Beruflich Dokumente
Kultur Dokumente
SUBMITTED BY:
SHAILIKA CHAUHAN
MBA (2008-2010)
DECLARAION
I take this opportunity to thank Mr. Sachin Shekhar, my project guide, who helped,
inspired and mentored me and without whose support this project report would not
have taken its current shape.
I would like to thank my Project Guide Mrs. Meenakshi Saxena, at SBS, Shobhit
University, Meerut who helped me in making this project and for his constant
support and inspiration.
Finally I thank all my friends who gave me the important information about the
literature related to this project and also helped with websites that provided me
with adequate topics.
I once again express my heartfelt indebtness to all-aforesaid. Any omission or
error in acknowledgement is inadvertent. For such oversights and lapses, I tender
unconditional apology.
SHAILIKA CHAUHAN
TABLE OF CONTENTS
EXECUTIVE SUMMARY-----------------------------------1
CHAPTER 1. INDUSTRY PROFILE---------------------------------------3
1) Background of insurance industry-----------------------4
2) Major players--------------------------------------------------5
3) Principles of insurance---------------------------------------6
CHAPTER 2. COMPANY PROFILE-------------------------------------10
1) AXA Group--------------------------------------------------10
2) Bharti enterprise---------------------------------------------10
3) Bharti AXA life insurance Ltd.-------------------------12
4) Products of Bharti AXA----------------------------------14
5) SWOT analysis----------------------------------------------15
CHAPTER 3. RESEARCH OBJECTIVE--------------------------------17
1) Research methodology-------------------------------------17
2) Research design---------------------------------------------17
3) Data collection----------------------------------------------18
CHAPTER 4. SCOPE OF STUDY---------------------------------------19
1) Limitations----------------------------------------------------19
CHAPTER 5. DATA ANALYSIS & INTERPRETATION------------20
CHAPTER 6. FINDINGS & ANALYSIS---------------------------------28
CHAPTER 7. SUGGESTIONS----------------------------------------------32
CHAPTER 8. APPENDIX---------------------------------------------------33
1) Annxture------------------------------------------------------34
EXECUTIVE SUMMARY
The service industry is one of the fastest growing sectors in India today. The
upcoming sectors which are really showing the graph towards upwards are - Telecom,
Banking, and Insurance. These sectors really have a lot of responsibility towards the
economy. Amongst the above-mentioned areas insurance is one sector, which took a
lot of time in positioning itself. The insurance business of non-life companies was not
much in problems but the major problem was with life insurance.
The Life Insurance Companies Act 1912 made it necessary that the premium rate
tables and periodical valuations of companies should be certified by an actuary. But
the Act discriminated between foreign and Indian companies on many accounts,
putting the
Indian companies at a disadvantage. The formation of IRDA, entrance of private life
insurance companies into India with one foreign partner, compulsory training of
Insurance agents etc. developments started to take place. And this was the time when
these companies started searching for proper channel partners who can help the
organization in expanding its network and business in India.
This study is carried out to understand the behavioral dynamics of consumers and to
develop rapid stage segmentation strategies for customer retention and expansion
An exploratory research was carried out through questionnaire for which a stratified
sampling technique was adopted and a sample size of 80 individuals was taken. A
questionnaire was drafted to analyze the dependence of type of insurance policy
required, on the life cycle stage of the individual. It will also clearly show the
customers perception towards insurance compared with the other investment options
and financial instruments, and as to how we can make it better.
Both qualitative and quantitative techniques were applied but this study heavily relied
on qualitative technique and it was proven that the life cycle stage of an individual is
an important determinant for deciding the type insurance policy required by the
individual.
After the completion of the study the recommendations are 1) Life time customer
strategy, 2) Introduce innovative policies, 3) Increase dependent features in policy,
4) Maintain a database of customers, which has been more clearly explained in the
later stage of the report.
The implication of this research study for Bharti Axa can be developing customer
retention and expansion strategies by creating a bouquet of offerings to meet and
surpass expectations and add value in the business system and recrafting the offerings
at various points in the product life cycle to provide a total brand value experience.
CHAPTER 1
INSURANCE INDUSTRY
The Insurance Act, 1938 had provided for setting up of the Controller of Insurance to
act as a strong and powerful supervisory and regulatory authority for insurance. Post
nationalization, the role of Controller of Insurance diminished considerably in
significance since the Government owned the insurance companies.
But the scenario changed with the private and foreign companies foraying in to the
insurance sector. This necessitated the need for a strong, independent and autonomous
Insurance Regulatory Authority was felt. The Insurance Regulatory and Development
Authority Act, 1999 is an act to provide for the establishment of an Authority to
protect the interests of holders of insurance policies, to regulate, promote and ensure
orderly growth of the insurance industry and for matters connected therewith or
incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance
Corporation Act, 1956 and the General insurance Business (Nationalization) Act,
1972 to end the monopoly of the Life Insurance Corporation of India (for life
insurance business) and General Insurance Corporation and its subsidiaries The act
extends to the whole of India and will come into force on such date as the Central
Government may, by notification in the Official Gazette specify. Different dates may
be appointed for different provisions of this Act.
Insurance in India has its history dating back till 1818, when Oriental Life Insurance
Company started was started by Europeans in Kolkata to cater to the needs of
European community. Pre-independent era in India saw discrimination among the life
of foreigners and Indians with higher premiums being charged for the latter. It was
only in the year 1870, Bombay Mutual Life Assurance Society, the first Indian
insurance company covered Indian lives at normal rates.
At the dawn of the twentieth century, insurance companies started mushrooming up.
In the year 1912, the Life Insurance Companies Act, and the Provident Fund Act were
passed to regulate the insurance business. The Life Insurance Companies Act, 1912
made it necessary that the premium rate tables and periodical valuations of companies
should be certified by an actuary. However, the disparage still existed as
discrimination between Indian and foreign companies.
Even though the first legislation was enacted in 1938, it was only in 19th of January,
1956, that life insurance in India was completely nationalized, through the Life
Insurance Corporation Act, 1956. There were 245 insurance companies of both Indian
and foreign origin in 1956. Nationalization was accomplished by the govt. acquisition
of the management of the companies. The Life Insurance Corporation of India
was created on 1st September, 1956, as a result and has grown to be the largest
insurance company in India as of 2006.
Till 1999, there were not any private insurance companies in Indian insurance sector.
The Govt. of India then introduced the Insurance Regulatory and Development
Authority Act in 1999, thereby de-regulating the insurance sector and allowing private
companies into the insurance. Further, foreign investment was also allowed and
capped at 26% holding in the Indian insurance companies.
Life Insurance
• Public
• Private
PRINCIPLES OF INSURANCE
• Definite Loss. The event that gives rise to the loss that is subject to the insured, at
least in principle, take place at a known time, in a known place, and from a known
cause. The classic example is death of an insured person on a life insurance policy.
Fire, automobile accidents, and worker injuries may all easily meet this criterion.
Other types of losses may only be definite in theory. Occupational disease, for
instance, may involve prolonged exposure to injurious conditions where no specific
time, place or cause is identifiable. Ideally, the time, place and cause of a loss should
be clear enough that a reasonable person, with sufficient information, could
objectively verify all three elements.
• Accidental Loss. The event that constitutes the trigger of a claim should be
fortuitous, or at least outside the control of the beneficiary of the insurance. The
loss should be ‘pure,’ in the sense that it results from an event for which there is
only the opportunity for cost. Events that contain speculative elements, such as
ordinary business risks, are generally not considered insurable.
• Large Loss. The size of the loss must be meaningful from the perspective of the
insured. Insurance premiums need to cover both the expected cost of losses, plus
the cost of issuing and administering the policy, adjusting losses, and supplying the
capital needed to reasonably assure that the insurer will be able to pay claims. For
small losses these latter costs may be several times the size of the expected cost of
losses. There is little point in paying such costs unless the protection offered has
real value to a buyer.
• Calculable Loss. There are two elements that must be at least estimable, if not
formally calculable: the probability of loss, and the attendant cost. Probability of
loss is generally an empirical exercise, while cost has more to do with the ability of
a reasonable person in possession of a copy of the insurance policy and a proof of
loss
associated with a claim presented under that policy to make a reasonably definite and
objective evaluation of the amount of the loss recoverable as a result of the claim.
Bharti Enterprises
Bharti Enterprises is a pioneer in telecom sector and the group is widening its horizons
by entering new business areas such as insurance and retail. Bharti Enterprises has
created a vantage position for itself in the global telecommunications sector. Bharti
Airtel Limited occupies numero uno status in mobile telephony in India while its
brand 'Beetel' is the largest manufacturer and exporter of world class telecom
terminals.
Founder of Bharti Group is Sunil Mittal. In 1983, Sunil Mittal entered into an
agreement with Germany's Siemens to manufacture the company's push-button
telephone models for the Indian market. In 1986, Sunil Bharti Mittal incorporated
Bharti Telecom Limited (BTL) and his company became the first in India to offer
push-button telephones, establishing the basis of Bharti Enterprises. This first-mover
advantage allowed Sunil Mittal to expand his manufacturing capacity elsewhere in the
telecommunications market. By the early 1990s, Sunil Mittal had also launched the
country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won
a bid to build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the
cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996,
cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises
acquired control of JT Holdings, and extended cellular operations to Karnataka and
Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in
Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti
Enterprises went public in 2002, and the company was listed on Mumbai Stock
Exchange and National Stock Exchange of India. In 2003, the cellular phone
operations were rebranded under the single AirTel brand.
TeleTech Services (India) Ltd: TeleTech Services (India) Ltd is a joint venture
between TeleTech Holdings, Inc., world's leading full-service provider of business
process outsourcing and Bharti TeleTech Ltd. The company offers offer the entire
spectrum of front-to-back-office business processes ranging from voice and non-voice
customer support, back office administration (including credit and collections, account
maintenance, application processing, claims processing, asset management, document
management etc.), sales and marketing (including database marketing, marketing
support, web sales).
FieldFresh Foods Pvt Ltd: FieldFresh Foods (P) Ltd is an equal partnership
venture between Bharti Enterprises and ELRo Holdings India Ltd, an investment
company of the Rothschild family. The company provides premium quality fresh
produce to the markets worldwide and promotes world class standards for agricultural
practices, progressive farming techniques & identification and adoption of appropriate
technologies.
Bharti Retail Pvt Ltd: Bharti Retail Pvt Ltd. is a 100% subsidiary of Bharti
Enterprises. Bharti Retail is planning to launch its retail outlets in multiple consumer
friendly formats in several cities across India.
Under the agreement AXA has a 26% equity interest in the joint venture, while Bharti
holds the balance. AXA, a global leader in insurance business, enabled the company
to have access to AXA’s global life insurance and asset management expertise. Bharti
brought its strong local market knowledge, reputation and India-wide retail presence.
“The insurance sector in India provides a mega opportunity for private players like
Bharti Axa Despite the strong growth witnessed by the sector in the recent years,
nearly 80% of the Indian population is without life insurance coverage. As one of
India’s leading business conglomerates having an established brand and a significant
presence in the retail space, Bharti has inherent advantages in being a part of this
growth story. In AXA, Bharti has a global leader as its partner, one that is known for
its expertise and best practice across the world. More importantly, this new venture
also fits into our strategy of taking on projects that make a difference to the society at
large.
This joint venture is an opportunity for AXA to enter the Indian life insurance market,
one of the most attractive emerging insurance markets. India is a fast growing
economy and a huge market with more than 1.1 billion people. This coupled with a
large middle class and increasing income levels will drive growth in the insurance
market. Bharti is a well-established and financially strong group whose capabilities
and network will be of significant value to the joint venture.
The joint venture invested in the region of Rs. 500 crores (115 Million USD) over the
first three to four years of operations, reflecting both partners’ commitment to quickly
establish a strong foothold in the Indian market.
The joint venture commenced business in the first half of 2006, subject to IRDA,
FIPB and other statutory approvals.
Vision
To be a leader and the preferred company for financial protection and
wealth management in India
Strategy
Strategic differentiators
• Strong partner Bharti - provides access to customer base of more than 20 million
• Multi channel execution capability
• Current Asia product range which is a strong match to products sold to the mass
and mass affluent
• Global scale providing cost effective and speedy re-use of systems, products and
business capability
• Strong AXA and Bharti brands which can be leveraged to attract and retain a high
quality management team.
➢ SECURE CONFIDENT : It ensures that the dreams you aspired for your family
in your lifetime, don’t remain unfulfilled by the financial void which might get
created due to the unfortunate event of death.
➢ FUTURE CONFIDENT II : It serves you in building wealth for your long term
needs, but most importantly, provides the extra financial protection to your loved
ones.
Weakness
• Late entrant in the insurance sector
• Thin distribution network all over the nation
• Very less number of product offering in comparison to its competitors
• Lack of confidence among the customers as parent company does not have a financial
background.
Opportunities
• Strong growth of unit linked market at the mass affluent end.
• Potentially with 20% insurance cross sale only to new telecom customers, this
network can yield 48 lac policies per year with sum assured of nearly Rs 58000
crores.
Threats
• Many more companies are lining up to enter into Indian Insurance Industry.
• Consumer’s preference is still more towards public sector insurance companies.
CHAPTER 3
RESEARCH OBJECTIVE
RESEARCH METHODOLOGY
Methodology:
An exploratory research was carried out to understand the behavior dynamics and
need states and also understands the messages and experience the consumer is
exposed to both from within the product/service category as well as across categories.
Both qualitative and quantitative techniques are applicable although exploration relies
more heavily qualitative techniques. Correlation is used to find out the relation
between various variables.
RESEARCH DESIGN
Sample size:
• As the research is based on study to exhibit relation between life cycle stage of an
individual and the type of insurance policy required at different stages, a stratified
sampling technique was adopted and a sample size of 80 individuals were taken.
• The survey has been conducted within the geographic area of Meerut. The time
period for which survey has been undertaken is June- July 2009.
Sampling techniques:
A stratified sampling technique was adopted because of the nature of the study and
for higher statistical efficiency requirement to come to an analysis. The sample was
carefully drafted. A lot of care was taken and 20 samples from each age group were
taken. There are total 80 Questionnaire.
The age groups discussed in the study are 21-30, 31-40, 41-50 and 51-60. The
sample was designed in the above stated manner to make the analysis easier. Open
ended and close ended questions are used in the questionnaire.
DATA COLLECTION
Primary data:
• A questionnaire was drafted which included sample rating scales like simple
category scale, multiple- choice single-response scale, multiple- choice multiple-
response scale , multiple- rating list scale, and constant sum scale, and open
ended questions.
• The questionnaire contains 12 questions which helps us to analyze the
dependence of type of insurance policy required on the life cycle stage of the
individual.
• It will also clearly show the customers perception towards insurance compared
with the other investment options and financial instruments, and as to how we can
make it better.
Secondary data:
The secondary data was collected through the web sites of different organizations,
news papers. The secondary data is collected through the Websites related to
insurance sectors, Journals & Books on Research Methodology.
CHAPTER 4
SCOPE OF STUDY
LIMITATIONS
• Project was undertaken in the Meerut region only .So it might not be a true
Representation of the views of the insured of other places.
• The project is based on survey of population related to Bharti Axa only.
• The time factor; I have limited time to conduct our survey and to meet the people
according to the sample size.
• All the responses taken are personal opinions & perception of the respondents that
are subjective.
• The area covered was too large in a time of 8 weeks.
CHAPTER 5
DATA ANALYSIS & INTERPRETATION
Table-1
children need 8 15 7 3
family need 7 16 15 15
Insurance 2 7 9 7
policy
Mutual 7 6 7 10
funds
Shares 11 7 4 3
Table-4
Numbers of policies hold by different life
stages
0 Policies 12 6 2 0
0-3 5 5 8 2
Policies
3-5 1 3 7 9
Policies
5 and 2 3 5 10
above
Table- 5
TABLE- 6
1 2 3 4 5
• The primary reason being maximum percentage of this age group are not married
and do not have children so do not have any kind of a responsibility towards
family.
• Secondly most of them are still parasites and dependent on their parents for living.
A small extent is working but do not have sufficient fund to take a life insurance
policy.
• They have high risk takers and want to earn quick money so are more interested in
the share market.
• They have a notion that they will live long and no unavoidable circumstances can
hamper their life.
• The offspring’s are already grown up and investment for their benefit has already
been made in the previous stage.
• They start thinking about their old age and after retirement financial solution.
SUMMARY
➢ To retain customer, company should design such insurance policies that contain the
composition of the features having high correlation. Due to this, customer will
attract more towards insurance rather than other investment.
➢ A few of the innovations should be based on specific needs at certain life stages.
Consumers are often migrated to these newer policies. The Critical Illness Plan
should be introduced as a response to a stated need of consumers. The
differentiator here is clearly different in the number of illnesses it includes
➢ Unlike other categories, customer retention in the insurance business has not yet
been under serious consideration. Insurance as an industry till date has adopted a
strategy of “one time customer”, and is the same with Bharti Axa, but the concept
should be revised and “life time customer” Strategy should be adopted for long
term sustainability and growth of the company.
➢ The company has to begin a huge database monitoring exercise with annual
statements / mailers to the customers and updating their databases. This can also be
used for cross selling of different policies at different life stage of the customer
CHAPTER 8
APPENDIX
BIBLIOGRAPHY
Times of India
Skees, J., Hazell, P., Miranda, M.. 1999. New Approaches to Crop Yield Insurance
in Developing Countries.
Business Research Methods, Cooper & Schindler
S. Balchandran, IRDA, IC-33 LIFE INSURANCE
Financial Express
Business Today
WEBSITE REFERENCE
http://www.irdaindia.org/
http://www.licindia.com/
http://www.bharti-axalife.com/
http://www.lifeinscouncil.org/
www.iinvestor.com
www.google.com
www.insure.com
www.financialexpress.com
ANNEXURE
SHOBHIT UNIVERSITY
SCHOOL OF BUSINESS STUDIES
Name: __________________________________Occupation:____________________
Address: _______________________________
Age: 21-30 31-40 41-50 51-60
Gender: Male Female
2) If no, why have you not taken any life insurance policy?
• Not aware
• I don’t require it
• Have other investment options
• Lack of fund
• Planning in near future
1) Now being aware of life insurance why would you take a life insurance policy?
(Can give multiple choices)
• To cover Future cash needs
• Tax benefit
• As an investment instrument
• As an angel of mercy
• As a hedge against old age
5) If yes what was your main concern for taking a life insurance policy?
• Investment
• Tax benefit
• Purely insurance
6) What were your needs when you had taken life insurance policies? (Can tick multiple
choices)
• Family need
• Children need
• Old age need
• Asset building need
Assuming that life insurance policy is purely an investment option please
answer the following questions
7) If you hold a policy please rate the benefits in insurance policy compared to
investing in shares market and mutual funds on scale of 1-5 (where 1 being the least
and 5 being the most?)
• Flexibility 1 2 3 4 5
• Diversification 1 2 3 4 5
• Security 1 2 3 4 5
• Return on investment 1 2 3 4 5
• Requirement of funds 1 2 3 4 5
• Transparency 1 2 3 4 5
• Liquidity 1 2 3 4 5
• Control over financial future 1 2 3 4 5
8) Given a certain amt of money where would you invest, assuming that insurance is
purely an investment option?
• Life insurance
• Mutual funds
• Share market
9) Suppose you have 100000/- of rupees in spare, how much would you invest in the
investment options state below?
• Life insurance __________
• Mutual funds __________
• Share market __________
10) What would be the reason for above decision? (30 Words Max)
11) Which medium do you find more suitable to gain knowledge about different
financial instruments?
• Personal reference
• Financial advisors
• Telephonic
• Advertisement (T.V, newspaper)
12) Please give a few suggestions as to how we can make life insurance a better
investment option compared to mutual funds and share market?
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