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Section: “E” Group”” Name: KRITIKA NEGI Company: LIC

Marketing Assignment
Individual Project Submission

Introduction
• The Life Insurance Corporation of India is the largest state-owned life
insurance company in India, and also the country's largest investor. It is fully
owned by the Government of India. I define my market boundary to the insurance
industry of India including both life insurance and other types of insurance and
also both foreign and in domestic players.

Environmental Analysis
Macro-Environmental Analysis
Political-legal Environment

1. Companies registered under IRDA Regulations can transact life insurance business
2. Government has power to change the tax policy against life insurance industry.
• Health insurance rebate,
• Pension saving rebate, etc.
3. Regulating bodies.
IRA: Insurance Regulatory Authority.
IRDA: Insurance Regulatory and Development Authority.
TAC: Tariff Advisory Committee

Economic Environment
1. Increase in Gross Domestic Savings.
2. Interest rate at bank and interest rate of P.F variation very much affect to life
insurance industry, because people always attract by higher return. Therefore, they do
not prefer lower return policy.
3. Unemployment also affects insurance industry, because
the unemployment people will not have earning, so no saving and no buying of policies.
4. Requirement of adequate capital.
5. Increased economic activities.
6. Interest rates.
7. Inflation rate.

Socio-cultural Environment
1. Changing Indian perception.
2. Typical Indian want luxurious product against low income, so that they prefer installment
or annuity (EMI), so that they may not have extra saving to invest in life insurance.
3. Increase in lifestyle diseases.
4. Social benefits.
5. Increasing middle class.
Technological Environment
1. Automation of processes
2. Increase in CRM solutions
3. Internet driven information era
4. Business Process Monitoring (BPM)

Demographic Environment
1. Policies for children, women, handicapped, married couples.

2. Rise in elderly population.

3. Low insurance coverage.

4. Literacy level

5. Increased earnings.

6. Growth in the middle class population.

Inference: - the life insurance sector is highly governed by the government as it is a very
important service sector. With increase in the economic activities the demand for insurance has
also increased. The interest and the inflation rates should be favourable for the industry. With an
increase in the earnings of people and also the changing perceptions of the people regarding the
benefits of the insurance policies, the demand for the insurance is increasing substantially, with
an increase in the demand for diverse products. The industry has less control over the
technological environment due to less number of suppliers. The variation in the demographic
environment forces the company and industry to introduce diverse products on a timely basis as
per the needs and wants of the customers.

Micro-environmental analysis (Porter’s Five force analysis)


Threat of New Entrants
1. FDI Ceiling.

2. Capital and lower expenses ratio


Requirements.

3. Distribution Requirements.
4. High brand orientation. Success is
Bargaining power of customers difficult for a new brand.
• Widening Product Range 5. Difficult to achieve economies of scale.
Intensity of competition Bargaining power of suppliers
• Icici prudential 1. Limited Actuaries in the
• Large Corporate Clients
Market.a
• Bajaj allianz
• Price Sensitive Buyers 2. Reinsurance
• Birla sunlife Concentration.
• Highly segmented
market. • Hdfc standard life 3. Cession to the National
• Return oriented, and Insurer.
switchers. • Tata Aig
4. Dependence on IT
• Max New york life insurance Providers
Threat of Substitutes
1. Term deposits in bank.
2. Investment in government securities.
3. Money market investment.
4. Capital market.
5. Threat of increasing market potential
of NSC, Government debenture etc.
6. mutual funds
7. Post office securities.

Inference:- Because of the restrictions on FDI and huge requirement of capital and a well
managed and developed distribution network it is very difficult for the new entrants to enter the
industry. There is intense competition among the current players each trying to gain each others
market share with innovative plans. It is a must for the organization to come up with diverse
plans in order to satisfy the diverse needs of the customers. There are various near substitutes
with equal benefits are available for the life insurance, the company needs to compete dually:
with the competitors as well as the substitutes. With limited actuary experts and dependence on
the providers of technology, the company has less command over its suppliers.

SWOT Analysis

Strength Weakness
1. Oldest and well experienced.
1. After sales customer
2. Well developed distribution network. grievance redressal
mechanism is
3. Huge consumer base. inefficient
2. Lethargic and less
4. Evolved as a powerful brand. motivated staff.
3. Agents not taking into
5. Being government owned, it is being trusted by the account the needs of
people. people and promote
policies having high
6. Large product portfolio. commissions only
4. Very slow decision
7. Easier claim settlement. making process and
internal problems
8. Advantage of government guarantee. between top
management and
lowercadre staff.
5. Large scale corruption
in main office.
6. Less autonomy given
to the officers and
agents in giving ideas
for new products and
services.

Opportunities Opportunity Threats Threat


1. Emergence of a huge middle income consumer market 1. Entry of new players.
in the country
2. Internal discord
2. Pension markets, health insurance and large real
estate portfolio and other new products can be 3. Decrease in bank rate.
introduced.
4. Fraud in insurance
Strength
3. People becoming more 1.wide
awaredistribution
and demanding so 1.huge consumer
sector.base,decrease in bank rate.
network,
there is scope for a whole lot ofuntapped market.
innovative (3,3)
Products. (2,3) 5. Technical edge with
4. Untapped markets. 2. large product portfolio, 2.old and well
the experienced,internal
new entrants
pension markets, health
5. Increased economic activity. discord(1,2)
insurance and real estate
portfolio.(6,2)
Weakness 1. Less autonomy given to 1.very slow decision making process,entry of
the officers and agents, new players.(4,1).
People becoming more 2.large scale corruption,internal discord.(5,2)
aware and demanding so
there is scope for a whole
lot of innovative
Products.,(6,3).
2.slow decision making
process and increasing
demand of new products
and services as per the
diverse needs and wants of
customers. (4,3)

Tows matrix:
Untapped market and a well developed distribution network:

• New markets like the rural markets can be tapped, and awareness can be
created by efficient marketing strategies.
• Distribution network can be enhanced by selling through electronic medias.
• The growing population increases the potential customers for the insurance
industry, the organization needs to realize the unexplored markets.
• India has traditionally being a high savings country, market properly tapped
can fetch in high profits.
• The lack of comprehensive social security system combined with a
willingness to save means that Indian people demand for pension products
will be large. We just need to find out the right potential customers.

THANK YOU

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