2009

JODHPUR NATIONAL UNIVERSITY, Narnadi Jhanwar Road, Jodhpur

 A REPORT
ON

Study of insurance sector and competitiveness

with the special reference to Bajaj Allianz Life
Insurance Company Ltd.

Submitted By

AJAY SINGH RATHORE(3003)

MBA II
JODHPUR INSTITUTE OF MANAGEMENT

Company Guide: Designation

Mr. Sanjay Khandewal Sr. Divisional Branch Manager
Mr. Kedar Upadhyay Area Training Manager
Mr. Dhiraj Khichi Branch Training Manger

Faculty Guide:
Dr. Abha Purohit Ass. Professor (JIM)
Date of Submission: 28th August 2009

2
 TO Whomsoever IT MAY CONCERN

This is to certify that Mr. Ajay Singh Rathore student of MBA

(2008-2010) JODHPUR INSTITUTE OF MANAGEMENT, (JIM)
Jodhpur has done his live summer training project under my
guidance and supervision from 1st July 2009 to 19th August 2009.
He has completed the project titled “Study of insurance sector and
competitiveness with the special reference to Bajaj Allianz”
towards the partial fulfillment of MBA under my supervision.
During his project he was found to be very dedicated, sincere and
attentive to small details whatsoever told to him.

I wish him luck and success in future.

……………………………………………..
Mr. Kedhar Upadhyay
Area Training Manager
Bajaj Allianz Life Insurance Company Ltd.

3
 AUTHORISATION
The summer Internship program has been conducted for the
partial fulfillment of MBA program in Jodhpur Institute of
Management Jodhpur. Summer internship program also included a
project work on “Study of insurance sector and competitiveness
with the special reference to Bajaj Allianz life Insurance
Company Ltd.”. Bajaj Allianz Life Insurance Company Limited and
Jodhpur National University hereby authorize Mr. Ajay Singh
Rathore to conduct his summer Internship Project under the
supervision of company guide Mr. Kedar Upadhyay (Area Training
Manager) and the faculty guide Dr. Abha Purohit (Faculty of
Operation Research). A final project report w4ll have to be
submitted to Bajaj Allianz Insurance Company Limited and Jodhpur
Institute of Management. Jodhpur

……………………………….. …………………………
Mr. Kedar Upadhyay Dr. Abha Purohit
Area Training Manager Ass. Professor
Company Guide Faculty Guide
Bajaj Allianz Ins. Co. Ltd JIM

4
 ACKNOWLEDGEMENT
Sometimes words fall short to short gratitude, the same happened
with me during this project. The immense help and support
received from Bajaj Allianz Life Insurance Company Ltd.
Overwhelmed me during the project.

My sincere gratitude to Mr. Sanjay Khandelwal (Sr. Divisional

Branch Manager, BALIC, Jodhpur), Mr. Kedar Upadhyay (Area
Training Manager), for providing me with an opportunity to work
with Bajaj Allianz Life Insurance Company.

I am highly indebted to Mr. Dhiraj Singh Khichi (Branch Training

Manager, Jodhpur) and company project guide, who have provided
me with the necessary information and his valuable suggestion
and comments on bringing out this report in the best possible way.

I am grateful to all the members of Bajaj Allianz Life Insurance

Company, Jodhpur branch, who have helped me to carry on the
project.

Ajay Singh Rathore

JNU3003

5
JIM, Jodhpur

TABLE OF CONTENT

Contents
Preface 8
Executive Summary 9
Chapter 1 Project Proposed 10-12
1.1 Objective of the project
1.2 Methodology
1.3 Sampling
1.4 Limitations
Chapter 2 Introduction 13-20
2.1 Definition of insurance
2.2 Functions of insurance
2.3 Definitions of life insurance
2.4 Role of life insurance
2.5 Importance of life insurance
2.6 Stages of Insurance
Chapter 3 Agency business model 21-23
3.1 Insurance agencies
3.2 Functions of agency manager
3.3 Operational work of insurance agency
Chapter 4 A brief history of the insurance sector 24-42
4.1 How big is the Insurance Market
4.2 Indian Scenario
Trends in Life Insurance business- Unit Linked
4.3 Insurance Plans
4.4 Existing Insurance Companies/Corporation
4.5 Indian Regulatory Development Authority(IRDA)
4.6 Changing perception of Indian Consumers
4.7 Changing Face of Indian Insurance Industry

6
5. Functioning of insurance industry 43-46
5.1 Insurer’s business model
5.2 Investment management
5.3 Key ratios and terms
5.4 Requirements of an insurance risk
5.5 Various types of insurance products
6 Bajaj Life Insurance Company 47-56
7 Introduction to Research Study 57-60
Distribution of insurance product
Effective marketing strategies for insurance 61-67
8 companies
Bajaj Allianz Investment on Advertisement
9 Competitors of Bajaj Life Insurance 68-80
10 Comparison of ULIP products 81-85
11 Survey and Results 86
12 Questioner 87-89
13 Conclusions and findings 90-99
14 SWOT Analysis 100
16 Conclusions 102
17 Recommendations 103
18 Bibliography 104

PREFACE

7
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 23 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
premium, 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 volumes game. Therefore, private insurers would be best
served by a middle-market approach, targeting customer segments that
are currently untapped.
EXECUTIVE SUMMARY

8
Monopoly of LIC has been broken to make Indian Insurance to change its
face and pace to tap the market and to make the new challenges in it.
Insurance in India is not about India only; it is an open sector for the private
players. The name which you would see in Indian insurance market is
something like: - BAJAJ (Indian company) + Allianz (foreign player), TATA
(Indian company) + Aig (foreign player) and so many like them. Companies
now are tapping a lot of ways to capture the market and hence adopting
different ways to hold the large portion of the market. My project was to
understand the different marketing strategies adopted by the companies to
increase their market share and along with it meeting their own targets to
achieve the position of no.1 in respective field or segment of the market. My
summer training learning helped me a lot to complete my project in order to
learn a lot of things of the corporate. As a project trainee the first task given
to me was to understand the basic behavior of the Employee of insurance
company in order to influence the market according to the our target
competition. For this we did developed a questionnaire and I did my survey
in important location of Jodhpur city.

Bajaj Group is one of the India's largest and most respected business groups.
Bajaj Allianz Insurance Company is one of the leading insurance companies
that provide both life insurance as well as general insurance. This pioneer
company is a joint collaboration between the Allianz AG, and Bajaj Auto.
They own the company in the ratio of 26:74.Bajaj Allianz Insurance Company
is having different insurance policies. At the end of the project people will be
knowledgeable about various insurance organizations and different products
taking into considerations fifty sample sizes in Jodhpur city.

Project is Study of insurance sector and competitiveness with the special

reference to Bajaj Allianz Life Insurance Company Ltd. To get to know a
questionnaire has been prepared which contains open ended and close
ended questions. For collecting the data field survey method, personal
interview technique has been used. Secondary data has been collected from
the company. The data collected are represented into suitable tabular forms
for drawing inferences. A quantitative technique like averages, percentages,
range, two-way tables, has been applied as per the requirement. For the
representation of data various charts and graphs are used as per
requirement.

Cha pter 1
9
 Project proposed
Agency business model of different insurance companies- competitive
strategies.
Different agencies of different insurance companies are having some
strategies to survive in the market. Their strategies may be in the form of:
 How they target their customers.
 How they make their advisors active.
 How they make their operational and sales department effective.
 How they promote their employees.
 How they handle the conflict in agency.

Objective of the project:

Main objective of the project is to find out the strategies of different
insurance agencies and evaluate them. Project is about to penetrate the
competitors of Bajaj Allianz Life Insurance.

Conclusion of this project can give an idea of strategies of different

companies which may be helpful to the company. Now days all the insurance
companies in India are trying to establish themselves in the competitive
market. They are introducing innovative marketing strategies to survive in
the market. Many other private companies are looking to enter in the Indian
insurance market .so it is very essential to a company to innovate their
marketing strategies in terms of

 Recruiting their advisors

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  To make their advisors active
 Well educated and capable employee in the agency
 Marketing of their products
 Deployment of their products
 Targeting the right and potential customers
 Differentiating from other companies
 Future plan of the company

This study consists of to find out the marketing strategies of different

insurance companies which are the competitors of Bajaj Allianz Life
insurance. This research requires the interview of branch managers of
different insurance companies and find out their branches are working in
terms of above mentioned factors.

Methodology :

Research is totally based on primary data. Secondary data can be used only
for the reference. Research has been done by primary data collection, and
primary data has been collected by meeting with the branch and agency
manager of different insurance agencies and branches in Jodhpur City. Data
collection has been done through by giving structured questioner. Research
has been done after 50 branch managers or agency manager & agents. This
study will be based on judgment sampling and this research is skewed to
organization level. This is an exploratory type of research. And this research
needs further study also Research is a kind of pilot study.

11
Sampling :
Sample size has been taken by judgment sampling. Judgment sampling is a
process in which the selection of a unit, from the population is based on the
pre judgment. This research requires the survey of different insurance
agencies in Jodhpur city. So research concentrates on the branch or agency
manager of different insurance companies. So the selection of unit for this
research has been judged by the researcher. Sample size for this research is
50.

Limitations:
 Time limitation
 Research has been done only in Jodhpur City.
 Companies did not disclose their secrets data and strategies.
 Possibility of Error in data collection.
 Possibility of Error in analysis of data due to small sample size.

12
 Chapter 2

Introduction to insurance

13
 INTRODUCTION
Future is always uncertain and full of risk. It is not certain that what is going
to happen tomorrow. Therefore a man is always worried about security of
property and life. Insurance is a means of meeting out loss caused by future
risks and uncertainties.

“Insurance is a contract between two parties whereby one party called

insurer undertakes in exchange for a fixed sum called premiums, to pay the
other party called insured a fixed amount of money on the happening of a
certain event."

According to Patterson – “Insurance is an agreement between two parties

under which one party undertakes specified future risk of another party and
compensates the loss from that risk on payment of some consideration
known as premium payable by the later”.

Insurance may be described as a social device to reduce or eliminate risk of

life and property. Under the plan of insurance, a large number of people
associate themselves by sharing risk, attached to individual.

With the help of Insurance, large number of people exposed to a similar risk
makes contributions to a common fund out of which the losses suffered by
the unfortunate few, due to accidental events, are made good.

Insurance is a tool by which losses of a small number are compensated out

of funds collected from plenteous. Gradually as competition increased
benefits given by industry to its customers increased by leaps and bounds.
Insurance is a basic form of risk management which provides protection
against possible loss to life or physical assets. Person who seeks protection
against such loss is termed as insured, and company that promises to honor
claim, in case such loss is actually incurred by insured, is termed as Insurer.
In order to get insurance, insured is required to pay to insurance company a
certain amount called premium. Premium is collected by insurance

14
companies which acts as trustee to pool created through contributions made
by persons seeking to protect themselves from common risk. Any loss to the
insured in case of happening of an uncertain event is paid out of this pool. .

Insurance provides:
 Protection to investor.
 Accumulation of savings.
 Channeling these savings into sectors needing huge long term
investment

FUNCTION OF INSURANCE:

 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 an instrument 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.

 Measurement 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.

15
 Small capital to cover larger risk: Insurance relieves the businessmen
from security investments, by paying small amount of premium against
larger risks and uncertainty.

 Contributes towards the development of 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.

 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 ways.

 Risk free trade: Insurance promotes exports insurance, which makes the
foreign trade free with the help of different types of policies under marine
insurance cover

Insurance business is divided into four classes:

 Marine Insurance

 Fire Insurance

 Miscellaneous Insurance

 Life Insurance

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MARINE INSURANCE:
In the development of Insurance history Marine Insurance is of the oldest
time. In ancient times trade between tow countries was through sea routes.
During voyage, there I risk of collision of ships, attack by pirates sinking of
the ship etc. Marine Insurance gives protection against these sea risks.

FIRE INSURANCE:
The Fire Insurance is next important type of insurance. The owner of the
factory or ship or a residential house may purchase a fire insurance policy on
the payment of nominal premium, and if unluckily the property is party or
wholly destroyed by fire the insurance company will makes good such loss.
Thus on payment of a very small sum, we are tremendous safety.

MISCELLLANEOUS INSURANCE:
Besides these fire insurance , marine insurance, & life insurance several
other types of insurance have recently come into being eg. Motor Insurance,
Crop Insurance, Bad Debts Insurance, Sickness Insurance. The functions of
these type of insurances are very clear form their names.

17
LIFE INSURANCE:
Life insurance is a contract under which the insurer (Insurance Company) in
Consideration of a premium paid undertakes to pay a fixed sum of money on
the death of the insured or on the expiry of a specified period of time
whichever is earlier.

A person may insure his life or the life of a person in whom he is financially
interested so that a certain sum becomes payable by the insurance when
death takes place or when the insured attains a certain age according to the
terms of agreement In case of life insurance, the payment for life insurance
policy is certain. The Event insured against is sure to happen only the time of
its happening is not known. So life insurance is known as `Life Assurance`.

The subject matter of insurance is life of human being. Life insurance

provides risk coverage to the life of a person. On death of the person
insurance offers protection against loss of income and compensate the
titleholders of the policy. If the life of the bread winner of the family is
insured his wife or children will be able to tide over the financial difficulty
after his death.

ROLES OF THE LIFE INSURANCE:

 Life insurance as an investment: - Insurance products yield more than
any other investment instruments and it also provides added
incentives or bonus offered by insurance companies.

 Life insurance as risk cover: - Insurance is all about risk cover and
protection of life. Insurance provides a unique sense of security that
no other form of invest can provide.

 Life insurance as tax planning: - Insurance serves as an excellent tax

saving mechanism too.

IMPORTANCE OF THE LIFE INSURANCE:

18
 Protection against untimely death: - Life insurance provides
protection to the dependents of the life insured and the family of the
assured in case of his untimely death. The dependents or family
members get a fixed sum of money in case of death of the assured.

 Saving for old age: -After retirement the earning capacity of a person
reduces. Life insurance enables a person to enjoy peace of mind and a
sense of security in his/her old age.

 Promotion of savings: - Life insurance encourages people to save

money compulsorily. When life policy is taken, the assured is to pay
premiums regularly to keep the policy in force and he cannot get back
the premiums, only surrender value can be returned to him. In case of
surrender of policy, the policyholder gets the surrendered value only
after the expiry of duration of the policy.

 Initiates investments: - Life Insurance Corporation encourages and

mobilizes the public savings and canalizes the same in various
investments for the economic development of the country. Life
insurance is an important tool for the mobilization and investment of
small savings.

 Credit worthiness: - Life insurance policy can be used as a security to

raise loans. It improves the credit worthiness of business.

 Social Security: - Life insurance is important for the society as a whole

also. Life insurance enables a person to provide for education and
marriage of children and for construction of house. It helps a person to
make financial base for future.

 Tax Benefit: - Under the Income Tax Act, premium paid is allowed as a
deduction from the total income under section 80C.

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Stages in Policy Issuance
1) Proposal
A Proposal Stage is the First stage before the policy is issued at COPS. At this
stage, the application form is received by COPS, but it is pending for issuance
due to further clarifications required from the customer.
2) Login
A proposal which is complete i.e., duly filled with all necessary documents
attached to it & accepted by the Branch ops, is called a Login
3) Reject
An Application gets rejected at the Branch Ops level due to necessary details
not filled in the form or necessary documents not submitted is a Reject. It is
then sent back to the Advisor for completion.
4) Issuance
Issuance means a policy that is issued to the Customer by Central Ops.
5) Decline Status
When a customer refuses to take a policy post login but before Issuance is
called a Decline

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6) Cancellation
When the cheque given by the customer bounces, it amounts to cancellation
of the policy.
7) Lapse
A policy for which the Customer fails to pay subsequent premiums is a
Lapsed Policy.
8) Free look
Post issuance of the policy, the policyholder has the option to turn down the
policy within 15 days from the date of issuance. This period of 15 days is
called Free look Period.
9) Surrender
When a customer wants to discontinue with the policy.

Agency business model

In India insurance is sold through mainly four channels.

 Through branch
 Through agency
 Through financial institution
 Through banks

Independent agency system means of selling and servicing property and

casualty insurance through agents who represent different companies. The
agents own the records of the policies they sell.

Insurance is now governed by a blend of statutes, administrative agency

regulations, and court decisions. State statutes often control premium rates,
prevent unfair practices by insurers, and guard against the financial
insolvency of insurers to protect insured’s.

21
In most states, an administrative agency created by the state legislature
devises rules to cover procedural details that are missing from the statutory
framework. To do business in a state, an insurer must obtain a license
through a registration process. This process is usually managed by the state
administrative agency. The same state agency may also be charged with the
enforcement of insurance regulations and statutes.

Administrative agency regulations are many and varied. Insurance

companies must submit to the governing agency yearly financial reports
regarding their economic stability. This requirement allows the agency to
anticipate potential insolvency and to protect the interests of insured’s.
Agency regulations may specify the types of insurance policies that are
acceptable in the state, although many states make these declarations in
statutes. The administrative agency is also responsible for reviewing the
competence and ethics of insurance company employees.

Insurance agencies:
Insurance agency can be defined as a group of insurance agents or advisor.
These agents or advisors create a distribution channel to sell the different
insurance products. These advisors are the strongest distribution channel for
an insurance agency. An advisor or agent works as a third party or
intermediate between insurance company and customers. All the advisors in
an agency work as a team. Main work of insurance advisor or agent is to
promote and sell different insurance products of company.

Functions of agency manager:

22
A person who governs a group of insurance advisors is known as agency
manager. Success of an agency manager depends on the success of their
advisors. work of agency manager is to control the advisors in an efficient
way. Agency manager is like a creature of two wings. He has to recruit
advisors as well as to give sales to the insurance company.
 To recruit advisors.
 Make them aware of different insurance products.
 To give them training session.
 To motivate them for efficient work.
 To get maximum and efficient work from their advisors.

Operation work of insurance agency:

(Bajaj Allianz Life Insurance):
Every industry has an operational department which supports the market
division.
In the reference to the Bajaj Alliance Life insurance, development of
insurance products, distribution, planning services products and claims are
taken care by the head office. Back office providers are those persons who
take care of the operational part of the organization and front office
providers are the people who brings sell to the organization. Back office has
its own hierarchy which is connected to head office, and every policy has to
be processed to head office. Unit for the operations is known as processing
centre, and processing centre within the city is known as mini processing
centre. Proposal forms come through front office and the verification of the
proposal is done by manually which is known as scrutiny. After scrutiny the
operational staff enters it in BALIC website, which is done online. the entry of
a proposal is done in a sequential order starting with scrutiny, inwards,
proposal wise inwards, cashier entry, cashier entry approval, data entry and

23
finally outwards. After finishing all these operations policy issues from the
head office of the state.

 Decentralized operations fro quicker response.

 Nationwide network of 1200 + branches.
 Specialized Business channels.
 Bancassurance
 Corporate Agency
 Rural
 Micro Insurance
 Group Business
 Dedicated product teams for:
 Pension
 Health
 Women and child
 Micro finance

Chapter 3

INTRODUCTION OF INDIAN
INURANCE INDUSTRY

24
 INDIAN INSURANCE INDUSTRY
The Insurance sector in India governed by Insurance Act, 1938, the Life
Insurance Corporation Act, 1956 and General Insurance Business
(Nationalization) Act, 1972, Insurance Regulatory and Development
Authority (IRDA) Act, 1999 and other related Acts. With such a large
population and the untapped market area of this population Insurance
happens to be a very big opportunity in India.

Today it stands as a business growing at the rate of 15-20 per cent annually.
Together with banking services, it adds about 7 per cent to the country’s
GDP .In spite of all this growth the statistics of the penetration of the
insurance in the country is very poor. Nearly 80% of Indian populations are
without Life insurance cover and the Health insurance.

This is an indicator that growth potential for the insurance sector is immense
in India. It was due to this immense growth that the regulations were

25
introduced in the insurance sector and in continuation “Malhotra
Committee” was constituted by the government in 1993 to this immense
growth that the regulations were introduced in the insurance sector and in
continuation “Malhotra Committee” was constituted by the government in
1993 to examine the various aspects of the industry. The key element of the
reform process was Participation of overseas insurance companies with 26%
capital. Creating a more efficient and competitive financial system suitable
for the requirements of the economy was the main idea behind this reform.
Since then the insurance industry has gone through many sea changes .

The competition LIC started facing from these companies were threatening
to the existence of LIC .since the liberalization of the industry the insurance
industry has never looked back and today stand as the one of the most
competitive and exploring industry in India. The entry of the private players
and the increased use of the new distribution are in the limelight today. The
use of new distribution techniques and the IT tools has increased the scope
of the industry in the longer run.
A BRIEF HISTOR OF THE INSURANCE SECTOR:
The business of life insurance in India in its existing form started in India in
the year 1818 with the establishment of the Oriental Life Insurance Company
in Calcutta. 
The story of insurance is probably as old as the story of mankind. The
same instinct that prompts modern businessmen today to secure themselves
against loss and disaster existed in primitive men also. They too sought to
avert the evil consequences of fire and flood and loss of life and were willing
to make some sort of sacrifice in order to achieve security. Though the
concept of insurance is largely a development of the recent past, particularly
after the industrial era – past few centuries – yet its beginnings date back
almost 6000 years.
Life Insurance in its modern form came to India from England in the
year 1818. Oriental Life Insurance Company started by Europeans in Calcutta
was the first life insurance company on Indian Soil. All the insurance
companies established during that period were brought up with the purpose

26
of looking after the needs of European community and these companies
were not insuring Indian natives. However, later with the efforts of eminent
people like Babu Muttylal Seal, the foreign life insurance companies started
insuring Indian lives. But Indian lives were being treated as sub-standard
lives and heavy extra premiums were being charged on them. Bombay
Mutual Life Assurance Society heralded the birth of first Indian life insurance
company in the year 1870, and covered Indian lives at normal rates. Starting
as Indian enterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social security
through insurance to various sectors of society. Bharat Insurance Company
(1896) was also one of such companies inspired by nationalism.

The Swadeshi movement of 1905-1907 gave rise to more insurance

companies. The United India in Madras, National Indian and National
Insurance in Calcutta and the Co-operative Assurance at Lahore were
established in 1906. In 1907, Hindustan Co-operative Insurance Company
took its birth in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance
and Swadeshi Life (later Bombay Life) were some of the companies
established during the same period. Prior to 1912 India had no legislation to
regulate insurance business. In the year 1912, the Life Insurance Companies
Act, and the Provident Fund Act were passed. The Life Insurance Companies
Act 1912 made it necessary that the premium rate tables and periodical
valuations of companies should be certified by an actuary. But the Act
discriminated between foreign and Indian companies on many accounts,
putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of

growth in insurance business. From 44 companies with total business-in-
force as Rs.22.44 Crore, it rose to 176 companies with total business-in-force
as Rs.298 Crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed miserably.
The Insurance Act 1938 was the first legislation governing not only life
insurance but also non-life insurance to provide strict state control over

27
insurance business. The demand for nationalization of life insurance industry
was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative
Assembly. However, it was much later on the 19th of January 1956 that life
insurance in India was nationalized. About 154 Indian insurance companies,
16 non-Indian companies and 75 provident were operating in India at the
time of nationalization. Nationalization was accomplished in two stages;
initially the management of the companies was taken over by means of an
Ordinance, and later, the ownership too by means of a comprehensive bill.
The Parliament of India passed the Life Insurance Corporation Act on the
19th of June 1956, and the Life Insurance Corporation of India was created
on 1st September, 1956, with the objective of spreading life insurance much
more widely and in particular to the rural areas with a view to reach all
insurable persons in the country, providing them adequate financial cover at
a reasonable cost.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices,
apart from its corporate office in the year 1956. Since life insurance
contracts are long-term contracts and during the currency of the policy it
requires a variety of services need was felt in the later years to expand the
operations and place a branch office at each district headquarter. Re-
organization of LIC took place and large numbers of new branch offices were
opened. As a result of re-organization servicing functions were transferred to
the branches, and branches were made accounting units. It worked wonders
with the performance of the corporation. It may be seen that from about
200.00 Crore of New Business in 1957 the corporation crossed 1000.00 Crore
only in the year 1969-70, and it took another 10 years for LIC to cross
2000.00 Crore mark of new business. But with re-organization happening in
the early eighties, by 1985-86 LIC had already crossed 7000.00 Crore Sum
Assured on new policies.

Today LIC functions with 2048 fully computerized branch

offices, 100 divisional offices, 7 zonal offices and the corporate office. LIC’s
Wide Area Network covers 100 divisional offices and connects all the
branches through a Metro Area Network. LIC has tied up with some Banks

28
and Service providers to offer on-line premium collection facility in selected
cities. LIC’s ECS and ATM premium payment facility is an addition to
customer convenience. Apart from on-line Kiosks and IVRS, Info Centers have
been commissioned at Mumbai, Ahmadabad, Bangalore, Chennai,
Hyderabad, Kolkata, New Delhi, Pune and many other cities. With a vision of
providing easy access to its policyholders, LIC has launched its SATELLITE
SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate
anywhere servicing and many other conveniences in the future.

From then to now, LIC has crossed many milestones and has set
unprecedented performance records in various aspects of life insurance
business. The same motives which inspired our forefathers to bring
insurance into existence in this country inspire us at LIC to take this message
of protection to light the lamps of security in as many homes as possible and
to help the people in providing security to their families.

Some of the important milestones in the life insurance business

in India are:

1818 British introduced the life insurance to India with the establishment
of the Oriental Life Insurance Company

1850 Non life insurance debuts with triton insurance company.

1870 Bombay mutual life assurance society is the first Indian owned life
insurer

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.

29
1938 Earlier legislation consolidated and amended to by the Insurance Act
with the objective of protecting the interests of the insuring public.

1956 245 Indian and foreign insurers and provident societies taken over by
the central government and nationalized. LIC formed by an Act of
Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 Crore from
the Government of India.

1993 Malhotra committee was constituted under the chairmanship of

former RBI chief R. N. Malhotra to draw a blue print for insurance sector
reforms.

1994 Malhotra committee recommended reentry of private players.

1997 IRDA (Insurance Regulatory and Development Authority) was set up as

a regulator of the insurance market in India.

2000 IRDA started giving license to private insurers. ICICI Prudential ,HDFC
were first private players to sell insurance Policies.

2001 Royal Sundaram was the first non-life private player to sell an
insurance policy.

2002 Bank allowed to sell insurance plans as TPAs enter the scene, insurers
start setting non-life claims in the cashless mode.

HOW BIG IS THE INSURANCE MARKET?

The insurance sector was opened up for private participation. For years
now, the private players are active in the liberalized environment. The
insurance market have witnessed dynamic changes which includes presence
of a fairly large number of insurers both life and non-life segment. Most of
the private insurance companies have formed joint venture partnering well
recognized foreign players across the globe.

30
There are now 29 insurance companies operating in the Indian market – 14
private life insurers, nine private non-life insurers and six public sector
companies. With many more joint ventures in the offing, the insurance
industry in India today stands at a crossroads as competition intensifies and
companies prepare survival strategies in a detariffed scenario.

There is pressure from both within the country and outside on the
Government to increase the foreign direct investment (FDI) limit from the
current 26% to 49%, which would help JV partners to bring in funds for
expansion.

There are opportunities in the pensions sector where regulations are being
framed. Less than 10 % of Indians above the age of 60 receive pensions. The
IRDA has issued the first license for a standalone health company in the
country as many more players wait to enter. The health insurance sector has
tremendous growth potential, and as it matures and new players enter,
product innovation and enhancement will increase. The deepening of the
health database over time will also allow players to develop and price
products for larger segments of society.

Insurance is a Rs.400 billion business in India, and together with banking

services adds about 7% to India's Gap. Gross premium collection is about
2% of Gap and has been growing by 15-20% per annum. India also has the
highest number of life insurance policies in force in the world, and total
investible funds with the LIC are almost 8% of GDP. Yet more than three-
fourths of India's insurable population has no life insurance or pension
cover. Health insurance of any kind is negligible and other forms of non-life
insurance are much below international standards.

INDIAN SCENARIO:

Insurance is a big opportunity in a country like India with a large population

and untapped potential. The life insurance business (measured in the context
of first year premium) registered a growth of 23.88 per cent in 2007-08,
(94.96 per cent achieved in 2006-07). The general insurance business (gross
direct premium) has registered a growth of 11.72 per cent in 2007-08 (3.52

31
per cent achieved in 2006-07). This has resulted in increasing insurance
penetration in the country. Insurance penetration or premium volume as a
ratio of GDP, for the year 2007 stood at 4.00 per cent for life insurance and
0.60 per cent for non-life insurance. The level of penetration, particularly in
life insurance, tends to rise as income levels increase. India, with its huge
middle class households, has exhibited growth potential for the insurance
industry. Saturation of markets in many developed economies has made the
Indian market even more attractive for global insurance majors. The
insurance market in India has witnessed dynamic changes including entry of
a number of global insurers in both life and non-life segment.

Most of the private insurance companies are joint ventures with recognized
foreign players across the globe. Over the last eight years, consumer
awareness has improved. Competition has brought more product innovation
and better customer servicing. This made a positive impact on the economy
in income generation and creating employment opportunities in this sector.

Life Insurance
The total capital of the life insurers at end March 2008 stood at Rs.12296.42
crore. The additional capital brought in by the existing private insurers
during 2007-08 was Rs.3787.01 crore and the two new entrants, brought in
equity of Rs.385 crore making the total additional capital brought in 2007-08
by the private insurers to Rs. 4172.01 crore. Of this, the domestic and the
foreign joint venture partners added Rs.3160.12 crore and Rs.1011.88 crore
respectively.

32
There has been no infusion of capital in the case of LIC which stood at Rs.5
crore.

Source:www.indiaprwire.com

TRENDS IN LIFE INSURANCE BUSINESS—UNIT LINKED

INSURANCE PLANS:

It wasn’t too long back when the good old endowment plan was the
preferred way to insure oneself against an eventuality and to set aside some
savings to meet one’s financial objectives. The traditional endowment
policies were Investing funds mainly in fixed interest Government securities
and other safe investments to ensure the safety of capital. Thus the
traditional emphasis was always on security of capital rather than yield.
However, with the inflationary trend witnessed all over the world, it was

33
observed that savings through life insurance were becoming unattractive
and not meeting the aspirations of the policyholders.

The policyholder found that the sum assured guaranteed on maturity had
really depreciated in real value because of the depreciation in the value of
money. The investor was no longer content with the so called security of
capital provided under a policy of life insurance and started showing a
preference for higher rate of return on his investments as also for capital
appreciation. It was, therefore found necessary for the insurance companies
to think of a method whereby the expectation of the policyholders could be
satisfied. The object was to provide a hedge against the inflation through a
contract of insurance. Decline of assured return endowment plans and
opening of the insurance sector saw the advent of ULIPs on the domestic
insurance horizon. Today, the Indian life insurance market is riding high on
the unit linked insurance plans.

ULIPs and its Features:

Unit linked insurance plans (ULIPs) are insurance plans that combine the
benefit of investment with insurance. They give the investor an option to put
a part of their premium in various investment portfolios and derive the
benefits depending upon the performance of the funds chosen by them.
ULIPs were launched at an opportune time when stock markets had just
taken off. Being market- linked, they were major beneficiaries of the secular
rise in stock markets. ULIPs have gained high acceptance due to the
attractive features they offer. These include:

1. Flexibility
1. Flexibility to choose Sum Assured.
2. Flexibility to choose premium amount.
3. Option to change level of Premium even after the plan has started (Top up
facility).
4. Flexibility to change asset allocation by switching between funds.

2. Transparency

34
1. Changes in the plan & net amount invested are known to the customer.
2. Convenience of tracking one’s investment performance on a daily basis.

3. Liquidity
1. Option to withdraw money after few years (comfort required in case of
exigency).
2. Low minimum tenure.
3. Partial / Systematic withdrawal allowed

4. Fund Options
1. A choice of funds (ranging from equity, debt, cash or a combination).
2. Option to choose fund mix based on desired asset allocation.

Traditionally, endowment plans have invested in government securities,

corporate bonds and the money market. ULIPs however, have a broader
choice. They invest across the board in stocks, government securities,
corporate bonds and money market instruments. Of course, within a ULIP
there are options wherein equity investments are capped. The common
types of funds available in ULIPs are Bond Fund, Protector Fund, Secure
Fund, Balanced Fund, Growth Fund, Index Fund, and Enhancer Fund.
Depending on one’s risk appetite one can choose the fund. However the
investment risk is borne by the investor. The common type of charges, fees
and deductions in ULIPs are Premium allocation charges, Mortality charges,
Fund management charges, Policy/administration charges, Surrender
charges, Fund switching charges and Service tax.

35
Insurance companies are required to declare the NAV of various ULIPs on a
daily basis. The movement of NAV enables the policy holder to assess the
performance of his investment and accordingly make intervention in the
form of switches, withdrawal and top-ups. After opening up of the insurance
sector, Unit-linked insurance policies (ULIPs) have become increasingly
popular. Analysis of figures for the last three years indicates the growth
pattern of unit linked business.

Existing Insurance Companies/Corporations

36
S.No Lic.N Date of Name of Life Insurance Companies
O Inco.
1. 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2. 104 15.11.2000 Max New York Life Insurance Co. Ltd. 
3. 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd. 
4. 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance
Limited 
5. 109 31.01.2001 Birla Sun Life Insurance Company Ltd. 
6. 110 12.02.2001 Tata AIG Life Insurance Company Ltd. 
7. 111 30.03.2001 SBI Life Insurance Company Limited .
8. 114 02.08.2001 ING Vysya Life Insurance Company Private
Limited 
9. 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited 
10. 117 06.08.2001 Metlife India Insurance Company Ltd. 
11. 133 04.09.2007 Future Generali India Life Insurance Company
Limited
12. 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.
13. 121 03.01.2002 Reliance Life Insurance Company Limited.
14. 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
15. 127 06.02.2004 Sahara India Insurance Company Ltd.

16. 128 17.11.2005 Shriram Life Insurance Company Ltd.

17. 130 14.07.2006  Bharti AXA Life Insurance Company Ltd. 

18. 133 04.09.2007 Future Generali India Life Insurance Company

Limited
19. 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.

20. 136 08.05.2008 Canara HSBC Oriental Bank of Commerce Life

Insurance Company Ltd.
21. 138 27.06.2008 Aegon Religare Life Insurance Company Ltd.

22. 140 27.06.2008 DLF Pramerica Life Insurance Company Ltd.

23. 142   Star Union Dai-ichi Life Insurance Co. Ltd.,

37
In 1999, the Insurance Regulatory and Development Authority (IRDA) was
constituted as an autonomous body to regulate and develop the insurance
industry. The IRDA was incorporated as a statutory body in April, 2000. The
key objectives of the IRDA include promotion of competition so as to
enhance customer satisfaction through increased consumer choice and
lower premiums, while ensuring the financial security of the insurance
market. The IRDA opened up the market in August 2000 with the invitation
for application for registrations. Foreign companies were allowed ownership
of up to 26%. The Authority has the power to frame regulations under
Section 114A of the Insurance Act, 1938 and has from 2000 onwards framed
various regulations ranging from registration of companies for carrying on
insurance business to protection of policyholders’ interests. IRDA is regulated
or controlled under the chairmanship of Shri. J.Hari Narayan
chairman@irda.gov.in.

Role of IRDA:
 Protecting the interests of policyholders.
 Establishing guidelines for the operations of insurers, and brokers.
 Specifying the code of conduct, qualifications, and training for
insurance intermediaries and agents.
 Promoting efficiency in the conduct of insurance business.
 Regulating the investment of funds by insurance companies.
 Specifying the percentage of business to be written by insurers in rural
sectors.
 Handling disputes between insurers and insurance intermediaries.

38
Changing Perception of Indian Customers:
Indian Insurance consumers are like Indian Voters, they are soft but when
time is right and ripe, they demand and seek necessary changes. De-tariff of
many Insurance Products are the reflection of changing aspirations and
growing demand of Indian consumers.

For historical years, Indian consumers were at receiving end. Insurance

Product was underwritten and was practically forced onto consumers on a
“Take-it-As-it-basis”. All that got changed with passage of IRDA act in 1999.
New insurance companies have come into existence leading to open
competition and hence better products for customers.

Indian customers have become very sensitive to Coverage / Premium as well

as the Products (read Risk Solution), that is given to them. There are not
ready to accept any product, no matter even if that is coming from the
market leader, should that product is not serving the purpose. A case in
point is ULIP Product / Group Life and Credit Life in Life Insurance segment
and Travel / Family Floater Health and Liability Insurance in the Non-life
segment are new age Avatar. The new products are constantly being
demanded by Indian consumers, which is putting huge pressures on
Insurance companies (Read Risk Under-writers) and Brokers to respond.

Customers are looking at Insurance for covering Pure Risk now which I have
covered in my next section. Another good reason why we are seeing quick
changes in the buying behavior of Insurance from mere Investment to risk

39
mitigation is the cost of Replacement of Goods (ROG) or Cost of Services
(COS).

Now Indian customers are aware of insurance industry and insurance

products provided by companies. They have become more sensitive. They
would not accept any type of insurance product unless it fulfills their
requirements and needs. In historic day’s customers looking at insurance
products as a life cover which can provide security against any unacceptable
events, but now customers look at insurance products as an investment as
well as life cover. So today’s customers wants good return from the
insurance companies. The Indian customer’s forms the pivot of each
company’s strategy.

Investment of Indian household savings (as a % in different sector)

BANK DEPOSITS 39%
CORP. BANKS 2%
SHARES AND DEBENTURES 1%
MUTUAL FUNDS 2%
NBFC’S 3%
GOVT. BONDS 13%
INSURANCE 13%
PF/ RETIRE FUNDS 21%
CURRENCY 6%

Source: - www. avivaindia.com

Changing face of Indian insurance industry:

40
 After the Insurance Regulatory and Development Authority Act have
been passed there has been establishment of many private insurance
companies in India. Previously there was a monopoly business for Life
Insurance Corporation of India (L.I.C.) who was the only life-insurance
company for the people till 2000. L.I.C. still holds 71.4% of the market share
in 2006. But after the introduction of private life insurance companies there
is a great competition in Indian market now. Everyone is trying to capture
the fresh market here and penetrate it with aggressive marketing strategies.
Today life-insurance is not only limited up to just life risk cover and maturity
period bonuses but changed to greater return from the investments. With
the introduction of the unit linked insurance policies these companies are
investing the money in different investment instruments like shares, bonds,
debentures, government and other securities. People are demanding for
higher returns with the life risk cover and private companies are giving 30-
40% average growth per annum. These life-insurance companies have every
kind of policies suiting every need right from financial needs of, marriage,
giving birth and rearing up a child, his education, meeting daily financial
needs of life, pension solutions after retirement. These companies have every
aspects and needs of our life covered along with the death-benefit.

In India only 25% of the population has life

insurance. So Indian life-insurance market is the target market of all the
companies who either want to extend or diversify their business. To tap the
Indian market there has been tie-ups between the major Indian companies
with other International insurance companies to start up their business. The
government of India has set up rules that no foreign insurance company can
set up their business individually here and they have to tie up with an Indian

41
company and this foreign insurance company can have an investment of
only 24% of the total start-up investment.

Indian insurance industry can be featured by:

 Low market penetration.

 Ever growing middle class component in population.

 Growth of customer’s interest with an increasing demand for better

insurance products.

 Application of information technology for business.

 Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private

players, each of which are making strides in raising awareness levels,
introducing innovative products and increasing the penetration of life
insurance in the vastly underinsured country. Several of private insurers have
introduced attractive products to meet the needs of their target customers
and in line with their business objectives. The success of their effort is that
they have captured over 28% of premium income in five years.

The biggest beneficiary of the competition among life insurers

has been the customer. A wide range of products, customer focused service
and professional advice has become the mainstay of the industry, and the
Indian customer’s forms the pivot of each company’s strategy. Penetration
of life insurance is beginning to cut across socio-economic classes and
attract people who have never purchased insurance before.

42
 Life insurance is also now being regarded as a versatile financial
planning tool. Apart from the traditional term and saving insurance policies,
industry has seen the entry and growth of unit linked products. This provides
market linked returns and is among the most flexible policies available today
for investment. Now products are priced, flexible, and realistic and sustain so
people in better position to understand the risk and benefits of the product
and they are accepting these innovative products.
So it is clear that the face of life insurance in India is changing,
but with the changes come a host of challenges and it is only the credible
players with a long term vision and a robust business strategy that will
survive. Whatever the developments, the future and the opportunities in this
industry will surely be exciting.

There are major 12 private players in Indian life insurance market.

6 bank owned insurers: - HDFC standard life, ICICI prudential, ING Vysya,
MetLife, OM Kotak, SBI life.
6 independent insurers: - Aviva, ANP sanmar, Birla sun life, Bajaj Allianz,
Max New York life, Tata AIG.
Major international insurers are- Allianz from
Germany Prudential and Standard life from UK, Sun life of Canada, AIG,
MetLife and New York life of the US.

Functioning of insurance industry:

43
Insurer’s business model:
Profit = earned premium + investment income - incurred loss - underwriting
expenses
Insurers make money in two ways: (1) through underwriting, the processes
by which insurers select the risks to insure and decide how much in
premiums to charge for accepting those risks and (2) by investing the
premiums they collect from insured.
The most difficult aspect of the insurance business is the underwriting of
policies. Using a wide assortment of data, insurers predict the likelihood that
a claim will be made against their policies and price products accordingly. To
this end, insurers use actuarial science to quantify the risks they are willing
to assume and the premium they will charge to assume them. Data is
analyzed to fairly accurately project the rate of future claims based on a
given risk. Actuarial science uses statistics and probability to analyze the
risks associated with the range of perils covered, and these scientific
principles are used to determine an insurer's overall exposure. Upon
termination of a given policy, the amount of premium collected and the
investment gains thereon minus the amount paid out in claims is the
insurer's underwriting profit on that policy.
An insurer's underwriting performance is measured in its combined ratio.
The loss ratio (incurred losses and loss-adjustment expenses divided by net
earned premium) is added to the expense ratio (underwriting expenses
divided by net premium written) to determine the company's combined
ratio. The combined ratio is a reflection of the company's overall
underwriting profitability. A combined ratio of less than 100 percent
indicates underwriting profitability, while anything over 100 indicates an
underwriting loss.
Insurance companies also earn investment profits on “float”. “Float” or
available reserve is the amount of money, at hand at any given moment that
an insurer has collected in insurance premiums but has not been paid out in
claims. Insurers start investing insurance premiums as soon as they are
collected and continue to earn interest on them until claims are paid out..
Naturally, the “float” method is difficult to carry out in an economically

44
depressed period. Bear markets do cause insurers to shift away from
investments and to toughen up their underwriting standards. So a poor
economy generally means high insurance premiums. This tendency to swing
between profitable and unprofitable periods over time is commonly known
as the "underwriting" or insurance cycle.
Finally, claims and loss handling is the materialized utility of insurance. In
managing the claims-handling function, insurers seek to balance the
elements of customer satisfaction, administrative handling expenses, and
claims overpayment leakages.

Investment management:
Investment operations are often considered incidental to the business of
insurance, and have traditionally viewed as secondary to underwriting. In
the past risk management was the most important part of business,
whereas today the focus has shifted to fund management. Investment
income is a large component of insurance revenues, skilful and careful
management of funds. Insurance is a business of large numbers and
generates huge amount of funds over time. These funds arise out of
policyholder funds in the case of life insurance, and technical and free
reserves in the non-life segments. Time lag between the procurement of
premium and the payment of claim provides an interval during which the
funds can be deployed to generate income. Insurance companies are among
the largest institutional investors in the world. Assets managed by insurance
companies are estimated to account for over 40% of the world’s top ten
asset managers.

Returns on investments influence the premium rates and

bonuses and hence investment income will continue to be an important
component of insurance company profits. In life insurance, benefits from
insurance profits accrue directly to policy holders when it is passed on to him
in the form of a bonus. In non life insurance the benefits are indirect and
mostly by the creation of an investment portfolio. Investment income has to
compensate for underwriting results which are increasingly under pressure.

45
In the case of insurance, the difference between revenue and the expenses is
known as operating surplus.

Revenue =premium.
Expenses =sum of claims + commission payable on procurement of
business + operating expenses.
Operating surplus =revenue-expenses.

Net investment income includes income from trading in and holding stock
market securities including government securities, special deposits with the
central government, loans to several public utilities and service providers in
state government.
Insurance premium collected is converted in a pool of fund then
divided in to four expenses.
 To pay the expenses of the management.
 To pay agency commission.
 To pay for the claims.
 Surplus money will be invested in govt. securities.

Requirements of an insurance risk

Insurance normally insure only pure risks .However, not all pure risk is
insurable .certain requirements usually must be fulfilled before a pure risk
can be privately insured .From the view point of the insurer, there are ideally
six requirement of an insurable risk

 There must be a large number of exposure units

 The loss must be accidental and unintentional.
 The loss must be determinable and measurable.
 The loss should not be catastrophic.
 The chance of loss must be calculable.
 The premium must be economically feasible

Various types of life insurance policies:-

46
 Endowment policies: This type of policy covers risk for a specified
period, and at the end of the maturity sum assured is paid back to
policyholder with the bonuses during the term of the policy.
 Money back policies: This type of policy is for periodic payments of
partial survival benefits during the term of the policy as long as the
policy holder is alive.
 Group insurance: This type of insurance offers life insurance
protection under group policies to various groups such as employers-
employees, professionals, co-operatives etc it also provides insurance
coverage for people in certain approved occupations at the lowest
possible premium cost.
 Term life insurance policies: This type of insurance covers risk only
during the selected term period. If the policy holder survives the term,
risk cover comes to an end. These types of policies are for those
people who are unable to pay larger premium required for
endowment and whole life policies. No surrender, loan or paid up
values are in such policies.
 Whole life insurance policies: This type of policy runs as long as the
policyholder is alive and is covered for the entire life of the
policyholder. In this policy the insured amount and the bonus is
payable only to nominee on the death of policy holder.
 Joint life insurance policies: These policies are similar to endowment
policies in maturity benefits and risk cover, but joint life policies cover
two lives simultaneously such as married couples. Sum assured is
payable on the first death and again on the death of survival during
the term of the policy.
 Pension plan: a pension plan or annuity is an investment over a
certain number of years but does not provide any life insurance cover.
It offers a guaranteed income either for a life or certain period.
 Unit linked insurance plan: ULIP is a kind of insurance plan which
provides life cover as well as return on premium paid over a certain
period of time. The investment is denoted as units and represented by
the value called as net asset value (NAV).

47
 CHAPTER 6
INTRODUCTION ABOUT BAJAJ ALLIANZ

48
 COMPANY PROFILE
BAJAJ ALLIANZ LIFE INSURANCE
Bajaj Allianz Life Insurance Company Limited

Bajaj Life Insurance Company Ltd. Is one of India’s leading private

companies, which offers a range of individual and insurance solution? It is a
joint venture between Allianz se Limited and Bajaj auto. Bajaj auto ltd. is
India’s leading automobile company. Bajaj Auto Ltd. is the largest exporter
of two and three wheelers. With Kawasaki Heavy Industries of Japan, Bajaj
manufactures state-of-the-art range of two-wheelers. The brand, Pulsar is
continually dominating the Indian motorcycle market in the premium
segment. Its Discover DTSi is also a successful bike on Indian roads.

Bajaj auto Ltd.

 One of the largest 2 & 3 wheeler manufacturer in the world
 21 million+ vehicles on the roads across the globe
 Managing funds of over Rs 5,329 cr.
 Bajaj Auto finance one of the largest auto finance cos. in India
Rs. 6,340 Cr. Turnover & Profits after tax of 767 Cr. in 2004-5
Allianz se is the Germany based insurance company. it also working 70
countries and it  Provide the insurance last 119 years
 Incorporated on 12th march 2001.
 Received certificate of Registration (No.116)for IRDA of India on 3th
Aug 2001.

Bajaj Finsev
 Associate Company of Bajaj incorporated on 30th April 2007.
 Net profit as on 31-03-2008 Rs 4395 Lakh capital Base as on 31-03-
2008 Rs 7234 lakhs.

ALLIANZ SE
 Headquartered in Munich, Germany, established in 1890 has over 119
years of Insurance experience.

49
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G  One of the world's biggest insurers, Allianz SE offers a range of
insurance products and services -- including life, health, and
property/casualty coverage for individuals and businesses -- through
some 100 subsidiaries and affiliates operating all over the globe.
 In addition to selling insurance, Allianz provides retail and institutional
asset management services through Allianz Global Investors and
private equity investment through Allianz Capital Partners. Other
brands include Euler Hermes, Fireman's Fund, and Mondial, all
property insurance subsidiaries. Allianz has transformed itself into a
Societas Europaea, a joint stock company that operates under
European Union rules.
 Worldwide 2nd by Gross Written Premiums – Rs 4,77,930 Cr (Euro 89
billion) 
 3rd largest Assets Under Management (AUM) & largest amongst
Insurance cos. - AUM of Rs 50,096,199 Cr (Euro 764621 million)
 11th largest corporation in the world
 50 % of global business from Life Insurance, close to 60 million lives
insured globally.
 Presence in more than More than 70 countries, 182865 employees
worldwide
 Provide Insurance to almost half of the Fortune 500 cos..

Who`s who @ Allianz Group

50
 Allianz Insurance Management Asia Pacific

Allianz Group’s Worldwide Presence

WORLDWIDE: ASIA PACIFIC:

Argentina
Austria Australia
Belarus Greece Brunei
Belgium Hungary China
Bermuda Ireland Hong Kong
Brazil Italy India
Bulgaria Lebanon Indonesia
Burkina Faso Liechtenstein Japan
Cameroon Luxembourg Slovenia Laos
Canada Mexico South Africa Malaysia
Central African Rep. Morocco Spain New Zealand
Chile Namibia Sweden Pakistan
Croatia Netherlands Switzerland Philippines
Cyprus Norway Tunisia Singapore
Czech Republic Peru Turkey South Korea
Denmark Poland Ukraine South Pacific Islands
Egypt Portugal United Arab Emirates Taiwan
Estonia Russia United Kingdom Thailand
France Senegal USA Vietnam
Gabon Slovakia Uzbekistan
Germany Venezuela

Financial Snapshot (first nine months of

2001).........................................................................................................
......................
Worldwide Total Sales at
54.......................................................................................................................
.......9 billion euros (USD 50.4 billion)*
Net income in excess of 1.3 billion euros (USD 1.2 billion)*
One of Europe’s most highly valued stock corporations
Worldwide Number One by Gross Written Premiums
Worldwide Number Two by Market Capitalization
‘AA+’ rating by Standard & Poor’s
‘A++’ rating by A.M Best
Assets Under Management at approximately 1,120 billion euros
(USD 1,028 billion)*

51
 Bajaj Allianz Life Insurance

About Bajaj Allianz

Bajaj Allianz Life Insurance Company Limited is one of the private insurance
companies in India. Bajaj Allianz Life Insurance is a union between Allianz SE,
one of the largest Insurance Company and Bajaj Finserv. (Recently demerged
from Bajaj Auto.). Bajaj Auto Limited is 74% shared holder in the company
with the remaining 26% being held by Allianz SE.
On 2001, the Bajaj Allianz Life Insurance was given the IRDA (Insurance
Regulatory and Development Authority) certification of Registration for
conducting the Life Insurance business (which also included the Health
Insurance business) in the country. Bajaj Allianz India is headquartered in
Pune. The company has its offices in 200 towns all over India.

Allianz SE is a leading insurance conglomerate globally and one of the

largest asset managers in the world, managing assets worth over a Trillion
(Over INR. 55, 00,000 Crores). Allianz SE has over 115 years of financial
experience and is present in over 70 countries around the world.

At Bajaj Allianz Life Insurance, customer delight is our guiding principle. Our
business philosophy is to ensure excellent insurance and investment
solutions by offering customized products, supported by the best technology.
Financial services arm's profit rises to Rs 42 crore
BS Reporter / Mumbai July 16, 2009, 0:40 IST
Bajaj Finserv, the financial services arm of the Bajaj Group, posted a net
profit of Rs 42 crore for the quarter ended June 30, 2009. It had posted a loss
of Rs 36 crore in the corresponding period last year.

52
The group’s life insurance arm, Bajaj Allianz Life Insurance Company, was
the biggest contributor to the firm’s income. Bajaj Allianz has posted a profit
of Rs 68 crore in the June quarter. In the year-ago quarter, it had posted a
loss of Rs 3 crore.Gross written premium for the quarter rose 40 per cent to
Rs 2,001 crore as against Rs 1,847 crore in the corresponding period last
year. Renewal premium, too, increased to Rs 1,423 crore as against Rs 1,018
crore in the quarter ended June 30, 2008. However, new business premium
fell 42.28 per cent to Rs 577 crore

Culture @ Bajaj Allainz

 Be a winning team.
 Have a passion for excellence and hate bureaucracy.
 Be empowered, have he confidence to take decisions quickly and be
accountable.
 Make BALIC a “great place to work”
 Have a sense of humor.

Bajaj allianz way

 Invest in people – pay, develop & career planning.
 Dominate the market – Be decisive & communicate clear goals.
 Never sit still – change continuously, change when the going is good &
revolutize.
 Think service – service, service – continuous improvement.
 Make The future – be flexible & be aware of competitors. Manage the
business like a corner shop – customer satisfaction, employee
satisfaction ensuring cash flow.

53
Mr. Kamesh Goyal Mr.Sashi Krishnan
Country Manager CEO CIO
BALIC

Rajesh Viswanathan
Mr. Sanjay Jain
C.F.O.
Head,
BALIC
Marketing

 Bajaj Allianz Head of the Department: Details of the Company

ORGANISATION STRUCTURE OF
BAJAJ ALLIANZ

54
BOARD OF DIRECTORS:
Mr. Rahul Bajaj (Chairman)
Dr. Werner Zedelius
Mr. Sanjay Asher
Mr. Niraj Bajaj
Mr. Sanjiv Bajaj
Mr. Heinz Dollberg
Mr. Ranjit Gupta
Mr. S. H. Khan
Mr. Suraj Mehta
Mr. Dietmar Raich
Mr. Manu Tandon
Mr. Kamesh Goyal (Alternate Director to Dr. Werner Zedelius)
Branch Address: Bajaj Allianz Life Insurance Co. Ltd.
Shalimar Towers, TC-57N Vibhuti Khand
Gomtinagar, Lucknow-226010.
Telephone: (+91 522) 6450751
Head Office Address:
Bajaj Allianz Life Insurance Company Limited
GE Plaza, Airport Road, Yerawada, Pune-411006 Maharashtra
Telephone: (+91 20) 66026777

CHANNEL PARTNERS OF BAJAJ ALLIANZ

Standard Chartered Bank
Contact Number :
022 2492 8888
E-mail Address:
customer.care@in.standardchartered.com
Syndicate Bank
Contact Number :
020 4026 742
E-mail Address:
insurancediv@syndicatebank.net
Placement Sales and Services Ltd.
Contact Number :
0487-2388666,2385922 Tele Fax - 2388666
E-mail Address:
placementss@rediffmail.com
Address: Regency Centre, Kalavary Road,
West Fort, Thrissur –4 Kerala, India

55
 Team Life Care Co. (India) Ltd.
Contact Number :
0427 - 2410707; 2420707; Tele Fax -
2421245
Address: 5/118, Yercaud Main Road,
Chinnakollapatti, SALEM - 636008.
Ernestine Consultants Pvt Ltd.
 Contact Number :
080- 4034 1999 Fax- 080 - 4034 1920
Address: 1011, Ist Floor 3rd Cross, 13th
Main HAL 2nd Stage, Indira Nagar
Bangalore-560038

COSMOS Co-op BANK Ltd.

Contact Number : 020 2488051
E-mail Address : info@cosmosbank.in

List of products offered by Bajaj Allianz

The life insurance plans are generally divided into two types: (a) Traditional
plans (b) Unit linked insurance plans (ULIP). Traditional plans are basically
insurance plus savings whereas ULIPs are insurance plus investment. Further
they are classified into pure protection, savings, investments, pension and
living benefits. The classifications are shown in the table below

PRODUCTS PORTAL

        
  UNIT LINKED PENSION  TRADITIONAL  TERM PLANS
   Regular Premium Annuity    Endowment    
           
New UnitGain Pension Life Time Care New Risk Care
   Guarantee        
UnitGain Plus Gold    Retirement Super Saver
       Money Back Term Care
Future Income    
Generator CashGain
   
Swarna Vishranti

     

56
    HEALTH CHILDREN   JUST
Single Premium PLAN  LAUNCHED 
New UnitGain Plus SP Family CareFirst
New UnitGain Health Care ChildGain Invest Plus
Premier SP Group Seva Plan

Customer Care Centre:

 Well Networked Customer care centers (CCCs) with state of art IT

systems.
 Highest standard of customer’s service & simplified claims process in
the industry least number of IRDA complaints.
 Website for all kinds of assistance and information or Products and
service. Online buying and renewals.
 Toll free number 1800-233-7272

INCOME TAX GROSS ANNUAL HOW MUCH BAJAJ ALLIANZ

SECTION SALARY TAX CAN YOU LIFE INSURANCE
SAVE? PLANS

Sec. 80C Across All income Upto Rs. 33,990 All the life insurance
Slabs saved on plans.
investment of
Rs. 1,00,000.

Sec. 80 CCC Across all income Upto Rs. 33,990 All the pension plans.
slabs. saved on
Investment of
Rs.1,00,000.

Sec. 80 D* Across all income Upto Rs. 3,399 All the health insurance
slabs saved on riders available with the
Investment of conventional plans.
Rs. 10,000.

57
TOTAL SAVINGS
Rs37,389
POSSIBLE **
Rs. 33,990 under Sec. 80C and under Sec. 80 CCC , Rs.3,399 under
Sec. 80 D, calculated for a male with gross annual income
exceeding Rs. 10,00,000.

Chapter 7

INTRODUCTION OF THE RESEARCH

58
 STUDY
Distribution of insurance products

Insurance has to be sold the world over. The Touch point with the ultimate
customer is the distributor or the producer and the role played by them in
insurance markets is critical. It is the distributor who makes the difference in
terms of the quality of advice for choice of product, servicing of policy post
sale and settlement of claims. In the Indian market, with their distinct
cultural and social ethics, these conditions will play a major role in shaping
the distribution channels and their effectiveness. In today's scenario,
insurance companies must move from selling insurance to marketing an
essential financial product. The distributors have to become trusted financial
advisors for the clients and trusted business associates for the insurance
Companies.

Challenges for insurance companies and intermediaries in India-

 Building faith about company in the mind of clients.
 Building personal credibility with the clients.

Different distribution channels in India:-

A multi-channel strategy is better suited for the Indian market. Indian

insurance market is a combination of multiple markets. Each of the
markets requires a different approach. Apart from geographical spread
the socio-cultural and economic segmentation of the market is very wide,
exhibiting different traits and needs. Different multi-distribution channels
in India are as follows

59
  Agents: Agents are the primary channel for distribution of insurance.
The public and private sector insurance companies have their
branches in almost all parts of the country and have attracted local
people to become their agents. Today's insurance agent has to know
which product will appeal to the customer, and also know his
competitor's products to be an effective salesman who can sell his
company, the product, and himself to the customer. To the average
customer, every new company is the same. Perceptions about the
public sector companies are also cemented in his mind. So an
insurance agent can play an important role to create a good image of
company.

 Banks: Banks in India are all pervasive, especially the public sector
banks. Many insurance companies are selling their products through
banks. Companies which are bank owned, they are selling their
products through their parent bank. The public sector banks, with
their vast branch networks, are helpful to insurance companies. This
channel of selling insurance is known as Banc assurance.

INSURANCE COMPANY ASSOCIATE BANKS

ICICI prudential ICICI bank, bank of India, Citibank,
Allahabad bank, Federal bank, south
Indian bank, Punjab and
Maharashtra cooperative bank
SBI life State bank of India
Birla sun life Deutsche bank, Citibank, bank of
Rajasthan, Andhra bank
ING Vysya bank Vysya bank

60
Aviva life insurance ABN amro bank, Rajasthan Bank
HDFC standard life Union bank, Indian bank
Met life Karnataka bank, j&k bank
Source: - Hindu Business Line, January 08, 2007

 Brokers: Now a day’s different financial institution are selling

insurance. These financial institutions are known as brokers. They are
taking some underwriting charges from the insurance companies to
sell their insurance products.
 Corporate agents: Corporate agency is a cross selling type of
channel.  Insurance companies’ tie-up with business houses in other
industries to sell insurance either to their employees or their
customers. Insurance industry, during the past 2 years has witnessed a
number of such strategic tie-ups and alliances. Corporate agents have
become a major force to reckon with in distributing insurance
products. Such as- Bajaj Allianz tied up with Maruti Udyog and Ford
for auto insurance and Tata AIG life has tied up with Tata tea,
khaitan’s Williamson major and bridge foundation for selling rural
policies.
 Internet: In this technological world internet is also a channel of
selling insurance. This can be as direct marketing.

Effective marketing strategies

61
A marketing strategy is a process that can allow an organization to
concentrate its (always limited) resources on the greatest opportunities to
increase sales and achieve a sustainable competitive advantage.

Marketing strategy as a key part of the general corporate strategy

marketing strategy is most effective when it is an integral component of
corporate strategy, defining how the organization will engage customers,
prospects and competitors in the market arena for success. It is partially
derived from broader corporate strategies, corporate missions, and
corporate goals. They should flow from the firm's mission statement. They
are also influenced by a range of micro environmental factors

Now the Indian consumer is knowledgeable and sensitive. Consumers are

increasingly more aware and are actively managing their financial affairs.
People are increasingly looking not just at products, but at integrated
financial solutions that can offer stability of returns along with total
protection. In view of this, the insurance managers need to understand more
about the details that go into the introduction of insurance products to make
it attractive in this competitive market. So now days an insurance manager
requires leadership, commitment, creativity, and flexibility ."Every family in
every village in the country should feel safe and secure". This vision alone
will help to bring the new ideas to the insurance manager.

Financial, marketing and human resource polices of the

corporations influence the unit mangers to make decisions. Performance of
insurance company depends on the effectiveness of such policies. Insurance
corporations formulate and revise these policies from time to time to ensure
that the performance of the managers is best for the organization.
In the competitive market, insurance companies are being forced to adopt a
strictly professional approach in marketing. The insurance companies face
the challenge of changing the uninspiring public image of the industry. Some
of the important marketing elements are-

 Marketing mix.
 The importance of relationship.

62
  Positioning.
 Value addition.
 Segmentation.
 Branding.
 Insuring service quality.
 Effective pricing.
 Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it.

The following factors influence the market and demand of product-
 Government policies.
 Growth in population.
 Changing age profile.
 Income wise distribution of the population.
 Level of insurance awareness.
 The pricing of the policies.
 The economic climate of the country.
 The dislike to risk.
 Social and political features of the country.
 Growth scenario in the world.
Different companies adopt different approaches in their marketing
strategies. One approach is focus upon product quality which can give
confidence in the mind of customers that they are offered by best featured
products. And other approach is focusing on customer’s needs, which involve
a heavy investment in developing relationships with policyholders. Under
this approach customer can expect a range of products and service offered
to him. Third approach is market segmentation under which the population
can be divided into several homogeneous products and groups, the effort
should be tie clients to the company by customized combination of coverage,
easy payment plans, risk management advice, and convenient and quick
claim handling.
Types of marketing strategies

63
Every marketing strategy is unique, but if we abstract from the
individualizing details, each can be reduced into a generic marketing
strategy. There are a number of ways of categorizing these generic
strategies. A brief description of the most common categorizing schemes is
presented below:
Strategies based on market dominance - In this scheme, firms are classified
based on their market share or dominance of an industry. Typically there are
three types of market dominance strategies:
 Leader
 Challenger
 Follower
Porter generic strategies - strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while
strategic strength refers to the firm’s sustainable competitive advantage.
 Cost leadership
 Product differentiation
 Market segmentation
Innovation strategies - This deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is
on the cutting edge of technology and business innovation. There are three
types:
 Pioneers
 Close followers
 Late followers
Growth strategies - In this scheme we ask the question, “How should the
firm grow?”. There are a number of different ways of answering that
question, but the most common gives four answers:
 Horizontal integration
 Cost leadership
 Product differentiation
 Market segmentation

A more detailed scheme uses the categories:

64
  Prospector
 Analyzer
 Defender
 Reactor
 Vertical integration
 Diversification
 Intensification

An insurance product can be classified in three phases:

Core product: In insurance industry the core product is the policy that
provides protection to the customers.
Expected product: Because of competition customers start to expect more
from an insurance product. Then insurance companies provide some
tangible attributes in their product to differentiate from competitors, such
as-
 Brand
 Some additional features in existing product
 By providing instruction manual with the policy.
Augmented product: An insurance company can provide different types of
services to differentiate their products-
 Post sales services.
 Branches in different places for customers.
 Customer complaint management.
 Payment option convenient to customers.

The entry of private players and their foreign partners has given domestic
players a tough time, because the opening up of the sector has not brought
in only foreign players, but also professional techniques and technologies.
The present scene in India is such that everyone is trying to put in the best
efforts. There are marketing strategies more for survival than growth. But
the most important gift of privatization is the introduction of customer-
oriented services. Utmost care is being taken to maximize customer
satisfaction.

65
Success of an insurance company depends on four important
functions:-
 Identification of markets: Identification of markets means need to
understand the trends in culture and businesses constantly, through
conducting research and analysis. Insurance companies can take this
job on their own or assign it to an external agency. Relying on an
external agency can be risky due to the questionable loyalty of the
agents.

 Assessment of risks (of the insured and the insurance corporation)

and estimation of losses: Efficiency of actuaries and assessors of the
insurance policies in fixing premiums and settling claims is foremost
an important area for achieving overall efficiency in operations. The
quality of assessing the risk and estimation of losses has the largest
claim on the performance of an insurance company. Well trained,
experienced and expert hands are needed for the operations.

 Penetration into and exploitation of markets: Market penetration or

exploitation of a company can be identified with the growth in
number of policies in each type of insurance, growth rate in earnings
or turnover, company’s market share, increase in number of branches
and divisions etc. Efforts of the company as a whole and that of the
divisions and branches are assessed to measure the effectiveness.

 Control over investment and operating costs: Control over resources

such as men, machines, and materials at each level of the
organization provides measures of efficiency of a unit as well as the
organization. Investment control and expense control are dealt
separately and the effectiveness of management’s’ decisions at
various levels is to be assessed separately

66
 To find best prospects:
 Allocating marketing strategies against market potential.
 Estimating potential for specific products within local markets.
 Identifying high opportunity areas.
 Measuring agency performance relative to market potential.
 Optimizing your agency network against market potential.

Attributes to develop marketing strategies:

 Channel data: - Useful to know future buying preferences, learning
about products and purchase channels.
 Consumer attitudes.
 Consumption data: - Useful to evaluate annual premiums, number of
annuities owned, value of annuities, and with which company the
current policy is held.

Effective strategies for insurance agents:

 Learn how to construct a mental image for success.

 Learn how to find a proper perspective and how to turn off all the
signals that cause people not to buy from you.
 Learn how to get and set more appointments.
 Learn how to convert a new lead into sales.
 Learn how to act when you meet a client for the first time.
 Learn how the order in which you explain the types of policies can
double your income.
 Take Easy steps to avoid delays in issuing policies.

67
 Bajaj Allianz Investment on Advertisement
In the modern business world, advertising pays to companies or producers. It plays a vital
role in pushing up the sales because it is psychological weapon which is exploited by the
business to meet purely commercial ends. It is a mass selling technique. Its fundamental
purpose is to bring the product, its features and uses to the knowledge of customer and
persuade them to purchase the product of the producers. In this way, it widens the
market of the product.
Bajaj Allianz through better advertisement increases sales and demand of the product
day by day. Their are as follows various popular advertisement.

LOVE AAJ KAL association with Bajaj Alliaz

Gajini popularity using in Bajaj Allianz ad for tax saving plans

Vijender Singh Olympic gold medalist winner feature on bajaj allianz adverstiment for safe plans.

Kungu panda advertisment for safety plans through comic way.

Competitors of Bajaj Life Insurance

68
ICICI prudential: ICICI prudential insurance is a joint venture of ICICI bank
and prudential plc a leading financial service group in the UK. Total capital
stands for Rs.  37.72 billion, with ICICI Bank holding a stake of 74% and
Prudential plc holding 26%. ICICI begin their operations in December 2000
after receiving approval from IRDA. Now ICICI prudential is having over 1000
offices, over 270000 advisors and 21bancassurance partners. ICICI Prudential
was the first life insurer in India to receive a National Insurer Financial
Strength rating of AAA from Fitch ratings. ICICI prudential is working on the
base of five core values-
 Integrity
 Customer first
 Boundary less
 Ownership
 Passion

Key features:

 Understanding the needs of customers and offering them superior

products and service.
 Leveraging technology to service customers quickly, efficiently and
conveniently.
 Developing and implementing superior risk management and
investment strategies to offer sustainable and stable returns to
policyholders.
 Providing an enabling environment to foster growth and learning
for employees. 

HDFC standard life insurance: HDFC Standard Life Insurance Company Ltd.
is one of India's leading private insurance companies. It is a joint venture of
Housing Development Finance Corporation Limited, India's leading housing
finance institution and a Group Company of the Standard Life in UK. HDFC as
on March 31, 2007 holds 81.9 per cent of equity venture. Gross premium
income of the HDFC for the year ending March 31, 2007 was Rs. 2, 856
crores and new business premium income was Rs. 1,624 crores. The

69
company has covered over 8, 77,000 lives year ending March 31, 2007. HDFC
standard is having 1000 advisors in 11 towns.

Key features:

 Creating corporate agents through HDFC bank in India.

 Creating agents to provide total financial consultancy.

 Introducing low cost group schemes for companies and NGOs.

Reliance life insurance: Reliance Life Insurance Company Limited is a part of

Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance
Capital is one of India’s leading private sector financial services companies,
and ranks among the top 3 private sector financial services and banking
companies, in terms of net worth. Reliance Capital has interests in asset
management and mutual funds, stock broking, life and general insurance,
proprietary investments, private equity and other activities in financial
services. Reliance Capital Limited (RCL) is a Non-Banking Financial Company
(NBFC) registered with the Reserve Bank of India under section 45-IA of the
Reserve Bank of India Act, 1934.

Aviva life insurance: Aviva is UK’s largest and the world’s fifth largest
insurance Group. It is one of the leading providers of life and pensions
products to Europe and has substantial businesses elsewhere around the
world. Aviva has a joint venture of Dabur, one of India's oldest, and largest
Group of companies. And country's leading producer of traditional
healthcare products. In accordance with the government regulations Aviva
holds a 26 per cent stake in the joint venture and the Dabur group holds the
balance 74 per cent share. Aviva has  193 Branches in India (including rural
branches) supporting its distribution network. Through its Banc assurance
partner locations, Aviva products are available in  more than  2,795  locations
across India.  Aviva has a sales force of over 30000 financial planning
advisors.

Key features:

70
  Through the “Financial Health Check” (FHC) Aviva’s sales force has
been able to establish its credibility in the market. The FHC is a free
service administered by the FPAs for a need-based analysis of the
customer’s long-term savings and insurance needs. Depending on the
life stage and earnings of the customer, the FHC assesses and
recommends the right insurance product for them.

 Introduced the concept of Banc assurance in India.

 Products to provide customers flexibility, transparency and value for

money.

 Differentiation in fund management operations.

MetLife insurance: MetLife India Insurance Company Limited is an affiliate

of MetLife, Inc. and was incorporated as a joint venture between MetLife
International Holdings, Inc. and 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 offers 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 32,000 Financial Advisors. It has approximately 70 million
customers all over world. MetLife is working on the base of six core values-

 Innovation

 Long term relationship

 Customer centered and result focused vision

 Creating high performance organization

 Working with integrity, fairness and financial prudence

 Partnering with internal and external customers

71
Max New York life insurance: Max New York Life Insurance Company Ltd. is
a joint venture between New York Life, a Fortune 100 company and Max
India Limited, one of India's leading multi-business corporations The
Company's paid up capital is Rs. 907.4 crore. Max New York life is working
on the base of six core values-

 Excellence,

 Honesty,

 Knowledge,

 Caring,

 Integrity

The Company practices a lot of importance on its selection process of

insurance advisors which comprises four stages - screening, psychometric
test, career seminar and final interview. 337 agent advisors have qualified
for the Million Dollar Round Table (MDRT) membership in 2007 and Max
New York Life has moved up to 21st rank in MDRT global list.

Key features:

 Max New York Life has adopted prudent financial practices to ensure
safety of policyholder's funds.

 Investing significantly in its training programme and each agent is

trained for 152 hours as opposed to the mandatory 100 hours
stipulated by the IRDA before beginning to sell in the marketplace.

 Using a five-pronged strategy to pursue alternative channels of

distribution which include the franchisee model, rural business, direct
sales force involving group insurance and telemarketing opportunities,
banc assurance and corporate alliances.

72
Bharti Axa life insurance: Bharti Axa life insurance is a joint venture
between Bharti, one of India’s leading business groups with interests in
telecom, agri business and retail, and Axa world leader in financial
protection and wealth management. The joint venture company has a 74%
stake from Bharti and 26% stake of Axa. The company started its operations
in December 2006. Now company is having over 5200 employees across over
12 states in the country. Company is working on the base of five core values-

 Professionalism
 Innovation
 Team Spirit
 Pragmatism

 Integrity

Key features:

 Using multi-distribution, multi product platform techniques.

 Adapting AXA's best practices as a sound platform for profitable
growth.
 Leveraging Bharti's local knowledge, infrastructure and customer
base.
 Delivering high levels of shareholder return.
 Building long term value with business partners by enhancing the
proposition to their customers.
 Retaining the best talent in India.

Tata AIG life insurance: Tata AIG Life Insurance Company Limited (Tata AIG
Life) is a joint venture company of the Tata Group and American
International Group, Inc. (AIG). The Tata Group holds 74 per cent stake in the
insurance venture with AIG holding the balance 26 percent. Tata AIG Life
provides insurance solutions to individuals and corporate. Tata AIG Life
Insurance Company started to operate its business in India on April 1, 2001.
Tata AIG is having 3000 advisors all over India.

Key features:

73
  Establishing direct mailers; call-centers in 60 centers.

 Creating awareness workshops in housing societies.

 15-day trial period with refund, premium payment through credit

card.

ING Vysya life insurance: ING Vysya Life Insurance Company Limited  a part
of the ING group the world’s largest financial services provider entered in the
private life insurance industry in India in September 2001.ING Vysya Life is
currently present in 246 cities and has a network of over 300 branches,
staffed by 7,000 employees and over 51,000 advisors, serving over 5.5 lakh
customers. ING Vysya Life has a diversified distribution channels,. While Tied
Agency remains the strongest channel, the Alternate Channels business
within ING Vysya Life is one of the fastest growing distribution channels. ING
Vysya Life has strengthened its position as the unparallel leader in the life
insurance industry in cooperative banks tie ups. The company currently has
tie ups with 130 cooperative banks across the country. The Alternate
Channels division has Banc assurance, ING Vysya Bank, Corporate Agents
and SMINCE. ING Vysya is working on the base of five core values-

 Professionalism

 Entrepreneurial

 Trustworthy

 Approachable

Birla sun life insurance: Birla Sun Life Insurance Company Limited (BSLI) is a
joint venture between the Aditya Birla Group and the Sun Life Financial
Services of Canada. It started operations in March 2001 after receiving its
registration license from IRDA in January 2001. Company is having more
than 45 branches across India.

Key features:

74
  Focus on unit linked insurance products supported with protection
products to maintain leadership in product innovation.

 Use of multi distribution channels- Direct Sales Force, Alternate

Channels and offering convenient channels of purchase to customers.

 Web-enabled IT systems for superior customer services and issuing

policies on the internet.

 High degree of transparency in all business practices and procedures.

 Working on operational Business Continuity Plan.

MARKET SHARE OF DIFFERENT PRIVATE PLAYERS:

Fig 3 source: www freepress.in

75
If we see market share of different private players in the financial year 2009
then from the above chart we can understand, the Major 7 insurance
company market share are as follows:

1. ICICI Prudential is holding the maximum market share i.e. 21.6%.

2. After that SBI Life is holding 14.8%

3. Bajaj Allianz is holding 13.2% which is good market share,

4. Reliance Life is holding 9.9%,

5. Birla Sun life is holding 8.5%,

6. HDFC Standard they are also holding a good market share all over the
India 8.0 %,

7. Max New York Life insurance is holding 5.6%

76
77
78
79
80
81
Growth in premiums of different insurance companies:-

Companies Premium up Premium up Growth %

to oct 07 to oct 06
(Rs.mill.) (Rs.mill.)
ICICI 31831.8 20808.5 53
Prudential
HDFC Standard 10675.7 6595.7 61.9
SBI Life 14717.4 8142.4 80.8
Bajaj Allianz 26498.1 15208.2 74.2
Aviva life 4586.8 3464.2 32.4
insurance
MetLife 2756.0 1162.7 137.0
insurance
Reliance life 8571.2 2803.7 205.7
insurance
Birla sun life 7595.4 3844.7 97.6
insurance
Max new York 6942.0 3720.4 86.6
life insurance
Bharti AXA life 258.7 1.1 22907.8
insurance
Tata AIG 4413.0 3264.8 35.2
ING Vysya 3047.7 2086.7 46.1
Kotak 3476.6 2172.6 60.0
Mahindra

Comparison of ULIP products of different

insurance companies
ICICI Prudential
Fund options- growth fund, balanced fund, income fund, and preserver.

82
allocation to equities- upto 100% in growth fund, upto 40% in balanced
fund, nil in income fund, 50% in preserver.
minimum premium- 20,000.
min/max age at entry- upto 65 years.
sum assured- annual premium*term/2.
fund management charges- 1.5% in growth fund, 1.0% in balanced fund, .
75% in income and preserver fund.
fixed monthly expenses- 60rs.
partial withdrawals- above one partial withdrawal 100 rs. charge per
withdrawal.
charges on top ups- 1%.
switching charges- above 4 switches in a year 100 rs. Per switching.

Birla Sun Life Insurance

fund options- enhancer fund, builder fund, protector fund.
allocation to equities- maximum 35% in enhancer fund, maximum 20% in
builder fund, maximum 10% in protector fund.
minimum premium- 20,000 rs.
min/max age at entry- 30 days to 60 years.
sum assured- face amount + policy fund.
fund management charges- 1% for all the fund options.
fixed monthly expenses- 22 rs.+ annual charges as applicable.
partial withdrawals- 2 free partial withdrawals in a year.
charges on top ups- 2%.
switching charges- 2 free switches in a year, and 100 rs. Per switching.

HDFC Standard Life Insurance

fund options- growth fund, balanced fund, defensive fund, secure fund,
liquid fund.
allocation to equities- 100% in growth fund, 30-60% in balanced fund, 15-
30% in defensive fund, 0% in secure and liquid fund.
minimum premium- 10,000.
min/max age at entry- 18- 65 years.

83
sum assured- annual premium*term/2, to 40 times the regular premium
amount.
fund management charges- .80%.
fixed monthly expenses- 20 rs.
partial withdrawals allowed- above 6 partial withdrawals 250 rs. per
withdrawal.
charges on top ups- 2.5% for initial 2 years, after 1%.
switching charges- 24 free switching and then 100 rs. per switching.

SBI Life Insurance

fund options- equity fund, bond fund, growth fund, balanced fund.
allocation to equities- upto 100% in equity fund, upto 20% in bond fund, 40 -
100% in growth fund, 40 – 60% in balanced fund.
minimum premium- 24,000.
min/max age at entry- 7 – 65 years.
sum assured- 5 – 50 times the regular premium amount.
fund management charges- 1.5% for equity fund, 1.35% for growth fund,
1.25% for balanced fund, 1% for bond fund.
fixed monthly expenses- 60 rs.
partial withdrawals allowed- above 4 partial withdrawals 100 rs. per
withdrawals.
charges on top ups- 1%.
switching charges- above 4 switching 100 rs. per switching.

Max New York Life Insurance

fund options- growth fund, balanced fund, conservative fund, secure fund.
allocation to equities- 20 – 70% in growth fund, 10 – 40% in balanced fund,
0 – 15% in conservative fund, 0% in secure fund.
minimum premium- 15,000.
min/max age at entry- 12 – 60 years.
sum assured- minimum sum assured 100,000 rs.
fund management charges- .90% - 1.25% of net assets in the fund.
fixed monthly expenses- 50 rs.
charges on top ups- nil.

84
switching charges- above 2 switching per year 500 rs. Per switching.

Reliance Life Insurance

fund options- equity fund, growth fund, balanced fund, capital secure fund.
allocation to equities- upto 100% in equity fund, upto 40% in growth fund,
upto 20% in balanced fund, 0% in capital secure fund.
minimum premium- 10,000.
min/max age at entry- 30 days to 65 years.
sum assured- for age of 12 years 5 times, above 12 years 5 times to
unlimited.
fund management charges- 1.75% in equity and growth fund, 1.5% in
capital secure fund.
fixed monthly expenses- 40 rs.
partial withdrawals allowed- rs. 100 for every withdrawal.
charges on top ups- 2%.
switching charges- above 1 switching 100 rs. Per switching.

Insurer Market view Product focus Distribution Others

strategy
Bajaj Allianz Current Most products More focus Growth and
life industry homogeneous on smaller market
insurance growth across players, towns, share
sustainable not much greater oriented
for next 7 – price emphasis on strategy,
10 years, differentiation agency force detarrifing
target 10% , ULIP sales expansion. would hit
market unlikely to be non life
share in next affected by segment
5 years recent adversely.
regulations,
not much
threat from
mutual funds.
HDFC Expect high Focus on Prefer own Breakeven

85
Standard life double digit regular offices versus not
insurance market premium franchisees, necessarily
growth over products and higher focus in next 18
next few higher on training months, it
years, persistency agents rather would
steady state levels, group than hard require
not expected focus given sell, rural capital even
flexibility in focus if FDI were
equity required but raised to
investment, obstacles 49%.
competitive include lack
versus mutual of bank
funds for infrastructure
longer tenure .
products given
lower amc
charges
ICICI Market Pension and Significantly Significant
Prudential growth at healthy diversified capital
60%CAGR in products likely with 40% requirement
medium to grow given from non for maintain
term, target aging agency force, share in a
to maintain population expanding high growth
share at 30% and increasing reach to non market, both
in private life metro areas. partners
segment. expectancy. willing to
Product contribute
awareness is
slightly behind
LIC despite a
significant
time
disadvantage;
health could

86
 comprise 3 – ,
5% of product
mix in 5 years.
Birla sun life Target to be Currently only Agent It believes
insurance top in 5 unit linked productivity is some
years products sold an issue given marginal
but group their part players could
linked time nature, br bought
products are target is 130 out.
focus area for branches all
development. over India,
also will
leverage on
group’s
products
distribution
strengths.

87
CHAPTER 12

88
 Questionnaire
JIM ,Jodhpur
Narnadi Jhanwar Road,
Jodhpur-
Ph. 029
Ajay singh rathore

Name-

Company-

Designation-

Contact no.-

The following questionnaire is for the purpose of our research project as a

part of our MBA curriculum on ‘“Study of insurance sector and
competitiveness with the special reference to Bajaj Allianz Life Insurance
Company Ltd.”It is assured from us that any information given by the
company will not be disclosed by any means. With this assurance I expect
accurate data from company to help me for my project.
_____________________________________________________________

1. How long you have been in insurance industry?

(a) > 2 years (b) 2-5 years (c) 5-8 years (d) >8 years

2. When did you join your present company?

(a) > 2 years (b) 2-5 years (c) 5-8 years (d) >8 years

3. Your designation while joining this company……………………….. .............................

.....................................................................................................................................

4. How many advisors do you have? (For branch Manager only)

(a) >250 (b) 250-400 (c) 400-550 (d) >550

89
5. How many advisors do you have? (For agency Manager)
(a) >25 (b) 25-50 (c) 50-100 (d) 100-150

6. On what basis do you recruit your advisor?

(a) Through personal reference
(b) Through advertisement
(c) Through walk in interviews
(d) Through placements agencies

7. How do you make them active?

(a)By increasing incentives
(b)By offering higher channel position
(c)By awarding non-cash prizes
(d)By giving training session

8. How many MBAs do you have in your agency?

(a) None (b) 1-3 (c) 4-6 (d) more than 6

9. On what products you are stressing more?

(a) Term insurance
(b) Unit linked products
(c) Money back products
(d) Endowment products

10. What is the basis of your product deployment?

(a) Profit oriented
(b) On customers need and demand
(c) On channel feedback from market
(d) By adding some additional benefits in current product

11. How do you differentiate your product from your competitors?

(a) By advertising and promotional activities
(b) By pricing of the product
(c) Based on the operation of funds
(c) By providing better service quality

90
12. Your mode of interaction with customers.
(a) Direct marketing
(b) By telephonic contacts (creating database)
(c) Through advertisement
(d) Through references

13. Which kind of strategies should an insurance company use to compete in the
market (in your view)?
(a) Better service quality
(b) Accordingly change in the pricing of product
(c) By increasing periodicity of interaction with advisors and customers
(d) By providing extra benefits to advisors and customer

14. What is average total premium collection in your branch (in a month?)
(a) >2 Cr. (b) 2-4 Cr. (c) 4-5 Cr. (d) >5 Cr.

15. How many MDRT are become in your branch.

(a) >3 (b) 4-6 (c) 7-8 (d) 8 - 10

16. Other useful activities which you do in agency (if any, please mention)
…………………………………………………………………….............................................................
.....................................................................................................................................
.......................................................................................................................

17. What are your best products which you think it is a best in insurance sector?
.....................................................................................................................................
.....................................................................................................................................

18. What are your future plans (please define)……………………………………………………..

.....................................................................................................................................
.....................................................................................................................................

91
 Findings
Primary data has been collected by the survey of branch and agency manager
of different insurance companies in Bajaj Allianz Life Insurance. sample size
for this research is 50
(a) Age-profile:

Table No. I(a) showing age profile of respondents:

S. No Age No .of Percentage
respondents
1. 20-30 15 30.%
2. 30-40 25 50%
3. 40-50 7 14%
4. 50-above 3 6%
Total 50 100

Age-profile

40-50 20-30
14% 30%
50-above
6% 20-30
30-40
40-50
30-40
50% 50-
above

INTERPRETATION :

In this survey I found the maximum number of respondents belongs to

the age group of 30-40 years, followed by 20-30 years of age category.

(b) Gender-wise:

92
 Table No. I(b) showing gender wise profile of respondents:
S. No Gender No. of Percentage
respondents
1. Male 45 90%
2. Female 5 10%
Total 50 100%

Gender-wise overview
Male
Female Female

Male

INTERPRETATION :

Table No.I(b) represents the gender ratio of the respondents in this

survey.90% of the covered respondents were male and remaining 10%
were female

Recruitment of advisors:-

In insurance industry advisors play most important role, and these advisors
are recruited through different ways. Mainly four ways for recruiting the
advisors are-
1. Through personal references.
2. Through advertisements.
3. Through walk in interviews.
4. Through placement agencies.

S. No Recruitment of No. of Percentage

advisors respon
dents

93
 1. Personal 35 70%
references.
2. Advertisement 5 10%
3. walk in interviews 10 20%
4. placement agencies 0 0%
Total 50 100%

Recruitment of advisors

60% Personal Referneces

40% Advertisement
20% walk in interviews
0% placement agencies
es t
ec en ws ies
n em vie enc
er tis te
r g
ef er in ta
la R d v in en
so
n A alk em
r w al c
Pe p

So most of the companies are recruiting their advisors through personal

reference and through walk in interviews, some companies are recruiting
their advisors through advertisement also, but none company is recruiting
their advisors through placement agencies.

Making advisors active: To get efficient work from their advisors

companies do some practices to make them active. Some practices are-
1. By increasing incentives.
2. By offering higher channel position.
3. By awarding them non cash prizes.
4. By giving them training session.

94
S. No Making advisors No. of Percentage
active respon
dents
1. Increasing 5 10%
incentives
2. Offering higher 20 40%
channel position
3. Awarding them non 5 10%
cash prizes.

4. Giving them 20 40%

training session
Total 50 100%

95
 40% 0.4
40%
35%
30%
25%
20%
15% 0.1 0.1 Increasing incentives
10% awarding non cash prizes
giving them training session
5%
Column1
0%

So most of the companies are giving training session , offering higher

channel position awarding non cash prizes to make their advisors active,
some of the companies are increasing incentives.

Type of products: Different insurance companies are having different

categories of insurance products. Some product categories are-
1. Term insurance products.
2. Unit linked products.
3. Money back products.
4. Endowment products.

S. No Type of products No. of Percentage

respon
dents
1. Term insurance 7 14%
products
2. Unit linked products 30 60%
3. Money back 10 20%
products
4. Endowment 3 6%
products.

Total 50 100%

96
 Type of Products

60%
60%
50% Term insurance
products
40%
30% Unit linked products
20%
20% 14% Money back products
6%
10% Endowment products
0%
No. of respondents

So all the companies are promoting their unit linked products and some
companies are promoting rest of the products including unit linked products.

Basis of product use: - All insurance companies are deploying their

products in various categories. Some of the tactics are-
1. Profit oriented.
2. On customers need and demand.
3. On channel feedback from market.
4. By adding some additional benefits in current products.

97
S. No Basis of product No. of Perce
deployment respondents ntage
1. Profit oriented 10 20%
2. Customers need and 30 60%
demand
3. On channels feedback 5 10%
4. Adding some additional 5 10%
Benefit in current
products

Total 100%

Basis of product deployment

Profit oriented

60% customers need

60% and demand

40% channel feedack

20%
from market
20% 10%10%

addition benefit in
0%
cureent products
No. of respondents

98
So most of the companies are deploying their products based on the
customers need and demand.

Differentiation strategies: To make their products different from their

competitors companies are using some strategies which are-
1. By advertisement and promotional activities.
2. By pricing of the product.
3. Based on the deployment of the funds.
4. By providing better service quality.

S. No Differentiation No. of Percentage

strategies respon
dents
1. advertisement and 15 30%
promotional activities
2. pricing of the product 15 30%
3. Based on the 5 10%
deployment of the
funds
4. providing better service 15 30%
quality
Total 50 100%

Differentiation strategies

30%30% 30%
30%
advertisement and
25% promotional
20%
10% pricing of product
15%
10% operation of funds
5%
better service quality
0%
No. of respondents

99
So most of the companies are giving better service quality and better pricing
to differentiate their products and better advertisement and promotional
activities from their competitors.

Mode of interaction: There are different types of way to interact with

customers. Some of the important ways are-
1. Direct marketing.
2. By creating database (telephonic contact).
3. Through advertisement.
4. Through online contacts

S. No Mode of No. of Percentage

interaction respon
dents
1. Direct marketing 35 70%
2. Creating database 13 26%
(telephonic contact).
3. Advertisement 2 4%
4. online contacts 0 0%
Total 50 100%

Mode of interaction

70%
70%
60% Direct Marketing
50%
Creating database
40% 26% (telphonic)
30%
20% Advertisement
4%
10% 0%
Online contacts 100
0%
No. of respondents
So almost all the companies are interacting with customers through direct
marketing and by telephonic contacts (creating database).

Strategy to compete in market: Most common strategies to compete

in the market for insurance companies are-
1. Better service quality.
2. Change in pricing of products.
3. By increasing periodicity of interaction with advisors and customers.
4. By providing extra benefits to advisors and customers.

S. No Strategy to No. of Percentage

compete in respo
market ndent
s
1. Better service quality 10 20%
2. Change in pricing of 0 0%
products
3. Interaction with 35 70%
advisors and
customer
4. Extra benefit 5 10%
Total 50 100%

101
 Strategy to compete in market

70%
80% Better serice quality

60% change in price and

products
40% 20% interaction with adv. &
10% customer
20% 0%
extrabenefit
0%
No. of respondents

So most of the insurance companies think that providing better periodicity of

interaction with advisors and customers is most suitable strategy to compete
in the market.

SWOT ANALYSIS
Strength:
 Money Power, which makes them ignorant about the gestation period
 Brand image, business experience, and innovative products
 The agents are very selectively chosen have excellent communication
skills
 Service quality, which is core of their mission
 Large network branches which is helped to customer for the payment
 Strong and popular brand name.

102
Weaknesses:
 High targets for financial advisors and for the sales departments.
 Many competitors in the market offer same product by the title
difference the premium and offerings.
 Sustainable to twist associated with investment in money market.
 Try to catch middle-lower level people also.
 Lack of awareness about insurance among people
 Less coverage in Rural Areas

Opportunity:
 Huge market is laterally untapped; out of estimated 320 millions
insurable markets only 20% of the population is insured.
 Health insurance and pension schemes, an estimated market potential
of approximately $15 billion
 Bajaj Allianz Life Insurance should give the insurance coverage both to
the parent and child so that their life could be covered in both cases. The
Customer doesn’t mind paying some extra premium for that.
 Fast growing economy.

Threats:
 Players like icici prudential and birla sun life with low premium for the
similar plans Entry of many other private companies with equally strong
experience and financial strength of foreign partners making the
competition difficult and saturating the urban markets.

103
 Current Govt. Policies do not encourages gross domestic saving. If the
tax liability of the services class rises, the customer will have little money
to invest.
 LIC has woken up from sleep and is following competitive strategies.
Its huge surplus in life fund gives a capability to lodge price war.

Conclusion
 Insurance companies are recruiting their advisors mainly through
personal reference, through advertisement, and through walk in
interviews. None of the company is recruiting their advisors through
placement agencies.

 Those advisors who are recruited through personal references need

more training session and company has to put effort to make them
active. Most of the companies are giving training session to advisors
to make them active. Companies are also providing higher channel
position and increasing incentives to make them active.

104
 Most of the insurance companies have started recruiting agency
manager and high posted people from professional colleges to
improve efficiency of the insurance company.

 Insurance companies have forgotten their traditional products.

Companies are totally concentrating on selling ULIP products. Now
insurance companies are selling their products as an investment
product not as life insurance products.

 Insurance companies are using their products mostly based on

customer needs and demands. Insurance companies are not doing
enough market researches to know the potential of the market.

 Most of the insurance companies are differentiating themselves from

the competitors by providing better service quality, better pricing of
the product, advertisement and promotional activities.

 Sales managers of most of the companies think that providing better

service quality is the best tool to compete in the market. Better service
quality may be in the form-
1. Issuing policy in time, Providing claims in time
2. Making customers aware about their status of policy.
Recommendations

 Bajaj Allianz Life Insurance Company should start recruiting advisors

through placement agencies. By practicing this Bajaj Life Insurance
Company will get more capable advisors who can work efficiently.
Inactive advisors kind of thing would not happen.

 Bajaj Life should also promote the term and endowment insurance
products including ULIP products. Because these are basic insurance
products. Promote products as life insurance products not an as
investment products.

105
  To increase awareness in rural market Bajaj Life should do some
activities in villages and small towns. This can be done by putting and
festival melas organizing in villages.

 Bajaj Allianz life insurance should sell their products through head of
the villages or through panchayat in villages. People in villages believe
on the head and panchayat so selling insurance will be easier in
villages.

 Bajaj Allianz can introduce some special policies for the farmers to tap
the rural market, and pricing for these kinds of products should be less
so farmers can easily afford to take policies.

.
BIBLIOGRAPHY
Books:
Kothari C.R., (1999) Research Methodology, Wishwa Prakashan
Kotler P., (1999 ) Marketing Management Analysis, Planning,
Implementation and Control, New Delhi, Prentice Hall of India
Business today

Web sites
www.bajajallianzlifeinsurance.com
www.freepress.iin

106
www.licindia.com
www.irda.org
www.lifeinsure.com

107