Professional Documents
Culture Documents
TATA AIG
Agents
Banks
Brokers
Work Site Marketing
Internet
TYBCBI
TATA AIG
Interpretation
SWOT Analysis
Sum Up
Questionnaire
Biblography
TYBCBI
TATA AIG
Tata AIG has a corporate agency channel, which handles its corporate agents and
have tie-ups with 38 corporate houses.
Insurers want to lower distribution costs by finding more efficient channels. The
new private players are developing multiple channel models; many insurers use or
plan to use several banks as distributors. Because most banks have strong
regional bias, in this regards Tata AIG has
agency distribution) through that it is doing both life insurance and general
insurance business..
Because most banks have a strong regional bias, Insurers can use several banks
TYBCBI
TATA AIG
without creating large overlap. Many larger banks are sourcing products from
several insurers acting as manufacturers.
An important distribution challenge facing insurers is the need to meet the rural
and social sector legislative requirements stipulated in terms of market opening.
For Tata AIG, it takes rural insurance as an opportunity and not an obligation.
For
achieving objective in rural area it has also tie with NGOs(Bridge stone for
distribution of
as the whole topic of distribution can be known for the both company of Tata
AIG ( Life and General insurance). Gradually channels are incorporating day by
day for the growth of business.
In the span of two to three years Tata AIG achieve much more business growth
what it expected at the time of entrance in Indian market. It happened because it
has quality people, innovative management, be able to employ technology
effectively besides having right product.
TYBCBI
TATA AIG
EXECUTIVE SUMMARY
This project has been a great learning experience for me; at the same
time it gave me enough scope to implement my analytical ability. Tata
Group is one of the India's largest and most respected business groups.
Tata Group's name is synonymous with India's industrialization.
Tata
AIG Insurance Solutions is one of the leading insurance companies that provide
both life insurance as well as general insurance. ThSis pioneer company is a joint
collaboration between the American International Group, Inc. (AIG) and
Tata Group. They own the company in the ratio of 26:74. It is a
leading financial institution that has carved a niche for itself all over
the world. Tata AIG Insurance Company is having different insurance
policies. At the end of the project people will be knowledgeable about
various
study
insurance
of
Tata
organizations.
AIG
Insurance
Project
is
Company
on
in.
the
To
market
get
to
potential
know
questionnaire has been prepared which contains open ended and close ended
questions.
TYBCBI
TATA AIG
RESEARCH METHODOLOGY
In this project descriptive research use. The research methodology adopted for
carriying out the study was at the first stage theoretical study is attempted and at
the second stage observedin an internet.
TYBCBI
TATA AIG
TYBCBI
TATA AIG
Chapter-I
Background of the Insurance sector
Insurance is over one and one-half centuries old in India. The First general
insurance company, Titan Insurance Company Ltd., was established in 1850.
Life insurance came to India from the U.K. in 1880, with the establishment of
the Oriental Life Assurance Company in Calcutta.
nationalized under the Life Insurance Corporation (LIC) of India. Although efforts
were made to maintain an open market for the general insurance industry by
amending the Insurance Act of 1938 from time to time, malpractice escalated
beyond control. Thus, the general insurance industry was nationalized in 1972.
Political ScenarioUntil recently, India continued to be one of the few remaining countries of the
world to remain insulated from the direct foreign investment in its insurance
sector. However, things are changing now with the passage of Insurance
Regulatory Development Act (IRDA) through Indian Parliament in late 1999. A
much awaited and much debated act, it met with strong resistance from the
political institutions of India and took almost six years to see daylight. Though
8
TYBCBI
TATA AIG
Recent initiatives
Privatization is expected to foster competition, innovations and greater awareness
on the need for buying insurance services and variety of products. The IRDA bill
Passed by the parliament was an important development in the field of Insurance
business. The IRDA Act marks an end to the monopoly of the government in
the insurance sectors by opening it up to private players. It gives priority in the
TYBCBI
TATA AIG
The IRDA will have all the powers that the controller of insurance had.
Solvency margin fixed at not less than Rs.50crores for life and general
insurance.
10
TYBCBI
Views of
TATA AIG
IRDA:-
Composite broker:- means an insurance broker who arranges insurance for clients
with insurance companies and to whom the license has been granted by the
Authority(IRDA) under regulation 12.Alt: means a person who is licensed under
the regulation to carry on both direct broking and reinsurance broking.
Direct general insurance broker: - means a person who is for the time being
registered in respect of general insurance business but does not include broking of
insurance business.
Direct Life insurance broker:- means a person who is for the time being
registered in respect of Life business but does not include broking of insurance
business.
Insurance broker:- means a person who for a consideration or otherwise arrange
insurance for clients with underwriting insurance companies and to whom a
license has been granted by
insurance broker.
Insurance consultants:- shall mean a person , other than an insurance broker as
as specified under categories I(direct general insurance broker), II( direct life
11
TYBCBI
TATA AIG
Function of direct
insurance broker:The Function of both
general
insurance
broker
and
direct
life
shall be to:
12
TYBCBI
TATA AIG
Function of insurance consultant:An Insurance consultants, risk management consultant or any other nomenclature
as may be approved by the authority shall mean a person, other than an insurance
broker and excluding an insurance surveyor and loss authority shall mean a
person, other than an insurance broker and excluding an insurance surveyor and
loss assessors, who for a consideration or otherwise offers insurance consultancy
or related services to his clients and
Insurance agents are the main intermediaries in the Indian insurance market,
but with liberalization brokers will be an additional channel for selling
insurance products.
Brokers are likely to play a major role in ensuring clients get insurance
covers tailor made to suit their requirements at good terms.
13
TYBCBI
TATA AIG
The potential of the Indian insurance market is huge with current life
insurance penetration being only 1.9 of the GDP.
THE GREAT INDIAN INSURANCE MARKET:There are two factors that make India an attractive market for most insurance \
companies.
First, of course is the sheer size of the market. With a population of over one
billion, out of which about 40-45% is the insurable population. India is clearly a
market poised for growth. The insurance penetration as well as the size of the
average cover is well below international average, again providing a great
marketing opportunity for the insurance companies.
Second, till about two years back life
LIC has done commendable work, there is still a great deal of scope for
bringing in innovative products and distribution channels to tap this market.
TYBCBI
The list of foreign
players entering the
Indian Insurance sector
and their Indian
partners: Indian
Partner
TATA AIG
Foreign Insurer
15
Specialization
Present Status
It is for 2000.
Now many have tak
license
TYBCBI
Aditya Birla Group
TATA AIG
Sun Life, Canada
Life
Received License
Life
Received License
HDFC
Standard Life, UK
Life
Received License,
Commences Operation
Reliance
No Foreign Alliance
ICICI
Prudential, UK
Life
Received License,
Commences Operation
ICICI
Lombard, Canada
Non-Life
Not applied
Max India
Life
Received License
Sundaram
Non-Life
Received License
IFFCO
Non-Life
Received License
Tata Group
AIG, USA
Received License
Vysya Bank
ING Insurance,
Netherland
Life
Hero Group
Zurich, Switzerland
Life
Not Applied
Cholamandalam Group
Undecided
Life
Not Applied
Hindustan-Times
Undecided
Life
Not Applied
Dabur
CGNU Life, UK
Life
Not Applied
Bajaj Auto
Allianz
Non Life
Undecided
Metlife, USA
Life
Not Applied
Sanmar Group
AMP, Australia
Life
Not Applied
SBI
Cardiff, France
Life
Not Applied
Undisclosed
Non-Life
Finalizing Partner
Corporation Bank
Undisclosed
Life
Finalizing Partner
Undisclosed
Aegon, Netherlands
Finalizing Partner
Undisclosed
Cigna, USA
Finalizing Partner
Undisclosed
Chubb, USA
Finalizing Partner
Undisclosed
16
Finalizing Partner
TYBCBI
TATA AIG
Undisclosed
Finalizing Partner
Undisclosed
Nationwide, USA
Finalizing Partner
Citibank, India
Undecided
Non-Life
Finalizing Partner
Undisclosed
GE Capital Services
International, USA
Life
Finalizing Partner
Videocon International
Non-Life
Finalizing Partner
Tata AIG
General Insurance
Location
Headquartered in Mumbai, the company employs over 2,100 people across 160+
locations in the country.
CAREERS AT TATA AIG
Tata AIG General Insurance Company, which started its operations in India on
January 22, 2001 offers the complete range of insurance for automobile, home,
personal accident, travel, energy, marine, property and casualty, as well as several
specializefinanciallines.
Tata AIG offers exciting opportunities to learn, contribute and build careers. As a
leading name in the fast-paced insurance industry, we are constantly growing and
are always in search of bright talent across all levels. The company's philosophy
is strongly oriented to developing talent through larger and more enriching
assignments. We recognize potential and consistent performance - fast!
Chapter-II
Tata AIG Profile
Tata (Indian)+ AIG( American Insurance Group Inc.)= Tata AIG;
17
TYBCBI
TATA AIG
18
TYBCBI
TATA AIG
19
TYBCBI
TATA AIG
20
TYBCBI
TATA AIG
Strategy of
Insurance.
Tata
AIG
for
life
Insurance
and
General
There is no question of competing with LIC. It already has about 9 lakh agents
and that number is likely to go up to 10 lakh by the end of the current fiscal.
No company is allowed to poach on another's agents, least of all on LIC's. We
only select freshers and, five years down the line, we hope to have about 1 lakh
agents. Unlike the non-life segment, selling life insurance requires a more personal
touch, which is why good agents are important in this business. In life insurance,
policies are sold not bought. As of now about 60 per cent of our agents work
on a part-time basis, but the ratio will come down to 50 per cent by the end of
our fifth year [in operation]. All our agents earnings are commission-based. They
make a 40 per cent commission in the first year on new business and 7.5 per
cent in the next two years on renewable business. The commission rate declines
to 5 per cent in the fourth year.
The company is targeting a policy base of one million covering three million lives
and an agency force of one-lakh agents in five years. As against others who have
21
TYBCBI
TATA AIG
set targets of sum insured or premium income, Tata AIG strategy is to cover the
maximum number of Indians among the new companies. Already the company
together with its general insurance partner, Tata AIG General Insurance provides
cover to close half a million individuals.
Individual
(II)
Corporate
General Insurance
(I)
Individual
Corporate
(a) Energy
(b) Accident and Health
(c) Property
(d) Marine
(e) Contingents.
Chapter-III
Distribution Channel of insurance Industry in India
22
TYBCBI
TATA AIG
The insurers must refine and exploit the market segment product distribution
system linkage.
This will lead to distribution system pluralism; many different distribution systems
will be implemented across companies rather than across the industry.
Distribution channels:Why it is needed.
B)
Challenging Scenario
of intermediaries
demanding
role
transformation
Insurance has to be sold the world over, and the Asian Market is no exception.
The touch point with the ultimate customer is the distributor or the producer (as
they are known in certain markets), 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 Asian markets, with their distinct cultural and social ethos, 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.
This calls for leveraging multiple distribution channels in a cost effective and
customer friendly manner. For example, in the developed markets producers
23
TYBCBI
TATA AIG
(brokers and agents) form the major channels of distribution, while the web as a
complementary channel is catching up slowly. According to a Forrester survey,
88% of the Life insurance executives responding identified agents as the primary
channel of distribution.
TYBCBI
TATA AIG
companies, with their offices across the country, the new companies have miles to
go before they reach anywhere. They must overcome the mindset of the customer
that life insurance is Life Insurance Corporation of India (LIC) and general
insurance is General Insurance Corporation of India (GIC) if they hope to grow in
the market. Meanwhile, the public sector companies are going to great lengths to
revamp their image to look and feel more contemporary.
Both the public and new private sector companies are fighting their own battles
from the perspective of customer perception management:
To retain their creamy layer clientele Work against the people's mindset
who are the most likely to be wooed that they are not here for the long
by the new companies
term
Retain and attract good intermediaries Attract
intermediaries
especially
agents
with
the
requisite
qualifications and attributes who can
market the company and the product.
Match the aura created by the new Run the risk of tapping an already
companies in the urban market
insured market for repeat insurance
instead of tapping new virgin pockets
in the market
In this process all are targeting the same market --the existing pie is being cut up
further, but no attempt is being made to increase the size of the pie. For
example, while attempts are made to complete the quota of rural insurance in
percentage terms, the rural market potential is yet to be tapped, as the new
insurers are not able to attract the right kind of talent into their distribution force
to address this. Intelligent segmentation of distribution channels to match the
market segmentation is what will help the companies to move in this direction
TYBCBI
TATA AIG
Traditionally tied agents have been the primary channels for insurance distribution
in the Indian market; the public sector insurance companies have their branches in
almost all parts of the country and have attracted local people to become their
agents. The agents are from various segments in society and collectively cover
the entire spectrum of society. A person who has lived in the locality for many
years sells the products of the insurance company with a local branch nearby.
This ensures the last mile touch point being closer to the customer. Of course, the
profile of the people who acted as agents suggests they may not have been
sufficiently knowledgeable about the different products offered, and may not have
sold the best possible product to the client. Nonetheless, the customer trusted the
agent and company. This arrangement worked adequately in the absence of
competition.
In today's scenario agents continue as the prime channel for insurance distribution
in India, as is the case in most markets, supported by call centers to a small
extent. Almost all the new players follow this model primarily because the
regulations for other channels are yet to be put in place.
However there is great excitement in the industry over the impending broker
regulations, and companies are planning possible channels in their enthusiasm to
increase volumes. The belief that all these channels will grow and seamlessly
integrate to bring in business seems a fallacy.
What has emerged is a much more difficult and evolving market scene with
existing players, more new players coming in, and global marketing practices and
ideas being tested. But none of this has changed the fundamental character of the
market, which we believe will take more time than expected
As the insurance market in India is liberalized, the pattern of distribution is
likely to undergo some changes with new channels being introduced
A quantum jump in insurance business in terms of premium, policies, lives
covered, etc would necessitate a corresponding increase in the capacity of
the distribution channels.
The cost of effectiveness of certain channels would induce insurers to start
using them.
There are sectors of market for whom the agency channel may not be the
most efficient and introduction of new channel will help to increase the
penetration of insurance products.
Creation of awareness and demand as a result of the increasing distribution
channels.
Dissatisfaction with the existing channels.
26
TYBCBI
TATA AIG
The distribution channels would play an important role in meeting the increased
volumes. Traditionally, the life insurers have been working primarily on the agency
distribution force, while the general insurance business has depended primarily on
the development officer. The private players are bringing with them international
experience, new technology, new channels of distribution and of course, new
products. The ground rules in the insurance business are being redefined. Even the
existing public sector players are gearing up with matching strategies to face
competition.
Earlier there was only one distribution channel
MULTIPLE CHANNELS
BANKS
CORPORATES/
INSTITUTIONS
BROKERS
TELEMARKETING/
WORK-SITE MKTG./
DIRECT MKTG.
INTERNET
Agents
Today's insurance agent has to know which product will appeal to the customer,
and also know his competitor's products in the same space to be an effective
27
TYBCBI
TATA AIG
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.
The new companies are looking for educated, aware individuals with marketing
flair, an elite group who can be attracted only with high remuneration and the
lure of a fashionable job, all of which may not be possible in this business with
its price pressures and the complexity of selling insurance. Unable to attract this
segment, they have started easing recruitment conditions as against the stringent
norms they had earlier, thereby diluting the process.
While the public sector companies are able to attract agents, they continue to
suffer from high attrition rates due to indiscriminate agent appointment. The most
successful of these companies' tied agents are hardly of the elite variety of
salesman. They are still the neighborhood do good -- the postman, the school
teacher, and the shopkeeper -- who know the people and are themselves known in
the community. The challenge here is the lack of knowledge of the competitive
market and the inability to do intelligent comparisons with the competitor's
products. Educating and training these agents is a serious challenge for the
insurance company.
The relevance of this kind of agent continues even today as agents are sought or
contacted by families by word of mouth. Insurance companies are advised not to
follow the path of FMCG's/credit card companies, believing that a suited and
booted customer care consultant or financial consultant will necessarily appeal to
the average Indian customer.
This is the main distribution channel due to complexity of most insurance
products (Endowment, Whole of life, Unit-linked).
Social feature in the market is the considerable respect for age in Indian society
and a belief that an older person knows better. A very young up-market agent
who is a typical salesman may not appeal to a large segment of the middle class,
which is looking for a solid trustworthy person from whom they can buy
insurance.
In this context it might be a rewarding exercise to recruit some older people (who
have taken VRS from banks and other financial institutions) to sell some lines of
products like pension plans, annuities etc.
Gender of agents is another relevant feature in the rural context that makes a
difference, especially for the female population. Women to whom the customers
can relate --e.g., nurses, gram sevikas -- can target the female segment of the
population more effectively. What is applicable for the rural women and children
health programs and population control programs is equally applicable for
insurance selling also. Max New York Life has adopted a version of this strategy
by appointing gram sahayaks to sell and service the rural customers.
With this kind of segmentation of intermediaries the challenge for the insurance
company lies in training and educating these people to become effective sales
persons. But this in no way diminishes the benefits of intermediary segmentation.
Advantage Past experience as well as ability to deliver right advises.
Disadvantage- This channel can be expensive and it is a time consuming sales
process.
28
TYBCBI
TATA AIG
Banks
Banks in India are all pervasive, especially the public sector banks. Can they also
become the foremost channel for distribution of insurance? Perhaps in the future.
The public sector banks, with their vast branch networks, are also plagued by a
rigid unionized workforce and archaic systems, and lack vision of a broader
service spectrum encompassing non-banking products. The newer banks are
constrained by their lack of reach and meager branch strength. For banks to
become a predominant channel for selling insurance will require a paradigm shift.
But the encouraging fact for insurance companies waiting for bancassurance to
take off is that bank branches are here to stay, and customers do want them. A
customer survey by Deloitte Consulting in the western developed markets found
that for banking activities, customers place high importance on having convenient
branches in their banking relationships. This is good news for the Indian banks
with their many branches, and also makes a strong case for taking up banc
assurance.
Product- The major lines of business that can be sold through banc assurance
successfully are term insurance, creditor insurance, and non-life products like
Property, Motor and Personal accident, Homeowners comprehensive insurance etc.
Process- (Distribution technique) In general distribution can be made through a
quick and convenient sale such as during loan application process. However bank
may act as a source of financial planning advice therefore, the use of highly
trained advisor is very important. The bank staff at all levels to be able to serve
the customer properly must also support this advisor. In no case should the
advisor be marginalized as an out-siderfrom the banks stand point. Simple
straightforward product with the right amount of protection (e.g loan amount)
sufficient. for Example the process may identify a need for life insurance, medical
insurance as well as saving for education for child.
An example is SBI Life, has plan to take advantage from the brokers regulation
to be put in place in order to move ahead aggressively with the bancassurance
model. One of their major product lines is creditor insurance, and they have
launched their first creditor insurance product, which covers the liabilities of the
creditor in case of death of debtor. SBI Life is planning a similar product for
home loan borrowers of State Bank of India. This model has high relevance in
the Indian context with far-flung villages where the insurance potential is in
volume and not in high per capita premiums. Some advantages and disadvantages
are:
Advantages of bancassurance
Disadvantages of bancassurance
TYBCBI
TATA AIG
vision and awareness
Low cost channel for selling simple Useful for selling only certain lines
vanilla products
of products
Extensive reach including the rural Initial investment in systems and
pockets
processes and people training
The strategy should be to use multiple banks according to their presence in
different regions. Success would come by using banc assurance where it will be
most effective i.e., selling simple, cheap products to the masses at a low cost.
This awareness is growing and is evident from the fact that nearly every
insurance company has partnered with one or many banks to implement banc
assurance.
Brokers
With the broker regulation 2002 come into effect this could be the next hope,
especially for the urban market. This will be a new experience for the insurance
customer, accustomed to brokers in financial services, real estate, and travel and
tourism. For historical reasons the image that 'broker' carries in the minds of the
customer is not very favorable.
Thus the new breed of insurance brokers face
the challenge of establishing credibility.
The positives are that brokers in the urban arena can attract the elite and the
upper middle class customer. Brokers represent the customer and will sell the
products of more than one company. They seek to determine the best fit for the
client and can effectively address the mind block faced by the public about the
various companies. This is applicable in the case of life insurance for the highend and corporate/group segment.
In the non-life segment, broking is not entirely new, as reinsurance brokers were
arranging exotic covers. For individual customers also, with a wide range of
competitive products, the broker can get a good deal. The corporate broking
companies will have to play a prominent role.
If NGOs based in rural areas can be attracted into the rural sector cooperatives
arena, they stand a good chance of succeeding and can help the new players get
a foothold in the rural market. These are the players with the potential to make
the difference, as they have the trust of the people. We envisage scenarios like
that in Bangladesh's micro lending growth and the milk co-operatives in Gujarat
selling insurance in addition to milk production and distribution. It would be a
new dawn in Indian insurance distribution! With the right impetus the Indian rural
insurance scenario could be one with high business volume and tremendous
growth potential.
ICICI Prudential Insurance and HDFC Standard Life Insurance have already
partnered with NGOs to sell some low cost insurance in rural areas.
Product products for this channel must match the distribution technique whole
life policies and general insurance policies should be offer that enable the broker
to offer a lot of choice and options to the client.
30
TYBCBI
TATA AIG
Internet
Though India is joining the fast growing breed of net users, using net for
transactions has not yet caught up. Though a few banks provide online banking,
the usage is still a small fragment. The insecurity associated with transactions over
the net is still an inhibiting factor. At present most of the insurance companies
have product information and/or illustrative tools on the web.
We do not see the web evolving into a means for direct selling of insurance in
the current scenario.
In the Indian market, where insurance is sold after
considerable persuasion even after face-to-face selling, the selling over the net,
which must be initiated by the client, would take some more time.
While the technology capability is there, improvements in bandwidth and
infrastructure are needed.
Also needed are simpler products where autounderwriting is feasible. Automobile insurance, one of the segments of insurance
purchased "off the shelf" in India, would be the ideal segment to start with. On
the life side, term assurance for standard lives with simplified underwriting is a
possibility.
These channels by themselves will not be able to overcome the mindset of the
people, but rather can only be enablers for the human channels.
Direct marketing31
TYBCBI
TATA AIG
Invisible Insurer
In this model, the insurance company or its representative is not the entity
marketing the products. The insurance cover is sold by an automobile /credit card
company as an add-on product leveraging the brand of the retailer. The risk is
carried by the insurance company, which underwrites it. . Products like creditor
insurance, automobile insurance, and credit card related insurance could be
distributed using this channel. This model can be adopted in all market segments
for the lines of business mentioned. It is already prevalent in some areas like
credit card insurance and crop insurance for agricultural loans.
The new players are also attempting this model. The venture of Maruti into
insurance by setting up two subsidiaries MIDS and MIBL to sell automobile
insurance is a case in point. These firms will largely arrange insurance cover for
Maruti's captive customer base. MIDS has been registered as a corporate agent
with an exclusive arrangement with Bajaj Allianz General Insurance, while MIBL
has linked up with state-owned National Insurance Company Limited.
What makes these arrangements attractive is the low distribution cost and captive
customer base. However, repeat business or renewal of business cannot be assured.
In the life segment, group creditor insurance may be the most suitable product for
this channel.
Essence
The success of marketing insurance depends on understanding the social and
cultural needs of the target population, and matching the market segment with the
suitable intermediary segment.
In addition a major segment of the Indian population has low disposable income,
meaning that every penny won will be obtained after a lot of persuasion and the
expected value for money is high.
32
TYBCBI
TATA AIG
All intermediaries can't sell all lines of business profitably in all markets. There
should be clear demarcation in the marketing strategies of the company from this
perspective.
Clients should also receive price differentials for using different
channels. This is not a new concept, as the Public sector Property & Casualty
companies are giving discounts in lieu of agency commission.
The channel
composition should not be homogeneous but should reflect the larger society.
For example:
Agents from different economic, social strata and different age and gender.
Bancassurers ranging from multinational banks to micro credit lending
agencies
Brokers stretching from corporates to NGOs to milk co-operatives
These intermediaries need to be empowered with the right learning, training and
sales tools and technology enablers. Coupled with the right product mix, this will
help the insurers to survive and flourish in this competitive market.
Let us tell a story of a retired postal clerk who became a success story for
selling postal savings and insurance in his village in Punjab in Northern India.
The person is well known, who is a retired postal employee and took up agency
for postal savings and insurance to supplement his meager retirement earnings.
Today -- 10 years later -- he is one of the top agents selling postal savings and
insurance in his village, assisted by his illiterate wife and grandson (a seven year
old computer literate) doing all the administrative work from home on a small
Personal computer using a package (developed by Local a programmer) to handle
his client portfolio.
The entire village population trusts him with the investment advices that he does
out and has no qualms in handing over small amounts of cash to him for
depositing in the post office. He is their trusted customer care or financial
consultant. This we feel is the essence of distribution of financial products in
India.
Another true story is related with Shree Lambother jha agent (chairman Club LIC,
Bihar). 10 years ago when he was merely a student he decided to sell LIC policy
in his village and nearby with bicycle and even without that.
Now he is millionaire. Basically his approach is so good that people recognized
him as a good solicitor regarding their insurance investment or disposable income.
He always tries to make people aware of the policy and according to suitability
suggest a policy taking convenience as a factor of consideration. He has done all
these things in so ethical way that people have faith on him. Not only has he
sold the product but he also serves the society by suggesting the utility of
insurance product.
He is a live example. He became a Brand in his area. He makes himself a
member agent of distinguished chairman club from simple agent. Presently LIC
has given all special facility at his home and his local office. He also has given
33
TYBCBI
TATA AIG
employment (voluntary) of his two brothers for administrative work in his office
and some time (peak month) field for premium collection.
This shows that channel member should be aware about the requirement and need
of the people and product of insurance both.
The players have started exploring new channels of distribution just the way the
developed economies have done it in the past. Some of the new channels of
distribution are marketing through a dedicated
(a) Sales force (tied agents),
(b) Corporate agents (DSA like),
(c) Banc assurance,
(d) Work-site marketing,
(e) Independent financial advisors (individual qualified agents)
telemarketing(DM),
(f) Retail chains,
(g) Internet,
(h) NGOs,
(i) Brokers etc.
The mantra is innovation and diversification. Distribution is more crucial for the
life insurer, which needs to have a mass retail base to minimize the chances of
being adversely affected by any casualty.
The companies are using different models each model has its pros and cons, the
banc assurance model is cost-effective and is also quite efficient for market
penetration. This is for the simple reason that since the banking and insurance
industry share a common target of financial services customers, the existing
customer base of banks can be targeted rather than building a new one.
Chapter IV
Interpretation And Data Analysis
3.1 DATA ANALYSIS AND INTEPRETATION
Q.1 Are you insured?
YES
NO
34
TYBCBI
TATA AIG
Intepretation
Analysis of this information make us clear that maximum no people said that
means 65% people are have an insurance policy and 35% of people are not have
an insurance policy.
General insurance
Health insurance
All of them
35
TYBCBI
TATA AIG
Intepretation
40%
Q.3 Are you aware all the plans and update from company?
YES
NO
Intepretation
70% of people said that they are aware of plans and update of company,and 30%
of people are not aware of plan and update of company.
NO
36
TYBCBI
TATA AIG
Intepretation
65%
of people said that they are satisfy of the plan of these company,
35%
of people said that they are not satisfy of the plan of these company.
Q.5
TATA AIG
ICICI
Intepretation
30%
25%
20%
20%
of people said that they have an insurance policy in BIRLA SUN LIFE
MOTOR
PENSION PLAN
37
TYBCBI
TATA AIG
Intepretation
Analysis of the information 55% of people said that they prefer life insurance,25%
of people prefer motor insurance and 20% of people prefer pention plan policy.
Q.7
AGENT
ADVERTISEMENT
MOUTH OF SPREAD
Intepretation
Analysis of the information, 35% of people said they come to know through as
an agent, 35% of said that they come to know through as an advertisement, 15%
of people said that they come to know through as an news paper, 15% of people
said that they come to know
Q.8
organisation?
38
TYBCBI
Job security
monetary factors
TATA AIG
job satisfaction
status
Intepretation
35%
of people said that for the job security they are remain in organisation,
25% are remain in organisation for job satisfaction, 20% are remain in
organisation for monetory and another 20% of people said that for the status they
are remain in organisation.
Q.9
What are the reasons for which you are a part of this TATA
AIG?
39
TYBCBI
TATA AIG
Trust
security
others
Intepretation
50% of the people said that they are part of this organisation for trust, 25% of
people said that for security and another 25% of people said that they are part of
this organisation for others.
No
Intepretation
65% of the people said that they are satisfy of the plan of this company and
35% of people said that they are not satisfy of the plan of this company.
INTERPRETATION
40
TYBCBI
TATA AIG
3) 70% of people said that they are aware of plans and update of
company,and 30% of people are not aware of plan and update of company.
4) 65% of people said that they are satisfy of the plan of these company,
35%
of people said that they are not satisfy of the plan of these
company.
5) 30%
25%
20%
20%
LIFE
6) Analysis of the information 55% of people said that they prefer life
insurance,25% of people prefer motor insurance and 20% of people prefer
pention plan policy.
7) Analysis of the information, 35% of people said they come to know
through as an agent, 35% of said that they come to know through as an
advertisement, 15% of people said that they come to know through as an
news paper, 15% of people said that they come to know through as a
mouth of spread
8) 35%
of people said that for the job security they are remain in
organisation, 25% are remain in organisation for job satisfaction, 20% are
41
TYBCBI
TATA AIG
remain in organisation for monetory and another 20% of people said that
for the status they are remain in organisation.
9) 50% of the people said that they are part of this organisation for trust,
25% of people said that for security and another 25% of people said that
they are part of this organisation for others.
10) 65% of the people said that they are satisfy of the plan of this company
and 35% of people said that they are not satisfy of the plan of this
company.
SWOT ANALYSIS
OF TATA AIG
Tata AIG
Parent Company
42
TYBCBI
TATA AIG
Category
NBFC
Sector
Tagline/ Slogan
USP
Segment
Target Group
Positioning
Strength
Weakness
Opportunity
Threats
1.
2.
Competitors
1.
2.
3.
Bajaj Allianz
Sahara Life Insurance
Reliance Life Insurance
Chapter V
Summary Finding and Conclusion
43
TYBCBI
TATA AIG
44
TYBCBI
TATA AIG
Recommendations
These are the recommendations, which can help Tata AIG to become master in
the field of Insurance.
(I)
(II)
(III)
(IV)
Because most of the agent come due to brand value and status with
monetary benefit. So they should provide lumpsump amount as a
stipend and require respect.
(V)
(VI)
45
TYBCBI
TATA AIG
46
TYBCBI
TATA AIG
Conclusion
In India the insurance market was suffering before but now it has regained its lost status. But
still now Life Insurance Corporation of India acquires 64% share of the entire insurance
holders followed by ICICI prudential which has only 9% approx. of the market. Tata AIG has
almost a negligible Insurance market share which is less than 2%. So they need to work a
lot in order to establish their hold in Indian market.
CONCLUSION
The insurance industry is in the throes of a silent revolution and the best part is
that all of us are part of this revolution process, contributing to it and influencing
shape of things to merge. It will be quite interesting to see a plethora of
distribution system taking shape and competing with each others.
47
TYBCBI
TATA AIG
But we can be confident that in the insurance industry in India, for quite some
time to come, the agency channel is going to dominate the scene, for the simple
reason that majority of customers would prefer a one-to one, eye ball sale, so far
as their savings oriented risk and pension plans are concerned.
Particular in rural areas this channel is going to hold greater sway as the rural
marketing is still relationship-based where an insurance agent happens to be a
family friend and it becomes difficult to distinguish him from the rest of the
family.
However, the new channels will very soon develop their own niche appeal. The
market will also see the development of segment-specific and product specific
channels. The Internet is going to be yet another prominent player in the
distribution network because of its appeals, access and reach.
The success of the insurer in the new environment, therefore, will depend upon
his capacity to build up a network of distribution channels, thereby increase his
market access and delivery capacity.
At the same time, the expertise in channel management and putting the network
to more productive uses like research in customer relationship management etc.
will be the factors deciding as to who among the many emerges as a market
leader in the industry
There is one truth in marketing that is different consumers Approach buying
differently. Studies have time and again shown that insurance is bought because of
convenience, product features, product placement, and safety of funds, advice, and
not the price. Tata AIG makes their product to sale according to the nature of the
distribution channel and demand of the market. It can fulfill the gap both the
channel as well as demand of the Market.
Tata AIG has adopted the policy to established maximum possible innovative
marketing channel through, well-educated sales force, tie with different organization
and brokers firm with HSBC bank that enable it to provide full financial solution
to its customer.
We can expect from this organization that it will lead the innovative process with
quality of services that will help the Indian consumer to take advantage from
insurance business.
Chapter 6
Questionnaire
48
TYBCBI
TATA AIG
Dear Sir/Madam,
We are conducting a survey on Market potential study of Tata AIG in Mumbai by Insurance
organizations. We hope for your kind coordination.
Name:
Age:
Sex: Male [ ] Female [ ]
Name and address of the organization:
.
.........................
............
Contact Number:
E-mail
address:
...........
1. Family Members: (Please tick)
a)1-4
[ ]
d)
[ ]
12-16
b) 4-8
[ ]
e) 16>
c) 8-12
[ ]
[ ]
[ ]
b) 2-4
d)
[ ]
e) More:
6-8
c) 4-6
[ ]
[ ]
b) Business
[ ]
c) Professional
[ ]
[ ]
[ ]
b) 100000-300000
[ ] c) 300000-500000
c) 500000-1000000
[ ]
e) 1000000
[ ]
49
TYBCBI
TATA AIG
[ ]
d) Share buying
[ ]
b) Post office
[ ]
e) Insurance policy
c) Mutual fund
[ ]
[ ]
[ ]
b) No
[ ]
[ ]
b) Private Players
[ ]
8. Do you have any Insurance policy in the Following companies? (Please Tick)
a) LIC
[ ]
b) Tata AIG
[ ]
c) ICICI
[ ]
[ ]
f) Any Other:
[ ]
[ ]
d) Medi claim
[ ]
50
[]
TYBCBI
TATA AIG
Any Comments:
............
................................
.
BIBLIOGRAPHY
For the references different books, journals, and newspapers have been used and
different websites have been used.
51
TYBCBI
TATA AIG
Name of books:
Title
Author
Uma Narang
operation in executing
Tata AIG life insurance company
Limited,
Insurance regulatory development
C.S.Rao.
Authority (IRDA)
Name of newspaper:
The Hindu
25.02.2014
06.03.2014
Times of India
17.10.2012
Business standard
10.08.2013
Hindustan times
02.11.2013
NAME OF WEBSITES
http://www.tata-aig-life.com/
https://apps.tata-aig-life.com/CP/news/current-news.jsp
http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_List.aspx?DF=insprdts&mid=.1
http://www.economy watch.com/insurance-overviewaccess
www.scribd.com
52
TYBCBI
TATA AIG
http://www.managementparadise.com/29381-distribution-channels-tata-aig.html
53