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Agency business model of different insurance companies- competitive strategies.
Different agencies of different insurance companies are having some strategies to
survive in the market. Their strategies may be in the form of:
Ô mow they target their customers.
Ô mow they make their advisors active.
Ô mow they make their operational and sales department effective.
Ô mow they promote their employees.
Ô mow they handle the conflict in agency.

›       Main objective of the project is to find out the
strategies of different insurance agencies and evaluate them. Project is about to
penetrate the competitors of SBI life. Conclusion of this project can give an idea of
strategies of different companies which may be helpful to the company. Now days
all the insurance companies in India are trying to establish themselves in the
competitive market. They are introducing innovative marketing strategies to
survive in the market. Many other private companies are looking to enter in the
Indian insurance market .so it is very essential to a company to innovate their
marketing strategies in terms of

Ô <ecruiting their advisors

Ô To make their advisors active
Ô Sell educated and capable employee in the agency
Ô Marketing of their products
Ô Deployment of their products
Ô Targeting the right and potential customers
Ô Differentiating from other companies
Ô juture plan of the company

This study consists of to find out the marketing strategies of different

insurance companies which are the competitors of SBI Life insurance. This
research requires the interview of branch managers of different insurance
companies and find out their branches are working in terms of above mentioned


<esearch is totally based on primary data. Secondary data can be used only for the
reference. <esearch has been done by primary data collection, and primary data
has been collected by meeting with the branch and agency manager of different
insurance agencies and branches in Mumbai. Data collection has been done
through by giving structured questioner.. This is an exploratory type of research.


Ô Time limitation
Ô <esearch has been done only in Mumbai.
Ô Companies did not disclose their secrets data and strategies.
Ô Possibility of Error in data collection.
Ô Possibility of Error in analysis of data due to small sample size.


The story of insurance is probably as old as the story of mankind. Tendency of a
human being to secure themselves against loss and disaster has been from the
starting of world. They sought to avert the evil consequences of fire and flood and
loss of life and were willing to make some sort of sacrifice in order to achieve
security. Though the concept of insurance is largely a development of the recent
past, particularly after the industrial era ± past few centuries ± yet its beginnings
date back almost 6000 years as per records.

Insurance business is divided into four classes:

Ô Life Insurance
Ô jire
Ô Marine
Ô Miscellaneous Insurance.


Ô Protection to investor.
Ô Accumulation of savings.
Ô Channeling these savings into sectors needing huge long term investment.


~lobally, insurers increasingly are pressured by the demands of their clients. The
development of global insurance industry over the past few years was influenced
by booming stock markets which enabled considerable capital gains to be made in
non life business. Increase in insurers equity capital increased underwriting
capacity, while demand did not develop at the same pace, resulting in decrease in
insurance policies prices. The stock market boom of the past few years led to

demand for unit linked insurance products.

The global insurance industry is growing at rapid pace. Most of the markets
are undergoing globalization. Lot of mergers and acquisition are taking place in the
insurance world. The rapidity in the industry, technological improvement has
resulted in pressures on a few economic parameters. The world insurance industry
is at peak of its globalization process.
~lobal insurance market is increasing by an average of six percent per
year since 1990. Insurance companies have collected $2443.7 billion premium
world wide according to the global development of premium volume in 144
countries in 2005. $1521.3 has been generated as life insurance premium and
$922.7 as non life insurance premium. The US accounted for 35% of global life
and non life premium, Japan had global share of 21%, and UK was having 10% of
global share.


In this era of globalization, insurance companies face a dynamic global
environment. Dramatic changes are taking place owing to the internationalization
of activities, appearance of new risk, new types of covers to match with new risk
situations, and unconventional and innovative ideas on customer services. Low
growth rates in developed markets, changing customers needs, and the uncertain
economic conditions in the developing world are exerting pressure on insurer¶s
resources and testing their ability to survive. Now the existing insurers are facing
difficulties from non-traditional competitors those are entering the retail market
with new approaches and through new channels.
India has a rapidly growing middle class and this section can afford to buy
insurance products. This shows the attraction that the Indian market holds for
foreign insurers who have been putting pressure on developing countries as well as
on India to open up its market.


United kingdom 8.9%
Japan 8.3%
Korea 7.3%
United states 4.1%
Malaysia 3.6%
India 3.0%
China 1.8%
Brazil 1.3%


In 1999, the Insurance <egulatory and Development Authority (I<DA) was
constituted as an autonomous body to regulate and develop the insurance industry.
The I<DA was incorporated as a statutory body in April, 2000. The key objectives
of the I<DA include promotion of competition so as to enhance customer
satisfaction through increased consumer choice and lower premiums, while
ensuring the financial security of the insurance market. The I<DA opened up the
market in August 2000 with the invitation for application for registrations. joreign
companies were allowed ownership of up to 26%. The Authority has the power to
frame regulations under Section 114A of the Insurance Act, 1938 and has from
2000 onwards framed various regulations ranging from registration of companies
for carrying on insurance business to protection of policyholders¶ interests.
Ô Protecting the interests of policyholders.
Ô Establishing guidelines for the operations of insurers, and brokers.
Ô Specifying the code of conduct, qualifications, and training for insurance
intermediaries and agents.
Ô Promoting efficiency in the conduct of insurance business.
Ô <egulating the investment of funds by insurance companies.
Ô Specifying the percentage of business to be written by insurers in rural
Ô mandling disputes between insurers and insurance intermediaries.


Ô     The primary function of insurance is to provide
protection against future risk, accidents and uncertainty. Insurance cannot
check the happening of the risk, but can certainly provide for the losses of
risk. Insurance is actually a protection against economic loss, by sharing the
risk with others.


 Insurance is an instrument to share the financial
loss of few among many others. Insurance is a mean by which few losses are
shared among larger number of people. All the insured contribute the
premiums towards a fund and out of which the persons exposed to a
particular risk is paid.

 Insurance determines the probable volume of risk by
evaluating various factors that give rise to risk. <isk is the basis for
determining the premium rate also.

Ô     Insurance is a device, which helps to change from

uncertainty to certainty. Insurance is device whereby the uncertain risks may
be made more certain.

Ô É       

 Insurance relieves the businessmen
from security investments, by paying small amount of premium against
larger risks and uncertainty.

 Insurance provides
development opportunity to those larger industries having more risks in their
setting up. Even the financial institutions may be prepared to give credit to
sick industrial units which have insured their assets including plant and

Ô ²
 Insurance serves as savings and
investment, insurance is a compulsory way of savings and it restricts the
unnecessary expenses by the insured's jor the purpose of availing income-
tax exemptions also, people invest in insurance.

Ô É      " Insurance is an international

business. The country can earn foreign exchange by way of issue of marine
insurance policies and various other ways.
Ô <
    Insurance promotes exports insurance, which makes the
foreign trade risk free with the help of different types of policies under
marine insurance cover.


Life insurance is a contract under which the insurer (Insurance Company) in
Consideration of a premium paid undertakes to pay a fixed sum of money on
The death of the insured or on the expiry of a specified period of time
Shichever is earlier. In case of life insurance, the payment for life insurance policy
is certain. The Event insured against is sure to happen only the time of its
happening is not known. So life insurance is known as µLife Assurance¶. The
subject matter of insurance is life of human being. Life insurance provides risk
coverage to the life of a person. On death of the person insurance offers protection
against loss of income and compensate the titleholders of the policy.



 Insurance products yield more than any
other investment instruments and it also provides added incentives or bonus
offered by insurance companies.

    Insurance is all about risk cover and
protection of life. Insurance provides a unique sense of security that no other
form of invest can provide.

"   Insurance serves as an excellent tax
saving mechanism too.


  Life insurance provides protection to
the dependents of the life insured and the family of the assured in case of his
untimely death. The dependents or family members get a fixed sum of
money in case of death of the assured.

Ô É       After retirement the earning capacity of a person

reduces. Life insurance enables a person to enjoy peace of mind and a sense
of security in his/her old age.
  Life insurance encourages people to save money
compulsorily. Shen life policy is taken, the assured is to pay premiums
regularly to keep the policy in force and he cannot get back the premiums,
only surrender value can be returned to him. In case of surrender of policy,
the policyholder gets the surrendered value only after the expiry of duration
of the policy.

  Life Insurance Corporation encourages and
mobilizes the public savings and canalizes the same in various investments
for the economic development of the country. Life insurance is an important
tool for the mobilization and investment of small savings.
Ô  ! 

Life insurance policy can be used as a security to raise

loans. It improves the credit worthiness of business.
Ô É  É   Life insurance is important for the society as a whole
also. Life insurance enables a person to provide for education and marriage
of children and for construction of house. It helps a person to make financial
base for future.
Ô O" #   Under the Income Tax Act, premium paid is allowed as a
deduction from the total income under section 80C.


Ô Ý !   
  This type of policy covers risk for a specified
period, and at the end of the maturity sum assured is paid back to
policyholder with the bonuses during the term of the policy.
Ô ²     
 This type of policy is for periodic payments of
partial survival benefits during the term of the policy as long as the policy
holder is alive.
This type of insurance offers life insurance protection
under group policies to various groups such as employers-employees,
professionals, co-operatives etc it also provides insurance coverage for
people in certain approved occupations at the lowest possible premium cost.
Ô O  
 This type of insurance covers risk only
during the selected term period. If the policy holder survives the term, risk
cover comes to an end. These types of policies are for those people who are
unable to pay larger premium required for endowment and whole life
policies. No surrender, loan or paid up values are in such policies.

Ô S  
 This type of policy runs as long as the
policyholder is alive and is covered for the entire life of the policyholder. In
this policy the insured amount and the bonus is payable only to nominee on
the death of policy holder.
Ô 6   
 These policies are similar to endowment
policies in maturity benefits and risk cover, but joint life policies cover two
lives simultaneously such as married couples. Sum assured is payable on the
first death and again on the death of survival during the term of the policy.

  a pension plan or annuity is an investment over a certain
number of years but does not provide any life insurance cover. It offers a
guaranteed income either for a life or certain period.

  ULIP is a kind of insurance plan which
provides life cover as well as return on premium paid over a certain period
of time. The investment is denoted as units and represented by the value
called as net asset value (NAV).



In India insurance is sold through mainly four channels.

Ô Through branch
Ô Through agency
Ô Through financial institution
Ô Through banks

Independent agency system means of selling and servicing property and casualty
insurance through agents who represent different companies. The agents own the
records of the policies they sell.
Insurance is now governed by a blend of statutes, administrative agency
regulations, and court decisions. State statutes often control premium rates, prevent
unfair practices by insurers, and guard against the financial insolvency of insurers
to protect insureds.

In most states, an administrative agency created by the state legislature devises

rules to cover procedural details that are missing from the statutory framework. To
do business in a state, an insurer must obtain a license through a registration
process. This process is usually managed by the state administrative agency. The
same state agency may also be charged with the enforcement of insurance
regulations and statutes.

Administrative agency regulations are many and varied. Insurance companies must
submit to the governing agency yearly financial reports regarding their economic
stability. This requirement allows the agency to anticipate potential insolvency and
to protect the interests of insureds. Agency regulations may specify the types of
insurance policies that are acceptable in the state, although many states make these
declarations in statutes. The administrative agency is also responsible for
reviewing the competence and ethics of insurance company employees.
Traditional insurance relationships usually involve too many links in the
administration chain. This can result in unclear ownership and responsibility in key
areas, poor control processes and difficulty of access to decision makers.
This in turn can lead to duplication of tasks. It can also mean a lack of in-depth
knowledge at the insurers which can lead to inefficiency, delays or unauthorised
And all of this can hit profitability and customer satisfaction levels. jor example, if
the distributor cannot influence the decision making and processing times for
claims payment from an inefficient insurer then customers will be unhappy and so
will the distributor.
Many insurers often end relationships with distributors at short notice leaving them
without a carrier for their clients. At Inter mannover, we commit to long term
partnerships with our underwriting agents because we know that mutual trust and
dependency with the right controls can lead to more rewarding and profitable
relationships. Sith us, you don't get a packaged product but one tailor made to suit
our mutual business goals.
The business model successfully combines the agents¶ access to markets, client
understanding, product innovation and nose for market niches with Inter
mannover¶s history of agency management, long term partnership ethos, world
wide expertise, quality capacity, capital and security.


Insurance agency can be defined as a group of insurance agents or advisor. These
agents or advisors create a distribution channel to sell the different insurance
products. These advisors are the strongest distribution channel for an insurance
agency. An advisor or agent works as a third party or intermediate between
insurance company and customers. All the advisors in an agency work as a team.
Main work of insurance advisor or agent is to promote and sell different insurance
products of company.


a person who governs a group of insurance advisors is known as agency manager.
Success of an agency manager depends on the success of their advisors. work of
agency manager is to control the advisors in an efficient way. Agency manager is
like a creature of two wings. me has to recruit advisors as well as to give sales to
the insurance company.
Ô To recruit advisors.
Ô Make them aware of different insurance products.
Ô To give them training session.
Ô To motivate them for efficient work.
Ô To get maximum and efficient work from their advisors.

›  !  

%É# &
Every industry has an operational department which supports the market division.


Develop insurance products Distribute product
CUSTOME<S Plan and manage company BUSINESS PA<TNE<S
julfill and service product Claims

#    < 


In the reference to the SBI Life insurance, development of insurance products,
distribution, planning services products and claims are taken care by the head
office. Back office providers are those persons who take care of the operational
part of the organization and front office providers are the people who brings sell to
the organization. Back office has its own hierarchy which is connected to head
office, and every policy has to be processed to head office. Unit for the operations
is known as processing centre, and processing centre within the city is known as
mini processing centre. Proposal forms come through front office and the
verification of the proposal is done by manually which is known as scrutiny. After
scrutiny the operational staff enters it in SBI Life website, which is done online.
the entry of a proposal is done in a sequential order starting with scrutiny, inwards,
proposal wise inwards, cashier entry, cashier entry approval, data entry and finally
outwards. After finishing all these operations policy issues from the head office of
the state.


Indian Insurance consumers are like Indian Voters, they are soft but when time is
right and ripe, they demand and seek necessary changes. De-tariff of many
Insurance Products are the reflection of changing aspirations and growing demand
of Indian consumers.

jor historical years, Indian consumers were at receiving end. Insurance Product
was underwritten and was practically forced onto consumers on a ³Take-it-As-it-
basis´. All that got changed with passage of I<DA act in 1999. New insurance
companies have come into existence leading to open competition and hence better
products for customers.
Indian customers have become very sensitive to Coverage / Premium as well as the
Products (read <isk Solution), that is given to them. There are not ready to accept
any product, no matter even if that is coming from the market leader, should that
product is not serving the purpose. A case in point is ULIP Product / ~roup Life
and Credit Life in Life Insurance segment and Travel / jamily jloater mealth and
Liability Insurance in the Non-life segment are new age Avatar. The new products
are constantly being demanded by Indian consumers, which is putting huge
pressures on Insurance companies (<ead <isk Under-writers) and Brokers to

Customers are looking at Insurance for covering Pure <isk now which I have
covered in my next section. Another good reason why we are seeing quick changes
in the buying behavior of Insurance from mere Investment to risk mitigation is the
cost of <eplacement of ~oods (<O~) or Cost of Services (COS).
Now Indian customers are aware of insurance industry and insurance products
provided by companies. They have become more sensitive. They would not accept
any type of insurance product unless it fulfills their requirements and needs. In
historic day¶s customers looking at insurance products as a life cover which can
provide security against any unacceptable events, but now customers look at
insurance products as an investment as well as life cover. So today¶s customers
wants good return from the insurance companies. The Indian customer¶s forms the
pivot of each company¶s strategy.



NBjC¶S $
Pj/ <ETI<E jUNDS c

Source: - www.



After the Insurance <egulatory and Development Authority Act have been
passed there has been establishment of many private insurance companies in India.
Previously there was a monopoly business for Life Insurance Corporation of India
(L.I.C.) who was the only life-insurance company for the people till 2000. L.I.C.
still holds 71.4% of the market share in 2006. But after the introduction of private
life insurance companies there is a great competition in Indian market now.
Everyone is trying to capture the fresh market here and penetrate it with aggressive
marketing strategies. Today life-insurance is not only limited up to just life risk
cover and maturity period bonuses but changed to greater return from the
investments. Sith the introduction of the unit linked insurance policies these
companies are investing the money in different investment instruments like shares,
bonds, debentures, government and other securities. People are demanding for
higher returns with the life risk cover and private companies are giving 30-40%
average growth per annum. These life-insurance companies have every kind of
policies suiting every need right from financial needs of, marriage, giving birth and
rearing up a child, his education, meeting daily financial needs of life, pension
solutions after retirement. These companies have every aspects and needs of our
life covered along with the death-benefit.

In India only 25% of the population has life

insurance. So Indian life-insurance market is the target market of all the companies
who either want to extend or diversify their business. To tap the Indian market
there has been tie-ups between the major Indian companies with other International
insurance companies to start up their business. The government of India has set up
rules that no foreign insurance company can set up their business individually here
and they have to tie up with an Indian company and this foreign insurance
company can have an investment of only 24% of the total start-up investment.

Indian insurance industry can be featured by:

Ô Low market penetration.

Ô Ever growing middle class component in population.

Ô ~rowth of customer¶s interest with an increasing demand for better

insurance products.

Ô Application of information technology for business.

Ô <ebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private players,
each of which are making strides in raising awareness levels, introducing
innovative products and increasing the penetration of life insurance in the vastly
underinsured country. Several of private insurers have introduced attractive
products to meet the needs of their target customers and in line with their business
objectives. The success of their effort is that they have captured over 28% of
premium income in five years.

The biggest beneficiary of the competition among life insurers has

been the customer. A wide range of products, customer focused service and
professional advice has become the mainstay of the industry, and the Indian
customer¶s forms the pivot of each company¶s strategy. Penetration of life
insurance is beginning to cut across socio-economic classes and attract people who
have never purchased insurance before.
Life insurance is also now being regarded as a versatile financial
planning tool. Apart from the traditional term and saving insurance policies,
industry has seen the entry and growth of unit linked products. This provides
market linked returns and is among the most flexible policies available today for
investment. Now products are priced, flexible, and realistic and sustain so people
in better position to understand the risk and benefits of the product and they are
accepting these innovative products.
So it is clear that the face of life insurance in India is changing, but
with the changes come a host of challenges and it is only the credible players with
a long term vision and a robust business strategy that will survive. Shatever the
developments, the future and the opportunities in this industry will surely be

There are 12 private players in Indian life insurance market.

(   !  

  mDjC standard life, ICICI prudential, IN~ Vysya,
MetLife, OM Kotak, SBI life.

Aviva, ANP sanmar, Birla sun life, Bajaj Allianz, Max
New York life, Tata AI~.
Major international insurers are- Prudential and Standard
life from UK, Sun life of Canada, AI~, MetLife and New York life of the US.

YEA< LIC (in bn rs.) P<IVATE PLAYE<
jY03 110 10
jY04 120 20
jY05 130 40
jY06 140 60
jY07 240 160

Source: - Insurance Industry (ICjAI publication book)

Ô jurther deregulation of the market.
Ô ~reater concern for the customers.
Ô Newer products and services.
Ô Competition and quality consciousness.
Ô Cost effective operations.
Ô <estructuring of the public sector.
Ô Consolidation of domestic insurance markets.
Ô Technology driven shift in product design.
Ô Actual operations and distribution.
Ô Convergence of financial services.



Profit = earned premium + investment income - incurred loss - underwriting

Insurers make money in two ways: %c& through underwriting, the processes by
which insurers select the risks to insure and decide how much in premiums to
charge for accepting those risks and % & by investing the premiums they collect
from insured.

The most difficult aspect of the insurance business is the underwriting of policies.
Using a wide assortment of data, insurers predict the likelihood that a claim will be
made against their policies and price products accordingly. To this end, insurers
use actuarial science to quantify the risks they are willing to assume and the
premium they will charge to assume them. Data is analyzed to fairly accurately
project the rate of future claims based on a given risk. Actuarial science uses
statistics and probability to analyze the risks associated with the range of perils
covered, and these scientific principles are used to determine an insurer's overall
exposure. Upon termination of a given policy, the amount of premium collected
and the investment gains thereon minus the amount paid out in claims is the
insurer's underwriting profit on that policy.

An insurer's underwriting performance is measured in its combined ratio. The loss

ratio (incurred losses and loss-adjustment expenses divided by net earned
premium) is added to the expense ratio (underwriting expenses divided by net
premium written) to determine the company's combined ratio. The combined ratio
is a reflection of the company's overall underwriting profitability. A combined
ratio of less than 100 percent indicates underwriting profitability, while anything
over 100 indicates an underwriting loss.

Insurance companies also earn investment profits on ³float´. ³jloat´ or available

reserve is the amount of money, at hand at any given moment that an insurer has
collected in insurance premiums but has not been paid out in claims. Insurers start
investing insurance premiums as soon as they are collected and continue to earn
interest on them until claims are paid out.

. Naturally, the ³float´ method is difficult to carry out in an economically

depressed period. Bear markets do cause insurers to shift away from investments
and to toughen up their underwriting standards. So a poor economy generally
means high insurance premiums. This tendency to swing between profitable and
unprofitable periods over time is commonly known as the "underwriting" or
insurance cycle.

jinally, claims and loss handling is the materialized utility of insurance. In

managing the claims-handling function, insurers seek to balance the elements of
customer satisfaction, administrative handling expenses, and claims overpayment


Investment operations are often considered incidental to the business of insurance,
and have traditionally viewed as secondary to underwriting. In the past risk
management was the most important part of business, whereas today the focus has
shifted to fund management. Investment income is a large component of insurance
revenues, skilful and careful management of funds. Insurance is a business of large
numbers and generates huge amount of funds over time. These funds arise out of
policyholder funds in the case of life insurance, and technical and free reserves in
the non-life segments. Time lag between the procurement of premium and the
payment of claim provides an interval during which the funds can be deployed to
generate income. Insurance companies are among the largest institutional investors
in the world. Assets managed by insurance companies are estimated to account for
over 40% of the world¶s top ten asset managers.
<eturns on investments influence the premium rates and
bonuses and hence investment income will continue to be an important component
of insurance company profits. In life insurance, benefits from insurance profits
accrue directly to policy holders when it is passed on to him in the form of a bonus.
In non life insurance the benefits are indirect and mostly by the creation of an
investment portfolio. Investment income has to compensate for underwriting
results which are increasingly under pressure. In the case of insurance, the
difference between revenue and the expenses is known as operating surplus.

< +   





+ " 

Net investment income includes income from trading in and holding stock market
securities including government securities, special deposits with the central
government, loans to several public utilities and service providers in state
Insurance premium collected is converted in a pool of fund then
divided in to four expenses.
Ô To pay the expenses of the management.
Ô To pay agency commission.
Ô To pay for the claims.
Ô Surplus money will be invested in govt. securities.


Insurancenormally insure only pure risks .mowever, not all pure risk is insurable
.certain requirements usually must be fulfilled before a pure risk can be privately
insured .jrom the view point of the insurer, there are ideally six requirement of an
insurable risk

Ô There must be a large number of exposure units

Ô The loss must be accidental and unintentional.
Ô The loss must be determinable and measurable.
Ô The loss should not be catastrophic.
Ô The chance of loss must be calculable.
Ô The premium must be economically feasible


! É  

Insurance is often erroneously confused with gambling .There are two
important differences between them .jirst ,gambling creates a new speculative risk
,while insurance is a technique for handling an already existing pure risk .thus ,if
you bet <s 300 on a horse ,a new speculative technique is created ,but if you pay
<s 300 to an insurer for fire insurance ,the risk of fire is already present and is
transferred to the insurer by a contract. No new risk is created by the transaction.
The second difference between insurance and gambling is that gambling is
socially unproductive, because the winner¶s gain comes at the expense of the loser
.In contract; insurance is always socially productive, because neither the insurer
nor the insured is placed in a position where the gain of the winner comes at the
expense of the loser. The insurer and the insured have a common interest in the
prevention of a loss. Both parties win if the loss does occur .Moreover, consistent
gambling transaction generally never restore the losers to their former financial
position .In contract ,insurance contracts restore the insured¶s financially in whole
or in part if a loss occurs

% &
The concept of hedging is to transferring the risk to the speculator through
purchase of future contracts .An insurance contract, however, is not the same thing
as hedging .Although both technique are similar in that risk is transferred by a
contract, and no new risk is created, there are some important difference between
them. jirst, an insurance transaction involves the transfer of insurable risks,
because the requirement of an insurable risk generally can be met .mowever,
hedging is a technique for handling risks that are typically uninsurable ,such as
protection against a decline in the price agriculture products and raw materials.
A second difference between insurance and hedging is that insurance and hedging
is that insurance can reduce the objective risk of an insurer by application of the
law of large numbers. As the number of exposure units increases, the insurer¶s
prediction of future losses improves, because the relative variation of actual loss
from expected loss will decline .thus, many insurance transactions reduce objective
risk. In contract, hedging typically involves only risk transfer , not risk reduction
.The risk of adverse price fluctuation is transferred because of superior knowledge
of market conditions .The risk is transferred, not reduced, and prediction of loss
generally is not based on the law of large numbers.

Ô Indian economy is growing in reference to global market. Business of
insurance with its unique features has a special place in Indian economy.
Ô It is a highly specialized technical business and customer is the most concern
people in this business, therefore this business is able to spur the growth of
infrastructure and act as a catalyst in the overall development of Indian
Ô The high volumes in the insurance business help spread risk wider, allowing
a lowering of the rates of the premium to be charged and in turn, raising
profits. Shen there is a bigger base, the probabilities become more
predictable, and with system wide risks balanced out, profits improve. This
explains the current scenario of mergers, acquisitions, and globalization of
Ô Insurance is a type of savings. Insurance is not only important for tax
benefits, but also for savings and for providing security. It can be serving as
an essential service which a welfare state must make available to its people.
Ô Insurance play a crucial role in the commercial lives of nations and act as the
lubricants of economic activities. Insurance firms help to spread the
potentially financial consequences of risk among the large number of
entities, to mobilize and distribute savings for productive use, facilitate
investment, support and encourage external trade, and protect economic
entities against external risk.

Insurance and economic growth mutually influences each other. As the economy
grows, the living standards of people increase. As a consequence, the demand for
life insurance increases. As the assets of people and of business enterprises
increase in the growth process, the demand for general insurance also increases. In
fact, as the economy widens the demand for new types of insurance products
emerges. Insurance is no longer confined to product markets; they also cover
service industries. It is equally true that growth itself is facilitated by insurance. A
well-developed insurance sector promotes economic growth by encouraging risk-
taking. <isk is inherent in all economic activities. Sithout some kind of cover
against risk, some of these activities will not be carried out at all. Also insurance
and more particularly life insurance is a mobilizer of long term savings and life
insurance companies are thus able to support infrastructure projects which require
long term funds. There is thus a mutually beneficial interaction between insurance
and economic growth. The low income levels of the vast majority of population
have been one of the factors inhibiting a faster growth of insurance in India. To
some extent this is also compounded by certain attitudes to life. The economy has
moved on to a higher growth path. The average rate of growth of the economy in
the last three years was 8.1 per cent. This strong growth will bring about
significant changes in the insurance industry.

At this point, it is important to note that not all activities can be insured. If
that were possible, it would completely negate entrepreneurship. Professor jrank
Knight in his celebrated book ³<isk Uncertainty and Profit´ emphasized that profit
is a consequence of uncertainty. me made a distinction between quantifiable risk
and non-quantifiable risk. According to him, it is non-quantifiable risk that leads
to profit. me wrote ³It is a world of change in which we live, and a world of
uncertainty. Se live only by knowing something about the future; while the
problems of life or of conduct at least, arise from the fact that we know so little.
This is as true of business as of other spheres of activity´. The real management
challenges are uninsurable risks. In the case of insurable risks, risk is avoided at a
{ É#  

SBI Life insuranceis a joint venture between the State Bank of India and Cardiff
SA of jrance. SBI Life insurance is registered with an authorized capital of <s 500
crore and a paid up capital of <s 350 crores. SBI owns 74% of the total capital and
Cardiff the remaining 26%. State Bank of India enjoys the largest banking
franchise in India. Along with its 7 Associate Banks, SBI ~roup has the unrivalled
strength of over 14,000 branches across the country, the largest in the world.

Cardiff is a wholly owned subsidiary of BNP Paribas, which is The Euro Zone¶s
leading Bank. BNP is one of the oldest foreign banks with a presence in India
dating back to 1860. It has 9 branches in the metros and other major towns in the
country. Cardiff is a vibrant insurance company specializing in personal lines such
as long-term savings, protection products and creditor insurance. Cardiff has also
been a pioneer in the art of selling insurance products through commercial banks in
jrance and 29 more countries .In 2004, SBI Life insurance became the first
company amongst private insurance players to cover 30 lakh lives.

The company expects to carve a niche in the Indian insurance market through
extensive product innovation and aims to provide the highest standards of customer
service through a technological interface. To facilitate this, call centre¶s have been
already installed and help lines will be installed and customers will have access to
their accounts through the Internet or through SBI branches. SBI Life insurance is
uniquely placed as a pioneer to usher banc assurance into India. The company
hopes to extensively utilize the SBI ~roup as a platform for cross-selling insurance
products along with its numerous banking product packages such as housing loans,
personal loans and credit cards. SBI¶s access to over 100 million accounts provides
a vibrant base to build insurance selling across every region and economic strata in
the country.

Under section 88 of insurance act 1961 an individual is entitled to a rebate of 20

per cent on the annual premium payable on his/her life and life of his/her children
or adult children. The rebate is deductible from tax payable by the individual or a
mindu Undivided jamily. This rebate is can be availed up to a maximum of <s
12,000 on payment of yearly premium of <s 60,000. By paying <s 60,000 a year,
you can buy anything upwards of <s 10 lakh in sum assured. (Depending upon the
age of the insured and term of the policy) This means that you get an <s 12,000 tax
benefit. The rebate is deductible from the tax payable by an individual or a mindu
Undivided jamily.

SBI Life Insurance is currently growing at an impressive rate of 200%. As per the
latest IrDA report SBI Life ranks No. 3 amongst the private insurers. The
company's market share has increased to 10% amongst the private players and is
2.25% in the total industry. This year, the company is aiming at a growth of 150%.
The new business premium of the company from beginning of the year to
September 2006 is <s 660 crores. The total business premium of the company
from the beginning of the year till September 2006 is <s 765 crores. The company
aims to collect first year premium of over <s 2,000 crores. SBI Life follow a multi
distribution channel approach and expect all channels to contribute to the overall
growth. Today, the agency channel contributes over 50% and banc assurance
channel contributes to 40% of the business. Other channels like Credit Life and
~roup Corporate are also performing very well.

(1)Unit Linked products (1) ~roup Employee Benefit

Ô morizon 11 Products
Ô Unit Pus 11 <etirement Solutions
Ô Cap Assure ~ratuity
Ô Unit plus child Plan
Ô Cap Assure Superannuation
Ô Unit Plan Elite
Ô Cap Assure Leave
(2)Pension Products
Ô morizon 11 Pension
Ô ~roup Immediate Annuity
Ô Unit Plus 11 Pension
Ô SBI Life ~olden ~ratuity
Ô Lifelong Pension
(3)Pure Protection Products Protection Plan
Ô Swadhan Ô Sampoorn Suraksha
Ô Shield Ô SBI Life ~roup Term Life
Ô keyman Scheme In Lieu of EDLI
(4)Protection cum savings products
Specialized Term Insurance
Ô Sudarshan Ô SBI Life Keyman Insurance
Ô Scholar11
Ô Setubandhan (2) ~roup Loan Protection Products
Dhanaraksha Plus
(5)Money back scheme products
Ô Dhanaraksha Plus SP
Ô Money Back
Ô Dhanaraksha Plus LPPT
Ô Sanjeevan Supreme
Ô Dhanaraksha Plus <P

(3) ~roup Savings Protection Plan
Ô Nidhi <aksha <P

(4) ~roup Micro Insurance

Ô ~rameen Shakti and Super


Insurance has to be sold the world over. The Touch point with the ultimate
customer is the distributor or the producer and the role played by them in insurance
markets is critical. It is the distributor who makes the difference in terms of the
quality of advice for choice of product, servicing of policy post sale and settlement
of claims. In the Indian market, with their distinct cultural and social ethics, these
conditions will play a major role in shaping the distribution channels and their
effectiveness. In today's scenario, insurance companies must move from selling
insurance to marketing an essential financial product. The distributors have to
become trusted financial advisors for the clients and trusted business associates for
the insurance Companies.

Challenges for insurance companies and intermediaries in India-

Ô Building faith about company in the mind of clients.
Ô Building personal credibility with the clients.


A multi-channel strategy is better suited for the Indian market. Indian

insurance market is a combination of multiple markets. Each of the markets
requires a different approach. Apart from geographical spread the socio-cultural
and economic segmentation of the market is very wide, exhibiting different
traits and needs. Different multi-distribution channels in India are as follows
 Agents are the primary channel for distribution of insurance. The
public and private sector insurance companies have their branches in almost
all parts of the country and have attracted local people to become their
agents. Today's insurance agent has to know which product will appeal to
the customer, and also know his competitor's products to be an effective
salesman who can sell his company, the product, and himself to the
customer. To the average customer, every new company is the same.
Perceptions about the public sector companies are also cemented in his
mind. So an insurance agent can play an important role to create a good
image of company.

Ô #
Banks in India are all pervasive, especially the public sector banks.
Many insurance companies are selling their products through banks.
Companies which are bank owned, they are selling their products through
their parent bank. The public sector banks, with their vast branch networks,
are helpful to insurance companies. This channel of selling insurance is
known as Banc assurance.


ICICI prudential ICICI bank, bank of India, Citibank,
Allahabad bank, jederal bank, south
Indian bank, Punjab and Maharashtra
cooperative bank
SBI life State bank of India
Birla sun life Deutsche bank, Citibank, bank of
<ajasthan, Andhra bank
IN~ Vysya bank Vysya bank
Aviva life insurance ABN amro bank, canara bank
mDjC standard life Union bank, Indian bank
Met life Karnataka bank, j&k bank

Ô # 
 Now a day¶s different financial institution are selling insurance.
These financial institutions are known as brokers. They are taking some
underwriting charges from the insurance companies to sell their insurance
 Corporate agency is a cross selling type of channel.
Insurance companies¶ tie-up with business houses in other industries to sell
insurance either to their employees or their customers. Insurance industry,
during the past 2 years has witnessed a number of such strategic tie-ups and
alliances. Corporate agents have become a major force to reckon with in
distributing insurance products. Such as- Bajaj Allianz tied up with Maruti
Udyog and jord for auto insurance and Tata AI~ life has tied up with Tata
tea, khaitan¶s Silliamson major and bridge foundation for selling rural
Ô  In this technological world internet is also a channel of selling
insurance. This can be as direct marketing.

c. Ý   

Now the Indian consumer is knowledgeable and sensitive. Consumers are

increasingly more aware and are actively managing their financial affairs. People
are increasingly looking not just at products, but at integrated financial solutions
that can offer stability of returns along with total protection. In view of this, the
insurance managers need to understand more about the details that go into the
introduction of insurance products to make it attractive in this competitive market.
So now days an insurance manager requires leadership, commitment, creativity,
and flexibility. "Every family in every village in the country should feel safe and
secure". This vision alone will help to bring the new ideas to the insurance

jinancial, marketing and human resource polices of the corporations

influence the unit mangers to make decisions. Performance of insurance company
depends on the effectiveness of such policies. Insurance corporations formulate
and revise these policies from time to time to ensure that the performance of the
managers is best for the organization.
In the competitive market, insurance companies are being forced to adopt a strictly
professional approach in marketing. The insurance companies face the challenge of
changing the uninspiring public image of the industry. Some of the important
marketing elements are-
Ô Marketing mix.
Ô The importance of relationship.
Ô Positioning.
Ô Value addition.
Ô Segmentation.
Ô Branding.
Ô Insuring service quality.
Ô Effective pricing.
Ô Customer satisfaction research.

The growth of insurance sector is governed largely by factors external to it. The
following factors influence the market and demand of product-
Ô ~overnment policies.
Ô ~rowth in population.
Ô Changing age profile.
Ô Income wise distribution of the population.
Ô Level of insurance awareness.
Ô The pricing of the policies.
Ô The economic climate of the country.
Ô The aversion to risk.
Ô Social and political features of the country.
Ô ~rowth scenario in the world.

Different companies adopt different approaches in their marketing strategies. One

approach is focus upon product quality which can give confidence in the mind of
customers that they are offered by best featured products. And other approach is
focusing on customer¶s needs, which involve a heavy investment in developing
relationships with policyholders. Under this approach customer can expect a range
of products and service offered to him. Third approach is market segmentation
under which the population can be divided into several homogeneous products and
groups, the effort should be tie clients to the company by customized combination
of coverage, easy payment plans, risk management advice, and convenient and
quick claim handling.

An insurance product can be classified in three phases:

  In insurance industry the core product is the policy that provides
protection to the customers.

Ý"      Because of competition customers start to expect more
from an insurance product. Then insurance companies provide some tangible
attributes in their product to differentiate from competitors, such as-
Ô Brand
Ô Some additional features in existing product
Ô By providing instruction manual with the policy.

     An insurance company can provide different types of

services to differentiate their products-
Ô Post sales services.
Ô Branches in different places for customers.
Ô Customer complaint management.
Ô Payment option convenient to customers.

The entry of private players and their foreign partners has

given domestic players a tough time, because the opening up of the sector has
not brought in only foreign players, but also professional techniques and
technologies. The present scene in India is such that everyone is trying to put in
the best efforts. There are marketing strategies more for survival than growth.
But the most important gift of privatization is the introduction of customer-
oriented services. Utmost care is being taken to maximize customer satisfaction.


 Identification of markets means need to
understand the trends in culture and businesses constantly, through
conducting research and analysis. Insurance companies can take this job on
their own or assign it to an external agency. <elying on an external agency
can be risky due to the questionable loyalty of the agents.




 Efficiency of actuaries and assessors of the insurance
policies in fixing premiums and settling claims is foremost an important area
for achieving overall efficiency in operations. The quality of assessing the
risk and estimation of losses has the largest claim on the performance of an
insurance company. Sell trained, experienced and expert hands are needed
for the operations.
Ô      "      
 Market penetration or
exploitation of a company can be identified with the growth in number of
policies in each type of insurance, growth rate in earnings or turnover,
company¶s market share, increase in number of branches and divisions etc.
Efforts of the company as a whole and that of the divisions and branches are
assessed to measure the effectiveness.

 Control over resources
such as men, machines, and materials at each level of the organization
provides measures of efficiency of a unit as well as the organization.
Investment control and expense control are dealt separately and the
effectiveness of management¶s¶ decisions at various levels is to be assessed


Ô Allocating marketing strategies against market potential.
Ô Estimating potential for specific products within local markets.
Ô Identifying high opportunity areas.
Ô Measuring agency performance relative to market potential.
Ô Optimizing your agency network against market potential.

Ô Channel data: - Useful to know future buying preferences, learning about
products and purchase channels.
Ô Consumer attitudes.
Ô Consumption data: - Useful to evaluate annual premiums, number of
annuities owned, value of annuities, and with which company the current
policy is held.


Ô Learn how to construct a mental image for success.

Ô Learn how to find a proper perspective and how to turn off all the signals
that cause people not to buy from you.
Ô Learn how to get and set more appointments.
Ô Learn how to convert a new lead into sales.
Ô Learn how to act when you meet a client for the first time.
Ô Learn how the order in which you explain the types of policies candouble
your income.
Ô Take Easy steps to avoid delays in issuing policies.

   ICICI prudential insurance is a joint venture of ICICI bank and
prudential plc a leading financial service group in the UK.Total capital stands for
<s. 37.72 billion, with ICICI Bank holding a stake of 74% and Prudential plc
holding 26%. ICICI begin their operations in December 2000 after receiving
approval from I<DA. Now ICICI prudential is having over 1000 offices, over
270000 advisors and 21bancassurance partners. ICICI Prudential was the first life
insurer in India to receive a National Insurer jinancial Strength rating of AAA
from jitch ratings. ICICI prudential is working on the base of five core values-
Ô Integrity
Ô Customer first
Ô Boundary less
Ô Ownership
Ô Passion


Ô Understanding the needs of customers and offering them superior

products and service.
Ô Leveraging technology to service customers quickly, efficiently and
Ô Developing and implementing superior risk management and investment
strategies to offer sustainable and stable returns to policyholders.
Ô Providing an enabling environment to foster growth and learning for
 mDjC Standard Life Insurance Company Ltd. is
one of India's leading private insurance companies. It is a joint venture of mousing
Development jinance Corporation Limited, India's leading housing finance
institution and a ~roup Company of the Standard Life in UK. mDjC as on March
31, 2007 holds 81.9 per cent of equity venture. ~ross premium income of the
mDjC for the year ending March 31, 2007 was <s. 2, 856 crores and new business
premium income was <s. 1,624 crores. The company has covered over 8, 77,000
lives year ending March 31, 2007. mDjC standard is having 1000 advisors in 11


Ô Creating corporate agents through mDjC bank in India.

Ô Creating agents to provide total financial consultancy.
Ô Introducing low cost group schemes for companies and N~Os.


  <eliance Life Insurance Company Limited is a part of
<eliance Capital Ltd. of the <eliance - Anil Dhirubhai Ambani ~roup. <eliance
Capital is one of India¶s leading private sector financial services companies, and
ranks among the top 3 private sector financial services and banking companies, in
terms of net worth. <eliance Capital has interests in asset management and mutual
funds, stock broking, life and general insurance, proprietary investments, private
equity and other activities in financial services. <eliance Capital Limited (<CL) is
a Non-Banking jinancial Company (NBjC) registered with the <eserve Bank of
India under section 45-IA of the <eserve Bank of India Act, 1934.

  Aviva is UK¶s largest and the world¶s fifth largest
insurance ~roup. It is one of the leading providers of life and pensions products to
Europe and has substantial businesses elsewhere around the world. Aviva has a
joint venture of Dabur, one of India's oldest, and largest ~roup of companies. And
country's leading producer of traditional healthcare products. In accordance with
the government regulations Aviva holds a 26 per cent stake in the joint venture and
the Dabur group holds the balance 74 per cent share. Aviva has 193 Branches in
India (including rural branches) supporting its distribution network. Through its
Banc assurance partner locations, Aviva products are available in more
than 2,795 locations across India. Aviva has a sales force of over 30000 financial
planning advisors.


Ô Through the ³jinancial mealth Check´ (jmC) Aviva¶s sales force has been
able to establish its credibility in the market. The jmC is a free service
administered by the jPAs for a need-based analysis of the customer¶s long-
term savings and insurance needs. Depending on the life stage and earnings
of the customer, the jmC assesses and recommends the right insurance
product for them.
Ô Introduced the concept of Banc assurance in India.
Ô Products to provide customers flexibility, transparency and value for money.
Ô Differentiation in fund management operations.

 MetLife India Insurance Company Limited is an affiliate of
MetLife, Inc. and was incorporated as a joint venture between MetLife
International moldings, Inc.and The Jammu and Kashmir Bank, M. Pallonji and
Co. Private Limited and other private investors. MetLife is one of the fastest
growing life insurance companies in the country. It offers a range of innovative
products to individuals and group customers at more than 600 locations through its
bank partners and company-owned offices. MetLife has more than 32,000
jinancial Advisors. It has approximately 70 million customers all over world.
MetLife is working on the base of six core values-

Ô Innovation
Ô Long term relationship
Ô Customer centered and result focused vision
Ô Creating high performance organization
Ô Sorking with integrity, fairness and financial prudence
Ô Partnering with internal and external customers

Max New York Life Insurance Company Ltd. is a
joint venture between New York Life, a jortune 100 company and Max India
Limited, one of India's leading multi-business corporations The Company's paid up
capital is <s. 907.4 crore. Max New York life is working on the base of six core

Ô Excellence,
Ô monesty,
Ô Knowledge,
Ô Caring,
Ô Integrity

The Company practices a lot of importance on its selection process of insurance

advisors which comprises four stages 

       !. 337 agent advisors have qualified for the Million
Dollar <ound Table (MD<T) membership in 2007 and Max New York Life has
moved up to 21st rank in MD<T global list.


Ô Max New York Life has adopted prudent financial practices to ensure safety
of policyholder's funds‘
Ô Investing significantly in its training programme and each agent is trained
for 152 hours as opposed to the mandatory 100 hours stipulated by the I<DA
before beginning to sell in the marketplace.
Ô Using a five-pronged strategy to pursue alternative channels of distribution
which include the franchisee model, rural business, direct sales force
involving group insurance and telemarketing opportunities, banc assurance
and corporate alliances.

# "  

 Bharti Axa life insurance is a joint venture between
Bharti, one of India¶s leading business groups with interests in telecom, agri
business and retail, and Axa world leader in financial protection and wealth
management. The joint venture company has a 74% stake from Bharti and 26%
stake of Axa. The company started its operations in December 2006. Now
company is having over 5200 employees across over 12 states in the country.
Company is working on the base of five core values-

Ô Professionalism
Ô Innovation
Ô Team Spirit
Ô Pragmatism
Ô Integrity

Ô Using multi-distribution, multi product platform techniques.

Ô Adapting AXA's best practices as a sound platform for profitable growth.
Ô Leveraging Bharti's local knowledge, infrastructure and customer base.
Ô Delivering high levels of shareholder return.
Ô Building long term value with business partners by enhancing the
proposition to their customers.
Ô <etaining the best talent in India.

Tata AI~ Life Insurance Company Limited (Tata AI~
Life) is a joint venture company of the Tata ~roup and American International
~roup, Inc. (AI~). The Tata ~roup holds 74 per cent stake in the insurance venture
with AI~ holding the balance 26 percent. Tata AI~ Life provides insurance
solutions to individuals and corporate. Tata AI~ Life Insurance Company started
to operate its business in India on April 1, 2001. Tata AI~ is having 3000 advisors
all over India.


Ô Establishing direct mailers; call-centers in 60 centers.

Ô Creating awareness workshops in housing societies.
Ô 15-day trial period with refund, premium payment through credit card.

# )  

Bajaj Allianz life insurance company ltd. Is a joint
venture of Allianz A~, one of the world¶s largest insurance companies and Bajaj
auto, one of the biggest two and three wheeler manufacturing companies in the
world. Company is having over 440000 satisfied customers in India. Company is
having 550 branches across the country and over 60000 advisors.


Ô Tying up with seven regional rural banks sponsored by Syndicate Bank to

tap the rural market.
Ô Introducing micro-insurance products and coming out with a new capital
guarantee product.
Ô Expanding its agency force from 1.60 lakh to 2 lakh and the branch network
will also be increased from 900 to 1400.

IN~ Vysya Life Insurance Company Limited a part
of the IN~ group the world¶s largest financial services provider entered in the
private life insurance industry in India in September 2001.IN~ Vysya Life is
currently present in 246cities and has a network of over 300 branches, staffed by
7,000 employees and over 51,000 advisors, serving over 5.5 lakh customers‘ IN~
Vysya Life has a diversified distribution channels,. Shile Tied Agency remains the
strongest channel, the Alternate Channels business within IN~ Vysya Life is one
of the fastest growing distribution channels. IN~ Vysya Life has strengthened its
position as the unparallel leader in the life insurance industry in cooperative banks
tie ups. The company currently has tie ups with 130 cooperative banks across the
country. The Alternate Channels division has Banc assurance, IN~ Vysya Bank,
Corporate Agents and SMINCE. IN~ Vysya is working on the base of five core

Ô Professionalism
Ô Entrepreneurial
Ô Trustworthy
Ô Approachable
Ô Caring

Birla Sun Life Insurance Company Limited (BSLI) is a
joint venture between the Aditya Birla ~roup and the Sun Life jinancial Services
of Canada. It started operations in March 2001 after receiving its registration
license from I<DA in January 2001. Company is having more than 45 branches
across India.


Ô jocus on unit linked insurance products supported with protection products

to maintain leadership in product innovation.
Ô Use of multi distribution channels Direct Sales jorce, Alternate Channels
and offering convenient channels of purchase to customers.
Ô Seb-enabled IT systems for superior customer services and issuing policies
on the internet.
Ô migh degree of transparency in all business practices and procedures.
Ô Sorking on operational Business Continuity Plan.


ICICI Prudential 9.1%

mDjC Standard 2.4%
SBI Life 3.0%
Bajaj Allianz 4.2%
Aviva life insurance 1.3%
MetLife insurance 0.6%
<eliance life insurance 1.1%
Birla sun life insurance 1.0%
Max new York life insurance 2.3%
Bharti AXA life insurance 0.1%
Tata AI~ 1.6%
IN~ Vysya 0.7%
Kotak Mahindra 0.9%



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0  3476.6 2172.6 60.0



 growth fund, balanced fund, income fund, and preserver.
 upto 100% in growth fund, upto 40% in balanced fund, nil
in income fund, 50% in preserver.
    - 20,000.
 4" upto 65 years.

  annual premium*term/2.

 1.5% in growth fund, 1.0% in balanced fund, .75% in
income and preserver fund.
 " " 

 !  !
 above one partial withdrawal 100 rs. charge per withdrawal.

- 1%.

- above 4 switches in a year 100 rs. Per switching.

# É 

 enhancer fund, builder fund, protector fund.
 maximum 35% in enhancer fund, maximum 20% in builder
fund, maximum 10% in protector fund.
     20,000 rs.
 4" 30 days to 60 years.

 - face amount + policy fund.

 1% for all the fund options.
 " " 

 22 rs.+ annual charges as applicable.
 !  !
 2 free partial withdrawals in a year.
charges on top ups- 2%.

 2 free switches in a year, and 100 rs. Per switching.


 growth fund, balanced fund, defensive fund, secure fund, liquid
 100% in growth fund, 30-60% in balanced fund, 15-30% in
defensive fund, 0% in secure and liquid fund.
 4"18- 65 years.

  annual premium*term/2, to 40 times the regular premium amount.

 " " 

 20 rs.
 !  !
! above 6 partial withdrawals 250 rs. per withdrawal.

 2.5% for initial 2 years, after 1%.

 24 free switching and then 100 rs. per switching.


 equity fund, bond fund, growth fund, balanced fund.
 upto 100% in equity fund, upto 20% in bond fund, 40 -
100% in growth fund, 40 ± 60% in balanced fund.
 4" 7 ± 65 years.

  5 ± 50 times the regular premium amount.

 1.5% for equity fund, 1.35% for growth fund, 1.25%
for balanced fund, 1% for bond fund.
 " " 

 60 rs.
  !  !
 !  above 4 partial withdrawals 100 rs. per


 above 4 switching 100 rs. per switching.

- growth fund, balanced fund, conservative fund, secure fund.
 20 ± 70% in growth fund, 10 ± 40% in balanced fund, 0 ±
15% in conservative fund, 0% in secure fund.
 4" 12 ± 60 years.

 - minimum sum assured 100,000 rs.

 .90% - 1.25% of net assets in the fund.
 " " 

 50 rs.


 above 2 switching per year 500 rs. Per switching.


 equity fund, growth fund, balanced fund, capital secure fund.
- upto 100% in equity fund, upto 40% in growth fund, upto
20% in balanced fund, 0% in capital secure fund.
 4"- 30 days to 65 years.

  for age of 12 years 5 times, above 12 years 5 times to unlimited.

 1.75% in equity and growth fund, 1.5% in capital
secure fund.
 " " 

 40 rs.
 !  !
!  rs. 100 for every withdrawal.

- 2%.

 above 1 switching 100 rs. Per switching.
Insurer Market view Product focus Distribution Others
ICICI Market Pension and Significantly Significant
Prudential growth at healthy diversified capital
60%CA~< products likely with 40% requirement
in medium to grow given from non for maintain
term, target aging agency force, share in a
to maintain population and expanding high growth
share at 30% increasing life reach to non market, both
in private expectancy. metro areas. partners
segment. Product willing to
awareness is contribute,
slightly behind
LIC despite a
health could
comprise 3 ±
5% of product
mix in 5 years.
mDjC Expect high jocus on Prefer own Breakeven
Standard life double digit regular offices versus not
insurance market premium franchisees, necessarily
growth over products and higher focus in next 18
next few higher on training months, it
years, steady persistency agents rather would
state not levels, group than hard sell, require
expected focus given rural focus capital even
flexibility in required but if jDI were
equity obstacles raised to
investment, include lack 49%.
competitive of bank
versus mutual infrastructure.
funds for
longer tenure
products given
lower amc
Bajaj Current Most products More focus ~rowth and
Allianz life industry homogeneous on smaller market share
insurance growth across players, towns, oriented
sustainable not much price greater strategy,
for next 7 ± differentiation, emphasis on detarrifing
10 years, ULIPsales agency force would hit
target 10% unlikely to be expansion. non life
market share affected by segment
in next 5 recent adversely.
years regulations,
not much
threat from
mutual funds.
Birla sun life Target to be Currently only Agent It believes
insurance top in 5 unit linked productivity some
years products sold is an issue marginal
but group given their players could
linked part time br bought
products are nature, target out.
focus area for is 130
development. branches all
over India,
also will
leverage on

c$ 5






1. mow long you have been in insurance industry?

(a) < 2 years (b) 2-5 years (c) 5-8 years (d) >8 years

2. Shen did you join your present company?

(a) < 2 years (b) 2-5 years (c) 5-8 years (d) >8 years

3. Your designation while joining this company«««««««««..


4. mow many advisors do you have?

(a) <250 (b) 250-400 (c) 400-550 (d) >550

5. On what basis do you recruit your advisor?

(a) Through personal reference
(b) Through advertisement
(c) Through walk in interviews
(d) Through placements agencies

6. mow do you make them active?

(a)By increasing incentives
(b)By offering higher channel position
(c)By awarding non-cash prizes
(d)By giving training session

7. mow many MBAs do you have in your agency?

(a) None (b) 1-3 (c) 4-6 (d) more than 6

8. On what products you are stressing more?

(a) Term insurance
(b) Unit linked products
(c) Money back products
(d) Endowment products
9. Shat is the basis of your product deployment?
(a) Profit oriented
(b) On customers need and demand
(c) On channel feedback from market
(d) By adding some additional benefits in current product

10. mow do you differentiate your product from your competitors?

(a) By advertising and promotional activities
(b) By pricing of the product
(c) Based on the deployment of funds
(c) By providing better service quality

11. Your mode of interaction with customers.

(a) Direct marketing
(b) By telephonic contacts (creating database)
(c) Through advertisement
(d) Through online contacts

12. Shich kind of strategies should an insurance company use to compete in the
market (in your view)?
(a) Better service quality
(b) Accordingly change in the pricing of product
(c) By increasing periodicity of interaction with advisors and customers
(d) By providing extra benefits to advisors and customer

13. Shat is average total premium collection in your branch (in a month)
(a) <2 Cr. (b) 2-4 Cr. (c) 4-5 Cr. (d) >5 Cr.

14. Other useful activities which you do in agency (if any, please

15. Shat are your future plans (please define)««««««««««.



Primary data has been collected by the survey of branch and agency manager of
different insurance companies in Calicut. sample size for this research is 27.


In insurance industry advisors play most important
role, and these advisors are recruited through different ways. Mainly four ways for
recruiting the advisors are-
1. Through personal references.
2. Through advertisements.
3. Through walk in interviews.
à  Through placement agencies 

< 6

<esponse jrequency Percent
yes 24 88.9
no 3 11.1
Total 27 100.0

 < 6 

<esponse jrequency Percent

yes 10 37.0
no 17 63.0
Total 27 100.0

 < 6 !

<esponse jrequency Percent

yes 12 44.4
no 15 55.6
Total 27 100.0

 < 6 

<esponse jrequency Percent

no 27 100.0

So most of the companies are recruiting their advisors through personal reference
and through advertisement, some companies are recruiting their advisors through
walk in interviews also, but none company is recruiting their advisors through
placement agencies.






P P  P  P


  To get efficient work from their advisors companies
do some practices to make them active. some practices are-
1. By increasing incentives.
2. By offering higher channel position.
3. By awarding them non cash prizes.
4. By giving them training session.


<esponse jrequency Percent
yes 7 25.9
no 20 74.1
Total 27 100.0



<esponse jrequency Percent

yes 6 22.2
no 21 77.8
Total 27 100.0


<esponse jrequency Percent

yes 10 37.0
no 17 63.0
Total 27 100.0


<esponse jrequency Percent

yes 14 51.9
no 13 48.1
Total 27 100.0

So most of the companies are giving training session and awarding non cash prizes
to make their advisors active, some of the companies are increasing incentives and
offering higher channel position to make their advisors active.
: Different insurance companies are having different
categories of insurance products. Some product categories are-
1. Term insurance products.
2. Unit linked products.
3. Money back products.
4. Endowment products.


<esponse jrequency Percent

yes 5 18.5
no 22 81.5
Total 27 100.0


<esponse jrequency Percent

yes 26 96.3
no 1 3.7
Total 27 100.0


<esponse jrequency Percent

yes 1 3.7
no 26 96.3
Total 27 100.0

6Ý !

<esponse jrequency Percent

yes 2 7.4
no 25 92.6
Total 27 100.0

So all the companies are promoting their unit linked products and some companies
are promoting rest of the products including unit linked products.






P P  P  P


    : - All insurance companies are deploying their
products in various categories. Some of the tactics are-
1. Profit oriented.
2. On customers need and demand.
3. On channel feedback from market.
4. By adding some additional benefits in current products.


<esponse jrequency Percent

yes 6 22.2
no 21 77.8
Total 27 100.0


<esponse jrequency Percent

yes 20 74.1
no 7 25.9
Total 27 100.0



<esponse jrequency Percent

yes 2 7.4
no 25 92.6
Total 27 100.0



<esponse jrequency Percent

yes 5 18.5
no 22 81.5
Total 27 100.0

So most of the companies are deploying their products based on the customers
need and demand.

"  # 






P P  P 

  To make their products different from their
competitors companies are using some strategies which are-
1. By advertisement and promotional activities.
2. By pricing of the product.
3. Based on the deployment of the funds.
4. By providing better service quality.



<esponse jrequency Percent

yes 4 14.8
no 23 85.2
Total 27 100.0

<esponse jrequency Percent

yes 13 48.1
no 14 51.9
Total 27 100.0


<esponse jrequency Percent

yes 7 25.9
no 20 74.1
Total 27 100.0


<esponse jrequency Percent

yes 17 63.0
no 10 37.0
Total 27 100.0

So most of the companies are giving better service quality and better pricing to
differentiate their products from their competitors.

"    '





P  $ % & P  $ % &

²     There are different types of way to interact with
customers. Some of the important ways are-
1. Direct marketing.
2. By creating database (telephonic contact).
3. Through advertisement.
4. Through on line contacts.

 ²   6 

<esponse jrequency Percent

yes 17 63.0
no 10 37.0
Total 27 100.0
 ²   6O 

<esponse jrequency Percent

yes 15 55.6
no 12 44.4
Total 27 100.0

²   6 

<esponse jrequency Percent

yes 1 3.7
no 26 96.3
Total 27 100.0

 ²   6› 

<esponse jrequency Percent

yes 1 3.7
no 26 96.3
Total 27 100.0

So almost all the companies are interacting with customers through direct
marketing and by telephonic contacts (creating database).






P  $ % & P  $ % &

É    Most common strategies to compete in the

market for insurance companies are-
1. Better service quality.
2. Change in pricing of products.
3. By increasing periodicity of interaction with advisors and customers.
4. By providing extra benefits to advisors and customers.


<esponse jrequency Percent

yes 21 77.8
no 6 22.2
Total 27 100.0

<esponse jrequency Percent

yes 2 7.4
no 25 92.6
Total 27 100.0


<esponse jrequency Percent

yes 7 25.9
no 20 74.1
Total 27 100.0


<esponse jrequency Percent

yes 3 11.1
no 24 88.9
Total 27 100.0

So most of the insurance companies think that providing better service quality is
most suitable strategy to compete in the market.






"    '

P P  P 



Premium jrequency Percent

less than 2 cr. 20 74.1
2 to 4 cr. 5 18.5
4 to 5 cr. 1 3.7
more than 5 cr. 1 3.7
total 27 100.0

So most of the companies are collecting premium less than 2 crores. at an agency
or branch level in a month.








P P  P 






Companies, recruiting their advisors through personal reference are doing practices
to make them active in under mentioned numbers.

By increasing incentives- 6 (17.65%)

By awarding non cash prizes- 9 (26.47%)
By giving higher channel position- 5 (14.71%)
By giving them training session- 14 (41.78%)

So companies are concentrating on training session and awarding non cash prizes
to make their advisors active.





Companies, recruiting their advisors through advertisement are doing practices to

make them active in under mentioned numbers.

By increasing incentives- 4 (26.67%)

By awarding non cash prizes- 4 (26.67%)
By giving higher channel position- 2 (13.33%)
By giving them training session- 5 (33.33%)

So companies, recruiting their advisors through advertisement are concentrating on

increasing incentive, awarding non cash prizes and training session.

!    !





Companies, recruiting their advisors through walk in interviews are doing practices
to make them active in under mentioned numbers.

By increasing incentives- 4 (23.52%)

By awarding non cash prizes- 6 (35.3%)
By giving higher channel position- 3 (17.6%)
By giving them training session- 4 (23.52%)

So companies, recruiting their advisors through advertisement are concentrating on

increasing incentive, awarding non cash prizes and training session.

Ô Insurance companies are recruiting their advisors mainly through personal
reference, through advertisement, and through walk in interviews. None of
the company is recruiting their advisors through placement agencies. But
some companies have started recruiting their advisors through placement
agencies as a trial basis.

Ô Those advisors who are recruited through personal references need more
training session and company has to put effort to make them active. Most of
the companies are giving training session to advisors to make them active.
Only one or two companies are providing higher channel position and
increasing incentives to make them active.

Ô Most of the insurance companies have started recruiting agency manager

and high posted people from professional colleges to improve efficiency of
the insurance company.

Ô Insurance companies have forgotten their traditional products. Companies

are totally concentrating on selling ULIP products. Now insurance
companies are selling their products as an investment product not as life
insurance products.

Ô Insurance companies are deploying their products mostly based on customer

needs and demands. Insurance companies are not doing enough market
researches to know the potential of the market.

Ô Most of the insurance companies are differentiating themselves from the

competitors by providing better service quality. Some companies are
differentiating themselves providing better pricing of the product.

Ô Branch managers of most of the companies think that providing better

service quality is the best tool to compete in the market. Better service
quality may be in the form-
1. Issuing policy in time.
2. Providing claims in time.
3. Making customers aware about their status of policy.
cg <  

Ô SBI Life should start recruiting advisors through placement agencies. By
practicing this SBI Life will get more capable advisors who can work
efficiently. Inactive advisors kind of thing would not happen.

Ô SBI Life should also promote the term and endowment insurance products
including ULIP products. Because these are basic insurance products.
Promote products as life insurance products not an as investment products.

Ô Somewhat the brand name of SBI is harming the SBI Life insurance,
because most of the people are not happy with the service provide by SBI
bank, so it is necessary to change the mentality of the people that SBI Life
insurance is different from SBI bank. SBI Life should promote their product
features rather than promoting their brand name.

Ô To increase awareness in rural market SBI Life should do some activities in

villages and small towns. This can be done by putting kiosk in fairs and
festival melas organizing in villages.

Ô SBI Life can sell their products through charitable institutions.

Ô SBI Life should sell their products through head of the villages or through
panchayat in villages. People in villages believe on the head and panchayat
so selling insurance will be easier in villages.

Ô SBI Life can introduce some special policies for the farmers to tap the rural
market, and pricing for these kinds of products should be less so farmers can
easily afford to take policies.

Ô As SBI Life is coming in general insurance so it can introduced products like

. It will also help to promote
the products of SBI Life insurance.

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