Documente Academic
Documente Profesional
Documente Cultură
ON
“CHANNEL
DEVELOPMENT
AT
SBI LIFE INSURANCE”
Submitted by
Ran Singh
Master of Business
Administration
of Sikkim Manipal University, India.
“Channel
Development at
SBI Life Insurance”
Submitted by
Ran Singh
( Roll No 510728502 )
A Report submitted in partial fulfillment of the
requirements for the degree of
Master of Business
Administration
of Sikkim Manipal University, India.
Sikkim Manipal University of Health, Medical
510728502 Page 2
and Technological Sciences
Syndicate house, Manipal - 576 104
510728502 Page 3
I hereby declare that the
project
report entitled
“Channel
Development at
SBI Life Insurance ”
Master of Business
Administration
To Sikkim Manipal University, India, is my
Original work and not submitted for the award of
any other degree, diploma, fellowship, or any
other similar title or prizes
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Place: Bangalore RAN SINGH
510728502 Page 5
The Project Report of
RAN SINGH
“Channel
Development at
SBI Life Insurance”
is approved and is
acceptable in quality and
form
510728502 Page 6
This is to certify that the
Project report entitled
“Channel
Development at
SBI Life Insurance”
Submitted in partial fulfillment of the
requirements for the degree of
Master of
Business
Administration
Sikkim Manipal University of Health,
Medical and Technological Sciences
Submitted by
RAN SINGH
Who has worked under my supervision and
guidance and that no part of this report has
been submitted for the award of any other
degree, Diploma, Fellowship or other similar
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titles or prizes and that the work has not
been published in any journal or Magazine
(Anurag Yadav)
Manager
SBI LIFE INSURANCE
ACKNOWLEDGEMENT
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TABLE OF CONTENT
510728502 Page 9
PREFACE
conditions under which they have to work in the future. It gives them a real
feel of the corporate world, which helps them to better equip themselves
with the required skills. It has been a great learning experience for me.
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EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
premium by the insured. The insurer pays the financial losses suffered by
2. In India the first company known as Sun Insurance Office Ltd. was
set up in year 1710. During the early years of 19th century, a large number
strengthen the insurance business, life insurance act 1923 was passed and
private insurance companies in 1956 to bring this vital sector under govt.
control to raise much needed development funds. Prior to the Indian sector
had become 246 companies in the insurance sector. Then, Life Insurance
Corporation Of India was formed and all other life insurance companies
gave their business to the corporation. The basic intention was to pay the
concept of life insurance to the gross root level of the Indian society.
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4. Life Insurance is a very important part of personal financial
planning because it is the quickest and easiest source of cash for the family
upon the death of a person. Within days, the insurance company will
money needed for funeral expenses, as well as for family living expenses.
formed and from July 1, 2000, private players entered the insurance
market.
who can afford to buy life, health and disability and pension plan products.
Out of this 20% have insurance and that too covers only 25% of their
needs and financial capacity. The remaining 80% have no insurance cover.
average business of LIC gets per active agent is Rs. 1.26 million.
7. Insurance needs to have social objectives and new covers will not
have that commitment. But now with the opening of the insurance sector to
8. The current budget has been a wake up call for Indian investors. The
era of fixed return instruments is over. This budget makes a point very
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clear one should be investing according to his financial goals and not with
the only objective to save tax. Investors should save and invest more for
his protection and meeting his future needs. His saving should not be
is uncertain. Moreover it’s an obligation that one has towards to the family
to ensure that the members are financially well off in any eventually.
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SCOPE OF THE STUDY
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SCOPE OF THE STUDY
the extensive distribution and sales network and study the functioning of
the channel structure, the hierarchy and the after-sales services procedure
2. The area for the study was preferably south Delhi but as per the
requirement & the availability of the respondents some use to stay at very
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INTRODUCTION
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INTRODUCTION
code of law known as the code of specific rules governing the practices of
from Loss by Fire. The company collected contributions & this money
went into an investment fund. Interest on this fund went towards paying
4. The Industrial Revolution in the US, in the early & mid 1800’s
establishes to sell life insurance policies & annuities. Several shared profits
5. Life insurance, in its present form, came to India from the United
1874. Prior to 1871, Indian lives were treated as sub-standard & charged
an Indian insurer which came into existence in 1871, was the first to cover
6. The Indian Life Assurance Companies Act, 1912 was the first
Indian Insurance Companies Act was enacted, to enable the govt. to collect
into effect with the enactment of the Insurance Act, 1938. Efforts in this
direction continued progressively & the Act was amended in1950, making
commission etc.
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1956, the management of the entire life insurance business of 229 Indian
insurers & provident insurance societies & the Indian life insurance
was taken over by the central govt. & then nationalized on 1st September
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LIBERALIZATION OF THE INSURANCE SECTOR
future economic policies will include the insurance reforms. When the
world over, insurance, markets have been opened up, India cannot remain
stay, heralding a new era of insurance in India. With the opening of the
pricing.
(e) It will secure for India larger inflows of foreign capital needed
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MAJOR PLAYERS
BUSNIESS
Insurance
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WHAT IS INSURANCE?
costs those results from loss of life, loss of health, lawsuits, or property
with some of the risks faced in every day life by every body. People
companies.
company. Indirectly, in the sense they must have insured the assets of
their own for example their house, car, or any thing else.
person assured (or failing him/her, to the person entitled to receive the
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same) on the happening of the event insured against. Usually the contract
motor, engineering, health, fire, etc. The contract provides for the payment
sick or lose income or savings to pay off medical bills. Individuals or their
relatives may come across untimely death, whatsoever the reason may be.
The assets of people may get damaged due to some heavenly act or by
6. No one knows in advance when a loss will occur or how serious that
loss will be. The uncertainty surrounding potential losses is known as Risk.
Insurance offers a way for people to replace risk with known costs- the
Insurance pools risks shared by many people, thereby, reducing the risks
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risk). In exchange, all policy holders (people who own insurance policies)
insurance organization will pay when any policy holder experience any
kind of loss.
IMPORTANCE OF INSURANCE
faced by many people. But it also serves many other important economic
& societal functions. Insurance provides the capital that communities need
employees against work related injuries & health problems. They also
insure their assets against any kind of wear n tear by natural forces &
forcibly.
collecting & paying out funds, insurance companies invest their funds to
bring extra revenue. Such investments help business & government finance
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their operations, & few profits from these investments support the
insurance companies can keep rates much lower than would otherwise be
possible.
affords full protection against risk of death. In case of death, the full
available. The later will be considerably less than the sum assured, if
• Easy settlement & protection against creditors: The life assured can
payable in the event of his death. The proceeds of a life policy can be
initial period, if the policy holder finds him unable to continue payment
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security of the policy without delay. Further, a life insurance policy is
insurance premiums from the total income tax liability. When this tax
relief is taken into account, it will be found that the assured is in effect
floods, breakdown, lightning, earthquakes, etc, are perils. If such perils can
cause damage to the asset, we say that the asset is exposed to that risk.
Perils are the events. Risks are the consequential losses or damages. The
a few lakhs or few crores of rupees, depending on the cost of the building
10. The risk only means that there is a possibility of loss or damage. The
damage may or may not happen. Insurance is relevant only if there are
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but the time of death is uncertain, In the case of a person who is terminally
ill, the time of death is not uncertain, though not exactly known. He cannot
be insured.
11. Insurance does not protect the asset. It does not prevent its loss due
to the peril. The peril cannot be avoided through insurance. The peril can
management. Insurance only tries to reduce the impact of the risk and the
owner of the assets and those who depend on that asset. It only
Life insurance
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13. These insurance are provided both by government and private
14. The IRDA Act, 1999 amending the Insurance Act, 1938 in Section 2
insurance cover;
Understanding;
per contract;
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COMPANY PROFILE
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COMPANY PROFILE
authorized capital of Rs. 1000 crore and a paid up capital of Rs. 500
crores. SBI owns 74% of the total capital and Cardif the remaining 26%.
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.
Cardif, the life insurance unit of BNP Paribas Assurance, has operations in
is the life and property & casualty insurance unit of BNI’ Paribas – a
among the worlds top 15 banks by market capitalization and is one of the
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competitive prices, ensuring high standards of customer service and world
packages such as housing loans and personal loans. SBI’s access to over
100 million accounts across the country provides a vibrant base for
customers.
7. After recording its fastest growth in the first nine months of the
101% growth in total premium for the first nine months. To support the
business growth in the last quarter, which is the best quarter for insurance
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companies SBI Life plans to infused Rs. 300 crore to 400 crore additional
been subdued till September” said U.S. Roy, M.D. & CEO of SBI Life
Insurance.
8. Asked about the issue of the capital infusion as the holding company
structure proposed by parent SBI Roy said “ if we don’t here from RBI
the valuation process is on and an initial public offer of shares would also
9. SBI Life which ranks the third among the private life insurance in
India was the first to report profits in last quarter. It has wiped out
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• SBI Life sustains leadership in lives covered at 7.2 million lives.
• SBI Life ranks 3rd amongst private life insurance companies in terms of
industry in India.
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12. The Organisation Chart of the company is as follows:
ORGANIZATIONAL CHART
Managing
Director
Territory Advisors/Trainees
Manager(TM)
Branch Manager
(BM)
Area Sales
Manager (ASM)
Senior Agency
Manager (SAM)
Agency Manager
(AM)
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PROJECT PROFILE
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PROJECT PROFILE
Insurance Products
returns plan.
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• SBI Life – Unit Plus II Pension: A flexible pension plan designed
to take control of the golden years ahead. The plan offers a wide
choice to invest and control four different funds as per one’s risk
appetite.
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3. NON UNIT LINKED PRODUCTS
Savings-cum-Protection Plans
resources to fund the higher educational needs of the child and at the
at maturity.
planning.
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• SBI Life – Shield: A pure term assurance plan that offers substantial
life cover at a very low cost with an option to choose for increasing
Sum Assured.
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4. Group Insurance Plans
rates.
The basics of the insurance business in india are governed by the agency
law, which is part of the indian contracts act,1872. Further, after the
industry got opened up the regulatory authority has been the insurance
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7. Agent-the definition
According to the section 182 of the Indian contract act ,1872, “an agent is
The insurance act ,1938 defines an agent as “one who is licensed under the
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THE INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY
10. Section 14 of IRDA act,1999 lays down the duties, powers and
functions of IRDA.
• Subject to the provisions of this act and any other law for the
time being in force, the authority shall have the duty to regulate
,promote and ensure orderly growth of the insurance business and re-
insurance business.
shall include,
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(c) Specifying requisite qualifications, code of conduct and
agents;
(d) Specifying the code of conduct for surveyors and loss assessors;
(g) Levying fees and other charges for carrying out the purposes of
this act;
of 1938)
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(j) Specifying the form and manner in which books of account
or insurance intermediaries;
11. The IRDA has prescribed both qualifications and disqualification for
510728502 Page 45
QUALIFICATIONS
otherwise;
DISQUALIFICATION’S
13. The factors that would debar a person from obtaining a license are
that he/she
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14. Has been found to be of unsound mind by a court of competent
jurisdiction
15. The license once issued can be cancelled whenever the person
16. There are two separate forms, one for individuals & another for
those other than individuals, in which the applications are to be made. The
two forms are numbered by irda-agent vb & are annexed to the regulation.
• Of age
17. The fee to be sent to the authority directly is Rs. 250 for new license
& for renewals applied for within the prescribed period, viz, at least 30
days before the date of expiry. If the application is made after the date of
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hardship would be caused otherwise, the license may be renewed. Prior to
renewal of the license of the license the agent should have completed at
least 50 hours practical training in life & general insurance business in the
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The Duties & Obligations of the Agent
18. As per the IRDA guidelines every advisor must be trained &
• Every insurance agent should himself & the insurance company that
• The advisors should take into the actual needs of the clients before
recommending a plan.
paid.
documents.
• Once the proposal is submitted, the advisor shall inform the status of
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• In case of a claim, the advisor is required to render necessary
existing policy taken from him/her & take a new proposal within 3
years.
policy is allowed.
code of conduct for the agents which state that the agent shall
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• Inform the insurer about any adverse habits & materials facts of the
person to be insured.
proposal.
contract.
a new proposal.
20. SBI life insurance co. ltd. aspires to provide state of the art of
510728502 Page 51
grow & prosper. The company wish to grow exponentially that is backed
• Highly trained professional sales people offering quality pre & post
sales service.
the importance of an advisor clearly stands out the advisor not only
contribute in brining in new business for the company, but also plays an
important part in offering world class pre & post sales service to the clients
to the clients with the support of the organization. But the company in its
principles clearly states out that an advisor to means “much more than a
consider the advisor force would be our biggest differentiating factor in the
coming years”. The advisor is an important asset not only for the
organization from the business point of view but also to the society on the
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community be helping people attain financial security & build funds for
their future needs thereby assisting them in getting their financial freedom.
If looked from the other side of the business where the company is
operating the competitive Indian market & more so in the business of life
insurance where the customers looks for self-belief & faith then the
advisor certainly holds the vital link in the overall business proposition.
They represent the company’s face & words on which the customers can
trust because the customer knows that face. The advisor helps to create a
web for the business to grow & driving the customer to come to the
22. The company in its vision out the urge to become the dominant
player in the industry. The company believes that a high level of self-
motivation & a coherent team work for the organization can only achieve
this on the whole. The company stresses great emphasis on its core values
which are:
• INTEGRITY
• CUSTOMER FIRST
• BOUNDARY LESS
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• OWNERSHIP
• PASSION
30. These are the foundation on which the organization works & the
base for the overall business environment of the company. Based on the
above mentioned ‘Pillars’ of the company the management has devised the
EMPOWERED TEAMS
23. Each employee is a stake holder in the organization & its growth. It
is the one of the important specialty here that the responsibility comes with
the channels & ranks whereby the targets are sent & the corrective
measures & rewards also come to them. The most important factor is the
24. The rewards in the company are directly proportional to the work &
targets achieved & gone beyond. You work hard you earn more. The
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manner & on the demonstrated competence level. But yes there is certainly
an extra for the people who go beyond then what is expected from them.
& work channel. Large scale interactive process at the organization &
them & how has been achieved. This factor encompasses through all the
26. The company is in a continuous search for the best of talents in the
market, which align with the vision & mission of the organization. The
company states out its working culture in certain important factors for the
interested incumbents:
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• Most important- the chance of flexible career.
27. The company is aware of the current trends in the market & the
Thus, the company has got some underlying facts & reasons for the
28. The company gives the space & time required to grow, achieve & to
makes it evident that the new opportunities will come from the gaps &
these new happenings & tap them as & when they arise. The people in the
company are its most important asset but the real focus should be on
29. The company also stresses out that the incumbents should have that
urge & self belief so that they are confident enough of driving the
innovation & change drives that they think are essential. The company
believes in being innovative & tenacious enough to open a new domains &
products & offerings state of art services to all its clients, brokers & agents
business the company also focuses on this aspect in the sense that it takes
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e-commerce & technology on a very high priority with increasing resource
30. QUALIFICATIONS
programs
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JOB PROFILE
31. As an advisor for the company, the role of the individual is no way
limited to sell the policies of the company. But the role basically starts
from the basics of explaining the life insurance aspects & the potential
upon the plan that suits them the best in terms of finance and security
• The freedom to work from anywhere & being one’s own boss.
32. The role of an advisor is multifaceted in the sense that his work
advisor has been laid down by the management in the following manner
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• Identifying prospective clients.
• Making appointments
sales & the internal reporting system so as to get the feed back &
33. The benefits have already been mentioned very often in the previous
The main benefits & supports that an advisor would be availing of are the
REWARDING CAREER
34. The job profile as mentioned earlier is unlimited & an advisor will
help people realize their dreams & provide them the financial &
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differences made to all these lives & that would be most satisfying in the
real sense.
SUCCESSFUL TEAM
35. Being at SBI gives the opportunity to be a part of India’s best team
of life insurance advisors. The company is numero uno among the private
players in the industry & has won numerous recognition & awards that
ATTRACTIVE REMUNERATION
the industry, which proves to be very useful from long term perspective of
added incentives just help as advisor to get more than what he/she expects.
INDEPENDENCE
37. At SBI, the advisor is a boss in himself & in the real sense. There is
the freedom to choose the workplace, the work timings & the amount of
earnings one wants to have. Moreover there is no need of any initial capital
manner.
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WORLD CLASS TRAINING
38. The company leverages on the international linkages that it has got
to provide the best training available in the industry at the present. The
company aims to impart the necessary skills & competencies to all even if
encouraging the advisors to the highest level of success all through their
career. One of the distinct factor is the opportunity & the option of a
BEST INFRASTRUCTURE
40. The huge investments that the company has made to develop the
provides the necessary tools, technology & human support that enable to
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EXTENSIVE PRODUCT PORTFOLIO
41. The company has got more than four hundred policies for its
42. The company has got unique sales & marketing tools to help &
support the advisors at every stage of the career. The sales, promotions &
marketing collaterals that the company posses help to achieve just that.
FINANCIAL STRENGTH
43. SBI Life offers the advisors & the customers’ unmatched financial
strength & solidity. The huge amount of paid up capital & growing
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• The UM recognizes the high performers
• And the advisors are also required to follow the weekly reporting
process.
CAREER PROGRESSION
performers. The TIGER TEAM represents a fast track career path for the
continues to do his/her business but the benefits comes added on. The
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• Age 25-40 years
47. This program is for the high achievers in the system & the major
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• A full time career as a Unit Manager
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• Case count of at least five per month (for 6 months)
AGENCY CHAMPION
51. This is the highest level of career progression on offer. It has got
several distinct features, which sets it apart from all the above mentioned
• The freedom of recruiting new advisors & making one’s own team
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THE TYPICAL CAREER PROGRESSION PATH
SALES MANAGER
ASM
UM
Trainer 12-18
Trainer 12-18
Months
Months
Agency
Advisor
Manager
Trainer
Role
BSM
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COMMISSION STRUCTURE
• Every quarter required to sell at least three policies & collect Rs. 20,000
as FYP
BONUS TARGET
55. The advisors are aptly rewarded for higher levels of productivity
that they achieve. The bonus targets for such achievers are as following:
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SBI Life Insurance
Authority (IRDA).
57. For the year ended March 31, 2006, the company garnered Rs
assurance partners and over 200 corporate agent and broker tie-ups.
rating from Fitch Ratings. For the past five years, SBI Life has
retained its position as the No. 1 private life insurer in the country,
with a wide range of flexible products that meet the needs of the
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OUR VISION
58. To make SBI Life Insurance the dominant Life and Pensions player
conveniently
policyholders
our employees
Ownership and Passion. Each of the values describes what the company
stands for, the qualities of our people and the way we work.
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60. We do believe that we are on the threshold of an exciting new
reshaping the sector. Given the quality of our parentage and the
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OBJECTIVE
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OBJECTIVE
i. Objective One
1. The objective of the research done for the company was to know
about the current perception about the company & its products. Moreover
the incumbents towards the company & its network of channel was on
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RESEARCH METHODOLOGY
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RESEARCH METHODOLOGY
competition, and also ways and means to beat it. It helps the company to
• Practical knowledge.
• Working environment of the company
• We learnt how to bring our theoretical knowledge into practice.
RESEARCH DESIGN
mail personal and by the diary. For the purpose of collected detailed
by means of questionnaire.
internet sites. Researcher has adopted this method of data collection, as the
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researcher liters no access to magazines and journal but a plenty of
SAMPLING METHODOLOGY
4. Sampling Technique:
100 customers who have taken Life Insurance plans by SBI Life Insurance
Company.
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LIMITATIONS OF THE STUDY
1. As we all know that for every good work there should be some
leakages also. Here leakages means some drawbacks. What I had found are
expected to be as follows:
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DATA ANALYSIS
AND
INTERPRETATION
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DATA ANALYSIS
1. When you hear the word insurance, what comes to your mind first?
3%
37% 42%
18%
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2. Insurance companies are now privatized?
70% 27% 3%
3%
27%
70%
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3. Can you name a few insurance companies?
2%
32%
38%
28%
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4. Do you have an insurance policy?
Yes No
82% 18%
18%
82%
Yes No
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5. The main aim to buy insurance policies is to
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35%
40%
25%
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6. Do you plan to buy insurance policy in next 3-4 months?
32%
43%
25%
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7. Would you be willing to buy insurance policy from a private
company?
30% 28%
42%
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8. Do you know which channel of distribution is most popular in
selling insurance?
1%
30%
43%
17%
9%
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9. How much is the earning of an advisor?
32%
46%
22%
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10. Do you have any idea about the benefits of an advisor?
32%
46%
22%
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11. Do you currently have an agency for any insurance company?
Yes No
37% 63%
37%
63%
Yes No
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12. Would you like to join as an insurance advisor?
15% 15%
70%
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INTERPRETATION
• Most of the people contacted were aware of the company but were very
company’s advisor
• The target population for the study was mostly the self-employed
segment so the urge to earn more money sitting at home was very much
evident
• Even the option of online training was not that impressive to them due
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• Further, the next problem that was evident was the prescribed fee of Rs.
1,000 was at times too much for the people specially for those who
come in the lower middle class but who do possess a good social
outstanding factor that stood out was the inability, on the respondent’s
side, to differentiate between the SBI Life & the LIC. Moreover the
policies of the LIC were also casting their effect on the benefits being
• Another important factor for the company was that all the respondents
were aware of the SBI brand name & hence the company’s name & its
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RECOMMENDATIONS
AND
SUGGESTIONS
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RECOMMENDATIONS AND SUGGESTIONS
2. The company has not exploited various sources which have a huge
business potential. for e.g. I gave 7 recruitments from a desk of SBI bank
very near to our branch office at videocon tower. Still there are lot of
willing and potential people who can give very good business to the
company.
4. More products, which give assured returns, should be there for the
investors because most of the investors ask about security part of the
policies especially during the time of slow down of the economy and to tap
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the investors because a lot of persons are saving to reduce their tax
tools to earn risk-free returns i.e. it should be considered more than just a
risk cover.
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CONCLUSION
510728502 Page 97
CONCLUSION
him/her to the life insurance industry, concepts of life insurance, the shared
mastery
3. The attrition for the company is 1.5%. it believes that people stay
with for the excitement & learning they get at the workplace. The
Performance, Pay for the Job & Pay in line with the market.
510728502 Page 98
4. The company anticipates the market place to get increasingly
competitive & it believes that its first mover advantage will pay rich
rewarding careers you will find. It is also hard work. But at SBI life, your
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ANNEXURE
Books:
Magazines:
Economic Times
The Hindu
Site Referred:
www.sbilife.co.in
www.economictimes.com
www.irdaindia.org
www.sbibank.com
Yes No
2. Are you aware of the tie-up between SBI and Cardiff of France?
Yes No
Good Average
7. What do you think is most important in the market linked plans of SBI
Life ?
Better return