St.

Gonsalo Garcia College of Arts and Commerce, Vasai (W)

TYBMS

Life Insurance Services

Service Sector Management Semester V
[The project provides an overview of the Life Insurance Services available in India with a comparison of colossal market players SBI Life and Bajaj Allianz Life]

Group # 9 [Type the company name] TYBMS

Group Members:
Roll. No. Name Remarks

09

Ms. Vinola Almeida

19

Ms. Sharon Faria

29

Mr. Javed Khan

39

Ms. GreeshmaNambiar

49

Mr. Sylvester Sirvel

Index:
Sr. no. Topic Presenter

01

Introduction & Current Scenario of Insurance in India

VinolaD almeida

02

SBI Life v/s Bajaj Allianz : Policy Comparison

GreeshmaNambiar

03

SBI Life v/s Bajaj Allianz : Marketing Mix

Sharon Faria

04

Future of Insurance & Challenges in Insurance Marketing

Sylvester Sirvel

05

Survey Results

Javed Khan

Introduction
Insurance is a policy from a large financial institution that offers a person, company, or other entity reimbursement or financial protection against possible future losses or damages. The meaning of insurance is important to understand for anybody that is considering buying an insurance policy or simply understanding the basics of finance. Insurance is a hedging instrument used as a precautionary measure against future contingent losses. This instrument is used for managing the possible risks of the future. Insurance is bought in order to hedge the possible risks of the future which may or may not take place. This is a mode of financially insuring that if such a incident happens then the loss does not affect the present well-being of the person or the property insured. Thus, through insurance, a person buys security and protection. Insurance can be defined as the process of reimbursing or protecting a person from contingent risk of losses through financial means, in return for relatively small, regular payments to the insuring body or insurance company. Insurance can range from life to medical to general (residential, commercial property, natural incidents, burglary, etc.) Following are the Principles for insurance: y y y y y y Utmost good faith Indemnity Subrogation Contribution Insurable Interest Proximate Cause

Current Scenario of Insurance in India

India with about 200 million middle class households shows a huge untapped potential for players in the insurance industry. Saturation of markets in many developed economies has made the Indian market even more attractive for global insurance majors. The insurance sector in India has come to a position of very high potential and competitiveness in the market. Consumers remain the most important centre of the insurance sector. After the entry of the foreign players the industry is seeing a lot of competition and thus improvement of the customer service in the industry. Computerisation of operations and updating of technology has become imperative in the current scenario. Foreign players are bringing in international best practices in service through use of latest technologies. The insurance agents still remain the main source through which insurance products are sold. The concept is very well established in the country like India but still the increasing use of other sources is imperative. More customers are buying products and services based on their true needs and not just traditional money back policies, which is not considered very appropriate for long-term protection and savings. There is lots of saving and investment plans in the market. However, there are still some key new products yet to be introduced - e.g. health products. There is an evolutionary change in the technology that has revolutionized the entire insurance sector. Insurance industry is a data-rich industry, and thus, there is a need to use the data for trend analysis and personalization. With increased competition among insurers, service has become a key issue. Moreover, customers are getting increasingly sophisticated and tech-savvy. People today don t want to accept the current value propositions, they want personalized interactions and they look for more and more features and add ones and better service. The insurance companies today must meet the need of the hour for more and more personalized approach for handling the customer. Today managing the customer intelligently is very critical for the insurer especially in the very competitive environment. Companies need to apply different set of rules and treatment strategies to different customer segments. However, to personalize interactions, insurers are required to capture customer information in an integrated system. With the explosion of Website and greater access to direct product or policy information, there is a need to developing better techniques to give customers a truly personalized experience.

Policy Comparisons:
1) Term Plans:

Company Plans

SBI Life Insurance Saral Shield SBI Life - Saral Shield is a traditional nonparticipating pure term plan, At a nominal cost;Saral Shield provides cover for our family and ensures that a proper safety net is created. Thus, it guarantees that there will be absolutely no compromise on our dreams and ambitions for our loved ones, at all times. Min-18 years Max-60 years Rs. 2,000/5-30 years 1.Hassle-free, convenient and easy issuance 2. Complete Financial Security at truly lower costs 3. Wide varieties of plan options to give you complete freedom from your liabilities 4. Attractive large sum assured rebates. 5. Enhance your protection by availing two riders- Accidental Death Benefit Rider and Accidental Total and Permanent Disability Rider.

Bajaj Allianz Life Insurance Protector Plan The Bajaj Allianz Protector Plan is a mortgage term insurance plan that covers the outstanding principal amount of a loan. It is an economical way to protect the family from the burden of repayment of the loan in case of death of the loanee. The plan is designed to pay a sum insured that will be equal to the outstanding principal amount of the loan due. Min-20 years Max-55 years Rs. 1,000/2-30 years

Overview

Entry Age Minimum Premium Term

1. It is an economical way to protect the family from the burden of repayment of the loan in case of death of the loanee. 2.The Plan offers us the convenience of choosing between two premium payment options - Regular Premium Payment & Single Premium Payment. 3. Joint Life availability - the option to cover the co-applicant of the loan under this plan.

Features

Tax Benefits

Tax benefits as per prevailing norms under the Income Tax Act, 1961

1. Under Section 80 C premiums up to Rs. 100,000 are allowed as deduction from taxable income. 2. Maturity and Death Benefits are tax free under section 10 (10) D of the Income Tax Act, 1961.

2) ULIP Unit Linked Insurance Plans

Company Plans Minimum Premium Entry Age Partial Withdrawal Premium Paying Term

SBI Life Insurance SaralMahaAnand Rs. 15,000/18-55 6 years 10-20 Years

Bajaj Allianz Life Insurance Money Secure Insurance Rs. 7,000/3-65 5 years 10 & 15years An investment plan that provides us the dual advantage of planning for our financial security and getting the best returns possible for every rupee we invest. The plan is structured to provide us a secure life cover and guaranteed maturity benefits aligned with their commitment to give us the best of both worlds.

Brief

SBI Life SaralMahaAnand, a unit linked insurance cum savings plan. Getting a Life Insurance policy has been made very easy. No medical examination, which means hassle-free coverage. Enjoy the power of liquidity through partial withdrawals.

3) Child Plan

Company Plans Min-max Age

SBI Life Insurance Smartscholar Life Insured:18-57 years Child:0-17 years

Bajaj Allianz Life Insurance Child gain Life Insured:20-50 years Child:0-13 years Rs. 5,000/Below 7 Years - Premiums paid will be refunded without interest and the policy will terminate. Above 7 and below 18 years - Sum assured with accrued bonuses will be paid and the policy will terminate. Above 18 and below 24 years Outstanding payouts will be paid as one lump sum and the policy will terminate. Option to Purchase Further Insurance at Maturity - They offer the child an option to purchase a with profits endowment or an equivalent plan from Bajaj Allianz Life Insurance Company for twice the amount of face value of this policy. 5 years

Minimum Premium per Annum

Rs. 50,000/-

Death Benefit

A lump sum benefit equal to or higher of the Sum Assured or 105% of all premiums paid till date of death will be payable.

Maturity Benefit

The fund value shall be paid to beneficiary in a lump sum.

Minimum Premium Payment Term

5-25 years

4) Pension Plan

Company Plans

SBI Life Insurance Life Long Pension Plus It is a unique individual non-participating traditional pension plan, which gives you total protection and security while offering you whole transparency and flexibility. This Plan is a perfect way for you to accumulate your savings and purchase an annuity with it, a time of your choice, to give you regular income. You would agree that all this will surely give you a secure future, and a cheerful retirement. Min-18 years

Bajaj Allianz Life Insurance Swarna Vishranti Bajaj Allianz s Swarna Vishranti is a plan with an option to take a tax-free lump sum up to 33% of Sum Assured + Accrued Bonuses. Open Market option: Purchase immediate annuity from Bajaj Allianz Life Insurance or any other Life Insurance Company. And also additional benefits can be availed of. Min-18years Max 65years 5-40years Rs. 5,000/45-70 years 1). Option to take a tax-free lump sum upto 33% of Sum Assured + Accrued Bonuses.

Overview

Entry Age Max-65 years Term Minimum Premium Maturity Age 5-40 years Rs. 7,500/40-70 years 1). You will know how your premiums are growing each step of the way. At the end of each financial year. 2). Guaranteed Additions of 10% of Annual Premium on 15th policy anniversary & 10% of Annual Premium on every 5th policy anniversary thereafter in case of Regular Premium policy whereas for Single Premium policy, 1% of Single Premium on 15th policy anniversary & 1% of Single Premium on every 5th policy anniversary thereafter. 3). Added to this is the matchless advantage of our expertise in investment management that shields you from the vagaries of the markets and gives you stable investment returns that grow your retirement kitty. 4). Choose Single or Regular payment, as per your need

Features

2). Open Market option: Purchase immediate annuity from Bajaj Allianz Life Insurance any other Life Insurance Company.

3). Additional Critical Accidental Death Benefit and Disability Benefit. Benefits: - Illness Benefit and Hospital Cash Benefit. 4). Family Income Benefit: In case of death or accidental total permanent disability of insured, all future

premiums are waived and 1% of the sum assured is paid monthly. 5). Augment your retirement kitty at any time during the policy term by making Additional Contributions. 6). Option to Prepone or Postpone the Vesting Age 7). Premium payment can be done monthly, half-yearly or yearly. You can also avail the tax benefits U/S 80C of Income Tax act. 5). Term Cover: Additional life insurance protection at a nominal cost. 6). Premium payment can be done monthly, half-yearly or yearly. Tax Benefit under section 80CCC (1)of the Income tax act now

Tax Benefits

Marketing Mix:
Insurance like all other services has the same characteristic features of Intangibility, Perishability, Heterogeneity, Non-Transferable ownership, Simultaneity, Inseparability, Quality measurement and Nature of Demand. The Marketing mix for Insurance services, therefore, needs to be extended to 7 P s instead of 4. The mix includes: Product (Service): The most important part of marketing strategies is the product/ service that the company wishes to sell. If the Service is not known the rest of the marketing mix will be of no use at all. In case of SBI Life Insurance, the Services range includes 8 different ULIP s, 2 Child Plans, 2 Pension Plans, 2 Protection Plans and 5 Savings Plans.| Bajaj Allianz on the other hand has an impressive range of 7 ULIPs, 8 Traditional Plans, 2 Pension Plans, 4 Term Plans, 2 Life + Health Plans, and a very non-conventional Women s Plan . Pricing (Premium): In terms of Insurance services, the pricing is the premium that the insured pays for the insurance. The premium amount plays a pivotal role in marketing as it determines what social class of persons will be more inclined to purchasing it, as well as the revenue that the company will earn. SBI Life insurance plans have affordable pricing terms however when compared with Bajaj Allianz, all the plans are slightly more expensive. Place (Distribution): Services are inseparable from the provider and cannot be transported or stored. It is of extreme importance that the service be available to the customer at the right time and place and should be accessible. Most insurance providers use the personal selling channel. The Agents are the distributors. Both SBI Life and Bajaj Allianz have Websites, Toll free numbers, E-mail addresses, SMS help provisions which can help the customer reach the company when he/she requires. When a potential customer tries to contact the company through any of these channels, a meeting is arranged between an agent and the customer. The meeting is mostly at the customers residence or in rare cases at the company office or any other place convenient to the customer. Promotion: Promotion of services encompasses various areas like Advertising, Personal Selling, Sales Promotion, Public Relations, Word of Mouth Publicity, and Direct mail also known as the promotion mix. Promotion adds tangibility to services. Often, People remember services by the adds that they saw on TV and create a brand image for the same. In the duration of 6-30 seconds, an advertisement, if well made, can help a company or product encash emotions. SBI Life s TV commercial, Directed by Chrome Pictures, is shot in the classic SBI Black and White Documentary Style. It uses an old Bollywood movie track and is in general pleasing to everyone with its storyline. SBI Life Insurance has a Facebook Page as well as a Twitter account. The ad campaign for SBI Life is called ZindagihaiJeenekeLiye

Bajaj Allianz, in its TV Commercial, scores a hat-trick on three parts i) The Music: Sukhwinder smelodious voice in the background wins people right at the beginning of the jingle. ii) The Lyrics: Touching lyrics penned by Gulzar add to the likeability of the advertisement. iii) Super-Agent: Last but not the least; Bajaj Allianz s SUPER Agent is an Animation 10 on 10. The TVC Made by TBWA is one of the most liked TVC s. Another One-up for Bajaj Allianz was the tie-up with Bollywood movie LOVE AAJ KAL for its promotions. Bajaj Allianz calls its Ad Campaign JiyoBefikar . They have a dedicated Facebook page as well as a YouTube Channel. People: In insurance, the people involved in the service provision are the agents, the customer-care executives, Support Staff, as well as other employees of the company. The people also include the customer himself and other customers of the same service. The Intermediary between the buyer (insured) and the seller (insurer) is the insurance agent. The Company should focus on hiring the right people, Training them in the right way and retaining the best employees. SBI Life hires employees after a through interview; a lot of effort goes into training the employees to perform their best at work. SBI has a comparatively more serious work environment and more centralized hierarchy considering the fact that it is a Government company. Bajaj Allianz calls its High Contact Personnel or Agents SUPER Agents. The term is inspired from the company s mascot of the same name who wears a Superman-type Cape, thus making him an agent with super powers Super Agent. The work culture at BALIC is decentralized and focuses on FUN @ WORK. Employees go through regular training sessions although care is taken to not vigorously stress out the employees. Process: The Process here means the duration and procedure for procurement of the policy. It is Vital that the process be simple and quick, reason being, a time-consuming and complicated process will only lead to an unsatisfied customer; which in turn will bring a bad name to the company. No matter how efficient or Customer Is King Fundamentals the company uses, an inefficient process will only leave the company with an irate customer. SBI Life insurance being a government plus foreign investment company has rigid regulations and the procedures or policy procurement as well as claim settlement takes longer. Bajaj Allianz, a private sector and foreign investor joint venture, has relaxed regulations, policy procurement is quick and easy and claims are settled as soon as possible. Physical Evidence: All factors that add tangibility to a service are included in the physical evidence aspect of the service. These may include the logo, signage, brochures, Policy document, TVCs, Radio Commercials, Visiting Cards, Websites, etc. SBI Life uses the traditional SBI logo along with a tagline saying With Us, You re Sure . Bajaj Allianz uses the logos of both the partner companies - Bajaj , one of India s most respected and trusted names and Allianz, one of the world s largest life insurance providers. The Mascot SuperAgent as well as the casual but emotionally strong tagling JiyoBefikar are BALIC s strongholds.

Future of Insurance in India

Indian Life Insurance Segment is growing at a rapid rate due to more liberal approach from Govt. of India and due to the upward trends in Indian economy and share market. More financial groups and banks including global players are eyeing the Indian Life Insurance Market. We live in the information age. People are becoming more aware of the importance of insurance in their life. However, there is a paradox in the form of a growing need to educate people to buy insurance. Today, natural disasters on a large scale occur regularly and even terrorism is increasing day by day. Specialized software is used in actuarial science to accurately predict life expectancy and mortality. But natural disasters are difficult to predict. This has highlighted to the world that insurance is a basic and fundamental need for the safety and security of the family. Only a larger insurance cover can guarantee a better future. However insurance claims for natural disasters are very low. This is because insurance coverage was too low, and those who really needed insurance had not taken it. There is the need to push insurance as a social responsibility for those who really need it. The Indian insurance market has joined the league of the fastest growing insurance markets in the Asian region, with the total insurance premium projected to grow at a CAGR of more than 50%. The Indian insurance industry will show upward trend in future as it has displayed in the last few years owing to large population and vast untapped market. After analyzing the growth potential of the Indian insurance market, the report says that many foreign investors have shown interest in the industry because the markets in most of the developed countries have reached saturation. Thus, foreign players have turned their attention to the emerging economies, and India is more lucrative as compared to other emerging economies, with more favorable environment for insurance expansion as the country has low insurance penetration. Insurance companies will have greater focus on renewal and persistency management, which will lead to increase in capital base The industry future is promising despite the concern of lack of awareness in majority of the population. The health insurance industry growth will mainly be driven by rising healthcare costs and prospering middle class population, encouraging people to secure their health by taking medical coverage. Government initiatives, including the de-tariffing of general insurance industry and the rationalization of premium rates, will also give impetus to the industry. Research indicates that presently only 10% of Indian population is covered under health insurance, indicating that there is tremendous scope for growth in this area. Total life insurance premium in India is projected to grow Rs 1,230,000 Crores by 2011-12. So even if the current scenario is people are spending more than investing the capital into life insurance, excluding them, others are worried about their future and have started taking insurance policies. So rapidly in future coming years insurance is going to grab everyone s attention and surely the Indians are going to secure their future by investing into it. Life insurance has already grown rapidly in India at present but guaranteed India is going to prosper with upcoming policy holders, which is also going to contribute to the country s growing capital investment. To making India developed in future terms.

The major key players like LIC, Bajaj Allianz and HDFC Standard under life insurance segments are going to contribute much to the boom of insurance in future. Insurance sector hurdles: The four main challenges facing the industry are product innovation, customer service, and investments. Unit-linked personal insurance products might find greater acceptability with rising customer awareness about customized, personalized and flexible products. Flexible products and new technology will play a crucial role in reducing the cost and, therefore, the price of insurance products. Finding the niche markets, having the right product mix through add-on benefits and riders, effective branding of product and services and product differentiation from competitors offering will be the key challenge for the new companies. The insurance industry has been growing between 15 and 20 percent, but it lags far behind its global counteracts. This is due to following reasons:1. Insurance companies create product and go out to find customers. They do not create products that the market wants. 2. Insurance awareness among the General Public is low. 3. The Term- Insurance plans are promoted. 4. Insurance covers are expensive. 5. Inefficient management and low investments yield are responsible for the high premium charged by Indian Insurance Companies. Investment restrictions have been responsible for low yield. 6. Returns from Insurance products are low. 7. There is a dearth of innovation and buyer-friendly insurance products. 8. Most agents and development officers are interested only in producing new business instead of servicing existing customers satisfactorily.

Survey:
Sr. no. 1 2 Age/ Sex 43/M 24/M No. Of No. of Qualification Occupation family earning members members H.S.C. B.Com Electrician Student 7 3 2 1 Gross Annual Family Income 1,00,000 40,000 Insurance Statement

No 1 (Education Plan) 3(ULIP, Money Maximization, Health) 2 (Term Plan, Health) 2 (Surgicare, Children) 1 (Surgicare) 2 (Term, Health) 3 (Life, Child Education, Term) 2 (Money Growth, Profit Maximization) No 2 (Life, Term) 5 (Life, Health, Education) 2 (Life) 8 (Life, Health, Education) 6 (Life, Health, Education)

Expensive Private Sector Private Sector Govt. Private Private Private Private

27/F

B.A.

Assistant

3,00,000

4 5 6 7 8

59/M 32/F 37/M 48/M 38/M

H.S.C. Graduate B.A. N/A D.Ed.

Retired House Wife Employed Employed Teacher

2 7 1 5 3

2 1 1 2

Pension 4,50,000 2,00,000 3,00,000 2,50,000

9 10 11 12 13 14

29/F 47/M 26/F 47/F 27/M 45/M

B.Com H.S.C M.B.A. B.A. H.M. B.Com

Clerk Conductor Wealth Manager Govt. Service

5 4 3 3 2

2 1 2 1 1 1

2,00,000 50,000 10,00,000 2,50,000 5,00,000 6,00,000

Private Expensive Private Govt. Private Private

HR Head (Payroll) House Wife

15

38/F

B.Com

8,00,000

Private

Bibliography
y y y y www.bajajallianz.com/Corp/index.jsp - Official Bajaj Allianz Website www.sbilife.co.in/sbilife/content/home - Official SBI Life Insurance Website www.google.com Search Engine www.youtube.com/jiyobefikar - Official YouTube Channel for BALIC