Beruflich Dokumente
Kultur Dokumente
ABHINAY KR.VERMA
(09KB050)
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PROJECT TITLE
SUBMITTED BY
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(09KB050)
Certificate
DR. R.C.Mohapatra
Faculty Guide
KBS
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TO WHOMS OEVER IT MAY CONCERN
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Declaration
I hereby declare that this report on “potential of life insurance
industry” has been written and prepared by me during the
academic year 2010.This project was done under the able guidance
and supervision of Dr. R.C.Mohapatra, Faculty of Krupajal Business
School and Mr. S.A.Mazumder Branch manager, ING vysya Life
Insurance Company Ltd. Kolkata in partial fulfillment of the
requirement for the Master Of Business Administration Degree
course of the Krupajal Business School.
I also declare that this project is the result of my own effort and has
not been submitted to any other institution for the award of any
Degree or Diploma.
Place: bbsr
Abhinay kr. verma
09KB050
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Acknowledgements
If words are considered to be signs of gratitude then let these words convey
the very same
My sincere gratitude to ING vysya Life for providing me with an
opportunity to work with ING vysya, Life and giving necessary directions
on doing this project to the best of my abilities.
I am highly indebted to Mr. Amitesh singh Sales Manager and company
project guide, who has provided me with the necessary information and also
for the support extended out to me in the completion of this report and his
valuable suggestion and comments on bringing out this report in the best
way possible.
I also thank Dr. R.C.Mohapatra, Krupajal business school, who has
sincerely supported me with the valuable insights into the completion of this
project.
I am grateful to all faculty members of Krupajal business school and my
friends who have helped me in the successful completion of this project.
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Contents
Sr. No. Subjects Covered Pages
1. Project Proposed 9 – 11
1.1 Objective of the project
1.2 Methodology
1.3 Sampling
1.4 Limitations
2. Introduction 12 – 16
2.1 Definition of insurance
2.2 Functions of insurance
2.3 Definitions of life insurance
2.4 Role of life insurance
2.5 Importance of life insurance
3. Agency business model 17 – 19
3.1 Insurance agencies
3.2 Functions of agency manager
3.3 Operational work of insurance agency
4. Indian insurance industry 20 – 27
4.1 History
4.2 IRDA
4.3 Changing perception of customers
4.4 Changing face of Indian life insurance industry
4.5 Possibilities
5. Global insurance industry 28 – 29
6. Functioning of insurance industry 30 – 36
6.1 Insurer’s business model
6.2 Investment management
6.3 Key ratios and terms
6.4 Requirements of an insurance risk
6.5 Various types of insurance products
7. Insurance and economy 37 – 39
8. ING vysya Life insurance company 40 – 42
9. Distribution of insurance product 43 – 46
10. Effective marketing strategies for insurance 47 – 52
companies
11. Competitors of ING Life 53 - 62
12. Comparison of ULIP products 63 – 69
13. Questioner 70 – 71
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14. Conclusions and findings 72 – 91
15. Recommendations 92
1. Project proposed
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:
• How they target their customers.
• How they make their advisors active.
• How they make their operational and sales department effective.
• How they promote their employees.
• How they handle the conflict in agency.
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Objective of the project: - 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 ING vysya 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 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
Methodology
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Research is totally based on primary data. Secondary data can be used only
for the reference. Research 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 Kolkata. Data
collection has been done through by giving structured questioner. Research
has been done after branch managers or agency manager. This study will be
based on judgment sampling and this research is skewed to organization
level. This is an exploratory type of research. And this research needs
further study also Research is a kind of pilot study.
Sampling
Sample size has been taken by judgment sampling. Judgment sampling is a
process in which the selection of a unit, from the population is based on the
pre judgment. This research requires the survey of different insurance
agencies in Kolkata city. So research concentrates on the branch or agency
manager of different insurance companies. So the selection of unit for this
research has been judged by the researcher.
Limitations:
• Time limitation
• Research has been done only in Kolkata.
• Companies did not disclose their secrets data and strategies.
• Possibility of Error in data collection.
• Possibility of Error in analysis of data due to small sample size.
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2. Introduction
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.
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• Marine
• Miscellaneous Insurance.
Insurance provides:
• Protection to investor.
• Accumulation of savings.
• Channeling these savings into sectors needing huge long term
investment.
Functions of insurance:
• Provide protection: 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.
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• Assessment of risk: Insurance determines the probable volume of
risk by evaluating various factors that give rise to risk. Risk is the
basis for determining the premium rate also.
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• Risk free trade: 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:
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
Whichever 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 ‘Life
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.
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• Life insurance as risk cover: - 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.
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• Credit worthiness: - Life insurance policy can be used as a security
to raise loans. It improves the credit worthiness of business.
• Social Security: - 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.
• Tax Benefit: - Under the Income Tax Act, premium paid is allowed
as a deduction from the total income under section 80C.
In India, ING is present in all three fields of banking, insurance and asset
management in the form of ING, ING Vysya Life Insurance and ING
Investment Management respectively. The presence in all three fields
signifies the importance that the group attaches to the Indian markets and the
group's operations here, as well as its bullish future outlook on the country.
ING and ING Vysya Life Insurance are headquartered at Bangalore, while
the corporate office of ING Investment Management is situated at Mumbai.
The synergies arising out of the three distinct but complimentary businesses
are bound to be an asset to the group in the changing market dynamics of the
future. The first such signs are already visible on the horizon with combined
products being successfully launched by the different entities of the group in
conjunction with each other.
Vision:-
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To create long term value along with market leadership
Missions:-
To help people mitigate risks of life, accident, health
and money at all stages and under all circumstances
Values:-
Integrity
Commitment
Passion
Seamlessness
Speed
Objectives
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To find out the reasons why people buy Insurance Products.
Methodology
Here the target group for the survey has been
the following:
People with income of 10,000 or more per month.
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• Through agency
• Through financial institution
• Through banks
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Insurance agencies:
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.
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Front office partners (independent agents)
Develop insurance products Distribute product
CUSTOMERS Plan and manage company BUSINESS
PARTNERS
Fulfill and service product Claims
Back office provider Regulatory institutions
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Life insurance came to India from England in 1818 when
oriental life insurance company started in Calcutta by Europeans. After this
many insurance companies had been started in India. But these companies
were looking after only the needs of European community established in
India. Indian people were not being insured by these companies. First Indian
life insurance company came as Bombay mutual life insurance assurance.
Second company was Bharat insurance company came in 1896. After this
the united India in madras, national Indian and national insurance in
Calcutta and the co-operative assurance in Lahore were established in 1906.
To regulate Indian insurance business first insurance act came
in 1912 as life insurance company act and provident fund act. These acts
consist of premium rates tables and periodical valuations of companies. In
the first two decade of 20th century many life insurance companies were
started. So the insurance act came in 1938 to governing life and non life
insurance companies and to provide strict state control. In 1956 the life
insurance business in India was nationalized. In 1956 life insurance
corporation of India (LIC) was created to spreading life insurance much
more widely particularly in rural areas. In that year LIC had 5 zonal offices,
33 divisional offices and 212 branch offices. In 1957 the business of LIC of
sum assured of 200crores, 1000crores in 1970, and 7000crores in 1986.
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industry. The IRDA was incorporated as a statutory body in April, 2000.
The key objectives of the IRDA 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
IRDA opened up the market in August 2000 with the invitation for
application for registrations. Foreign 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.
Role of IRDA:
• Protecting the interests of policyholders.
• Establishing guidelines for the operations of insurers, and brokers.
• Specifying the code of conduct, qualifications, and training for
insurance intermediaries and agents.
• Promoting efficiency in the conduct of insurance business.
• Regulating the investment of funds by insurance companies.
• Specifying the percentage of business to be written by insurers in rural
sectors.
• Handling disputes between insurers and insurance intermediaries.
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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.
Customers are looking at Insurance for covering Pure Risk 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 Replacement of Goods (ROG) or Cost of
Services (COS).
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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.
MUTUAL FUNDS 2%
NBFC’S 3%
GOVT. BONDS 13%
INSURANCE 13%
PF/ RETIRE FUNDS 21%
CURRENCY 6%
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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. With 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.
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company and this foreign insurance company can have an investment of
only 24% of the total start-up investment.
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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. Whatever the developments, the future and the opportunities in
this industry will surely be exciting.
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YEAR LIC (in bn rs.) PRIVATE PLAYER
FY03 110 10
FY04 120 20
FY05 130 40
FY06 140 60
FY07 240 160
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Globally, 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.
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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.
Insurers make money in two ways: (1) 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 (2) by investing the
premiums they collect from insured.
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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.
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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.
Investment management:
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.
Returns 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
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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.
Revenue =premium.
Expenses =sum of claims + commission payable on procurement of
business + operating expenses.
Operating surplus =revenue-expenses.
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 government.
Insurance premium collected is converted in a pool of fund
then divided in to four expenses.
• To pay the expenses of the management.
• To pay agency commission.
• To pay for the claims.
• Surplus money will be invested in govt. securities.
Insurance normally insure only pure risks .However, not all pure risk is
insurable .certain requirements usually must be fulfilled before a pure risk
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can be privately insured .From the view point of the insurer, there are ideally
six requirement of an insurable risk.
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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
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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.
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• Whole life insurance policies: This type of policy runs as long
as the policy holder 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.
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the growth of infrastructure and act as a catalyst in the overall
development of Indian economy.
• 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. When 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 insurance.
• 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.
• 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.
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promotes economic growth by encouraging risk-taking. Risk is inherent in
all economic activities. Without 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.
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8. ING vyasa life insurance
In India, ING is present in all three fields of banking, insurance and asset
management in the form of ING, ING Vysya Life Insurance and ING
Investment Management respectively. The presence in all three fields
signifies the importance that the group attaches to the Indian markets and the
group's operations here, as well as its bullish future outlook on the country.
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ING and ING Vysya Life Insurance are headquartered at Bangalore, while
the corporate office of ING Investment Management is situated at Mumbai.
The synergies arising out of the three distinct but complimentary businesses
are bound to be an asset to the group in the changing market dynamics of the
future. The first such signs are already visible on the horizon with combined
products being successfully launched by the different entities of the group in
conjunction with each other.
ING`s mission is to be a leading, global, client-focused,
innovative and low-cost provider of financial services
through the distribution channels of the client’s preference in
markets where ING can create value.
The new identity
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Product Portfolio
ING Vysya Life follows a “customer centric approach” while designing its
products. The Company’s product portfolio offers products that cater to
every financial requirement, at all life stages.
In fact, the company has developed the LifeMakerTM a simple
tool which can be used to choose a plan most suitable to a
specific customer based on his needs, requirements and current
life stage. This tool helps you build a complete financial plan
for life at every lifestage, whether the requirement is
Protection, Savings, Investment or Retirement. Suitable
products from ING Vysya Life Insurance’s product portfolio
for each such requirement, makes selection of your plan an
easy exercise.
The Company aims to make customers look at life insurance afresh, not just
as a tax saving device but as a means to live life to the fullest. It believes in
enhancing the very quality of life, in addition to safeguarding an individual's
security.
Distribution Channels
ING Vysya Life has a diversified distribution platform. While Tied Agency
remains the strongest channel, the Alternate Channels business within ING
Vysya Life is one of the fastest growing distribution channels. ING 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 Bancassurance, ING, Corporate Agents and SMINCE
The Brand Positioning
In 2007, ING Vysya Life developed its unique brand positioning ‘Mera
farz’. This positioning means, ING Vysya Life helps its customers fulfil
their responsibilities towards themselves and their families. This powerful
positioning has helped ING Vysya Life create a distinct identity for itself.
The latest brand campaign with a very catchy jingle dwells on how a little
planning and a helping hand from ING Vysya life can help lighten the
burden of responsibilities that often come with happy moments and let you
enjoy your life without any worries.
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Products:-
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9. Distribution of insurance products
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.
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• Agents: 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.
• Banks: 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.
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INSURANCE COMPANY ASSOCIATE BANKS
ICICI prudential ICICI bank, bank of India, Citibank,
Allahabad bank, Federal bank, south
Indian bank, Punjab and Maharashtra
cooperative bank
SBI life State bank of India
Birla sun life Deutsche bank, Citibank, bank of
Rajasthan, Andhra bank
ING Vysya bank Vysya bank
Aviva life insurance ABN amro bank, canara bank
HDFC standard life Union bank, Indian bank
Met life Karnataka bank, j&k bank
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• Internet: In this technological world internet is also a channel of
selling insurance. This can be as direct marketing.
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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-
• Marketing mix.
• The importance of relationship.
• Positioning.
• Value addition.
• Segmentation.
• Branding.
• Insuring service quality.
• Effective pricing.
• Customer satisfaction research.
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• Growth scenario in the world.
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Augmented product: An insurance company can provide different
types of services to differentiate their products-
• Post sales services.
• Branches in different places for customers.
• Customer complaint management.
• Payment option convenient to customers.
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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. Well trained, experienced and expert hands are needed for
the operations.
• Penetration into and exploitation of markets: 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.
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Attributes to develop marketing strategies:
• Channel data: - Useful to know future buying preferences, learning
about products and purchase channels.
• Consumer attitudes.
• Consumption data: - Useful to evaluate annual premiums, number of
annuities owned, value of annuities, and with which company the
current policy is held.
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11. Competitors of ING vysya life insurance
ICICI prudential: 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 Rs. 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 IRDA. 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 Financial Strength rating of AAA from Fitch ratings. ICICI
prudential is working on the base of five core values-
• Integrity
• Customer first
• Boundary less
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• Ownership
• Passion
Key features:
Key features:
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• Introducing low cost group schemes for companies and NGOs.
Aviva life insurance: Aviva is UK’s largest and the world’s fifth largest
insurance Group. 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
Group 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.
Key features:
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• Through the “Financial Health Check” (FHC) Aviva’s sales force has
been able to establish its credibility in the market. The FHC is a free
service administered by the FPAs 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 FHC assesses and
recommends the right insurance product for them.
• Introduced the concept of Banc assurance in India.
• Products to provide customers flexibility, transparency and value for
money.
• Differentiation in fund management operations.
• Innovation
• Long term relationship
• Customer centered and result focused vision
• Creating high performance organization
57
• Working with integrity, fairness and financial prudence
• Partnering with internal and external customers
Max New York life insurance: Max New York Life Insurance Company
Ltd. is a joint venture between New York Life, a Fortune 100 company and
Max India Limited, one of India's leading multi-business corporations The
Company's paid up capital is Rs. 907.4 crore. Max New York life is working
on the base of six core values-
• Excellence,
• Honesty,
• Knowledge,
• Caring,
• Integrity
Key features:
• Max New York Life has adopted prudent financial practices to ensure
safety of policyholder's funds.
• Investing significantly in its training programme and each agent is
trained for 152 hours as opposed to the mandatory 100 hours
stipulated by the IRDA before beginning to sell in the marketplace.
58
• 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: 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-
• Professionalism
• Innovation
• Team Spirit
• Pragmatism
• Integrity
Key features:
59
• Building long term value with business partners by enhancing the
proposition to their customers.
• Retaining the best talent in India.
Tata AIG life insurance: Tata AIG Life Insurance Company Limited (Tata
AIG Life) is a joint venture company of the Tata Group and American
International Group, Inc. (AIG). The Tata Group holds 74 per cent stake in
the insurance venture with AIG holding the balance 26 percent. Tata AIG
Life provides insurance solutions to individuals and corporate. Tata AIG
Life Insurance Company started to operate its business in India on April 1,
2001. Tata AIG is having 3000 advisors all over India.
Key features:
Bajaj Allianz life insurance: Bajaj Allianz life insurance company ltd. Is a
joint venture of Allianz AG, 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.
Key features:
60
• Tying up with seven regional rural banks sponsored by Syndicate
Bank to tap the rural market.
• Introducing micro-insurance products and coming out with a new
capital guarantee product.
• Expanding its agency force from 1.60 lakh to 2 lakh and the branch
network will also be increased from 900 to 1400.
Birla sun life insurance: Birla Sun Life Insurance Company Limited
(BSLI) is a joint venture between the Aditya Birla Group and the Sun Life
Financial Services of Canada. It started operations in March 2001 after
receiving its registration license from IRDA in January 2001. Company is
having more than 45 branches across India.
Key features:
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HDFC Standard 2.4%
SBI Life 3.0%
Bajaj Allianz 4.2%
Aviva life insurance 1.3%
MetLife insurance 0.6%
Reliance life insurance 1.1%
Birla sun life insurance 1.0%
Max new York life insurance 2.3%
Bharti AXA life insurance 0.1%
Tata AIG 1.6%
ING Vysya 0.7%
Kotak Mahindra 0.9%
62
insurance
Reliance life 8571.2 2803.7 205.7
insurance
Birla sun life 7595.4 3844.7 97.6
insurance
Max new York 6942.0 3720.4 86.6
life insurance
Bharti AXA life 258.7 1.1 22907.8
insurance
Tata AIG 4413.0 3264.8 35.2
ING Vysya 3047.7 2086.7 46.1
Kotak 3476.6 2172.6 60.0
Mahindra
12. Comparison of ULIP products of different
insurance companies
ICICI Prudential
Fund options- growth fund, balanced fund, income fund, and preserver.
allocation to equities- upto 100% in growth fund, upto 40% in balanced
fund, nil in income fund, 50% in preserver.
minimum premium- 20,000.
min/max age at entry- upto 65 years.
sum assured- annual premium*term/2.
fund management charges- 1.5% in growth fund, 1.0% in balanced fund, .
75% in income and preserver fund.
fixed monthly expenses- 60rs.
partial withdrawals- above one partial withdrawal 100 rs. charge per
withdrawal.
charges on top ups- 1%.
63
switching charges- above 4 switches in a year 100 rs. Per switching.
64
partial withdrawals allowed- above 6 partial withdrawals 250 rs. per
withdrawal.
charges on top ups- 2.5% for initial 2 years, after 1%.
switching charges- 24 free switching and then 100 rs. per switching.
65
Fixed monthly expenses- 50 rs.
Charges on top ups- nil.
Switching charges- above 2 switching per year 500 rs. Per switching.
66
Insurer Market view Product focus Distribution Others
strategy
67
ICICI Market Pension and Significantly Significant
Prudential growth at healthy diversified capital
60%CAGR 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
significant
time
disadvantage;
health could
comprise 3 –
5% of product
mix in 5 years.
68
growth over products and higher focus 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 FDI were
equity obstacles raised to
investment, include lack 49%.
competitive of bank
versus mutual infrastructure.
funds for
longer tenure
products given
lower amc
charges
Bajaj Current Most products More focus Growth 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
69
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
group’s
products
distribution
strengths.
70
13. Questioner
KBS bbsr
Krupajak business shool
Kauslya ganga
Puri road
Bhubaneswar
Orissa
Name-
Company-
Designation-
Contact no.-
The following questionnaire is for the purpose of our research project as a part of
our MBA curriculum on ‘potential of life Insurance companies’. It is assured from
us that any information given by the company will not be disclosed by any means.
With this assurance I expect accurate data from company to help me for my
project.
________________________________________________________________
71
(c) Through walk in interviews
(d) Through placements agencies
72
(c) By increasing periodicity of interaction with advisors and customers
(d) By providing extra benefits to advisors and customer
13. What 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 mention)
……………………………………………………………………...
………………………………………………………………………………...
………………………………………………………………………………...
73
14. Findings
Primary data has been collected by the survey of branch and agency
manager of different insurance companies in Kolkata. sample size for this
research is 27.
Recruitment Advertisement
Recruitment Interviews
74
Recruitment Placement agencies
Active Incentives
76
Active Training session
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.
77
Products Term insurance
Products Endowment
So all the companies are promoting their unit linked products and some
companies are promoting rest of the products including unit linked products.
78
T
Endowment products
79
Product deployment Customers need
Respons
e Frequency Percent
Yes 20 74.1
No 7 25.9
Total 27 100.0
80
B
On customer need
81
Differentiation pricing
Respons
e Frequency Percent
Yes 13 48.1
No 14 51.9
Total 27 100.0
Respons
e Frequency Percent
yes 7 25.9
no 20 74.1
Total 27 100.0
Differentiation service
Respons
e Frequency 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.
82
By better service quality
By pricing of product
83
Mode of interaction Telephone
So almost all the companies are interacting with customers through direct
marketing and by telephonic contacts (creating database).
84
Mod
Strategies Service
By telephonic contacts
85
Strategies_Pricing
Strategies_Interaction
Strategies_Extrabenefits
86
By providing extra benefits
Premium collection:-
By increasing periodicity
Premium Collection of
interaction
Premium Frequency 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
87
More than 5 cr.
88
Recruitment of advisors through personal reference and
making them active:-
Recrui
89
Recruitment of advisors through advertisement and making
them active:-
Recr
90
Recruitment of advisors through walk in interviews and
making them active:-
Recrui
91
Conclusion
92
15. Recommendations
• ING vysya Life should start recruiting advisors through placement
agencies. By practicing this ING Life will get more capable advisors
who can work efficiently. Inactive advisors kind of thing would not
happen.
• ING vysya 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.
• ING 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.
16. References
93
Insurance Magazines on Business Line Google search
distribution investment
94