Rural Recruitment and Its Challenges for Birla Sunlife Insurance Co. Ltd. Essay

RURAL RECRUITMENT AND ITS CHALLENGES FOR BIRLA SUN LIFE INSURANCE COMPANY LTD. IN WEST MIDNAPORE DISTRICT OF WEST BENGAL SUMMER TRAINING PROJECT REPORT PREPARED & SUBMITTED BY: Mr. Sukdev Barui Department of Business Administration ASSAM UNIVERSITY, Silchar UNDER GUIDANCE OF: Mr. Sumanta Ghosh (Branch Manager, BSLI West Midnapore) & Mr. Shriram Laxman (Regional Channel Distribution Manager Birla Sunlife Insurance Co. Ltd Zone-East 1) DEPARTMENT OF BUSINESS ADMINISTRATION SCHOOL OF MANAGEMENT STUDIES

ASSAM UNIVERSITY, SILCHAR 2009 DECLARATION: I, hereby declare that the project report entitled ‘Rural Recruitment and its challenges for Birla Sun Life Insurance Company Ltd. in West Midnapore district of West Bengal’ is an original work. To the best of knowledge and belief this project report or any part of it has not been submitted in any university or institutions for MBA or any other degree. Date- Place- Sukdev Barui (3rd Sem) Dept. of Business Administration Assam University, Silchar ACKNOWLEDGEMENT

Words are incapable of expressing the feelings of ineptness and gratitude that I feel, yet I take this opportunity to express heartfelt thanks to all those who supported and helped me in completion of the project successfully. At the very beginning I am thankful especially to Mr. Sumanta Ghosh (Branch Manager, BSLI West Midnapore) who helped me by showing the path and motivated me to undertake and accomplish the project work. I consider myself rather fortunate to have worked under the guidance of Mr.

Shriram Laxman (BSLI) who took keen interest throughout my project and was always there with a helping hand in times of need. My sincere gratitude to my respected teacher Professor R. K Raul, Head of the Department of Business Administration, Assam University, for his tireless inspiration and support which have made me understand the subject of the study in right perspective. I am also thankful to my respondents who helped me to build up a fruitful database for my analysis. For any error that remains, I of course stand personally responsible.

Sukdev Barui (3rd sem. ) Deptt. of Business Administration PREFACE In today’s competitive world professional management of an organization provide the cutting edge in the success of the organization. Managers who are professionally qualified manages the organization in a more professional way and the core of this qualification is an MBA degree. The business management students are required to undertaken the project works on real life problems in business and industrial organizations.

The object of the project works is to give the students an opportunity to develop their skills and apply management concepts and techniques to deal with management related problems. This study was conducted for the partial fulfillment of the requirement of Master of Business Administration (MBA) in Assam University, Silchar. Efforts have been made to make the study proper and concrete. In spite of it, if there are any lapses it is not deliberate but due to constraints. Concerted efforts were made to collect proper data and interact with the respondents.

The complete work was brought to this stage over a period of two months gathering data on the awareness level of people about life insurance among the people of Paschim Medinipur District of West Bengal. Sukdev Barui (3rd Sem) Deptt. of Business Administration EXECUTIVE SUMMARY Title of the project: ‘Rural Recruitment and its challenges for Birla Sun Life Insurance Company Ltd. in West Midnapore district of West Bengal’ Name of the organization: Birla Sun Life Insurance Company Ltd. , West Midnapore Branch. Place of the work: West Midnapore

Duration: 11th May – 10th July 2009 Organizational Guide: Mr. Sumanta Ghosh (Branch Manager, BSLI West Midnapore) Major Objectives: • To determine the awareness level of people about Life Insurance in Paschim Medinipur District of West Bengal with special reference to Birla Sun Life Insurance. • To know about the various attributes that influences a consumer to choose a Life Insurance. • To study about the strategy to improve the awareness of Life Insurance among people of Paschim Medinipur District of West Bengal with special reference to Birla Sun Life Insurance.

Research Methodology: The study will adopt the quantitative method of data collection. It will involve several field visits in the Paschim Medinipur District of West Bengal. Selection of Research Setting: The research setting is the two segments living in Paschim Medinipur District of West Bengal. Sample Selection: The respondents for the survey were chosen by the method of simple random sampling. Altogether 60 respondents from different socioeconomic background were selected from Paschim Medinipur District of West Bengal for the purpose of the study.

TOOLS OF DATA COLLECTION: The tool that was used for data collection was interview schedule and it was prepared in accordance to the object of the study. COMPILATION AND ANALYSIS OF DATA: Data thus gathered are analyzed in a sequential and logical order. For the purpose of analysis data are tabulated using SPSS 15 software and conclusion has been drawn on the ground of finding the desired result that fulfills the said objective. LIMITATIONS: i) Study has the sample size of 60 respondents only, because of time constraint of 8 weeks only. i) Being a social science research it suffers from the social constraints like willingness, perceptiveness. Fairness of the respondents to various questions asked is also one of the limitations of the study. Major Findings: ? It was found from the study that out of 60 respondents 58 of them has heard about insurance and among them 19 of them were under the age group of 17 to 26. ? The main sources of information about the insurance for the respondents were the insurance agents in the district where the study was conducted. Maximum people are interested in traditional policies and only few of them have heard about unit-linked policies. ? Major respondents are very much influenced by LICI as because it is Govt. undertaken. ? Maximum portion of people are not so much interested to do work as an advisor with insurance co. Major Recommendations: 1) Insurance Agents were the main source of information of insurance for the general public so in order to improve their policy holders in the district, Birla Sun Life Insurance Company should increase their insurance agents in those areas. ) The Birla Sun Life Insurance Company Ltd. has its branch office Paschim Medinipur District of West Bengal so in order to make its presence felt apart from spreading agents it should try to organize some social cultural programs as a tool of their advertisement. 3) Proper recruitment will help to increase the awareness of insurance among the rural people. 4) By the help of Gram Panchayat Pradhan, a meeting with the rural youths, employees, teachers etc. educated persons will attract more people for insurance advisor. CONTENTS | |Declaration 2 | | | |Acknowledgement 3 | |Preface 4 | |Executive Summery 5 | | | |Section-A: A. INTRODUCTION 8 | |A. 2 ORGANIZATIONAL PROFILE: 11 | |About BSLI 11 | |Vision / Mission 12 | |Products 13 | | | |Section-B: B. THE PRESENT STUDY | |Title of the Study 15 | |Objectives of the Study 15 | |Significance of the Study 15 | |Scope of the Study 16 | |Research Methodology 16 | |SECTION-C: C. 1 DATA ANALYSIS AND INTERPRETATION 17 | |SECTION-D: D. 1 FINDINGS OF THE SURVEY 28 | |D. SUGGESTIONS / RECOMMENDATIONS 30 | |D. 4 CONCLUSIONS 31 | |BIBLIOGRAPHY | |31 | |INTERVIEW SCHEDULE 32 | INSURANCE

The requirement of insurance is growing fast with the increasing population and their wealth. Insurance professionals assist and equip companies and individuals against risk and losses. Their paramount profile is to manage the risk and to secure people from the losses. Careers in the Insurance sector offer you the stimulating, lucrative environment. As an insurance professional, you will have to help clients in choosing the insurance policies which suit their requirements. You will also have the responsibility to guide your diverse customers in identifying the type, and level of insurance necessary, and help them to select the appropriate policy.

Posts and positions in the insurance sector include sales representative, underwriter, customer service representative, asset manager, or actuary. The Captive agents work for an insurance company, and only sell that company’s products. Independent insurance agents, or brokers, represent several insurance companies. Types of insurance include property and casualty, life, health, disability, and long-term care insurance. Now-a-days, every person would invariably have his/her life insurance done. Insurance is growing like wildfire, not only in the urban areas but also in the rural areas. There is an incredibly ample opportunity for success and prosperity in the insurance sector.

The rural market in India, constituting 742 million people, is by far the largest potential market in the world. The annual rural household income of Rs 56,630 (as per NCAER, IMDR 2002) coupled with changing rural aspirations in consumption patterns and lifestyles unfolds tremendous opportunities for rural marketing. However, some of the issues that seem to be hindering large-scale advent in the rural markets are lack of understanding of rural customer, inadequate data on rural markets, poor infrastructure, low levels of literacy and poor reach of mass media. The insurance sector, per se, also did not make much headway in the rural sector. The insurance market in India, liberalized in 2000 with the advent of private insurance companies in

November 2000 has not expanded in real terms beyond the urban domain. The penetration of insurance in India is pitifully low and if we aim for the modest target of insurance premium becoming 5% of GDP, insurance companies need to look at newer market segments rather than fight for a share in the same pie. There exists a vast potential in the rural areas where more than 70% of our population lives. But it is common perception and belief amongst the insurance companies that it is expensive to do business in rural areas. Most companies are focusing only on meeting regulatory requirements from rural areas and don’t see them as commercially viable rural business opportunities, waiting to be exploited.

Some of the questions tormenting the insurance marketers particularly the ones in the private sector are: Is the Indian rural market for insurance—a great promise or a great challenge? A potential miracle or a mirage? A mere regulatory obligation or a great opportunity? How is the rural market defined? Are rural operations cost-effective? Is it commercially wise to make huge investments to create a rural distribution and delivery system? We at the Foundation of Research, Training & Education in Insurance (FORTE) thought it would be a great help to the industry if these issues were addressed. So we decided to commission a research study to Marketing and Research Team (MART).

The study, titled ‘Rural Insurance: Issues, Challenges & Opportunities’ had the following objectives: o Understand rural customers’ current knowledge, attitude and practice regarding finance, specifically savings, loans, bank deposits as well as insurance itself. o Determine the potential rural customers’ perceived need for acceptance of and willingness to purchase insurance policies. o Gather inputs for the development of a broad marketing approach for each potential customer segment in terms of products/pricing of insurance policies, promotion and development of communications relevant to the rural markets. o Gather inputs for the development of a broad distribution strategy for each potential customer segment and identification of delivery systems relevant to rural markets. Interesting findings The study brought forth revealing data.

The rural folks have a strong saving habit—they save about one-third of their income annually across the three income segments studied. What was stunning was that the respondents, even those residing in backward areas, were quite conversant with insurance. The Indian rural market for insurance is not entirely an uninformed market. Almost 93% of the respondents were aware of life insurance; while 61% were aware of motor and accident insurance. Around 36% of them had bought some insurance or the other and another 38% of these policyholders had intention to buy more. A little over half (51%) of all the respondents had intentions of buying insurance products. Out of the non-policy holder respondents 62% intended to buy.

If these numbers are extrapolated over the macro level, rural population being 742 million, the potential market could be of mind-boggling proportions. Vibrant market Our research clearly indicates that the rural market is a vibrant market and holds tremendous potential for growth of insurance business, particularly because of the strong saving habit. While the industry would certainly be much heartened by the promising prospects in the rural sector, the real challenge for them would still be the distribution and delivery systems. Here again research has come up with valuable data about the extensive network built by the rural development agencies, the banks, the cooperative institutions, the NGOs and some industrial houses in the rural sector.

Insurance companies would therefore be well advised to work out collaborative arrangements with these institutions to mutual advantage. Building infrastructure These institutions, having spent huge amounts for creating the infrastructure, will be happy to collaborate and recover some of the costs. Insurance companies would be saving on huge potential investments that may be required to build up dedicated distribution and delivery systems and leverage the existing network at marginal costs. This indeed is a ‘win-win’ situation. Another important observation is that the ongoing IT and telecom revolution in India has not bypassed the rural sector.

The rural folks are reasonably technology-literate and are not averse to its use in their day-to-day activities. The state governments have also done their bit by inducting technology in their interface with them. This would certainly help in integrating the rural-urban markets. In order to further validate these findings, FORTE commissioned another research study to develop a rural distribution strategy as a case study in district Muzaffarnagar, UP. The study, titled ‘Developing a Rural Distribution Strategy for Insurers’ focused and looked threadbare at various distribution and delivery channels available in the district to reach out to the rural markets in a cost-effective manner.

The channels finally identified for distribution of insurance products were the panchayats, district cooperative banks, agriculture & dairy cooperatives and the agents. The study detailed operationalisation of these channels along with a comprehensive cost analysis to clearly highlight the viability of going to the rural markets. Therefore, there exists an immense opportunity to explore the rural potential with all its complexities and variables and meet the challenge of developing the insurance business in this sector, in tandem with its considerable economic growth. Says Godrej Soaps’ Adi Godrej, “The rural market is not sleeping any longer. We are”.

Insurance and rural market — Cost-effective delivery system holds the key THE insurance industry market in India was liberalised in 2000 and the first private insurance companies opened shop that November. The industry has now witnessed more than two years of private sector participation. However, the overall market has not really expanded, in real terms, beyond the urban domains. The penetration of insurance in India is pitiably low at just about 1. 6 per cent of GDP. If the overall market has to grow and expand, insurance companies will need to look at newer segments rather than fight for a share in the same pie. There exist a vast potential in the rural areas where more than 70 per cent of the population lives.

But it is common perception and belief among the insurance companies that it is expensive to do business in the rural areas. Most of them are focussing only on meeting the regulatory requirements from the rural areas and do not see them as commercially viable rural business opportunities, waiting to be exploited. One of the positive and welcome outcomes of this year’s Budget, presented by the Finance Minister, Mr P. Chidambaram, has been the revival of interest in the `resurgent rural reality’. Rural India has once again begun reclaiming its rightful space in the marketing strategies of most organisations. A number of senior corporate executives have been hotfooting to the interiors.

Government plans of huge investments in the rural sector will certainly have the effect of pushing up rural incomes at a much faster rate. With higher purchasing power in the hands of the bulk of rural folk, the demand for goods and services is expected to rise in tandem. This is what most marketers would be interested in. Saving habit [pic] The strong saving habit is underscored by the finding that even the relatively low-income families tend to save about a third of their annual earnings. Annual household money flows [pic] The average annual incomes are Rs 54,000 in segment A, Rs 40,000 in segment B and Rs 32,000 in segment C. In segment A, the annual income range is Rs 20,000-2,00,000; in Segment B it is Rs 15,000-1,50,000 and in Segment C Rs 5,000-80,000.

According to a study by FICCI-ING Insurance promoted Foundation of Research, Training and Education, a high level of awareness about insurance, particularly life insurance, is seen. About one-third of the respondents owned some insurance product or the other. Among those who owned insurance, there was a feeling of being under-insured and those who did not have one, felt the need for insurance cover. Insurance was largely seen as a risk-cover instrument and not so much as an investment option. Penetration of insurance products [pic] The rural market is vibrant and holds tremendous potential for growth of insurance business, particularly because of the strong saving habit.

It is worth highlighting the existence of a continuum of economic activity between rural and urban areas. Intermediate settlements, such as important villages, kasbas and tehsil towns play a key role in the process of rural-urban economic integration. Several towns are essentially overgrown villages of the past and have continued to retain their essential rural character. These towns have, indeed, proved critical to rapid economic growth of the rural areas in their hinterland as they provide them significant marketing and financial support. While the prospects in the rural sector are promising, the real challenge lies in distributing and delivering systems cost-effectively and efficiently.

It is common knowledge that the cost of building exclusive delivery systems for selling insurance would be prohibitive. However, valuable data are available on the existence of extensive network built by the rural development agencies, banks, cooperative institutions, NGOs, micro-financing institutions, women’s SHGs, youth clubs, panchayats and some industrial houses in the rural sector. Insurance companies would, therefore, be well-advised to harness this infrastructure and work out collaborative arrangements with these institutions to their mutual advantage. These institutions, having spent huge amounts for creating the infrastructure, will be happy to collaborate and recover some of their costs.

The insurance companies would save on large investments that would be required to build up dedicated distribution and delivery systems and leverage the existing network at marginal costs. This, indeed, is a unique `win-win’ situation. Since delivery channels would really hold the key to a successful strategy, a look at some: Non-governmental organisations • A number of NGOs are working in the rural areas to enhance income opportunities, improve living conditions, make available health and education to the villagers. The focus of these efforts is largely the low-income households with whom they develop a close relationship (such as family). Their involvement in social causes generates goodwill among the locals also. NGOs involved in micro-finance have the experience of extending loans and handling repayments. Their organisations provide micro-finance to SHGs. • A number of thrift and savings groups have been organised by government and non-government agencies across the country. These are mostly women groups of 15-20 members, which extend micro-credit to their members for starting an economic activity to augment family income. • Only these NGOs would be well suited for marketing insurance as they are already familiar with financial transactions and work extensively with the rural poor. Group insurance will be best-suited for women belonging to BPL (below poverty line) or low-income segments. Utility of newly-emerging post-office

As per the Department of Post’s Annual Report 2001-02, 1,55,279 post-offices, including 1,38,756 in rural areas, India has the largest postal network in the world. On an average, a post-office serves an area of 21. 17 sq. km. and a population of 6614. • The advent of courier services, easy Internet facilities and modern telecommunications methods is forcing the postal services out from the urban markets. • However, this service continues to be relevant in the villages where the post-office is a place for savings deposit, postal services and also the village telephone (pay phone for public use). People are also largely satisfied with the services of the post-office. The postal department also markets its own life insurance product because of which it may not commercially get involved in marketing insurance products of other companies. Possible rural agents to market insurance policies Efforts were made during the study to identify the potential rural agents. While the following categories of persons could be identified as potential agents, their competency to sell insurance products has to be ascertained by companies. Postal agents • The post-office sells savings certificates such as Kisan Vikas Patra, National Savings Certificate and also generates recurring deposits through postal agents. These agents are recruited by the district savings officer, Office of the Collectorate, and given a three-year renewable licence. Insurance companies can recruit and train these agents for marketing insurance products. The familiarity with financial instruments (savings) will be advantageous to these agents and to the insurance company as well. Youth club members • The youth clubs of Midnapore are active and are in activities such as starting a library, digging village ponds, processing official documents for villagers and organizing rural sports events and cultural shows to ensure better quality of life in the village. They are also part of government programmes where they get involved in spreading information and awareness on health and sanitation, government schemes and assist in government health camps. These youth are educated and seek avenues for generating income for themselves. • Leaders of youth clubs can be selected and recruited for marketing insurance products by companies. Doctors and school teachers Registered medical practitioners and teachers are the more educated persons in a village and command considerable respect and influence. Villagers also trust them. Many of them have worked as agents for LIC, post-office and other financial institutions. As these persons are well-educated, they can be easily trained under the IRDA curriculum and appointed as insurance agent by the private agencies. Rural market is vibrant and holds tremendous potential for growth of insurance business.

These are the markets, which would provide the future numbers and growth, and the companies which take early decision to enter these markets would certainly have the early mover advantage. The general notion that it is expensive to do business in the rural areas due to its inaccessibility and other factors, does not hold good due to the institutional infrastructure there, which can be profitably harnessed for reaching out to these areas. The challenge of developing a cost-effective delivery system is not insurmountable and there is enough scope for innovative collaborations. The process of penetration in the rural areas could be pushed further through an appropriate use of IT and a more pragmatic definition of `Rural’. Ref: Naren N. Joshi, Chief Representative, ING Insurance International B. V. , New Delhi. ) |Emerging Rural Insurance Market in India | | | | | | | | | | | |India is fast emerging on the world map as a strong economy and a global power. The country is going through a phase of rapid development and| |growth.

All the vital industries and sectors of the country are registering growth and thus, luring foreign investors. And insurance sector | |is one of them. To throw light on the Indian insurance sector, RNCOS has launched its report “Emerging Rural Insurance Market in India” that | |gives an extensive research and in-depth analysis of the insurance sector in India. This report helps clients to analyze the leading-edge | |opportunities critical to the success of the insurance industry in India. Based on this analysis, the report gives a future forecast of the | |market that is intended as a rough guide to the direction in which the market is likely to move. | | |Market Analysis | | | |With a huge population and large untapped market, insurance happens to be a big opportunity in India. The insurance business (measured in the| |context of first year premium) grew by 47. 93% in 2005-06, surpassing the growth of 32. 49% achieved in 2004-05. However, insurance penetration| |in the country continues to be low. | | | |Insurance penetration or premium volume as a share of a country’s GDP for the year 2005 stood at 2. 53% for life insurance and 0. 62% for | |non-life insurance. The level of penetration tends to rise as income increases, particularly in life insurance.

India, with its huge middle | |class households, has exhibited potential for the insurance industry. This has made international players to look at the Indian market. | |Moreover, saturation of markets in many developed economies has made the Indian market all the more attractive for global insurance majors. | | | |Key Findings | | | |  – The total life insurance premiums market in India could grow from Rs 16,8600 Crore (Nearly US$ 42. 85 Billion, Rs 1 = US$ 0. 254146) in | |2006-07 to Rs 1,230,000 Crore (Nearly US$ 312. 6 Billion, Rs 1 = US$ 0. 0254146) by 2010-11. | |  – The total non-life insurance premium is expected to increase at a CAGR of nearly 24. 7% for the period spanning from 2007-08 to 2010-11. | |  – With the entry of several low cost airlines along with fleet expansions by existing ones and increasing corporate aircraft ownership, the| |Indian aviation insurance market is all set to boom in a big way in coming few years. | |  – The home insurance segment is set to achieve a 100% growth as latest inclusion by financial institutions have made home insurance | |obligatory for housing loans approval. |  – Health insurance is poised to become the second largest business for non-life insurers in the next three years after motor insurance. | |  – A booming life insurance market has propelled the Indian life insurance agents into the top 10 country list in terms of membership to the| |Million Dollar Round Table (MDRT) — an exclusive club for the highest performing life insurance agents. | | | |Key Issues and Facts  | | | |  – Where does India stands in the context of emerging countries? | |  – What are key reasons behind attractiveness of Indian insurance market? |  – What are growing insurance segments in India? | |  – What are various opportunity areas in the market? | |  – What are the key issues need to be addressed? | |  – What is the status of Micro insurance in India? | |  – What are the various avenues for the growth of Micro insurance in India? | |  – What are the various challenges faced by the Micro insurance sector? | |  – What initiatives the government is taking to promote the Indian insurance market? | |  – Who are the major players engaged in providing Micro insurance in the country? | | | Key Players | | | |The major players discussed in the report are Life Insurance Corporation of India, Birla Sunlife Insurance Company Ltd. , Bajaj Allianz, Tata | |AIG, ICICI Prudential, Peerless, Rose Valley, SBI Life under life insurance segments and New India, National Insurance, Oriental, United | |India, and ICICI Lombard under non-life insurance segments. | Distribution of Micro Insurance Products in India ¦ IRDA’s Initiatives in Micro Insurance ¦ Micro Insurance Models ¦ Challenges in Micro Insurance Penetration ¦ Distribution Channels ¦ Conclusion IRDA’s Initiatives Definition of micro insurance ¦ Introduce the concept of “micro insurance product” and “micro insurance agent ¦ Recognition of wide network of intermediaries in rural and social sectors ¦ Offer alternative strategic entry points for intermediaries ¦ Recognition that procedures and services should be set by the insurers rather than the regulator ¦ Permitting an insurer to workout mechanism to provide life as well as general insurance products ¦ Review of existing definition of rural area Micro Insurance Models ¦ Direct Marketing by the insurance company ¦ Partner-agent model ¦ De-linked model ¦ Service Provider Model ¦ Direct Marketing by the insurance company Identification of clients, selling of policies, collection of premium, receipts of claims and settlement of claims etc. , all are done by the insurance companies ¦ Outreach to provide micro insurance to poor through this model has been very limited Partner-agent model ¦ Approved intermediary organizations act as insurance agents. ¦ Identify the customers, negotiate with insurance companies about the adequacy of products and premium rates to be paid, collect the premium ¦ Assist in clients in claim processing and settlement ¦ Dominant model De-linked model ¦ Community based insurance facility where NGO/MFI or federation of the groups act as insurer ¦ Coverage of risk remains with the insurer Sum insured, design and pricing of products, adverse selection, collection, claim verification and settlement data collection and maintenance, assessing client satisfaction etc are undertaken internally by the insurer Service Provider Model NGOs generally provide basic health care facilities to the rural population since necessary amenities were simply not present in their area of operation. Instead of premium, the service providers charge a membership fees to partly cover their costs Challenges in Micro Insurance Penetration ? Designing of products suiting the rural market ? Using the right distribution channel mix to reach the potential customer ? Intermediaries being able to build personal credibility with the clients ? Distribution Channels. ¦ Agents Formal Banks ¦ Regional Rural Banks ¦ Cooperative Banks ¦ SHGs & their Federations ¦ NGOs & MFIs ¦ Post Offices ¦ Internet & Rural Kiosks & Rural Knowledge Centers ¦ Corporate agents. Agents ¦ Prime channel for insurance distribution in urban areas ¦ Trust of the company & customer must ¦ Knowledge of different products ¦ Postman, School teacher, shopkeeper, gram sevikas, gram sahayaks ¦ Training & educating poses a challenge ¦ Not an optimum channel as 42 % of 600,000 villages have population of less than 500 Formal Banks ¦ Prime channel for insurance distribution in urban areas ¦ Trust of the company & customer must ¦ Knowledge of different products Postman, School teacher, shopkeeper, gram sevikas, gram sahayaks ¦ Training & educating poses a challenge ¦ Not an optimum channel as 42 % of 600,000 villages have population of less than 500 Regional Rural Banks ¦ 177 RRBs together with14,150 branches cover 516 districts and serve a client base of close to 62. 70 million ¦ RBI has permitted RRBs to undertake insurance business as corporate agent without risk participation ¦ Chitradurga Gramin Bank has -in close cooperation with the NABARD GTZ-Project- introduced a new deposit scheme for SHGs called “Rakshith” Savings Bank Scheme in tie up with LIC and UIICo. Ltd Cooperative Banks ¦ ST structure comprises of 30 SCBs, 367 DCCBs and over 112,309 PACS RBI has allowed scheduled licensed SCBs and licensed DCCBs having a networth of Rs. 500 million to undertake insurance business as corporate agents without risk participation ¦ Given their poor governance structures it is unlikely that they would emerge as efficient distribution channels SHGs & their Federations ¦ 1. 6 million SHGs comprising 24. 1 million families are linked to banks ¦ Rapidly growing year after year ¦ Many SHG promoters have formed federations ¦ Federations provide both financial and non financial services ¦ Federations promoted by DHAN Foundation are participating in Mutual Insurance Scheme as well as intermediary NGOs and MFIs Large number of NGOs and MFIs are involved in social as well as financial services intermediation ¦ Out of 61 sample MFIs studied by Sa-Dhan 34 were providing insurance services ¦ While all 34 MFIs provided life insurance products, only 9 facilitated non life insurance products ¦ The most significant range in amount of cover was in the category of Rs. 10,000 and above Challenges faced by NGO & MFIs ¦ Many of them are working as pure service provider particularly in health insurance, private insurer, intermediary ¦ Poor live for the present and do not plan for the future. Given their fatalistic attitude, it is difficult to explain the concept of insurance to poor Given this mindset, premium is seen as additional expenditure rather than risk cover ¦ Without the availability of basic health infrastructure in rural areas, health insurance is difficult to sell Challenges faced by NGO & MFIs ¦ Cooperation with the insurance company has not proved successful. Limited motivation on both sides to improve the cooperation ¦ Delays in settling claims and complicated formalities ¦ Challenge to pick up the necessary insurance techniques and adjust them to the needs of their members ¦ No legal status as a private insurer. This complicates the matter further when it comes to reinsurance ¦ Cooperation with the insurance company has not proved successful.

Limited motivation on both sides to improve the cooperation ¦ Delays in settling claims and complicated formalities ¦ Challenge to pick up the necessary insurance techniques and adjust them to the needs of their members ¦ No legal status as a private insurer. This complicates the matter further when it comes to reinsurance Post Offices ¦ There are about 129,000 rural post offices. ¦ Post Office itself is offering insurance products to the poor ¦ Its efficacy as an intermediary channel needs to be explored Internet, Rural kiosks & Knowledge Centers ¦ Using net for transactions has been catching up in urban areas. Many banks provide online banking Most of the insurance companies have product information and/or illustrative tools on the web ¦ In rural areas too rural knowledge centers are being set up to bring information close to the people. The insurance companies can use these centers to create awareness about insurance ¦ Can only be enablers for the human channels. (Ref: K. Muralidhara Rao, General Manager, micro Credit Innovations Department, NABARD, Mumbai) CHALLENGES FOR RECRUITMENT ? Lack of knowledge about insurance markets ? Lack of proper information about insurance benefits and insurance products. ? The major respondents are telling only about LICI as because it is undertaken by Govt. of India. The view of maximum people is the major market share is taken by the LICI, so it will be very hard to find out new customers for Birla Sunlife Insurance Co. Ltd. ? There are many competitors in market like Life Insurance Corporation of India, Bajaj Allianz, Tata AIG, ICICI Prudential, Peerless, Rose Valley, SBI Life under life insurance segments and New India, National Insurance, Oriental, United India, and ICICI Lombard under non-life insurance segments, Reliance insurance etc. ? Proper advertisements of BSLI are not there. ? Lack of any awareness programme or any training schedule is there. ? Cost of recruitment is high, so it is hard to bear the recruitment cost. ? Some respondents are telling about the scarcity of time Probable Solutions Proper training programme should be arranged with the help of Gram Panchayat Pradhan in the rural environment itself ? Proper advertisement promotion of the insurance products must be developed. So it will attract the people and ultimately the goal of the organization must be fulfilled. ? LICI is the pre-dominant in Midnapore district. Maximum people prefer LICI products because there is strong trust of the customers upon LICI. The foremost reason behind that, it is Govt. undertaken for the period of more than 50 years. So in that context the customer are not so much agree to take the BSLI products. But BSLI has brought a great opportunity to its advisor. These are i.

There is chance to work with the Aditya Birla Group, one of the leading business organization in India. ii. Great career opportunity iii. More income iv. More satisfaction v. Great respect vi. Flexible working hours. vii. To reach targets ? Competition must be there in life in different stages. So without completion customers will not judge the right products. BSLI has brought first to introduce the ULIP which has guaranteed maturity and more returns. Not only this, BSLI has introduced its Dream Plan with yearly premium as low as Rs. 3000. 00 So it will be very reliable and easier to penetrate the rural sector people whose monthly income is less enough. It also permits to give the premier in two easy installments i. e. Rs. 500. 00 as half-yearly mode. The commissions of the BSLI advisors are much better than any Insurance Company. Beside this there is an opportunity to come under direct fixed-pay of BSLI after successful completion of targets of 6 months. So these opportunities should be spread everywhere. After this why not potential people will come and join as an advisor for BSLI? If there is a question of existing of the company then if one house made up of BIRLA ULTRATECH CEMENT is standing for last 30 years, if the house is still standing, it is not broken down then is it not proved the trust upon the company? ? Recruitment cost of BSLI is Rs. 750. 00 only.

This cost may little high for poor people. But if we are able to make them understood that, this is the cost by which he is going to start a career. Many often we just waste some money. So if we save the waste then it will be easier to give our own money into a new career. INTERVIEW SCHEDULE: Dear Respondents, in association with Birla Sun Life Insurance Company Ltd. Paschim Medinipur Branch, I am conducting a survey to “Rural Recruitment and its challenges for Birla Sun Life Insurance in Paschim Medinipur District of West Bengal” It’s a survey conducted to understand Whether people living in Paschim Medinipur District are aware of Life Insurance or not?

The responses received from this will be strictly used for academic purpose and shall not be used for any other purpose and full confidentiality will be maintained about the respondents. I will be very grateful to you if you kindly spare some time & give me your valuable response. 1) Name _______________________________________________ 2) Age ____________ 3) Sex___________ 4) Marital Status a) Unmarried_________ b) Married __________ 5) Educational details: Tick the appropriate one. Below Metric ______ Metric/HSLC _____ Inter/HS ______ Graduate ______ Post graduate _____ 6) Occupation____________ 7) Have you heard about Insurance?

Yes____ No________ 8) If yes, where from did you come to know about Insurance? a) TV advertisementb) Friends c) Newspaperd) Insurance Agents e) Others 9) Do you have any knowledge of Insurance? a) Low___________ b) Average________ c) High___________ 9) Out of the following which Insurance Company you have heard? a) LICI b) Birla Sun Life Insurance Company Ltd. c) TATA AIG d) Bajaj Allianz. e) Others 10) Do you invest in any form of investment in insurance? Yes______ No______ 11) If yes what kind of insurance have you taken? a) Life Insurance b) General Insurance c) Both If you invest then what is the most preferable for you? a) ULIP_____________ ) Traditional_________ c) Any other__________ 12) If you have taken life Insurance from which company you have taken? a) LICIb) Birla Sun Life Insurance Company Ltd. c) TATA AIG d) Bajaj Allianz. e) Others 13) Have you heard the name of Birla Sunlife Insurance? Yes __________ No ________ 14) If yes, then how you have heard? a) TV advertisementb) Friends c) Newspaper d) Insurance Agents e) Others 15) Do you know think you have sufficient information regarding the need of a Life Insurance? Yes __________ No ________ 16) Do you want to earn by utilizing your surroundings, friends and relatives? Yes _________ No _______ 7) If yes then is it not that BSLI is giving you the best opportunity? Yes _________ No _______ 18) If no then why? ____________________________________________________________ __________________ Thank you for your valuable response Conclusions ¦ Micro Finance sector is in evolving phase ¦ Innovations are required at all stages for products, in pricing policy and in delivery channels ¦ Success of marketing micro insurance depends on understanding the social and cultural needs of the target population ¦ Clients should also receive price differentials for using different channels ¦ Groups & their promoters can provide ideal platform to kick start the micro insurance As Dream plan insurance policy of BSLI is very less i. e. annual premium is Rs. 3000. 00 and it can be given as in half-yearly mode also, so we can penetrate the rural segment whose yearly income is moderate or less. ¦ BSLI is providing the opportunity to its customer that they can choose life insurance unit-linked policy with guaranteed maturity. This opportunity is not provided by any other Insurance Company. ¦ The awareness of life insurance can be enhanced by the help of the Gram Panchayat Pradhan by arranging a meeting with the rural youths and beside this the youths will get a job opportunity. ¦ The people can earn more by utilizing their surrounding circles, friends, relatives etc.