Bajaj Allianz Life Insurance Co.

Ltd
Chorda Chowk, Jajpur Rd, Jajpur 755019
SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR
THE DEGREE OF MBA

Submitted by:

JAGDISH BISOYI
Roll No: 10MBA682
Regd. No: 12/826/09
UNDER

DDCE, SAMBALPUR UNIVERSITY.

DECLARATION
I, Jagdish Bisoyi, hereby declare that this project report entitled
Competition of Bajaj Allianz in Orissa developed by me is a bonafied
record of work done at Bajaj Allianz Life Insurance Company, Limited,
Chorda Chowk, Jajpur Rd, Jajpur 755019, under the guidance of Mr.
Keshab Mishra towards the fulfillment of the requirement for the degree
in MBA.

(Jagdish Bisoyi)

CERTIFICATE
This is to certify that project report entitled Competition of Bajaj
Allianz in Orissa is a bonafide work done by Jagdish Bisoyi with Roll.
No: 10MBA682 under my guidance and supervision. This project is
submitted to DDCE, SAMBALPUR UNIVERSITY in fulfillment of the
award of degree of MASTER OF BUSINESS ADMINISTRATION.

Keshab Mishra

CERTIFICATE OF GUIDE
This is to certify that Jagdish Bisoyi, bearing the Regd.
No. 12/826/09 is a bonafide student of DDCE, Sambalpur
University.

He

has

conducted

the

project

on

Competition of Bajaj Allianz in Orissa under my

guidance as per the partial fulfillment of the requirement
of the degree of MBA.
To the best of my knowledge he has work sincerely to
being this report.

Muralidhar Dash

ACKNOWLEDGEMENTS
I am thankful to Bajaj Allianz Life Insurance Company Limited for
giving me an opportunity to conduct research work under them, required
for my project.
I am honoured to take this opportunity to sincerely thanks
Mr. Praveen Sahay, Senior Area Manager, Bajaj Allianz Insurance Co.
Ltd, who allowed me to work under such an esteemed organization.
Mr. Keshab Mishra, Assistant Sales Manager, Bajaj Allianz Insurance Co.
Ltd, Bhubaneswar and Mr. Siddharth Shankar Pati, Insurance Consultant
for expressing their faith in me by assigning this project. The expert
guidance and encouragement that they have given me inspite of their
busy schedule. Their timely advice was a constant source of inspiration
throughout the tenure of this project.
I also thanks the Operation Department & all the members of Bajaj
Allianz Life Insurance Co. Ltd., for providing me the necessary
information and relevant datas.
Last but not the least I thanks all the respondents whose responses played
a major role in completion of this research work.

(Jagdish Bisoyi)

CERTIFICATE OF APPROVAL
This is to certify that the dissertation entitled:
Competition of Bajaj Allianz in Orissa
Submitted by Jagdish Bisoyi (Enr. No 12/826/09), Sambalpur University,
Burla towards partial fulfillment of the requirements for the award of the
degree of Master of Business Administration (MBA) is a bona fide record
of the work carried out by her under the able guidance of Mr.
Muralidhar Dash, Faculty, NICE, Jajpur.

(Approval of the center director)

Center Director

CONTENTS

Introduction to Insurance

What is Life Insurance-Historical Perspective

Pre-Independence Scenario

Nationalization of Life Insurance

Post Nationalization Story

Rationale for Opening up of Insurance Sector to Private Sector

Definition of Insurance

Kinds of Insurance

Principles of Life Assurance

Advantages of Life Insurance

Classification of Insurance Needs

Common Needs that can be provide by the application of life insurance

Human Life Values

Insurance Regulatory & Development Authority

Companys Profile

Allianz Bajaj Changes its name to Bajaj Allianz Life Insurance

Indian Operations

Bajaj Allianz Life Insurances ties up with DSP Merrill Lynch for Active Fund
Management for Unit-Linked Products

Focused Sales Network

Products

Competition of Bajaj Allianz Life in Orissa

Bajaj Allianz in Orissa

Competitors of Bajaj Allianz in Orissa

Swot Analysis

Conclusion

Suggestions

Bibliography

Annexures

PREFACE
The MBA curriculum is designed in such a way that student can
grasp maximum knowledge and can get practical exposure to the
corporate world in minimum possible time. Business schools of
today realize the importance of practical knowledge over the
theoretical base
The research report in necessary for the partial fulfillment of MBA
curriculum and it provides an opportunity to the researcher in
understanding

the

industry

with

special

emphasis

on

the

development of skills in analyzing and interpreting practical

problems through t he application of management theories an
techniques. It is a new platform of learning through practical
experience, which incorporates survey and comparative analysis. It
gives the learner an opportunity to relate the theory with the
practice, to test the validity and applicability of his classroom
learning against real life business situations.

EXECUTIVE SUMMARY
Life is full of uncertainties and uncertainties are always unpredictable. The biggest
uncertainty that could come to any known is death. We all are exposed to various risks
in our daily life. Even the wisest and cleverest person cannot provide for or avoid.
Nobody can predict or for see the calamity he may suffer in future. A person going for
office in the morning over dont know whether hell return in the evening or not Now
a days all humans are more prone to risk. Everybody on the road, whether on foot or
in a vehicle carries some risk of accident, which may result into various injury, loss of
limbs, impairing ability to earn livelihood or even death. One may take precaution
against such risk but the risk cannot be eliminated. Similarly, there can be risk due to
fire, floods, earthquakes, burglaries etc and all such risks causes human suffering. It is
possible to take precautions against such happenings, but the possibility of such
happenings cannot be completely ruled out. The only thing that can be done is to
minimize the impact of uncertain and risky happening. With this the only word that
comes to our mind is Insurance. The economic consequences arising out of any risk
can be insured that is providing financial support to any loss of damage. Loss or
damage may be of asset or person depending upon that asset. So, in both conditions
insurance can be done. All insurance except life of a human comes under General
Insurance heading and insurance related to life of human being is termed as Life
Insurances. It is a fact that only thing that supports a family after loss of the earning
member of the family is money and insurance plays a major role in this. Insurance in
real sense supports the sufferer financially.

So, insurance is way out for all sorts, uncertainties. Cabering to the needs of the
people many life insurance companies came into existence in India. Wayback
since1956, LIC of India lead the insurance sector till 1999, but after 1999 according to
the recommendations of the Malhotra Committee insurance sector has been opened up
and many private foreign players entered into India.
Bajaj Allianz Life Insurance Company Limited is a union between Allianz AG one of
the worlds largest insurance companies and Bajaj Auto, one of the biggest 2 & 3
wheeler manufacturers in the world. Bajaj Allianz LIC was launched in India in the
year 2001. Since then it is rising all stairs of success and is now no.1 Life Insurance
Company leaving behind all other private players of its kind.
For the proposed research topic Competition of Bajaj Allianz Life Insurance
Company Limited a comprehensive and exhaustive market research was done across
several cities of Orissa and has been found that most of the people prefers Bajaj
Allianz LIC due to its better return, prompt service and frequent branches across
whole of Orissa. It has been found that peoples perception towards insurance is
changing. With the changing time and requirements, people are more interested in
investment schemes rather than long term insurance schemes. Hence the unit link
products of Bajajj Allianz Cater to such needs.
Common needs that Bajaj Allianz fulfills through its various products are :
1.

Cash Needs

2.

Family Income Needs

3.

Income needs of a widow on the death of her husband.

4.

Income needs of a husband on the death of his wife.

5.

Retirement Income Needs.

6.

Educational Needs.

7.

Business Needs.

In Orissa LIC of India, ICICI Prudential Life Insurance, HDFC Standard Life and
Birla Sun Life Insurance are the major giants in this horse rear with Bajaj Allianz LIC.
LIC of India being the largest and oldest insurance company in India nationalized in
1956 has the major share in insurance sector but that is continuously declining with
the opening up of the insurance sector, as many foreign players entered into India and
formed dont venture with Indian companies. So, the monopoly of LIC is now
declining. Customized products and good services provided by other private players
trying out performing LIC. But still there is a faith among the minds of the people that
LIC is a govt. company and fear of the private company to run away with their money
is stopping them to in rest freely in the private companies. Since, the IRDA came into
existence, the investment in the private companies have become more transparent and
safe. So, the awareness is slowly coming to the minds of the people.
It is also found that most of the people come to know about Bajaj Allianz Life
Insurance Company Limited from their friends and relatives. Major respondents rated
the company as Good. It is also found that most of the people go for Bajaj Allianz
Life Insurance because of its better return on investment. Followed by better service
and reliability.
There are some suggestions given after research to sustain the position in Orissa.

Tie-up with regional and co-operative banks for efficient bancassurance.

In many branches there is no separate customer care or reception section. So

this should be taken care of.

More advertisement risk electronic media, print media and hoarding are
required.

Customers feedback from should also be provided with proposal form to know
what the customers recent.

Make the branches more customers friendly.

RESEARCH METHODOLOGY
OBJECTIVE :
The objective of this research is to find out the Competition of Bajaj Allianz Life
Insurance Co. Ltd. in Orissa. How competitive the Bajaj Allianz Life is as compared
to its competitors in Orissa. Finding out the Strengths, Weakness, Opportunities and
Threats (SWOT), core competence and competitive advantages.
SCOPE :

Understanding the Indian Insurance Scenario.

Studying the various products of Bajaj Allianz Life Insurance Co. Ltd.

Studying the various distribution channels of the company.

Study in detail what is bancassurance and companies position.

Studying about the Competition of the company.

RESEARCH METHOD :
Collection of Data : Both Primary and Secondary data.

Primary Data : Personal interviewing the respondents in Puri, Angul,

Berhampur and Bolangir with a pre-format Questionnaire has collected it. A
copy is attached in Annexure.

Secondary Data : It has been collected through secondary sources like

Magazine, Books and Internet Study.

Sampling Technique : Random sampling and Convenient Sampling

Sample Size : 150 Respondents (50 in Angul, 40 in Puri, 30 in Berhampur and 30 in
Bolangir).
LIMITATIONS :
As most of the people in Orissa are unknown about filling up the Questionnaire, so I
have collected data through personal interview.

WHAT IS LIFE INSURANCE-HISTORICAL PERSPECTIVE

ORIGIN OF LIFE ASSURANCE:
Life Assurance was born in England when the first policy providing temporary cover
for a period of 12 months was issued as early as 1583 A.D. the Amicable Society
started granting fluctuating sum on death since 1705 and a fix sum since 1757. With
the development of mortality tables, Life Assurance acquired a scientific character.
The Equitable Society founded in 1762 was the first Society established on scientific
basis.
In India, after failure of two British companies, the European and the Albert in 1870,
which attempted writing business on Indian lives, first Indian Life Assurance Society
was formed in the same year called Bombay Mutual Assurance Society Ltd. it was
followed by the Oriental Life Assurance Company Limited I 1874, Bharat in 1896and
Empire of India in 1897.
The Swadeshi Movement of 1905 provided impetus to the formation of several
companies such as the Hindustan Co-operative, the United India, the Bombay
Life, the National. Further in the wake of freedom movement number of companies
such as the New India, the Jupiter the Lakshmi emerged.
The Government began to exercise a certain measure of control on insurance business
by passing the Insurance business by passing the Insurance Act in 1912. For
controlling Investment of funds, expenditure and management, a comprehensive Act
1938. For controlling the affirm, the office of Controller of Insurance was established.
The act was extensively amended in 1950.
In the year 1955, approximately 170 insurance Offices and 80 provident Fund
Societies had been registered for transacting Life Assurance business in India. There
was, however, no full guarantees to the policyholders. The concept of trusteeship was
lacking. Many Insurance companies went into Liquidation. There were malpractices
in insurance business. For achieving the following purposes it was felt necessary to
nationalize the insurance business in India.

(i)

To provide security to the policyholders.

(ii)

To utilize the funds for nation-building activities.

(iii)

To avoid cut throat competition.

(iv)

To abolish mal-practices.

(v)

To spread the message of Insurance to the rural areas.

EVOLUTION OF LIFE INSURANCE :

The beginning of Life Insurance is almost as old as the story of mankind. The
term Life Insurance is, of course, a concept of modern times. But, the search for
security commenced with the beginning of human life it self. The recorded beginning
of human life itself. The recorded beginning of concept of Life Insurance is about
6000 years old.

RISK SHARING THE STORY FROM THE BIBLE:

The story of prophet Joseph as recorded in the Bible is one of the earliest known plans
of what Life Insurance stands for. The Egyptian Pharaoh had a dream one right in
which he saw seven fat cows coming out of the River Nile followed by seven lean and
hungry cows. The latter devoured the former. Joseph was called by the ruler to
interpret the dream. The seven fat cows, according to him, represented seven years of
rich harvest and prosperity, while the seven lean cows stood for seven years of
famine. To offset the effect of seven bad years, Joseph advised the ruler to store away
stock for bad years. The story illustrates the principle of spreading the risk, basic to all
contracts of insurance.

THE BABYLONIAN AND ROMAN PRACTICES :

About six thousand years ago, Babylon was the center of world trade to which
Caravans used to come with commercial merchandise from all parts of the world. The
travelers by land were exposed to the risk of robbery on the way. Similarly, the sea

trade faced the danger of piracy. In order to check the loss of goods due to robbery or
piracy, the Babylonians developed sound commercial practices in due course.
Surprisingly the earliest form to insurance devised by the world was insurance of
goods, cargo and property. The concept of Life Insurance was developed later.
By about 2000 B.C., the Babylonians and the Hindus were quite familiar with the
basic elements of Insurance of cargo and of the ships. The code of HUMMURABI of
Babylonians, related mostly to Caravans while Manus MANAV DHARMASHATRA
referred to both sea borne and overland trade. Later, still, the Romans who had a well
developed social structure, build up burial clubs based upon a study of birth and death
records. Though averse to thinking about death as an Insurance Risk the Romans
had no objection against decent burial of their dead. The Roman inscriptions refer to
collections made in cash and kind to ensure a Burial Fund. Later still, the Guilds of
Sworm Brotherhoods of various trades took over the responsibility of providing
relief during Distress to the families of their members. Towards the end of 17 th
Century, in England, the Guilds were replaced by friendly societies, the fore-runners
of Modern Insurance Organisations.

FIRST LIFE POLICY :

The earliest record Life Insurance Policy was issued on 18th June, 1583 on the Life of
William Gybbons, a citizen of London. The policy was procured by Richard Martin. It
was under written for 12 months by 16 individuals for an amount of 383-6s-8d with
premium @ 8% i.e. 30-13-4. The text of the policy ended with an interesting prayer.
God send the said William Gybbons died on May 29, 1584, that is within a year. The
underwriters disputed the claim pleading that the insured had survived 12 lunar
months of 28 days each. The claim ws finally paid through the Court.

LIOYDS COFFEE HOUSE :

In 17th Century, London had become center of world commerce, with ships sailing to
all parts of Europe, North America and India. But there was complete lack of
machinery for communication. As such the merchants used Coffee Houses for
personal contacts and exchange of information. The Coffee Houses in London, thus

became center of political, social and commercial intelligence. Edward Lioyds

obscure Coffee House in Tower Street, London, at the end of 17 th Century, was one
such meeting place for marine Insurance which ultimately developed into the world
wide institution of Marine Underwritered called the Lioyds.
The establishment of the Institute of Actuaries in London in 1848 marked the turning
point in the history of Life Insurance.

OLD AMICABLE AND OLD EQUITABLE :

One of the earliest life office registered in English Old Amicable had got a charter
from Queen Anna on 25th March, 1706. It insured all healthy persons upto the age of
45 charging a uniform premium. Then came Old Equitable in 1758 created by
Edward Mores. Later, Dr. Price and William Morgan, two leading actuaries of the 18 th
century, shaped the fortunes of this Company. The growth of Actuarial Sciences in
U.K. can be attributed to these two personalities, especially to William Morgan who
remained the Actuary of this Company for 50 years. During the period 1824 to 1868,
285 Life offices were set up in U.K. of these 174 closed down by 1840 due to bad
management and bad selection of lives. Albert was founded in 1838. It absorbed 26
other Life Offices but finally failed in1869. So, did European in 1870 causing great
financial misery. As a result, the British Parliament passed Insurance Act of 1870
making it compulsory for a Life Office to deposit 20,000 with Govt. and maintain
separate account of their life business.

PRE-INDEPENDENCE
SCENARIO

GROWTH UNDER BRITISH INFLUENCE :

With the coming of the British in India, a fundamental change took place in the
Indian, social commercial and economic outlook. Thus, modern institutions like
Banking and Insurance were planted in our country by the British Rulers. The first
serious attempt to set up a life office in India was made by the British In 1818 when a
group of Europeans established the Oriental life Insurance Society In Calcutta to
afford relief to the dependents of Europeans who died in the war with Gorkhas. The
Company later gave place to New Or1ental Company, which insured European
lives only.
Rustamji and Prince Dwarka Nath. Tagore were the first Indias to join Insurance.
(business In partnership with Europeans in the twenties of the 19th century. On May
1, 1823, Bombay life was floated In Bombay but soon. It went into liquidation:
Interestingly, the companies bearing the same names Oriental and Bombay life
came into prominence in later years.
BIRTH OF BOMBAY MUTUAL AND ORIENTAL GOVT. SECURITY LIFE COMPANY:
As stated earlier, a Iot of gloom was caused In British circles at home and in India due
10 the failure of M Albert and Europe in 1869 and 1870. As such some Influential
citizens of Bombay decided to form Indian Companies so as to retain the ,control of
business In their own hands. They also decided to accept Indian lives al par with
European settlers In India. Thus on 3rd December, 1870 seven zealous men of
Bombay brought Into existence Bombay Mutual Life Ass. Society with All the
affairs and transactions of the Society open (0 most minute inspection by every
member. According to Dr. R. M. Ray. The year 1870 stands out as a landmark In
the hi Storyolln Ol3n lnsurance, separating early period of pioneering attempt from
the subsequent period of steady development.

The selfless devotion of the seven promoters of Bombay Mutual could be assessed
from the fact that all of them agreed to work honoranly and even gave an undertaking
that If In the first two years a claim arose, they will make good the shortfall upto
Rs.5,000/- from their private resources. Fortunately, when the first claim of Rs. 3,000
arose on the life of Shri Balkrishna Morba In 1874, the Companys funds were quite
adequate to meet it. And then came Oriental Govt. Security Life Assurance Co. Ltd.
on 5th May, 1874, founded by Mr. Ducan M. Slater, with an authorise capital of Rs.10
lakhs. About the progress of Oriental, Mr. Slater later observed, No Life Insurance
Company has succeeded so well as Oriental although its constituents are chiefly
natives of Indict The advantages that Indians derived from Oriental are unique: when
it Is recalled that English Life Offices did not insure Indians at all upto 1866 and later
when they did, it was at increased rate of premium from 15% to 20%. This was all
swept away with the establishment of Oriental. The English Companies then foretold
that it was only a question 01 time when the Oriental would crash. They felt that no
sound Company could take Indian lives all par with Europeans. This gloomy forecast
has long since been exploded, will be of Interest to know that Mr. Slater started the
Oriental In a small room at 8, Elephantine Circle, Bombay at a monthly rent 01 Rs,
45/-.

A STATE ENTERPRISE :
For about 20 years after the establishment of Bombay Life, a number 01 Mutual
Insurance Societies were setup for the4 benefit of middleclass communities in
different parts of India. In 1891 the Mysore State govt. started Official Branch
Insurance for its employees making if compulsory for all permanent employees to
contribute 10% of their monthly salary with a maximum of Rs.0/- per moth. Later this
company opened its door for the private citizens of Mysore State as well.

THE NEW AWAKENING AND SWADESHI MOVEMENT :

The resentment against the discriminatory treatment of foreign insurance Companies
was growing stronger in India day after day. Coupled with it was the desire, that the

control of Indian business should remain in India rather than going with the
speculative promoters In England.

Thus the strengthening of. Swadeshi movement led to the formation of a number of
Indian Companies such .as Indian Life at Karachi in 1882, Sharat Insurance in
Lahore In 1886. Empire of India in Bombay In 1897, United India In Madras In 1906,
General Assurance at Ajmer, Hindustan Co-operattive In Culcutta and Indian
Mercantile in Bombay in 1907. Then came Bombay Life in 1908, Asian in 1909,
Western India of Satara in 1913, New India and Industrial & Prudential, Jupiter
General in 1919, Lakshmi Insurance at Lahore in 1924 under tata Lajpatnals
patronage, while Andhra Insurance was born in 1925, New Asiatic and Ruby General
in 1933 and 1936 respectively. Earlier, in 1928,the Indian Life Offices Association
and Indian Life Insurance Association had come into existence. During the year
1929-30 as many as 172 new offices were floated in India out of which about 100
went into liquidation or merged with other offices within a short time. A variety of
unhealthy trends had since developed into the working of this industry, As such the
Govt. tried to put the industry on sound footing through the Insurance Act, 1938, thus
establishing a regular department of Insurance headed by Superintendent. He was
later designated as Controller of Insurance after the Insurance Act of 1950..

INSURANCE ACT 1950:

As stated earlier under the inspiration of Swadeshi, a large number of Indian Life
Offices were established. But these lacked proper expertise. The result was growth of
unhealthy trends In the Industry. To safeguard against these another Insurance Act was
passed in 1950. This Act imposed a number of restrictions on the working of
Insurance Cos. Provisions were also made for appointment of Administrators for
financially unsound Insurance. Restrictions were imposed on conslidation of shares of
different classes. Rules made for investment of life fund and limitations imposed on
over all expense ratio, and payment of remuneration to official of the Companies.
Restriction were also imposed on the powers of the Directors in the matter of
investment of funds. The Act had a purifying effect on the industry, though for a short
time only.

NATIONALISATION OF LIFE INSURANCE (1956)

In spite of mushrooming of many insurance companies, per capita insurance in India
was merely Rs.8.00 in 1944 (against Rs.2000 in US and Rs.600 in UK). Besides some
companies were indulging in malpractices and a number of companies went into
liquidation. Big industry houses were controlling the insurance and banking business
resulting in interlocking of funds between banks and insurance companies. This had
shaken faith of insuring public in insurance companies as custodians of their savings
and security. The nation under the leadership of Pandit Jawaharlal Nehru was moving
towards socialistic pattern of society With the main aim of spreading of life
insurance to rural areas and to channelise huge funds accumulated by life insurance
companies to nation-building activities, Government of India nationalized the life
insurance industry in January 1956 by merging about 250 life insurance companies
and forming Life Insurance Corporation of India, which started functioning from
1.9.1956.

POST NATIONALISATION STORY

After completing the arduous task of integration of about 250 life insurance
companies, the Life Insurance Corporation of India had given an exemplary
performance in achieving various objectives of nationalization. The following table
shows the achievements of LIC in 40 odd years of its existence.
Sr. No.
1.

2.

3.
4.

Particulars
Annual Business
Sum Assured
Policies :
First Year Premium
Business in Force
Sum Assured
Policies :
Renewal Premium
Group Business in Force
Sum Assured :
No. of Lives :
Life Fund :

1957

1999

336.3 Crores
8,00,000
14 Crores

75606 Crs.
14857000
4171 Crs.

1477 Crores
5686000
74 Crores

459201 crs.
91726000
16136 Crs.

5.29 Crores

41040 Crores

69558 Crs
21671000
127389.06 Crs.

Besides, a number of measures were taken to reorganize the organization (starting

from 1982) to improve the service to policyholders and to give a bigger thrust for
growth of business especially in rural areas. These included wholesale
decentralization of servicing to primary units (i.e. Branches) (to bring service to the
door steps of the policy holders), opening of new divisions and branches, providing
them with up-to-date technology, cross-functional boundary-spanning management at
various office levels etc. This has brought Insurance Regulatory and Development
Authority is being set up to regulate and develop the insurance industry by opening it
up to the private sector. Foreign insurance companies can enter the insurance sector
in India only with an Indian partner, as a joint-venture, with a capital contribution up
to a maximum of 26% of the capital in the- joint venture. The rules and regulations
under which these companies can operate in India are expected to be finalized during
the first half of the year 2000, where after companies desirous of entering the
insurance field will have to apply to the Authority in such manner as may be laid
down by it. The first company is expected to commence operations only in the last
quainter of the year 2000.

RATIONALE FOR OPENING UP OF

INSURANCE SECTOR TO PRIVATE SECTOR
MALHOTRA COMMITTEE REPORT
Inspite of phenomenal progress of Life Insurance Corporation of India, especially in
the 80s,the Government and public at large were not quite satisfied with it. By signing
GATT accord, the Government of India committed, to opening of insurance sector to
private sector - to local and global operators. A committee under the Chairmanship of
late R. N. Malhotra (ex-Governor of Reserve Bank of India) was appointed by the
Government. to look into all the aspects of insurance industry in India. The
committee, too, opined that in its about 40 years of existence, LIC had been able to
insure only 22% of the insurable population. A moot reason may be the lack of
competition. Further, the monopoly has resulted in lack of sensitivity to .the
policyholders. There is a greater scope for product innovation and service
improvement. The committee recommended a number of measures to revamp LIC of
India, GIC of India and its four subsidiaries. It. also recommended allowing outside
Insurance companies to operate in India with an Indian partner.
JUSTIFICATION OF OPENING UP OF INSURANCE SECTOR TO PRIVATE SECTOR
1.

Size of The Market

The potential market is estimate at 312 million people. Some estimates and suggests
that only 25 percent insurable population has taken up the insurance policies. To
National Council of Applied Research, 50 million people have the capacity to pay an
annual premium of Rs.10,000. 100 million have the capacity to pay annual premium
of Rs.7,000 and another 50 million population have the capacity to pay Rs.3,500. thus
there is a huge market to be tapped.
2.

Enough For All Companies

There is no reason for LIC & GIC to worry about their future. There is enough market
for everyone to work upon. Each has to create their own place in the insurance
market.

3.

Low Penetration Ration

The penetration ration is extremely low in India. Per capita insurance premium in
1999 was $ 8 only as against $4800 in Japan. In the year before that the per capita
long term insurance was estimated at $5 (Rs.202) only. The Life Insurance premium
was only 1.4 percent of GDP. The penetration of non-life business is still lower at
Rs.81.26 or 0.56 pr cent of GDP. LIC and GIC have been able to tap only 10 percent
of the market and 90 percent of the market is still untapped.
4.

Growth in Economy & Insurance Business.

The economy has grown at the rate of 5.6% per annum during 1990s. The Gross
Domestic Savings are around 25%, which has the potential to grow to 45%. The
insurance business life and non-life has been showing the growth rate of 17% and
12% respectively. Therefore, there is need to have more players in the field.
5.

Good Prospect for Rural & Social Sector

The IRDA through its notification has ensured that the insurers do not ignore the rural
and social sector. Since, they have statutory obligation to do business in these sectors
the two sectors will get benefit.
6.

Funds for the Development of the Economy

Insurance funds are good source for long term needs of funds in an economy. The
untapped market has great potential for providing funds for the long-term projects,
particularly in the infrastructure.
7.

The Regulatory Framework

The insurance sector was opened by the Govt. in 1998. The requisite

framework has been put in place by IRDA, through various notifications. The IRDA
and advisory committee have started functioning, therefore the private sector will
work according to the guidelines given to them.
8.

More Products Required

With the large potential customer base, it is required that the products tailor made for
requirement of customers should be introduced. This will be possible only when there
will be competition in the market.
9.
Employment Generation
When the economies grows the contribution of the services to the GDP increases.
This trend has also been observed in India. There is great potential of growth in
employment through insurance related services.

As a result of the opening up the sector, the following Life Insurance have already
registered with IRDA :
S.N
o
1.

2.

3.

4.

5.

Name of the Company

Name of
Principal
Officer
Bajaj Allianz Life Insurance Mr. Sam
Co. Ltd.
Ghosh
GE Plaza, Airport Road,
Yerawada,
Pune-411006
Birla Sun Life Insurance Co. Nani B.
Ltd.
Javeri
th
6 Floor, Vaman Centre,
Makhwana Road,
Off Andheri Kurla Road
Andheri (E), MUMBAI 400
059.
HDFC
Standard
Life Mr. D. M.
Insurance Co. Ltd.
Satwalekar
Trade Star. 2nd Floor, A
Wing, Kondivita
Road Junction Andheri-Kurla
Road
Andheri (East) Mumbai 400
059
ICICI
Prudential
Life Ms. Shikha
Insurance Co. Ltd.
Sharma
ICICI Prulife towers, 1089,
Apparsaheb
Marathe Mag, Prabhadevi,
Mumbai-400025.
ING Vysya Life Insurance Mr. Kshitij
Company Pvt. Ltd.
Jain
th
ING Vysya Hoe, 5 Floor, #22
Mahatma
Gandhi
Road,
Bangalore 560 001.

Name of
Appointed
Actuary
Mr. Andrew
Wakeling

Telephone No./Fax./Email & Web Address

Tel:020-4026666
Fax : 020-4026789

Mr. Kedar
Mulgund

Tel. : 022 5678 3333

Fax ; 022 5678 3232

Mr. Nick
Taket

Tel : 022-822 2234/5551

6551
Fax : 022-2822 8844

Mr. K. V.
Rajagopalan

Tel : 022 56621996

Fax : 022 56622031

Ms.
Hemamalini
Ramakrishnan

Tel : 080 25328000

Fax : 080-25559764

S.
No

6.

7.

8.

9.

10.

11.

12.

Name of the Company

Name of
Principal
Officer
Life Insurance Corporation of Shri T. S.
India Yogakshema, Jeeva Bia Vijayan
Marg, post Box No.:19953,
MUMBAI-400 002.
Max New York Life Insurance Mr. Gary R.
Co. Ltd.
Benett
11th Floor, DLF Square,
Jacaranada Marg,
DLF City, Phase-II, Gurgaon
122 002.
Met Life India Insurance Mr.
Company Pvt. Ltd.
Venketesh
Brigade Seshamahal, No.-5, Mysore
Vani Vilas Road
Basavanagudi, Bangalore
560 004.
Kotak Mahindra Old Mutual Mr. Gaurang
Life Insurance Ltd.
Shah
6th Floor Penisula Chambers,
Penisula Corporate Part,
Ganpatra Kodam park
Lower Parel, Mumbai 400
013
SBI Life Insurance Co. Ltd.
Mr. S.
nd
Turner Morrison Building, 2 Krishnamurt
Floor, 16, Bank
y
Street, Fort Mumbai 400 023
Tata AIG Life Insurance Co. Mr. Trevor
Ltd.
Bull
5th 76th Floor, Penisula Tower,
Peninsula Corporate Park
Ganpatrao Kadam Marg,
Lower Parel, Mumbai 400
013.
Reliance Life Insurance Co. Mr. P.
Ltd.
Nandagopal
The Trapezium
39, First Floor,
Nelson Manickam Road
Chennai 600 029

Name of
Appointed
Actuary
Mr. Gorakh
Nath
Agawwal
Mr. John
Charles
Poole

Telephone No./Fax./Email & Web Address

Tel : 56598701 : 56598702
Fax : 2282436
E-mail :
chairman@licindia.com
Tel : 0124 2561717
Fax : 0124 2561764

Mr. K. P.
Sarma

Tel : 080 264638638

Fax : 080 26521970
Toll Free No.: 1-600-446969

Mr. A.
Venkatasubr
amanian

Tel : 020-5663-5000
Fax : 022-5663 5111

Mr. I.
Sambasiva
Rao

Tel : 022-56392000
Fax : 022-56621471

Mr. Heerak
Basu

Tel : 022-56516000
Fax : 022-56550711

Ms.
Pournima
Gupte

Tel : 044 30588200

Fax : 044 - 30588220

S.
No

13.

14.

15.

Name of the Company

Name of
Principal
Officer
Aviva Life Insurance Co. India Mr. Stuart
Pvt. Ltd.
Purdy
5th Floor, JMD Regent Square,
Mehrauli Road, Gurgaon
122001
Sahara India Life Insurance Mr. N. C.
Co. Ltd.
Sharma
Sahara India Bhawan,
Kopoorthala Complex,
Lucknow 226024
Shriram Life Insurance Co. Mr. R.
Ltd.
Duruvasan
Regd. Office : 3-6-478, 3rd
Floor,
Anand Estate, Liberty Road,
Himayat Nagar,
Hyderabad 500 029

Name of
Appointed
Actuary
Mr. K. K.
Wadhwa

Telephone No./Fax./Email & Web Address

Tel.: 0124-280 4141
Fax : 0124 280 4151

Mr. K. K.
Dhami

Tel.: 0522 2337777

Fax : 0522 2378200

Mr. N. S.
Sastry

Tel.: 040 23434466

72
Fax : 040 - 23434488

DEFINITION OF INSURANCE
There can be two approaches for defining insurance. One is functional approach other
is contractual approach.

FUNCTIONAL DEFINITION
The functional approach says insurance may be defined as a social device, whereby a
large group of individuals, through a system of equitable contributions may reduce or
eliminate measurable risk of economic loss common to all member of the group. In
similar sense Disnadle has defined that Insurance is an instrument of distributing loss
of few to many. Allen C. Mayerson states Insurance is device for the transfer to an
insured of certain risks of economic loss that would otherwise be borne by the
insured.
From the above definitions, it emerges clearly that the functional definition has the
following features :
(a)

It is a co-operative device.

(b)

It spreads the risk over a large number of persons who are insured against
the risk.

(c)

It provides security to be insured.

CONTRACTUAL DEFINITION
In contractual sense the following definition are noteworthy. To Justice Tindall,
Insurance is contract in which a sum of money is paid to the assured in consideration
of insurers incurring the risk of paying a large sum upon a given contingency. In the
words of E.W. Patterson, Insurance is a contract by which one party for a
consideration called premium, assumes a particular risk of the other party and
promises to pay to him or his niminee a certain a ascertainable sum of amount on a
specified contingency. The contractual approach definitions highlight the following
features.

(a)

It is a contract.

(b)

Where by insurer assumes the risk of insured.

(c)

Promises to pay a specified or ascertainable amount.

(d)

On the happening of a specific event.

(e)

In consideration of the premium paid by the insured.

The person who seeks protection against a risk is known as Insured. The person
who provides protection is Insurer (i.e. Insurance Company). The document
containing terms and conditions of contract is called Policy or Insurance Policy.
The consideration from the insured is called premium.

KINDS OF INSURANCE
Insurance can be mainly classified into two categories.

1.

1.

Life Insurance

2.

General Insurance
Life Insurance

The subject matter of Life Insurance is human life. Most of the insurance policies are
combination of savings and security. The insured is promised by the insurance
company that during the tenure of insurance in case of his death. His nominee will be
paid the insurance amount. According to section 2 (ii) in Insurance Act 1938. Life
Insurance is the business of effecting contracts of insurance upon human life
including any contract. Whereby the payment of money is assured on death, except
death by accident on the happening of any contingency dependent on human life and
any contract, which is subject to the payment of premium for a term of the policy,
he/she will be paid an amount as per terms of the policy.
2.

General Insurance

General Insurance covers all different types of activities performed by human. These
are also called as non-life insurance. Types are :
(i)

House / Office / Factory or any movable Fire Insurance assets destroyed in

fire.

(ii)

Shipment or transportation of goods Marine Insurance by ship, destroyed in

catastrophe.

(iii)

Jewellery / cash / household goods stolen Burglary Insurance or robbed.

(iv)

Goods in transit by road or railway Carrier Insurance destroyed.

(v)

Theft or accident of vehicles Vehicle Insurance.

Financial cover in ailments / surgery etc. Health Insurance.

PRINCIPLES OF LIFE ASSURANCE

(a)

LIFE INSURANCE CONTRACTS

A life insurance policy is a contract, in terms of the Indian Contract Act, 1872. A
contract is an agreement between two or more parties to do, or not to do so as to
create a legally binding relationship. Any simple contract must have the following
essentials

Offer and acceptance

Consideration Capacity to contract

Consensus ad idem (genuine meeting of minds) Legality of object or purpose

Capability of performance

Intention to create legal relationship

Insurance is a specialized type of contract. Apart from the usual essentials of a valid
contract, insurance contracts are subject to two additional principles yiz. Principle of
Utmost Good Faith & Principle of Insurable Interest. These apply to all insurances,
both life and non-life.
(b)

PRINCIPLE OF UTMOST GOOD FAITH

Commercial contracts are normally subject to the principle of caveat emptor i.e. let
the buyer beware. It is assumed that each party to the contract can examine the item or
service, which is the subject matter of the contract. Each party can verify the
correctness of the statements of the other party. There is no need to take the
statements on trust. Proof can be asked for.
In the case of insurance contracts, this principle does not apply. Most of the facts
relating to health, habits, personal history, family history, etc., which form the basis of
the life insurance contract, are known only to the proposer. The insurer cannot know
them, if the proposer does not disclose them. The underwriter can ask for a medical

report. Ye~ there may be certain aspects, which may not be brought out even by the
best medical examination. For example, a person suffering from Blood Pressure or
diabetes can, through appropriate medication, hide these facts from the examining
doctor. History of past sicknesses, operations, injuries can be suppressed. Some of
these may affect the life expectancy of the proposer. Hence, these constitute material
information from the underwriters point of view. Similarly, in general insurance, an
inspection of the premises may not disclose that the contents of the godown have been
temporarily relocated. Non-disclosure of such facts would put the insurer as well as
the community of policyholders, at a disadvantage. When a proposer puts an insurer
and the community of policyholders at a disadvantage, there is what is called adverse
selection. The contract is unfair, because one of the parties to the contract is in a
more advantageous position.
A summary of the doctrine of utmost good faith was given in the case of Rozanes vs.
Bowen in 1928 as follows As the underwriter knows nothing and the man who
comes to him to ask for insurance knows everything, it is the duty of the assured to
make a full disclosure to the underwriter without being asked, of all material
circumstances. This is expressed by saying that it is a contract of utmost good faith.
(c)

INSURABLE INTEREST

All risks are not insurable. Otherwise, an insurance contract would be no different
from a wagering contract. Wagering contract is illegal in terms of Section 30 of the
Indian Contract Act and therefore invalid. What distinguishes an insurance contract
from a wagering contract is that the insured must have an insurable interest in the
subject of insurance: In simple terms, it means that the proposer must have a stake in
the continuance of the subject insured and could suffer a loss, if the risk is not covered
through insurance. What is insured is the financial or pecuniary interest in the subject
matter of insurance. The insured must be in a relationship with the subject of
insurance, whereby he benefits from its safety and well being and would be
prejudiced by its loss or damage.

(d)

PRINCIPLE OF INDEMNITY

Insurance is meant to compensate losses. By implication, the mechanism of insurance

cannot be used to make a profit. This broadly is the Principle of Indemnity.
The amount paid out, as a claim cannot exceed the amount of loss incurred.
Insurance should place the insured in the same financial position after a loss,
as he enjoyed before it, not better.

PURPOSE AND NEED OF INSURANCE :

Life is full of uncertainties and insurance is based on un-certainties and if there are no
uncertainties about the occurrence of a disaster, the concept of insurance will cease to
exist. For insurance, if one is able to predict the forthcoming dangers, then one will
take a proper safeguard action and then face the crisis in a very normal manner, but
then, this is an utopian concept; because death, disaster and danger CANNOT be predicted. All individuals have assets; both tangible; the house, car, factory or intangible
like voice of a singer, leg of a footballer, the hand of a author and many such others as
quite often seen in the western countries. Now all such assets are insured, because
they run the risk of becoming non-functional through a disaster or an accident. Such
possible and unforeseen occurrences are known as PERILS. And the damage caused
by such perils are the RISK that the assets are exposed to. Risk is a contingency and
the insurance is done against such possible contingencies.
The concept of insurance is quite simple. People who are in a similar trade and are
exposed to the same risks, congregate and come to an agreement that if any individual
member suffers a loss, then the loss will be shared by others and minimised in order
to enable the individual member recover from the loss and cover his ground. Similarly
the different kinds of risks can be identified and separate groups can be formed to
counter such risks and reduce the impact to a manageable proportion, in which the
share could be collected from members either after the loss or in advance, at the time
of admission to the group. This is an exemplary sign of humanity and insurance
therefore serves mankind to a great extent; a point most of the individuals tend to
overlook, since monetary aspect is involved. Now such insurance is for tangible
assets.

The concept of insurance has been extended beyond the coverage of tangible assets.
Exporters run the risk of importers in other country defaulting as well as losses due to
sudden fluctuations in the currency exchange rates, economic policies turmoil. These
risks are now insured. Doctors run the risk of being charged with negligence and can
subsequently liable for damages. The amounts in questions can be fairly large, beyond
the capacity of individuals to bear. These are insured. Thus insurance is extended to
intangibles. In some countries even the voice of a singer, legs of a footballer can be
insured, even though the advantage of spread may not be available in these cases. Satisfaction of economic needs requires generation of income from some source. If the
property, which is the source of such income, is lost fully or partially, permanently or
temporarily, the income too would stop. The purpose of insurance is a safeguard
against such misfortunes by making goods the losses of the unfortunate few, through
the help of the fortunate many, who were exposed to the same risk, but saved from the
misfortune. Thus the essence of insurance is to share losses and substitute certainty by
uncertainty.
Similarly human life is also an income-generating asset, albeit, intangible. This asset
can be lost through an unexpectedly premature death due to some accident or disease
or the asset can also be made non-functional through some disabilities. In the case of
such unforeseen mishaps, insurance becomes essential to help those who are
dependents to maintain their life in a normal and a regular manner. In this context, it
becomes essential to mention that living too long can be equally or sometimes more
problematic than dying too young. Hence a very old age can be considered to be a risk
and insurance takes care of all such risks which need to be safe-guarded against.
Insurance can minimise the impact of the risk on the owner of the asset and those who
depend upon the asset, but only in terms of economy or finance, not in terms of
emotions. Hence one can see the need and the purpose of insurance, which sadly
speaking still remains a neglected part of an individuals life.

The following two examples explain the above concept of insurance

Example - 1
In a village, there are 400 houses, each valued at Rs. 20,000/-. Every year four houses
get burnt, resulting into a total loss of Rs. 80,000/-. If all the 400 owners come
together and contribute Rs. 200/- each, the common fund would be Rs.80,000/-. This
is enough to pay Rs. 20,000/- to each of the 4 owners whose houses got burnt. Thus
the risk of 4 owners is spread over 400 house-owners of the village.
Example-2
There are 1000 persons who are aged 50 and are healthy. It is expected that of these
10 persons may die during the year. If the economic value of the loss suffered by the
family of each dying person is taken as Rs. 20,000/-, the total loss would be
Rs.2,OO,OOO/-. If each person of the group contributes Rs.200/- a year, the common
fund would be Rs. 2,00,000/-. This would be enough to pay Rs. 20,000/- to the family
of each of the 10 dying persons. Thus 1000 persons share the risk in case of 10
persons.
ADVANTAGES OF LIFE INSURANCE
It is superior to ordinary saving plan. The risk of death is covered under insurance
scheme but not under ordinary saving plans. In case of death, insurer pays full sum
assured, which would be several times larger than the total of the premiums paid.
Under ordinary saving plans, only accumulated amount is payable.
Insurance encourages compulsory saving and forces thrift. After taking insurance,
if the premium is not paid, the policy lapses. Therefore, the insured is forced to go on
paying premium. In other words, it is compulsory. A saving deposit can be withdrawn
any time.
Easy settlement and protection against creditors. Once nomination or assignment
is made, a claim under life insurance can be settled in a simple way. Under M.W.P.
Act, the policy moneys become a kind of trust, which cannot be taken away, even by
the creditors.

It helps to achieve the purpose of the Life Assured. If a lump sum amount is
received in the hands of anybody, it is quite likely that the amount might be spent in
speculative way. To overcome this risk, the life assured can provide that the claim
amount be given in installments..
Ready marketability and suitability for quick borrowing. If a policyholder is not
in a position to pay the premium, he can surrender the policy for a cash sum. He can
also take loan for a short period to tide over the difficulty. Sometimes, a insurance
policy is acceptable as security for a commercial loan.
Tax relief. By paying the insurance premium, the life assured obtains significant
reliefs in income tax and wealth tax.
CLASSIFICA TION OF INSURANCE NEEDS.
The nature of needs for life assurance would vary to a great extent according to the
circumstances of the person insuring his life. Classification of persons according to
their circumstances:
1.

Young single... Saving. .

2.

Young married.

Basic need will be protection.

If with children, education of children also.
Need will also vary according to the type of income
derived - wage earner, salaried person, employer.
Attitude towards life assurance is determine-ed by a
persons character, level of intelligence and outlook.

3.

Old single....... Pension for life.

4.

Old married. Joint life pension for the annuitant and spouse for life.

COMMON NEEDS THAT CAN BE PROVIDED BY THE APPLICATION OF

LIFE ASSURANCE.
1.

Cash Needs. Death may be by accident or after prolonged illness. In case of

prolonged illness, medical/grocers bills will have to be paid. Liquid cash is
required to meet such liabilities. (Cleanup fund).

2.

Family Income Needs. In case of death of the breadwinner, a sudden and

drastic cut in the standard of living of the family would have devastating effect
on the morale of the family. It will be difficult for the young widow with
children to work to replace loss of income, in which case children would loose
both the parents. There would be a period of readjustment during which the
family settles down to a lower standard of living.

Family income policy under which readjustment income is provided, could meet the
needs of the situation.
3.

Income needs of a widow on the death of her husband.

readjustment income.

Con::lUOUS income on a reduced scale

to supplement income she is earning.

To partly replace income that is lost.

Incase she remarries, this need will cease completely.

Capital death benefit should be utilized to provide for immediate

cash needs and life time income for the widow.

4.

Income needs of a husband on the death of his wife.

Earned income lost.
Earned income saved by wife who undertakes household

duties.

housekeeper to look after the house and children.

Additional expenses during readjustment period.

in case of working ladies, there is loss of income

which has to be provided for.

5.

Retirement income needs.

In advanced countries, there is

Old age pension under social security scheme

Pension scheme set up by the employer to pension

under social security scheme.
Individual endowment plan with annuity option or

retirement annuity policy.

6.

Educational Needs.

These days education is very costly and higher education requires lot of money. It
may not be possible for widow to finance cost of higher education after the death of
the bread-winner.
Education Annuity and Marriage Endowment

Policy is suitable for such a situation.

7.

Business Needs. Circumstances under which a businessman may find it

necessary to go for life insurance cover for one or more of the following
purposes:
1.

To protect and of his own one man

concern.

2.

To preserve continuity in a partnership in

the event of death of a partner.

3.

To safeguard against loss which would

result from the death of key employees.

4.

To provide life assurance benefits during

service and pension after service for employees and their dependents.
.

5.

To provide annuity to highly placed

executives under deferred compensation plan.

HUMAN LIFE VALUES

WHAT IS HUMAN LIFE VALUE?
Purpose of life insurance is to compensate a financial loss happening due to
unanticipated death. Life insurance should not be constructed as an opportunity to
make profit in case of an unanticipated death. The economic loss does not take place
on death of an earning person, due to stoppage of his future earning. The economic
loss on death is not instantaneous, but continues for future earning period of deceased
person, had he been alive. To calculate total economic loss at the time of deaths, one
has to ascertain the present values of deceased persons future net earning, which
would have supported his dependent family members. This is his human life value at
point of death.

Formula of HLV
H

(E M) x a n

Represents Annual Earnings

Represents cost of Maintenance (self) + Taxes &

Life Insurance Premium

Represents the difference between

retirement age & present age.

Represents the interest rate assumed for discounting

of further income

presumed

EXAMPLE
An individual with age 35 years
Average annual income 2,40,000
Self-maintenance, Income tax,
LIP
Income for Dependents
Retirement at 60
Remaining work Life span 25 years

For capitalizing income stream of 1,20,000 per annum for 25 years

you choose discounted factor at appropriate interest rate i.e. 8%
e.g. present value at 8% factor is 11.5228
therefore HLV = (2,40,000) (1,20,000) x 11.5288
= 13,83,450 recommended insurance cover
for 14,00,000 maximum.

The curve line or arc AB represents the life time of an individual

born at point A and dying at point B. The area covered by arc AB
represents his cost of maintenance and, during his productive
years, his income tax liability the Area CD represents earning
capacity. During the period A to C there are no earnings, but there
are cost of maintenance represented by the triangle AEC.

Earnings commence at C and may represent part-time work or

sums earned for running errands. The area of arc CD that extends
above arc AB represents earnings in excess of taxes and the cost of
self-maintenance. Point D marks the age of retirement; and the
area DFB symbolizes the second period in the individuals life
during which the cost of self-maintenance exceeds his income.

Fig 1 is diagrammatic and obviously unrealistic. Neither earnings

nor maintenance expenses follow a symmetrical curve. For
example, the childhood period starts with a highly maternity costs.
Income is likely to commence earlier than at point C, under no
circumstances is likely to decline so gradually to the age of
retirement. In most occupations, earnings each their maximum in
the forties and decline only slightly to retirement. When they
terminate abruptly.
Fig.2 : Shows a fairly typical pattern of earnings among clerical
and professional groups.

Casual Concept :
The HLV is the creator of all utility, in tangible property. The life
value is the cause and property values are the Effect.

Where it not for human life values, there would be no property

values at all.

Prof. S. S. Huebner

HLV concept is a philosophical framework of the basic economic

risk. Life Insurance is regarded as a physical death proposition in
terms of economic / financial loss.
Special Attributes
For those of moderate means & with family responsibilities, life
Insurance would seem to afford the only practicable means for a
worthwhile bequest program, especially in view of their natural
weaknesses, in the field of theft and investment.

The human Life value is the creator of all utility in tangible

property. The life value is the cause and property values are the
Effect, were it not for human life values there would be no
property values at all.

By Mr. S. S. Huebner

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY

The Insurance Act 1938 provided comprehensive regulation of the insurance business
in India. It created a powerful supervisory authority in the Controller of Insurance.
The controller of insurance had the powers to direct, advice, caution, investigate,
inspect, search, seize, amalgamate, authorize, register and liquidate insurance
companies. In 1999 as per the recommendation of Malhotra Committee, IRDA has
been formed to regulate the insurance sector.

DUTIES, POWERS AND FUNCTIONS OF IRDA

Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.
1.

Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure
orderly growth of the insurance business and re-insurance business.

2.

Without prejudice to the generality of the provisions contained in sub-section

(1), the powers and functions of the Authority shall include, (a)

Issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registration.

(b)

Protection of the interests of the policy holders in matters concerning

assigning of policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other
terms and conditions of contracts of insurance.

(c)

Specifying requisite qualifications, code of conduct and practical

training for intermediary or insurance intermediaries and agents;

(d)

Specifying the code of conduct for surveyors and loss assessors;

(e)

Promoting efficiency in the conduct of insurance business;

(f)

Promoting and regulating professional organizations connected with

the insurance and re-insurance business;

(g)

Levying fees and other charges for carrying out the purposes of this
Act;

(h)

Calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers,
intermediaries, insurance intermediaries and other organizations
connected with the insurance business;

(i)

Control and regulation of the rates, advantages, terms and conditions

that may be offered by insurers in respect of general insurance
business not so controlled and regulated by the Tariff Advisory
Committee under section 64U of the Insurance Act 1938 (4 of 1938);

(j)

Specifying the form and manner in which books of account shall be

maintained and insurers and other insurance intermediaries shall
render statement of accounts;

(k)

Regulating investment of funds by insurance companies;

(l)

Regulating maintenance of margin of solvency;

(m)

Adjudication of disputes between insurers and intermediaries of

insurance intermediaries;

(n)

Supervising the functioning of the Tariff Advisory Committee;

(o)

Specifying the percentage of premium income of the insurer to finance

schemes for promoting the regulating professional organizations
referred to in clause (f).

(p)

Specifying the percentage of life insurance business and general

insurance business to be undertaken by the insurer in the rural or social
sector; and

(q)

Exercising such other powers as may be prescribed.

INTRODUCTION
BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED

Bajaj Allianz Life Insurance Co. Ltd. is a joint venture between two leading
conglomerates Allianz AG, one of the worlds largest insurance companies, and
Bajaj Auto, one of the biggest 2 and 3 wheeler manufactures in the world. The
company received the Insurance Regulatory and Development Authority (IRDA)
certificate of Registration (R3) No.116 on 3rd August, 2001 to conduct life insurance
business in India.

Vision Mission and Slogan

VISION

To be best insurance company in India to buy from, work for

and invest in.

MISSION

To sustain No.1 Position.

S LO G AN

Jaisi Jarurat Waisi Insurance

Bajaj Group
Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is the largest
manufacturer of two wheelers and three-wheelers in India and one of the largest in the
world.
A household name in India, Bajaj Auto has a strong brand image & brand loyalty
synonymous with quality & customer focus.
A STRONG INDIAN BRAND- HAMARA BAJAJ
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 4000 cr.
Bajaj Auto finance one of the largest auto finance cos. in India
Rs. 4,744 Cr. Turnover & Profits of 538 Cr. in 2002-03
It has joined hands with Allianz to provide the Indian consumers with a distinct option
in terms of life insurance products.
As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has the following
to offer Financial strength and stability to support the Insurance Business.
A strong brand-equity.
A good market reputation as a world class organization.
An extensive distribution network.
Adequate experience of running a large organization.

ALLIANZ AG GLOBAL COMPETENCE

Allianz Group is one of the largest and most renowned financial services providers in
the world. Representing an international network of strong brands with first-class
products, we bring together the expertise of specialists in the fields of property and
casualty insurance, life and health insurance, asset management and banking. Above
all, we are committed to excellence in our daily business - in our relationships with
customers, shareholders, employees and society.
Allianz Group is one of the worlds leading insurers and financial services
providers.
Founded in 1890 in Berlin, Allianz is now present in more than 70coIlntries with over
1,77,000 employees. At the top of the international group is the holding company,
AlIianz AG, with its head office in Munich.
Allianz Group provides its more than 60 million customers worldwide with a
comprehensive range of services in the areas of
Property and casualty insurance,
Life and health insurance,
Asset management and banking.
In fiscal year 2005, Allianzs total revenues amounted to some 100.9 billion euros. At
the end of 2005 AlIianz Group had more than 1.26 trillion euros in assets under
management. Of this, 743 billion euros were assets managed for third parties.

ALLIANZ BAJAJ CHANGES ITS NAME TO

BAJAJ ALLIANZ LIFE INSURANCE
On Mumbai, August 03, 2004 : Allianz Bajaj Life Insurance Co. Ltd., the fastest
growing private life insurance co, has changed its corporate name to Bajaj Allianz
Life Insurance Co. Ltd., effective from August 03, 2004. The change in company
name comes in conjunction with research findings from existing customers, business
associates, prospective customers and other stakeholders indicated higher comfort
level and ease of recalling Bajaj name first and then Allianz, and hence the name
Bajaj Allianz.
Bajaj Allianz General Insurance Co. Ltd & Bajaj Allianz Life Insurance Co. Ltd. will
now have a common logo and branding which will help in increasing our visibility
and familiarity which will create a much larger awareness and a greater mind share.
The new logo incorporates the new Bajaj Auto logo.
Commenting on this occasion Mr. Sam Ghosh, Country Manager, Allianz & CEO,
Bajaj Allianz Life Insurance said, we are not only acquiring a new name, but have put
in motion a new level of energy and commitment to delivering the best products. The
name change coupled with aggressive strategic market initiatives to reach and service
customers better will give us an unbeatable position in the insurance market in this
country and both Life & General companies together can unleash the Power of One
and be the leader in the insurance industry.
Bajaj Allianz Life Insurance recently launched over 100 satellite branches, new life &
non-life group products which has helped Bajaj Allianz (formerly known as Allianz
Bajaj) to log in Rs.100 Cr. Gross Written Premium (GWP) in the first 100 days of this
financial year and has leaped to 3rd position as per IRDA figures ending June, 04 from
its 7th position at the end of last financial year.
Bajaj Allianz Life Insurance has also brought in key executives, to infuse greater
thrust, new ideas, efficiency and professionalism to impart state of the art servicing to
the customers across the length and breadth of the country.

INDIAN OPERATIONS
Growing at a breakneck pace with a strong pan Indian presence Bajaj Allianz has
emerged as a strong player in India...
Bajaj Allianz Life Insurance Company Limited is a joint venture between two leading
conglomerates Allianz AG and Bajaj Auto Limited.
Characterized by global presence with a local focus and driven by customer
orientation to establish high earnings potential and financial strength, Bajaj Allianz
Life Insurance Co. Ltd. was incorporated on 12th March 2001. The company received
the Insurance Regulatory and Development Authority (IRDA) certificate of
Registration (R3) No 116 on 3rd August 2001 to conduct Life Insurance business in
India.
Bajaj Allianz- THE PRESENT

Product tailored to suit your needs

Decentralised organisation structure for faster response

Wide reach to serve you better - a nationwide network of 700 + branches

Specialised departments for Bancassurance, Corporate Agency and Group

Business

Well networked Customer Care Centres (CCCs) with state of art IT systems

Highest standard of customer service & simplified claims process in the

industry

Website to provide all assistance and information on products and services,

online buying and online renewals.

Toll-free number to answer all your queries, accessible from anywhere in the
country - Call Now 1800 22 5858 and a strong tele-marketing and Direct
marketing team

Swift and easy claim settlement process

Bajaj Allianz Life Insurance

No.1 Pvt. Life Insurer FY 2005-06, Leading by Rs.78 Cr.

No.1 Pvt. Life Insurer in Retail Business, Leading by Rs.339 Cr.

Whopping growth of 216% for the FY 2005 06.

Have sold over 13,00,000 policies to satisfied customers

Is backed by a network of 550 offices spanning the country

Bajaj Allianz Life Insurance ties up with DSP Merrill Lynch for
Active Fund Management for Unit-Linked Products
Asset Management Companies (AMC) are turning to insurance companies for new
business opportunities. Economic times, 8th June, 2004
The latest tie-up between an insurer and fund manager is that of Allianz Bajaj Life
Insurance and DSP Merrill Lynch Fund Managers for on-discretionary investment
advice on equity investments. The tie-up is with an eye on the unit-linked insurance
markets, which have generated most of the growth for private insurance companies.
Sam Ghosh, County Manager, Allianz Mbajaj, said that 80% of the sales of private
insurers are coming from unit-linked plans. In the case of Allianz Bajaj too, the share
of unit-linked plans was on the rise and had gone up to 60%, and was rising. Most
private insurers have affiliate asset management companies within their promoter
group. Since we do not have any associates, we have decided to go in for a tie-up.
Mr. Ghosh said that the tie-up was also necessary because the insurer had decided to
change tack from a passive investment strategy of investing in the Nifty 50 to being
an active manager. This was driven by the volatility in the market. He added that
setting up an in-house fund management team was an expensive proposition for the
present level of business, but it could be a viable proposition if the funds under
management grow sizably.

Last year, Allianz Bajaj underwent a change in top management that has resulted in a
change of strategy. From its earlier focus on numbers, in terms of individual assurance
policies, the company has decided to go with the market and concentrate on
increasing the sum insured. According to Mukul Gupta, Chief Financial Officer and
head bancasurance, the company was also shifting its optional structure to a hub and
spoke mode, whereby it would widen its presence through a large number of satellite
offices that would be controlled through few branches.
Earlier, Tata AIG Life Insurance tied up with Templeton Asset Management for
investment advice. The top private insurers ICICI Prudential Life Insurance, Birla Sun
Life Insurance and HDFC Standard Life Insurance have associate AMCs, where both
the Indian and the foreign promoter have a stack. These insurers rely on their AMCs
for investment advice. Although the insurance regulator bars insurers from
outsourcing fund management, insurers are free to obtain external investment advice
and act on them.
DSP Merrill Lynch Fund Managers the asset management company for DSP Merrill
Lynch has recently received permission from the regulator to provide portfolio
management schemes (PMS). The investment advice will be provided through the
PMS division, which as per SEBI guidelines has to operate as an independent division
within the AMC. The PMS division will also focus on high net worth individuals and
other institutions seeking professional management of a large corpus of funds.
DSP Merrill Lynch has also roped in PVK Mohan of IL&FS MF for heading the fund
management team for PMS. Several fund houses, including the UTI Mutual Fund, had
in the recent past launched PMS, as there is great demand for customized fund
management service from large investors.

FOCUSED SALES NETWORK

BANCASSURANCE
Bajaj Allianz Life Insurance Company Limited pioneered the phenomenon in India.
Bancassurance is one of their key business strategies and forms the core focus area.
Company feels proud to have tie-ups with several leading national and private sector
banks.

Standard Chartered Bank

Syndicate Bank

Centurion Bank

Other leading co-operative banks

Ever-expanding reach, through tie-ups with large regional banks

Exclusive life insurance products-MRTA & Credit Shield

Products customized to suit specific need of Bank.

Bajaj Allianz The Leader in Bancassurance

Life Insurance Companies

Source :

Life Track Magazine, Published by Bajaj Allianz Life,

July-Sept, 2005, Vol.-2

O
th
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s

Vy
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a

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IC

AV
IV
A
TA
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ja
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IC
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SB
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Bi
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160
140
120
100
80
60
40
20
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Ba

New Business in Rs. Crores

April-Sept 2005

ALTERNATE CHANNELS
The Strategic Alliances group at Bajaj Allianz focuses on solely on strengthening the
business through Group Insurance and Corporate Agency activities.

CORPORATE AGENTS, BROKERS AND FRANCHISEES

A constantly growing nationwide network of Corporate Agency Brokers and

Franchisees

A decentralized, dedicated team of professionals helps recruit, develop and

support Corporate Agents, Brokers and Franchisees

GROUP BUSINESS

A growing product range to meet generic and specific needs of various groups
like Group Term Insurance, Gratuity, Group Superannuation, MRTA, GTL in
lieu of EDU, are a few among many others.

A dedicated team ensures customers receive nothing but the best in terms of
service and delivery

ONLINE SELLING AND RENEWALS

Unit Gain Plus SP & Unit Gain Easy Pension

FINANCIAL SERVICES CONSULTANTS

A set of expert financial advisors to address comprehensive financial planning

needs of high net worth clients

Products designed to suit your needs

PRODUCTS

INDIVIDUAL PLANS
NEW UNITGAIN

A Unit Linked Plan

RISK CARE

Pure Term Plan

TERM CARE

Term

Plan

with

Return-of-

Premium
INVESTGAIN

An Endowment Plan

LIFETIME CARE

Whole Life Plan

CHILDGAIN

Childrens Policy

LOAN PROTECTOR

A Mortgage Reducing Term

Insurance Plan

CASHGAIN

Money Back Plan

KEYMAN INSURANCE

Promising

Business

Opportunity
SWARNA VISHRANTI

Retirement Plan

NEW UNITGAIN PLUS

Unit Link plan with higher

allocation

RIDERS UNITGAIN PLUS

While the basic life insurance

MAHILAGAIN RIDER

The unique plan that takes care

of you and your loved ones.

NEW UNITGAIN EASY PENSION PLUS

A Plan that enables you retire

with laughter lines
lines

not worry

SWARNA RAKSHA-ROC

A plan that provides you with

regular income ... for life.

HEALTHCARE

This is a three-year health

insurance

plan,

with

life

insurance benefit.
NEW UG PREMIER

Upfront Allocation of 105% of

single premium on day 1

New UG SUPER

Highest allocation Upto 93%

Guaranteed life cover

NEW FAMILYGAIN

The only Unitlinked insurance

plan with ethical equity fund.

SafeCare Economy-SP

An investment that provides

financial security and liquidity.

Group Plans
GROUP CREDIT SHIELD

Available

for

Employer

Employee

Groups

and

Non

Employer-Employee Groups
GROUP TERM LIFE

Available

for

Employer

Employee

Groups

and

Non

Employer-Employee Groups
GROUP TERM LIFE SCHEME

in lieu of EDLI (Employees

Deposit Linked Insurance)

GROUP SUPERANNUATION SCHEME

GROUP GRATUITY CARE SCHEME

Giving your Employees and

their families the heartening
reassurance of your care and
financial security

INSURANCE FOR NRIS

You can now easily steer your savings from overseas to conveniently meet your
familys needs - now and in the future.
All Indians have an underlying need to feel secure, to care for the loved ones and to
provide for old age. The need is felt more when you are away from your Homeland.
But being away from India doesnt mean you have to compromise on the safety and
security of your loved ones.
In fact, you can now easily steer your savings from overseas to conveniently meet
your familys needs - now and in the future.
We, at Bajaj Allianz understand your need. The need to do something fruitful for your
loved ones.. The urge to let them know that you care. Thats why we introduced the
NRI Insurance services. Now, you can invest your hard earned money in India and in
the bargain ensure your familys future.
OUR CARE SOLUTIONS FOR NRIS: Bajaj Allianz offers a large suit of products to
cater every insurance need that you have. Our care solutions include:

InvestGain

Our With Profits Endowment Plan.

CashGain

Our With Profits Money Back Plan.

ChildGain

Our With Profits Money Back Plan for children.

Lifetime Care

Our With Profits Whole of Life Plan.

Swarna Vishranti

Our With Profits Differed Annuity Plan.

Our Unit Linked Whole of Life Plan

UnitGain

The details of all these products is given in Annexures at the back.

COMPETITIVE ADVANTAGES OF BAJAJ ALLIANZ

LIFE
The competitive advantage is emanate from several functions that a firm performs
Marketing, Production, R & D and Personnel. All the different departments
collectively constitute or contributes for any companys competitive advantage.
Taking of the Bajaj Allianz Life Insurance Company Limited as No.1 private
insurance company at present in India, the company has following competitive
advantages :

BRAND POWER
Bajaj Allianz Life Insurance Company Limited is a strong brand among itself as it is a
combination of two major giants in their respective fields i.e.
Bajaj Group A strong brand name as one of the largest manufacturer of two and
three wheeler in India &
Allianz AG A strong brand name in the world as one of the largest insurance
company.
So, strong brand power and Indians recognition of Bajaj Group as a faithful company
makes Bajaj Allianz Life Insurance Company Limited as well known brand.

CUSTOMIZED PRODUCTS :
At Bajaj Allianz Customers delight is the guiding principle. Ensuring world class
solutions by offering customized products with transparent benefits supported by best
technology is the business philosophy, which becomes the competitive advantage for
Bajaj Allianz Life. Actually the main aspect that Bajaj Allianz Life gives stress on it
corners all segments of society i.e. Lower, Middle and Upper. The various product
range allows customers to close according to their needs.

BEST PERFORMING FUNDS :

Bajaj Allianz Life Insurance Company Limited offer best performing funds in
comparison to its other competitors. Bajaj Allianz, LIC provides Equity Plus fund
which is no.1 performing fund with highest return of 48.16% and Equity Plidoap Plus
which is 3rd Best performing fund. The above few funds are top market performers
which shows that Bajaj Allianz Life Insurance Companys funds are best. This gives
maximum return to customers.
A close review of various funds of different companies is shown in the following
table.

So, from the following table it is clear that Bajaj Allianz funds are the best performing
fund over other private insurance companies.
On the basis of the above funds Bajaj Allianz managed to outcome all other
companies of its kind.

The following table suggests the possible of Bajaj Allianz with respect to their rivals.
Ranking of Bajaj Allianz Life Insurance for the period ended Jan, 2006
Rank

Insure

1.
Bajaj Allianz
2.
ICICI Prudential
3.
HDFC Standard
4.
SBI Life
5.
Birla Sunlife
6.
Tata AIG
7.
Max New York
8.
Aviva
9.
Kotak Mahindra Old Mutual
10.
ING Vysya
11.
Reliance Life*
12.
Met Life
13.
Sahara Life
Private Total

Premium
(Rs. lakhs)
Upto Jan, 06
168,053.16
166,091.49
68,559.49
42,753.63
41,450.37
36,844.41
31,750.67
25,909.63
17,526.25
17,406.50
13,513.73
9,858.92
1,391.39
641,109.35

Growth
313.88
138.64
138.64
20.83
3.35
62.66
91.29
97.77
46.84
112.15
76.06
149.55
12,514.61
94.50

Market
Share
Upto Jan,06
7.29
7.20
2.97
1.85
1.80
1.60
1.38
1.12
0.76
0.75
0.59
0.43
0.06
27.80

ONLY COMPANY TO COVER 11 CRITICAL ILLNESS & REGULATIONS

Bajaj Allianz LIC is the only Company in India that covers 11 critical illness
They are
1.

First Heart Attack

2.

Stroke

3.

Cancer

4.

Kidney failure

5.

Major Organ Transplantation

6.

Multiple Sclerosis

7.

Aorta Graft Surgery

8.

Primary Pulmonary Arterial

9.

Hypertension

10.

Alzheimers

11.

Paralysis

BRANCHES :
Frequent braches is the major area where Bajaj Allianz outcomes its competitors.
Among private players Bajaj Alliznz Life here the largest network of 550 offices
located all over India. It makes easy for customer to inquire about their queries.

BAJAJ ALLIANZ IN ORISSA

At present there are 18 branches doing business in Orissa. Under the supervision of
highly efficient branch heads, all branches are doing unexceptionally good. In India
every year four to five branches from Orissa under top-10. this shows the business
strengthen of different branches in Orissa.
List of the branches and their heads is given below
OUR LOCATIONS

Angul
Manas Ranjan Sahu
5th Lane, Amala Pada PO, Angul District, Orissa 759122
Contact No.: 06764 234236 / 37, 309240

Balasore
Siba Prasad Panda
OPP. F. M. COLLEGE, MALIKASHPUR,BALASORE1,
ORISSA -756003
Contact No. : (06782)-309229/ 257278/79

Baripada
Amiya Kumar Girl
Bada Bazaar, Barlpada-757001
Contact No. : 06792- 309534/

Bhadrak
Chunnilaljee Jachhak
1ST FLOOR, S. P. ELECTONICS, CHHAPULIA, BY PASS, BHADRAK,
ORlSSA - 756100
Contact No. : 06784-394312
Bhubaneswar
Praveen Sahay (SSM)
3RD FLOOR.MIKNIK MALL, OPP.ISKON TEMPLE. OVER ICICI
BANK,NAYAPALLI, BHUBANESHWAR-751012
Contact No, : 0674-2562041,

Bhubaneswar
Subrat Mohanty (ASM)
168B, Bapuji Nagar, Forest Park, Sishubhawan Chowk,
Bhubaneswar-751009
Contact No. : (0674) 2532315,(0674) 2535385

Bolangir
Dinesh Mishra
Shiv Durga Complex, Opp. Govt. Girls HlghSchool, Samblapur Road,
Bolangir - 767001
Contact No. : 06652-235308, 235368

Cuttack
Harjote Singh (AVP)
1st, Shantlkunj Building, Plot No. 2332, Ward 23, Link Road
Cuttack - 753 032
Contact No. : (0671) 2332614,(0671) 2332558

Jagatsinghpur
Ayas Kumar Choudhury
HERO HONDA BUILDING2ND FLOOR,DURGA
BAZARJAGATSINGHPURORISSA - 754103
Contact No. : 06724 - 223295, 22374

Jajpur
Keshab Mishra
chorda Chowk, Jajpur Rd, Jajpur - 755019
Contact No. : (06726) 224768

Jeypure
Balbhadra Barik
2nd Floor, SN Plaza, Main Road, Jeypore-764001 (Orissa)
Contact No. : 06854 230678

Jharsuguda
Pranab Kumar Mohanty
Contact No. :

Kendrapara
Gyana Ranjan Das
College Square, Kendrapara-754211 (Orissa)
Contact No. : (06727) 220068

Keonjhar
Ranjan Kumar Pradhan
PLOT NO - 620, NH - 215, 1ST FLOOR, MAYUR MARKET COMPLEX,
GANDHI CHHAK, KEONJHAR - 758001
Contact No. : 06792- 309534

Khurda
Somajit Mohanti
Ganpat Mansion, First Floor, Contact No. : (06755) 309323;

Rayagada
Prasana Kumar Dash
OPP. ANDHRA BANK, NEW COLONY, RAYAGADA - 765001
Contact No. : 06856 - 223739
2nd floor, Pan Posh Rd., Rourkela 169004
Contact No. : 06856 - 223739

Rourkela
Badrinath Panda (ABM)
BALIC, Vrindavan Complex, 2nd Floor, Pan Posh Rd., Rourkela-769004
Contact No.:

Sambalpur
Soumit Mishra (ABM)
R. N. Complex, 1st Floor, Opp. To Budharaja High School, Budharaja
Sambalpur 768004
Contact No.: 0663 3090206, 0663 - 390215

COMPETITORS OF BAJAJ ALLIANZ LIFE IN

ORISSA
In Orissa ICICI Prudential Life Insurance, HDFC Standard Life and Birla Sun Life
insurance are the major competitors of Bajaj Allianz Life among private companies.
LIC of India being the largest and oldest insurance company in India since its
nationalization in 1956 has the major share in insurance sector in India. With the
opening up of Indian economy, many foreign players entered India and tied-up here
with the important and well-known name as Bajaj, Tata, HDFC etc. With here entry
into the market, the market share of LIC of India started declining.
Similar is the case in Orissa, LIC of India market share is continuously declining and
Bajaj Allianz Life being No.1 among private companies comes in direct competition
with LIC of India. At present 18 Branches of Bajaj Allianz Life are doing very well
over whole of Orissa. With the customized product suiting to the needs of all section
of society i.e. lower, middle and higher class, the Bajaj Allianz Life will definitely
outcome LIC of India in the coming years. Apart from that the prompt service of Bajaj
Allianz Life is providing them edge over other companies.
Comparing to the other private players in the rare Bajaj Allianz Life left other by
anything. ICICI Pru entered in Orissa in November 2002. Since then it was at No.1
position among private players for continuously three years. But in the last five year
Bajaj Allianz Life outcome ICICI prudential by a huge gap and is continuously
increasing. HDFC Standard Life is another competitor of Bajaj Allianz Life entered
Orissa in 2001 has good brand power. As HDFC is known to most of the people as a
bank for financing of house. So people have a faith upon HDFC Standard Life. HDFC
Standard life is the joint venture between HDFC and Standard Life. But less
awareness about the products, advertisement making them a market challenger to
Bajaj Allianz Life.
Apart from these 3 competitors just launched in Orissa. Max New York officially
started its operation on 22, May 2006. Reliance also started its operation in the month
of June, 2006. Other competitors are not so popular in Orissa.

THE SWOT ANALYSIS OF BAJAJ ALLIANZ LIFE IN

ORISSA
STRENGTHS

Untapped Population of Orissa

Large Network and Customer base of banks

Existing resources of insurance companies in Orissa

Wide Network of Branches and consultants in Orissa.

Well efficient Operation department

Efficient Sales Force

WEAKNESSES

Information technology not at par with other sectors.

Middle segment overburden with inflationary pressure

Inflexibility of products. Not tailor made to suit the needs of customers.

OPPORTUNITIES

Banks database in Orissa is enormous

Efficient IT structure of banks

Appropriate atmosphere and political consensus

Smaller cities, towns in Orissa

THREATS

New Entrants into Orissa

Channel conflicts

Banks venturing into insurance sector

Change in preferred model to broker model.

CONCLUSION
After FDI cap has been removed form the insurance sector up to 26%. Many foreign
companies entered into India and made joint venture with Indian majors. Bajaj Allianz
Life also started its operation in March 2001 in India. Company also proved itself one
of the competent insurance companies. Because goodwill and faith is very much
necessary to get the customers. Bajaj Allianz also received that goodwill and faith
through its efficient sales force and operation department. In time service, customized
products, flexibility8 in the products, better technology, and massive network are to
key areas in which Bajaj Allianz Life lead.
In Orissa Bajaj Life through its 18 branches doing extensively well. It started its
operation in 2009, March in Angul. Through continuous good service made the
company market leader in Orissa in Pvt. Companies. During my research it is also
found that many people faith on Bajaj Allianz Life because it is a subsidiary of Bajaj,
one of the trusted family name in the field of automobiles.
Better return in investment and flexible products fascinate many people to go with
Bajaj Allianz Life. As now a day people does not only want to do life Insurance, they
want something more that in insurance plus investment. Which Bajaj Allianz provides
through its customized products. Even in ULIP policies there is a flexibility to change
the investment to different funds as prescribed in the brochure.
It is also found that most of the people come to know about Bajaj Allianz Life from
their friends and relatives. Major respondents rated the company as GOOD. It is also
found that most of the people go for Bajaj Allianz Life because of its better return in
investment. Followed by better service and reliability.

SUGGESTIONS
Following are the suggestions to look upon so that company will sustain its good
position in future in Orissa market, as LIC of India is most widely known insurance
company in Orissa. Following points needs to be considered.
Tie-up with regional and co-operative banks for efficient bancassurance.
In many branches there is no separate customer care or reception section. So
this should be taken care of.
More advertisement risk electronic media, print media and hoarding are
required.
Customers feedback from should also be provided with proposal form to know
what the customers recent.
Make the branches more customer friendly.

Q U E S T I O N N A I R E

Name

Address

Date of Birth

Sex :
Phone No.

1.

Occupation

2.

Insured / Not Insured

3.

Company Name

4.

Plan Name

5.

Information about Bajaj Allianz Life Insurance Co. Ltd.

6.

If yes from where ?

7.

Insured under any plan of Bajaj Allianz Life Insurance Co. Ltd. : Yes / No

8.

Name of the Plan

9.

Information about any other Insurance Company :

10.

Satisfied with the service of Bajaj Allianz Life Insurance Co. Ltd. : Yes / No

11.

In what sense is it better than any other company :

12.

Remarks

: Yes / No

B I B LI O G R APH Y
1.

Marketing Management Book, V. Ramaswamy

2.

Marketing Management Book, P. Kotler

3.

Life News of Bajaj Allianz Life Co. Ltd.

4.

Life Tranck of Bajaj Allianz Life, Volume-2 | July-Sep 2005

5.

Insurance Management, Anand Ganguly

6.

Hand Book on Life Insurance, Pioneer Institute of Insurance

7.

www.bajajallianz.co.in

8.

www.google.com

9.

www.irdaindia.org