach, we obtained the references for prospects

from eminent people of society. Using such references, the prospects are influenced to make a

buying decision since the recommendations of eminent personalities are taken seriously.

Direct Mail or Telephone Method: This was the most frequently used method by us.

We used to contact the prospective buyer on the telephone and inform him about our product,

price range, benefits etc. We also used to send mail/letters to our existing customers informing

them about modifications made in the existing range.

Company’s Record: We were provided contacts of the prospective customers from company‘s

own records. We need to follow up with them and get appointments and make sales therefore.

Pre – Approach: Pre – Approach is the second step in the selling process which emphasizes that

salesman should know, after identifying the prospects in the prospecting stage, the prospect‘s

likes and dislikes, his needs, preferences, habits, nature, behavior, economic and social status etc.

Based on all this information, the salesman has the necessary tools to plan his visit/interview

with the prospect and can give an effective sales presentation. This kind of preparation to meet

the prospect is called the pre – approach. Because of pre-approach we gained ample knowledge

about the prospect. This helped us in giving the presentation more efficiently, effectively and

with confidence.

Approaching

In this stage the prospect and the salesman come in contact with each other face to face. Here the

salesman has the opportunity to understand and interact with the prospect in a better way. Hence,

the salesman should put forward his best efforts to make the best use of this opportunity in

getting the attention of the prospect and to convince him to buy the product. Hence, getting the

attention of the prospect and persuading him to buy are the two main objectives of a salesman.

The importance of the approach cannot be overemphasized since it is only after the salesman

starts interacting directly with the prospect that the latter decides within the first few minutes

whether he needs to purchase or not. Similarly, the salesman has the opportunity to judge

whether the prospect is in the mood to buy or not.

We generally found it very difficult to approach the prospects owing to their busy schedule. Also

sometimes they are not interested in proposal. Despite this major hurdle we kept on trying to

obtain an appointment with the prospect. We need to be a little diplomatic and polite in our

approach. Different ways in which we gained access to the prospects:

Direct approach: We used to directly approach the prospect without any introduction

whatsoever and conduct an interview. We stated the benefits of our product and tried to arouse

interest of the prospect.

Advance Mailer: Another manner in which we used to seek an appointment with a prospect was

by sending an advance mailer explaining our product and its benefits vis-a-vis our competitors.

Such mailers were designed and written in a simple but attractive manner so as to arouse the

interest of the prospect.

Reference: This is the best method of securing an appointment with the prospect. References

could be obtained from friend, relative, or business associate of the prospect. This not only

facilitated the interview but also made the task of selling the product easier.

Sale letters: These proved to be another kind of a door opener. Such letters provide ample detail

about the product, benefits and schemes available with the product. Such letters signed by senior

executives, when sent in advance, facilitated our entry. A successful approach enhances the sale

and it is thus important for running of a business. A failed approach on the other hand gives an

opportunity to the rival company. So a good approach goes a long way in building good relations

with the prospect, while a bad one causes to lose the business & facilitates competitor‘s entry.

Presentation: A good presentation is as important as a good product. The significance of a good

presentation of the product can be gauged from the fact that many a time an attractively packed

presentation is sufficient to sell the product.

Requirements of a good presentation:

We were required to explain the product with its features and price advantage to the customer in

simple and easy terms. We ought to have thorough knowledge about our product and also other

competitive products available in the market. This helps in satisfying all the queries of the

customers and answers them satisfactorily. It is very important that customer be shown the kind

of product he is looking for. This way not only his time is saved but also he tends to make a

quick decision.

The Close

This is the last stage of any sales presentation. The whole exercise becomes useless if the sale

does not take place. Therefore it‘s most crucial stage for any salesman. The main aim of the

close is to convince the prospect to sign the contract form immediately rather than in future. For

successfully closing the sale we needed to be attentive and open mind throughout so as to be able

to listen patiently to the prospect, face objections and confidently answer any queries of them.

Distribution Channels in Life Insurance

Life insurance is always sold and seldom bought Tied Agency force nearly 11 lakh agents with

LIC Constraints in terms of area, reach, resources which inhibit growth of business A multiple

distribution channels supplementary to existing channel

Bancassurance

Corporate Agents

Brokers

Direct Marketing

Net Marketing

Telemarketing etc