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Assignment Assessment Report

Campus: Level: Module Name: Students Name:

Mumbai PCL-I Sales

Year/semester Assignment Type Assessors Name Reqd Submission Date Actual Submission Date Submitted to :

2010-12 Assignment B

Ritesh asthana

e-mail id & Mob No Asthana.ritesh246@gmail.com Stream BUSINESS

Certificate by the Student: Plagiarism is a serious College offence. I certify that this is my own work. I have referenced all relevant materials. (Students Name/Signatures) ritesh Expected Assessment Gra Feedback Outcomes Criteria de bas ed on D,M ,P,R syst em General Parameters Clarity Analytical Thinking Research and innovative approach Formatting & PresentationClear understanding of the concept Ability to analyze the situation realistically and take required actions Research carried out to reach the outcome and innovative methods used Concise & clear thinking along with presentation

Subject Specific Parameters Clarity Clear understanding on the overall sales plan. Ability to analyze the current industry situation and have a clear perspective of the road map for this new life insurance organization. Research carried out to understand the market, the competitors and the prevailing tactics/tools.

Analytical Thinking

Research and innovative approach

Grades P M D

Grade Descriptors A Pass grade is achieved by meeting all the requirements defined. Identify & apply strategies/techniques to find appropriate solutions Demonstrate convergent, lateral and creative thinking.

Achieved Yes/No (Y / N)

Assignment Grading Summary (To be filled by the Assessor) OVERALL ASSESSMENT GRADE: TUTORS COMMENTS ON ASSIGNMENT: SUGGESTED MAKE UP PLAN (applicable in case the student is asked to re-do the assignment) REVISED ASSESSMENT GRADE TUTORS COMMENT ON REVISED WORK (IF ANY) Date: Assessors Name / Signatures:


Life Insurance is the fastest growing sector in India since 2000 as Government allowed Private players and FDI up to 26%. Life Insurance in India was nationalized by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC. In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a road map for privatization of the life insurance sector. While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating the Insurance Regulatory and Development Authority Act of 2000. The same year that the newly appointed insurance regulator - Insurance Regulatory and Development Authority IRDA --started issuing licenses to private life insurers.

Foreign Direct Investment (FDI) Policy in Insurance Sector As per the current (Mar 06) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit) with the balance being funded by Indian promoter entities. The limit to foreign investment includes both direct and indirect investment and has been a cause of significant lobbying by foreign insurance companies for a change in regulations to increase the FDI limit to 49% of equity issued. The Indian government has supported an increase in the FDI limit, which requires a change in the Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%. A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian government has tabled the bill in the Upper House of Parliament in August 2010. All life insurance companies in India have to comply with the strict regulations laid out by Insurance Regulatory and Development Authority of India (IRDA). Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player in the market. The private companies have come out with products called ULIPs (Unit Linked Investment Plans) which offer both life cover as well as scope for savings or investment options as the customer desires. These type of plans are subject to a minimum lock-in period of three years to prevent misuse of the significant tax benefits offered to such plans under the Income Tax Act. Comparison of such products with mutual funds would be erroneous


LIC still remains the largest life insurance company accounting for 64% market share. Mainly owing to entry of private players with innovative products and better sales force. Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its market share went up to 6.98% in 2007-08. The company ranked second (after LIC) in number of policies sold in 2007-08, with total market share of 7.36%. ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in India. Accounting for increase in market share to 8.93% in 2007-08. SBI Life Insurance Co Ltd in terms of new number of policies sold, the company ranked 6th in 2007-08. New premium collection for the company was Rs 4,792.66 crore in 2007-08, an increase of 87% over last year. Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76 crore and its MARKET SHARE went up to 2.96% from 1.23% a year back. HDFC Standard Life Insurance Co Ltd with an income of Rs 2,680 crore in FY2007-08, registering a yearon-year growth of 64%. Its MARKET SHARE is 2.88% and it ranks 6 th among the insurance companies and 5th amongst the private players. Birla Sun Life Insurance Co Ltd market share of the company increased from 1.22% to 2.11% in 200708. The company moved to the 7th position in 2007-08 from 8the a year before. Max New York Life Insurance Co Ltd has reported growth of 73% in 2007-08. Total new business generated was Rs 641.83 crore as against Rs 387.51 crore. The company was pushed down to the 8th position from 7th in 2007-08. Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08, the company reported growth of 80%, moving from the 11th position to 9th. It captured a market share of 1.19% in 2007-08. Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from 9th last year. It has presence in more than 3,000 locations across India via 221 branches and close to 40 bancassurance partnerships. Aviva Life Insurance plans to increase its capital base by Rs 344 crore. With the fresh investment, total paid-up capital of the insurer would go up to Rs 1,348.8 crore.

AEGON Religare Life Insurance Company

AEGON, an international life insurance, pension and investment company, Religare, a global financial services group and Bennett, Coleman & company, Indias largest media house, have come together to launch AEGON Religare Life Insurance Company Limited (ARLI). This venture is dedicated to build a profitable customer-centric business with scale, providing a work environment that fosters excellence and innovation. This joint venture will balance a local approach with the power of an expanding global operation. ARLI launched its pan-India operations in July, 2008 following a multi-channel distribution strategy with a vision to help people plan their life better. The fulfillment of this vision is based upon having a complete product suite, providing customized advice and enhancing the overall customer experience through superior service.

ARLI has launched a suite of products that are focused on providing the customer with the means to meeting their long-term financial goals. At the same time product development has been founded on the tenet of providing the customer with great value. ARLI products such as AEGON Religare Term Plan and AEGON Religare Future Protect Plan have been ranked among the best in terms of value and have attracted many external accolades. About AEGON As an international life insurance, pension and investment company, AEGON has businesses in over twenty markets in the Americas, Europe and Asia. With headquarters in The Hague, the Netherlands, AEGON companies employ approximately 28,000 people and serve some 40 million customers across the globe. The companys common shares are listed on three stock exchanges: Amsterdam, New York and London. AEGON has more than 160 years of experience with its roots going back to 1844. AEGON holds 26% equity in ARLI.

About Religare Enterprises Limited Religare Enterprises Limited (REL) is a global financial services group with a presence across Asia, Africa, Middle East, Europe and the Americas. In India, Religares largest market, the group offers a wide array of products and services ranging from insurance, asset management, broking and lending solutions to investment banking and wealth management. The group has also pioneered the concept of investments in alternative asset classes such as arts and films. With over 10,000 employees across multiple geographies, Religare serves over a million clients, including corporates and institutions, high net worth families and individuals, and retail investors. REL hold 44% equity in ARLI.

Sales Structure of AEGON Religare Life Insurance Company

1-Product sales orientation: here sales people are well versed in the products that the enterprise has to offer. This can be a specific product or a suite of products or a series of solutions that the sales person is the expert in. One major advantage to this structure is having product experts, but a major disadvantage is potentially high costs to support. 2-Market orientation: here the sales team is orientated towards certain industries. Examples could be government, financial or transportation segments where the sales person sells solutions that are appropriate for each segment. One major advantage to this structure is having industry/solutions experts, but a major disadvantage is potentially duplication of function per areas. Further sub divisions within market orientation are structures such as major/ named or national account management (NAM) or global (GAM) account management, where large of important accounts have assigned people. 3-Geographic structure: here sales people are assigned and are responsible for all accounts in their territory and for knowing all products. One major advantage to this structure is having low costs, but a major disadvantage is limited or few real experts in the field. 4- Sales function orientation: here sales people perform certain sales functions such as order entry, selling, or managing sales events. One major advantage to this structure is having an efficient sales operation, but a major disadvantage is duplication of costs to support. Complicating the different options is when a re-seller is added to the mix. For example, a firm may have a direct sales force to sell to everyone except Federal and State Governments. For these customers they use a specialized reseller. Regardless of structure one selects consider the following guidelines.

-What selling efforts will be needed to meet the organizational goals? -What skills and how many sales people are required to meet these goals -What structure (from above) is best suited to handle the type of products or solutions for the types of accounts and/or industries. -How should the selling effort be allocated/deployed to meet these goals -How will the sales force be managed and compensated -What will the workload be per sales person to achieve the targeted goals? Most importantly, know your customers and make sure they will receive the best in class services!



National Sales Manager

Regional Sales Manager

Zonal Sales Manager Sales Manager

Territory Sales Manager

General Manager

Branch Sales Manager

Sales persons

Channels to be employed

AEGON Religare Life Insurance (ARLI) bancassurance tie-up with Asias largest cooperative bank, the Nashik District Central Cooperative Bank (NDCC). ARLI launched its operations in July, 2008 with four distribution channels Agency Distribution, Direct Channel, Religare and Corporate Agents and Brokers. This tie-up adds a fifth distribution channel, Bancassurance, to the business. The 55-year-old bank, NDCC, started operations in January, 1955. This profitable bank now has over 200 branches and 25 divisional offices and has a share capital of over Rs 90 crore. NDCC distributes loans among small scale industries, farmers and milk plants, and has distributed more than Rs 500 crore in loans in the current fiscal year. On the tie-up, Mr. Rajiv Jamkhedkar, Managing Director and Chief Executive Officer, AEGON Religare Life Insurance said, Maharashtra is an important market for us and we generate significant business from the state. To increase our reach and penetration in Maharashtra, we had been scouting for a partner. In the Nashik District Central Cooperative Bank, which is a trusted name in this region with over 200 branches and solid financials, our search has ended with a partner who has a reach in the furthest corners of the state. There was a clear consensus that NDCC was the right partner for us. The bank shared our vision on helping people plan their lives better, thus resulting in a tie-up.

AEGON Religare Life Insurance is the coming together of AEGON, an international life insurance, pension and Investment Company and Religare, one of Indias leading integrated financial services groups. A diversified financial services group with a pan-India and international presence, Religare Enterprises Limited (REL) offers a range of products and services, including asset management, life insurance, wealth management, equity and commodity broking, investment banking, lending services, private equity and venture capital. REL operates from 7 domestic regional offices, 43 sub-regional offices, and has a presence in 498 cities controlling 1,837 business locations all over India as on June 2009. REL acquired UK-based Hichens, Harrison & Co. in 2008 which was subsequently re-named as Religare Hichens Harrison PLC (RHH). With the addition of RHH the REL group now operates out of multiple global locations (the UK, the USA, Brazil, South Africa, Dubai and Singapore).

AEGON Religare Life Insurance strengthens its foothold in southern India by alliance with T S Mahalingam & Sons is one of the largest car dealership in South India with businesses in financial services and real estate operating in Chennai, Bangalore, Coimbatore and Hyderabad. It is the pioneer in third party distribution of financial products in the country The company launched its pan-India multi-channel operations in July, 2008 with over 30 branches spread across India. In an industry first, AEGON Religare Life Insurance offers policy servicing on the phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication. It is also the first company to include the customers medical report in the policy kit. Religare has a truly pan-India footprint going well beyond Tier-1 cities, present through more than 1550 locations spread across over 460 cities and towns. Religares businesses are broadly clubbed across three key verticals the retail, institutional and the wealth spectrum. Structurally, all businesses are operated through 10 subsidiaries held by the holding company Religare Enterprises Limited.

Competition analysis of top three insurance companies



0.79 0.51 0.37 0.21

PRESENT SCENARIO OF INSURANCE INDUSTRY India with about 200 million middle class household 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. Indians, have always seen life insurance as a tax saving device, are now suddenly turning to the private sector that are providing them new products and variety for their choice. 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. Computerization 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. At present the distribution channels that are available in the market are listed below. Direct selling Corporate agents Group selling Brokers and cooperative societies Bancassurance Customers have tremendous choice from a large variety of products from pure term (risk) insurance to unit-linked investment products. Customers are offered unbundled products with a variety of benefits as riders from which they can choose. More customers are buying products and services based on their true needs and not just traditional moneyback 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. The rural consumer is now exhibiting an increasing propensity for insurance products. A research conducted exhibited that the rural consumers are willing to dole out anything between Rs 3,500 and Rs 2,900 as premium each year. In the insurance the awareness level for life insurance is the highest in rural India, but the consumers are also aware about motor, accidents and cattle insurance. In a study conducted by MART the results showed that nearly one third said that they had purchased some kind of insurance with the maximum penetration skewed in favor of life insurance. The study also pointed out the private companies have huge task to play in creating awareness and credibility among the rural populace. The perceived benefits of buying a life policy range from security of income bulk return in future, daughter's marriage, children's education and good return on savings, in that order, the study adds. With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other non-life insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

The life insurance industry in India grew by an impressive 36%, with premium income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. This report, Indian Insurance Industry: New Avenues for Growth 2012, finds that the market share of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share of the non-life insurance market. Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies. REPORT HIGHLIGHTS - Gains of Liberalization in Indian Insurance Sector - Indian Insurance Market Segmentation By Products - Size of the Market and Market Share Of Life Insurers, In INR (crore) - Market Share Of Non-Life Insurers - Forecast of Life Insurance Growth Up to 2012 - Forecast of Non-Life Insurance Growth Up to 2012 - Market Revenue of Both Public and Private Insurers - Policies and Measures Taken By IRDA To Develop The Insurance Market - Research and Development Activities - Regulation of insurance and reinsurance companies - Major Challenges That Indian Insurance Sector is Facing - Profiles of the Major Players

REPORT FEATURES In the globalize market scenario, companies need to understand and challenge the competitive markets they operate in the Indian Insurance Industry: New Avenues for Growth 2012 is a complete analysis of the market that will help you in decision making. Chapter 2, 3, and 4 of this report discussed the impact of liberalization of the market and market shares of public and private sector companies and polices implemented by IRDA to develop the insurance market in India. Chapter 5, 6, and 7 deals with market revenue of private and public players, opportunities and forecasts and policies taken by IRDA to develop the insurance market. Major challenges of Indian Insurance Sector along with Profiles of major players are discussed in Chapter 8 and 9. There are two types of training that fall under the umbrella of sales training. The first is teaching the mechanics of sales: how to go about selling in the general sense, with an emphasis perhaps on the sales techniques that work best for your industry. The second is company-specific training: details about your products and services, the sales process that your team is expected to use, tools and resources, etc. Every salesperson, no matter how experienced, can benefit from both types of sales training. Learning how to sell is an ongoing process. There are always new strategies and new technologies that your team must learn in order to sell effectively. When you bring a new salesperson on board, the priority will be in company-specific training. Unless your new employee is a rank beginner theyll have at least a basic grasp of the mechanics of selling, but its likely they wont know much about your own products or how your particular sales process works. The easiest way to get started is often to sit the new salesperson down with your customer service team. The customer service folks are intimately familiar with your products, and will know what existing customers like most (and least) about them. Let the new salesperson listen in on a few customer service calls, and give them access to documentation about the products (user guides, brochures, websites, etc.). Once your new employee is familiar with your product line, pair them up with an experienced salesperson. Listening to phone calls and riding along on appointments gives your new employees an idea of the process. Ideally, theyll get to see at least one sale go through the entire process. Finally, switch roles and have the new salesperson make calls and take appointments with a senior salesperson (or sales manager) observing. Not only will you find out how well they absorbed your company information, youll also get a look at their general sales knowledge. Now youll know how much mechanical sales training your new employee needs. If your new salesperson demonstrates weaknesses in particular areas (for example, theyre great at getting appointments but choke at the close) then it might be time for some basic training. You can

either train internally (do it yourself or assign a senior salesperson) or externally (signing your new employee up for a sales training class, for example). Internal training is cheaper and you can customize it perfectly to your employees needs, but it is time consuming and can end up costing you more in the long run, if your best salesperson is spending hours training instead of making sales! An alternative is to combine both approaches: sign the new salesperson up for an external class, and then arrange for them to practice by setting up role playing or sending them out on appointments. New team members are not the only ones who will need sales training. Anytime you add a new product or service, your salespeople need to know about it. If you change the sales process (for example, adding an ecommerce component to your website) your sales team needs to know about that, too. And if you have the resources its a great idea to periodically set up training for your salespeople, so they can learn new sales skills and hone existing skills.