Professional Documents
Culture Documents
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
²
<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.
Ô Protection to investor.
Ô Accumulation of savings.
Ô Channeling these savings into sectors needing huge long term investment.
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~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
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%
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 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
machinery.
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.
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Ô
Insurance products yield more than any
other investment instruments and it also provides added incentives or bonus
offered by insurance companies.
Ô
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.
Ô
" Insurance serves as an excellent tax
saving mechanism too.
Ô
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 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.
Ô
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.
Ô
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.
Ô
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).
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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
changes.
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.
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
respond.
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.
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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.
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.
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.
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*
Profit = earned premium + investment income - incurred loss - underwriting
expenses
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.
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.
,
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+
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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.
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.
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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
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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.
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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
economy.
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
insurance.
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
cost.
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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.
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.
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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.
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.
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
products.
Ô
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
policies.
Ô In this technological world internet is also a channel of selling
insurance. This can be as direct marketing.
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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.
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Ô
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.
Ô
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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.
Ô
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
separately
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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.
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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.
0
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.
²
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
²"/!1
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
values-
Ô Excellence,
Ô monesty,
Ô Knowledge,
Ô Caring,
Ô Integrity
!. 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.
0
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.
Ô Professionalism
Ô Innovation
Ô Team Spirit
Ô Pragmatism
Ô Integrity
0
O
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.
0
0
/
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
values-
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.
0
²
É!!!
!
!
.ñ .(
%<
& %<
&
31831.8 20808.5 53
mÉ 10675.7 6595.7 61.9
É# 14717.4 8142.4 80.8
#) 26498.1 15208.2 74.2
4586.8 3464.2 32.4
² 2756.0 1162.7 137.0
< 8571.2 2803.7 205.7
#
7595.4 3844.7 97.6
²"!1 6942.0 3720.4 86.6
#3 258.7 1.1 22907.8
O 4413.0 3264.8 35.2
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3047.7 2086.7 46.1
0 3476.6 2172.6 60.0
²
c
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.
!
- 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.
!
2 free switches in a year, and 100 rs. Per switching.
mÉ
growth fund, balanced fund, defensive fund, secure fund, liquid
fund.
-
100% in growth fund, 30-60% in balanced fund, 15-30% in
defensive fund, 0% in secure and liquid fund.
10,000.
4"18- 65 years.
!
24 free switching and then 100 rs. per switching.
É#
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.
24,000.
4" 7 ± 65 years.
!
above 4 switching 100 rs. per switching.
²"/!1
- 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.
15,000.
4" 12 ± 60 years.
!
above 2 switching per year 500 rs. Per switching.
!
above 1 switching 100 rs. Per switching.
Insurer Market view Product focus Distribution Others
strategy
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
significant
time
disadvantage;
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
charges
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
group¶s
products
distribution
strengths.
c$ 5
/
6666666666666666666666666666666666666666666666666666666666666666
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
mention)««««««««««««««««««««««««««...
««««««««««««««««««««««««««««««...
««««««««««««««««««««««««««««««...
c7
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
<6
P P P P
²
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.
6
<esponse jrequency Percent
yes 7 25.9
no 20 74.1
Total 27 100.0
6/
)
6O
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.
O
: 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.
6O
6
6²
6Ý!
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.
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.
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.
So almost all the companies are interacting with customers through direct
marketing and by telephonic contacts (creating database).
²
"
(
P $ % & P $ % &
É
6É
É
6
É
6Ý"
So most of the insurance companies think that providing better service quality is
most suitable strategy to compete in the market.
"
#
"
)
P P P
So most of the companies are collecting premium less than 2 crores. at an agency
or branch level in a month.
Ê
P P P
<
<
Companies, recruiting their advisors through personal reference are doing practices
to make them active in under mentioned numbers.
So companies are concentrating on training session and awarding non cash prizes
to make their advisors active.
<
Companies, recruiting their advisors through walk in interviews are doing practices
to make them active in under mentioned numbers.
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 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 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.
c( <
#
²)
/!
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