Assignment Sales B

8/2/2019 Assignment Sales B

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Assignment Assessment Report

Campus: Mumbai Year/semester 2010-12

Level: PCL-I Assignment Type Assignment B

Module Name: Sales Assessors Name

Students Name:Ritesh asthana

Reqd Submission

Date

e-mail id & Mob

No

[email protected]

Actual Submission

Date

Stream BUSINESS Submitted to :

Certificate by the Student:

Plagiarism is a serious College offence.

I certify that this is my own work. I have referenced all relevant materials.

(Students Name/Signatures)

ritesh

Expected

Outcomes

Assessment

Criteria

Gra

de

based

on

D,M

,P,R

syst

em

Feedback

General Parameters

Clarity Clear understanding of

the conceptAnalytical

Thinking

Ability to analyze the

situation realistically and

take required actions

Research and

innovative

approach

Research carried out to

reach the outcome and

innovative methods used

Formatting &

Presentation-

Concise & clear thinking

along with presentation


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Subject Specific Parameters

ClarityClear understanding on

the overall sales plan.

Analytical

Thinking

Ability to analyze thecurrent industry

situation and have a

clear perspective of the

road map for this new

life insurance

organization.

Research and

innovative

approach

Research carried out to

understand the market,

the competitors and the

prevailing tactics/tools.

Assignment Grading Summary (To be filled by the Assessor)

OVERALL ASSESSMENT GRADE:

TUTORS COMMENTS ON ASSIGNMENT:

SUGGESTED MAKE UP PLAN

(applicable in case the student is asked to re-do the

assignment)

REVISED ASSESSMENT GRADE

TUTORS COMMENT ON REVISED

WORK (IF ANY)

Date: Assessors Name / Signatures:

Grades Grade Descriptors

Achieved Yes/No

(Y / N)

P A Pass grade is achieved by meeting all the requirements defined.

MIdentify & apply strategies/techniques to find appropriate

solutions

D Demonstrate convergent, lateral and creative thinking.


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Introduction

Life Insuranceis the fastest growing sectorin Indiasince 2000 as Government allowed Private players

and FDI up to 26%. Life Insurance in India was nationalized by incorporating Life Insurance Corporation

(LIC) in 1956. All privatelife insurancecompanies at that time were taken over by LIC.

In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a

road map for privatization of the life insurance sector. While the committee submitted its report in

1994, it took another six years before the enabling legislation was passed in the year 2000, legislation

amending theInsurance Actof 1938 and legislating theInsurance Regulatory and Development

Authority Actof 2000. The same year that the newly appointed insurance regulator - Insurance

Regulatory and Development AuthorityIRDA--started issuing licenses to private life insurers.

Foreign Direct Investment (FDI) Policy in Insurance Sector

As per the current (Mar 06) FDI norms, foreign participation in an Indian insurance company is

restricted to 26.0% of its equity / ordinary share capital. The Insurance Regulator has stipulated that

foreign investment in Indian Insurance companies be limited to 26% of total equity issued (FDI limit)

with the balance being funded by Indian promoter entities. The limit to foreign investment includes

both direct and indirect investment and has been a cause of significant lobbying by foreign insurance

companies for a change in regulations to increase the FDI limit to 49% of equity issued.

The Indian government has supported an increase in the FDI limit, which requires a change in the

Insurance Act. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding

be increased to 49.0%.

A change in the Insurance Act requires a passage of the bill in both houses of Parliament. The Indian

government has tabled the bill in the Upper House of Parliament in August 2010.

All life insurance companies in India have to comply with the strict regulations laid out by Insurance

Regulatory and Development Authority of India (IRDA).

Life Insurance Corporation of India (LIC), the state owned behemoth, remains by far the largest player

in the market. The private companies have come out with products called ULIPs (Unit Linked

Investment Plans) which offer both life cover as well as scope for savings or investment options as the

customer desires. These type of plans are subject to a minimum lock-in period of three years to

prevent misuse of the significant tax benefits offered to such plans under the Income Tax Act.

Comparison of such products with mutual funds would be erroneous


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Current Market Share of LIFE INSURANCE COMPANIES

LIC still remains the largest life insurance company accounting for 64% market share. Mainly owing to

entry of private players with innovative products and better sales force.

Bajaj Allianz Life Insurance Co Ltd has reported a growth of 52% and its market share went up to 6.98%

in 2007-08. The company ranked second (after LIC) in number of policies sold in 2007-08, with total

market share of 7.36%.

ICICI Prudential Life Insurance Co Ltd is the biggest private life insurance company in India. Accounting

for increase in market share to 8.93% in 2007-08.

SBI Life Insurance Co Ltd in terms of new number of policies sold, the company ranked 6th in 2007-08.

New premium collection for the company was Rs 4,792.66 crore in 2007-08, an increase of 87% over

last year.

Reliance Life Insurance Co Ltd Total collected was Rs 2,792.76 crore and its MARKET SHARE went up to

2.96% from 1.23% a year back.

HDFC Standard Life Insurance Co Ltd with an income of Rs 2,680 crore in FY2007-08, registering a year-

on-year growth of 64%. Its MARKET SHARE is 2.88% and it ranks 6 th among the insurance companies

and 5th amongst the private players.

Birla Sun Life Insurance Co Ltd market share of the company increased from 1.22% to 2.11% in 2007-

08. The company moved to the 7th position in 2007-08 from 8the a year before.

Max New York Life Insurance Co Ltd has reported growth of 73% in 2007-08. Total new business

generated was Rs 641.83 crore as against Rs 387.51 crore. The company was pushed down to the 8th

position from 7th in 2007-08.

Kotak Mahindra Old Mutual Life Insurance Ltd the fiscal 2007-08, the company reported growth of

80%, moving from the 11th position to 9th. It captured a market share of 1.19% in 2007-08.

Aviva Life Insurance Company India Ltd ranking dropped to 10th in 2007-08 from 9th last year. It has

presence in more than 3,000 locations across India via 221 branches and close to 40 bancassurance

partnerships. Aviva Life Insurance plans to increase its capital base by Rs 344 crore. With the fresh

investment, total paid-up capital of the insurer would go up to Rs 1,348.8 crore.


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AEGON Religare Life Insurance Company

AEGON, an international life insurance, pension and investment company, Religare, a global financial

services group and Bennett, Coleman & company, Indias largest media house, have come together to

launchAEGON Religare Life Insurance Company Limited (ARLI). This venture is dedicated to build a

profitable customer-centric business with scale, providing a work environment that fosters excellence

and innovation. This joint venture will balance a local approach with the power of an expanding global

operation.

ARLI launched its pan-India operations in July, 2008 following a multi-channel distribution strategy with

a vision to help people plan their life better. The fulfillment of this vision is based upon having a

complete product suite, providing customized advice and enhancing the overall customer experience

through superior service.

ARLI has launched a suite of products that are focused on providing the customer with the means to

meeting their long-term financial goals. At the same time product development has been founded on

the tenet of providing the customer with great value. ARLI products such as AEGON Religare Term Plan

and AEGON Religare Future Protect Plan have been ranked among the best in terms of value and have

attracted many external accolades.

About AEGON

As an international life insurance, pension and investment company, AEGON has businesses in over

twenty markets in the Americas, Europe and Asia. With headquarters in The Hague, the Netherlands,

AEGON companies employ approximately 28,000 people and serve some 40 million customers across

the globe. The companys common shares are listed on three stock exchanges: Amsterdam, New York

and London. AEGON has more than 160 years of experience with its roots going back to 1844. AEGON

holds 26% equity in ARLI.


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About Religare Enterprises Limited

Religare Enterprises Limited (REL) is a global financial services group with a presence across Asia,Africa, Middle East, Europe and the Americas. In India, Religares largest market, the group offers a

wide array of products and services ranging from insurance, asset management, broking and lending

solutions to investment banking and wealth management. The group has also pioneered the concept

of investments in alternative asset classes such as arts and films. With over 10,000 employees across

multiple geographies, Religare serves over a million clients, including corporates and institutions, high

net worth families and individuals, and retail investors. REL hold 44% equity in ARLI.

Sales Structure ofAEGON Religare Life Insurance Company

1-Product sales orientation: here sales people are well versed in the products that the enterprise has to

offer. This can be a specific product or a suite of products or a series of solutions that the sales person

is the expert in. One major advantage to this structure is having product experts, but a major

disadvantage is potentially high costs to support.

2-Market orientation: here the sales team is orientated towards certain industries. Examples could be

government, financial or transportation segments where the sales person sells solutions that are

appropriate for each segment. One major advantage to this structure is having industry/solutions

experts, but a major disadvantage is potentially duplication of function per areas.

Further sub divisions within market orientation are structures such as major/ named or national

account management (NAM) or global (GAM) account management, where large of important

accounts have assigned people.

3-Geographic structure: here sales people are assigned and are responsible for all accounts in their

territory and for knowing all products. One major advantage to this structure is having low costs, but a

major disadvantage is limited or few real experts in the field.

4- Sales function orientation: here sales people perform certain sales functions such as order entry,

selling, or managing sales events. One major advantage to this structure is having an efficient sales

operation, but a major disadvantage is duplication of costs to support.

Complicating the different options is when a re-seller is added to the mix. For example, a firm may

have a direct sales force to sell to everyone except Federal and State Governments. For these

customers they use a specialized reseller.

Regardless of structure one selects consider the following guidelines.


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-What selling efforts will be needed to meet the organizational goals?

-What skills and how many sales people are required to meet these goals

-What structure (from above) is best suited to handle the type of products or solutions for the types of

accounts and/or industries.

-How should the selling effort be allocated/deployed to meet these goals

-How will the sales force be managed and compensated

-What will the workload be per sales person to achieve the targeted goals?

Most importantly, know your customers and make sure they will receive the best in class services!

CEO

National

SalesManager

Regional

SalesManager

Zonal

SalesManager

Territory

SalesManager

General

Manager

Sales

Manager

Branch Sales

Manager

VP

Sales

persons


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Channels to be employed

AEGON Religare Life Insurance (ARLI) bancassurance tie-up with Asias largest cooperative bank, the

Nashik District Central Cooperative Bank (NDCC).

ARLI launched its operations in July, 2008 with four distribution channels Agency Distribution, Direct

Channel, Religare and Corporate Agents and Brokers. This tie-up adds a fifth distribution channel,

Bancassurance, to the business.

The 55-year-old bank, NDCC, started operations in January, 1955. This profitable bank now has over200 branches and 25 divisional offices and has a share capital of over Rs 90 crore. NDCC distributes

loans among small scale industries, farmers and milk plants, and has distributed more than Rs 500

crore in loans in the current fiscal year.

On the tie-up, Mr. Rajiv Jamkhedkar, Managing Director and Chief Executive Officer, AEGON Religare

Life Insurance said, Maharashtra is an important market for us and we generate significant business

from the state. To increase our reach and penetration in Maharashtra, we had been scouting for a

partner. In the Nashik District Central Cooperative Bank, which is a trusted name in this region with

over 200 branches and solid financials, our search has ended with a partner who has a reach in the

furthest corners of the state. There was a clear consensus that NDCC was the right partner for us. The

bank shared our vision on helping people plan their lives better, thus resulting in a tie-up.

AEGON Religare Life Insurance is the coming together of AEGON, an international life insurance,

pension and Investment Company and Religare, one ofIndias leading integrated financial services

groups.

A diversified financial services group with a pan-India and international presence, Religare Enterprises

Limited (REL) offers a range of products and services, including asset management, life insurance,

wealth management, equity and commodity broking, investment banking, lending services, private

equity and venture capital. REL operates from 7 domestic regional offices, 43 sub-regional offices, and

has a presence in 498 cities controlling 1,837 business locations all over India as on June 2009. REL

acquired UK-based Hichens, Harrison & Co. in 2008 which was subsequently re-named as Religare

Hichens Harrison PLC (RHH). With the addition of RHH the REL group now operates out of multiple

global locations (the UK, the USA, Brazil, South Africa, Dubai and Singapore).


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AEGON Religare Life Insurance strengthens its foothold in southern India by alliance with T S

Mahalingam & Sons is one of the largest car dealership in South India with businesses in financial

services and real estate operating in Chennai, Bangalore, Coimbatore and Hyderabad. It is the pioneer

in third party distribution of financial products in the country

The company launched its pan-India multi-channel operations in July, 2008 with over 30 branches

spread across India. In an industry first, AEGON Religare Life Insurance offers policy servicing on the

phone via Interactive Voice Response System (IVR) by issuing the customer a T-Pin for authentication.

It is also the first company to include the customers medical report in the policy kit.

Religare has a truly pan-India footprint going well beyond Tier-1 cities, present through more than

1550 locations spread across over 460 cities and towns. Religares businesses are broadly clubbed

across three key verticals the retail, institutional and the wealth spectrum. Structurally, all businesses

are operated through 10 subsidiaries held by the holding company Religare Enterprises Limited.

Competition analysis of top three insurance companies

NAME OF THE PLAYER MARKET SHARE (%)

Name of the Player Market share (%)

LIFE INSURANCE CORPORATION OFINDIA 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJAJ ALLIANZ 2.03

SBI LIFE INSURANCE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YARK 0.90


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AVIVA 0.79

OMKOTAK MAHINDRA 0.51

ING VYSYA 0.37

MET LIFE 0.21

PRESENT SCENARIO OF INSURANCE INDUSTRY

Indiawith about 200 million middle class household shows a huge untapped potential for players inthe insurance industry. Saturation of markets in many developed economies has made the Indian

market even more attractive for global insurance majors. The insurance sector inIndiahas come to a

position of very high potential and competitiveness in the market. Indians, have always seen life

insurance as a tax saving device, are now suddenly turning to the private sector that are providing

them new products and variety for their choice.

Consumers remain the most important centre of the insurance sector. After the entry of the foreign

players the industry is seeing a lot of competition and thus improvement of the customer service in the

industry. Computerization of operations and updating oftechnology has become imperative in the

current scenario. Foreign players are bringing in international best practices in service through use of

latest technologies

The insurance agents still remain the main source through which insurance products are sold. The

concept is very well established in the country likeIndiabut still the increasing use of other sources is

imperative. At present the distribution channels that are available in the market are listed below.

Direct selling

Corporate agents

Group selling

Brokers and cooperative societies

Bancassurance

Customers have tremendous choice from a large variety of products from pure term (risk) insurance

to unit-linked investment products. Customers are offered unbundled products with a variety of

benefits as riders from which they can choose. More customers are buying products and services based

on their true needs and not just traditional moneyback policies, which is not considered very


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appropriate for long-term protection and savings. There is lots of saving and investment plans in the

market. However, there are still some key new products yet to be introduced - e.g. health products.

The rural consumer is now exhibiting an increasing propensity for insurance products. A research

conducted exhibited that the rural consumers are willing to dole out anything between Rs 3,500 and Rs

2,900 as premium each year. In the insurance the awareness level for life insurance is the highest in

ruralIndia, but the consumers are also aware about motor, accidents and cattle insurance. In a study

conducted by MART the results showed that nearly one third said that they had purchased some kind

of insurance with the maximum penetration skewed in favor of life insurance. The study also pointed

out the private companies have huge task to play in creating awareness and credibility among the rural

populace. The perceived benefits of buying a life policy range from security of income bulk return in

future, daughter's marriage, children's education and good return on savings, in that order, the study

adds.

With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the

potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05)

is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and

banking services contribution to the country's gross domestic product (GDP) is 7% out of which the

gross premium collection forms a significant part. The funds available with the state-owned Life

Insurance Corporation (LIC) for investments are 8% of GDP.

Till date, only 20% of the total insurable population of India is covered under various life insurance

schemes, the penetration rates of health and other non-life insurances in India is also well below the

international level. These facts indicate the of immense growth potential of the insurance sector.

The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place

with the ending of government monopoly and the passage of the Insurance Regulatory and

Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign

players to enter the market with some limits on direct foreign ownership.

Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a

proposal to increase this limit to 49% is pending with the government. Since opening up of the

insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and

21 private companies have been granted licenses.

Innovative products, smart marketing, and aggressive distribution have enabled fledgling private

insurance companies to sign up Indian customers faster than anyone expected. Indians, who had

always seen life insurance as a tax saving device, are now suddenly turning to the private sector and

snapping up the new innovative products on offer.


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The life insurance industry in India grew by an impressive 36%, with premium income from new

business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private

insurers. This report, Indian Insurance Industry: New Avenues for Growth 2012, finds that the market

share of the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling

2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as

private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04.

Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the

previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased

their market share from about 13% to about 22% in a year's time. The figures for the first two months

of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for

this period has further come down to 75 percent, while the private players have grabbed over 24

percent.

There are presently 12 general insurance companies with four public sector companies and eight

private insurers. According to estimates, private insurance companies collectively have a 10% share of

the non-life insurance market.

Though the focus of this market research report is on the potential growth on the Indian Insurance

Sector, it also talks about the market size, market segmentation, and key developments in the market

after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers

fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for

ease of interpretation and analysis. This report also provides company profiles of the major private

insurance companies.

REPORT HIGHLIGHTS

- Gains of Liberalization in Indian Insurance Sector

- Indian Insurance Market Segmentation By Products

- Size of the Market and Market Share Of Life Insurers, In INR (crore)

- Market Share Of Non-Life Insurers

- Forecast of Life Insurance Growth Up to 2012

- Forecast of Non-Life Insurance Growth Up to 2012

- Market Revenue of Both Public and Private Insurers

- Policies and Measures Taken By IRDA To Develop The Insurance Market

- Research and Development Activities

- Regulation of insurance and reinsurance companies

- Major Challenges That Indian Insurance Sector is Facing

- Profiles of the Major Players


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REPORT FEATURES

In the globalize market scenario, companies need to understand and challenge the competitive

markets they operate in the Indian Insurance Industry: New Avenues for Growth 2012 is a complete

analysis of the market that will help you in decision making. Chapter 2, 3, and 4 of this report discussed

the impact of liberalization of the market and market shares of public and private sector companies

and polices implemented by IRDA to develop the insurance market in India. Chapter 5, 6, and 7 deals

with market revenue of private and public players, opportunities and forecasts and policies taken by

IRDA to develop the insurance market. Major challenges of Indian Insurance Sector along with Profiles

of major players are discussed in Chapter 8 and 9.

There are two types of training that fall under the umbrella of sales training. The first is teaching the

mechanics of sales: how to go about selling in the general sense, with an emphasis perhaps on the

sales techniques that work best for your industry. The second is company-specific training: details

about your products and services, the sales process that your team is expected to use, tools and

resources, etc.

Every salesperson, no matter how experienced, can benefit from both types of sales training. Learning

how to sell is an ongoing process. There are always new strategies and new technologies that your

team must learn in order to sell effectively.

When you bring a new salesperson on board, the priority will be in company-specific training. Unless

your new employee is a rank beginner theyll have at least a basic grasp of the mechanics of selling, but

its likely they wont know much about your own products or how your particular sales process works.

The easiest way to get started is often to sit the new salesperson down with your customer service

team. The customer service folks are intimately familiar with your products, and will know what

existing customers like most (and least) about them. Let the new salesperson listen in on a few

customer service calls, and give them access to documentation about the products (user guides,

brochures, websites, etc.).

Once your new employee is familiar with your product line, pair them up with an experienced

salesperson. Listening to phone calls and riding along on appointments gives your new employees an

idea of the process. Ideally, theyll get to see at least one sale go through the entire process.

Finally, switch roles and have the new salesperson make calls and take appointments with a senior

salesperson (or sales manager) observing. Not only will you find out how well they absorbed your

company information, youll also get a look at their general sales knowledge. Now youll know how

much mechanical sales training your new employee needs.

If your new salesperson demonstrates weaknesses in particular areas (for example, theyre great at

getting appointments but choke at the close) then it might be time for some basic training. You can


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either train internally (do it yourself or assign a senior salesperson) or externally (signing your new

employee up for a sales training class, for example).

Internal training is cheaper and you can customize it perfectly to your employees needs, but it is time

consuming and can end up costing you more in the long run, if your best salesperson is spending

hours training instead of making sales! An alternative is to combine both approaches: sign the new

salesperson up for an external class, and then arrange for them to practice by setting up role playing or

sending them out on appointments.

New team members are not the only ones who will need sales training. Anytime you add a new

product or service, your salespeople need to know about it. If you change the sales process (for

example, adding an ecommerce component to your website) your sales team needs to know about

that, too. And if you have the resources its a great idea to periodically set up training for your

salespeople, so they can learn new sales skills and hone existing skills.

Documents

Assignment Sales B