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Group No. 6
Tejas Badheka Sachin Gupta Advait Khadse Rohan Pai Mayuresh Sanap Prafull Thakur
JBIMS Marketing presentation
Indias insurance sector is expected to grow even faster than the countrys overall economic growth, opening up new business avenues across the industry Growth Factors in Indian Insurance Industry Low life insurance penetration rate
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Objective
To understand the current market
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Industry growing at 19-20% GDP contribution 4% Penetration in Urban Area 65% Rural Area 40% Total Market Premium - $80 billion Opportunities Key Challenges Rising income levels
Low interest rates Strengthening core product proposition
Tax challenges
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Term
- Provides life insurance coverage for a specified term - Does not accumulate cash value - 3 key factors 1. Face Amount 2.Premium to be paid 3. Length of coverage - Common types 1. Annual Renewable term 2. Level Term 3. Decreasing Term
Whole Life
- Provides guaranteed insurance protection for the entire life - Higher premiums than term insurance - Carry tax deferred cash value component - Advantages 1. Guaranteed death benefits and cash value 2. Fixed, predictable annual premiums 3. Mortality expense charges - Disadvantages 1. Inflexibility of premiums 2. Not competitive IRR
Single Premium
- Requires insured to pay a one-time premium
- Companies charge a large amount if insured takes out money out during first few years
Endowment
- Lump sum is paid after a specified sum or on death - More expensive than whole life and universal - Cumulative cash value of policy equals death benefit - Common Types 1. Traditional with profits 2. Unit-linked 3.Full 4. Low-Cost
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IRDA is the controlling and regulatory apex body in the country for insurance sector and its chairman and members are appointed by Government of India
Qualification
Information
Terms of business
Books of accounts
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Propose a regulation strategy of bundling multiple insurance products together Term Plan + Health Plan Health plan takes care of you when you are still alive. Term Plan takes care of your loved ones after you die Term plan + Retirement Plan Retirement insurance ensures that you or your family members receive a regular pension amount post a retirement date
The combo products will help to increase the penetration of multiple insurance products
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Group No. 6
Insurance penetration is defined as the ratio of total premium collected to the total Gross Domestic Product (GDP) of an economy Insurance density is defined as the ratio of total premium to the total population in the country and is expressed in currency units
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Indias largest and most popular Insurance Company Has gained consumer trust and credibility over time
Insurance provider with the most reliable brand names Has plans for children to students to corporate executives to senior citizens First to introduce a 24x7 dedicated, toll free customer line
Indias most trusted private sector insurance provider First insurance company to receive a National Insurer Financial Strength of rating AAA
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An insurance provider with the highest financial strength First private sector insurance provider to make highest profit for 3 consecutive years since 2007 Offers plans for segments from urban to mid urban to rural divisions Indias first insurance provider with business continuity plan Model is based on disaster management principles
The master of group solution insurance plans Specializes in offering a wide range of solutions for groups and individuals
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Private 64.60% 35.40% 80.50% 19.40% 69.90% 30.10% 70.70% 29.30% [1pp] [-1pp] 357 lakh [-3.5%] Rs 85 Cr. [-22%] 7.35% [-1pp] 97.42% 11546 84.4 lakh [-24%] Rs 679 Cr. [34%] 17.53% [-.5pp] 89.30% 1251 All except HDFC
Reinsurance premium ceded Operating ratio [operations, training to develop distribution channels, capital req. under solvency margin]
Claims Settled
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LIC Total Insurance Premium Individual Biz. From Agents Banks Others Brokers Direct Selling Group Biz. From Agents Banks Others Brokers Direct Selling 1712 139.6 9 25.7 37167 41266 1098 92 17 264 202889 Cr.
1730 1485 46 81 2
1.93
7.65 184.5
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NEW PARADIGMS
Innovative products Smart marketing Aggressive distribution
Private bank led insurers have fared much better than insurers dependent on agency distribution in volumes Overall ticket sizes have remained flat for private insurers but bank led insurers have done better with growth in average ticket sizes aiding overall volumes Low margin single premium products have fuelled growth in past, although easier to sell they impair long term profitability
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Term Plans
Children's Plans Economic support and funding major milestones such as education
Retirement Plans Monetary security and financial independence even after retirement
Savings & Investment Plans Dual benefit of protection and long term savings
Health Plans
Plan Details
1. Money 1. HDFC Critical Back Plan 2. Endowm Care Plan ent 2. HDFC Assuranc SurgiCare e Plan Plan
JBIMS Marketing presentation
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Strong Presence across India: 481 branches 5000+ partner branches 3,000 Front Line Sales (FLS) serving partner bank branches
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Tapping the ones at the bottom of pyramid I.e Extreme niche clientele
No insurance companies are providing risk management & insurance services to this particular segment
Currently all the consumers are focusing on the Urban Middle & this has led to over concentration of this market
The retirement needs of this age group is not being met by proper value proposition by current products
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World Bank Report says the rural population in India is 83.3 crores. Insurance Penetration slipped to 4.1 %
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To be launched in phase one Focuses on students going abroad It allows us to bundle other Portfolio companies of HDFC argo This allows us to earn extra revenue through earning commission income
To be launched in phase Two Extremely high end consumers We sell customized structured insurance products It allows us increase our premium per policy The mortality cost is very less in the product
To be launched in phase Three Allows us to tap the wealth of rising middle income group We sell retirement plan products They are products sold at Annual pemium of less then Rs 2000
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Current lagging of Indian education scenario Emerging middle class considers education as the best inheritance that they can provide Thus no compromise on education of child Increase aspiration to have global exposure & education
Growth rate of indian economy Growing breed of HNIs Also need to sustain the same lifestyle for family Want of customized, discreet financial service, thus we calculate an plan Need for an extremely niche product with special benefit services which allows them to differentiate Increased banking penetration Increased size of middle age & middle class income segment Various government schemes related to tax benefits Aadhar drive initiated by government
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Can be sold through existing channels distribution through agents and banks Can be sold through various education consultant & travel agents We can tap the current HDFC channel of education loans called Credila Once Successful we can then later implement the same to localloans
Need to create a separate professional channels Can be sold through high end CFP & wealth management channels Can be sold to various corporate banking clients We can tap the current HDFC channel of wealth management and Imperia Banking
Banking correspondence Leverage the highly technosavy IT networks Can be sold through other large network of HDFC banks which have high lending exposure Developing a new force of Agents to sell the insurance products
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HNI Insurance
People with high earning potential Top management and heads of organizations
People with middle Age group [30-50 years] People from private sectors
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HNI Insurance
Direct Sales
Relationship managers
Personal Selling
Emotional Advertising
Sales points
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Student Insurance
Rational Appeal / Emotional Appeal Makes students feel responsible Celebrity Endorsement Rational Appeal Custom structure and format Through a personal relationship manager Emotional Appeal Concentrates on future planning Through reliable institutions
HNI Insurance
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HNI Insurance
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4
As a percent of sales
HNI Insurance
1
As a percent of sales
9
Group No. 6 JBIMS Marketing presentation
HNI Insurance
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HNI Insurance
Compare sales with revenue targets Engage profit sharing model with relationship managers
Compare sustained YoY growth with revenue targets Engage more sales force
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Current motto of HDFC life insurance is Sar utha ke jiyo! Conveys the idea of living your life with dignity and self respect The idea of self respect connects strongly to each of the current segments For students going abroad, the insurance will insure the students against uncertainties In case of HNIs, the insurance will allow the family members to live a lavish lifestyle
Group No. 6 JBIMS Marketing presentation
Operating Expenses/Total Premium decreasing from 18.7% to 12.2% over a period of three years.
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Assumptions: 10% of Students and 1% HNIs go for our products initially growing incrementally 100 80 60 40 20 0
Major Costs Major Costs Higher Commissions for HNI Business Operating Expenses in Students and HNIs Products
Change in PBT
Change in PBT
2014 15 16 17 18
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