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PROJECT REPORT

ON

MARKETING STRATEGIES ADOPTED BYVARIOUS INSURANCE COMAPNIES

AT

SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF

(2007-2009)

BY

SUDERSHAN SINGH NEGI

INTERNAL GUIDE EXTERNAL GUIDE

Mrs. RUPA KHANNA Mr. PARAG DIXIT

(FACULTY) ( Business Development Manager)

GEIT HDFC SLIC


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I am immensely thankful to God who provides me the health ability to withstand the

problem coming in my way.

I am thankful to Mrs. RUPA KHANNA, Faculty of MBA DEPARTMENT, GRAPHIC ERA

INSTITUTE OF TECHNOLOGY Dehradun. For her encouragement and providing other

assistances whenever required.

I wish to express my gratitude to, Mr. PARAG DIXIT who generously helped me to

color the mosaic of this project report with the titles of their knowledge, expertise and

memories.

Thanks are also due to various employees for their co-operation during research.

In the end I am beholder to my parents and my friends for their inspiration and

cooperation.

DATE. SIGNA


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Summer training is an important and integral part of management courses as it bridges

the gap between the critical practical aspect of subject understudy and further to get a

firsthand experience of industrial environment.

To the same, I did my summer training from HDFC Standard Life Insurance, Dehradun.

The study undertaken was MARKETING STRATEGIES ADOPTED BY VARIOUS

INSURANCE COMPANIES

The study reveals the strategies adopted by various insurancecompanies present in India as well as in the global competition

I choose this topic mainly because of the following reasons:

y The marketing strategies of any company is the backbone that frames the

growth and development of the company.

y HDFC STANDARD LIFE has been doing well in adopting various marketing

strategies by innovating new products time to time, adopted competitive pricing

strategies like FUND MANAGEMENT CHARGES(FMC) which are lowest in

the whole insurance companies and awarded advertisement

I have expressed in detail about the research. Hope the readers will find this report useful

to enhance their knowledge and help them in various ways.


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Today is the time of Globalization. Private Companies are coming in different

areas. Many National and International private Companies are coming in India like the

Western countries. Today the Govt. sector is being replaced by private sector. More

opportunities and challenges are breeding out with better benefits.

There are many companies in the market which provide insurance service to the

public. They try to influence an individual with their own ways. It is difficult for the

customer to decide as which one is the best. He (customer) associates himself with one

which is capable to harvest his sentiments. I had to sell the insurance plans of HDFC

SLIC.

Firstly we have to go through a 15 days IRDA training where we learnt about the

insurance that what it is and the current scenario of insurance industry. After that we have

to go through a product training given by the company itself where we get familiar with

the insurance plans available in HDFCSLIC. And lastly we have to give a exam for

recruited as financial consultant conducted by IRDA. After passing this exam only a

financial consultant gets his/her license as well as agency code. In the selling part of

products firstly we have to make telephonic calls to the prospect and after getting

appointment from the interested customer we went to him/her for further explanation of

the product/plan. Most of them knew HDFC as a banking Company. They did not know

this company as provider of insurance service. Most of the people were influenced with

the information given to them about insurance plans of the company.

HDFC has not created sufficient publicity regarding its insurance plans and their

benefits, which is essential to compete with other insurance companies.


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Economically sound people still have conventional thinking

regarding investment in different insurance plans. They still prefer to invest in Govt.

Insurance Company as they lack trust in private company.

It was revealed from the market survey that L.I.C. is number one in insurance

sector by sharing 49% of the market because it is a Govt. company and has sound

infrastructure although people are dissatisfied with quality of service rendered by it.

ICICI Isnumber twoinsurance company on account of better publicity and infrastructure.

People have better knowledge of different insurance plans of ICICI as compared to

HDFC SLIC although H.D.F.C SLIC offers the best returns.

Vision statement:-

The most successful and admired life insurance company, which

,Means that we are the most trusted company, the easiest to deal

with, and offer the best value for money, and set the standards in

the industry.

In short, THE MOST OBVIOUS CHOICEFOR ALL


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ACKNOWLEDGEMENT

PREFACE

EXECUTIVE SUMMARY

CERTIFICATE

INTRODUCTION

INDUSTRYPROFILE COMPANYPROFILE

STANDARD LIFE

AWARDS AND ACCOLADES

COMPETITORS

PRODUCTS OF HDFC STANDARD LIFE

INSURANCE MARKETING STRATEGIES

GROWTH &SURVIVAL STRATEGIES IN GLOBALCOMPETITION

STRATEGIES ADOPTED BYPLAYERS IN THE

MARKET

RESEARCH METHODOLOGY

DATA ANALYSIS

FINDINGS & RECOMMENDATIONS

SWOT ANALYSIS CONCLUSION

ANNEXURE

QUESTTIONARE

BIBLIOGRAPHY


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Life is a significant boon of Almighty. Every one wants to prolong it as so many

persons and activities are associated with it. Accidents bring ill consequences in life. An

individual himself and many more people suffer due to an accident. So man has been

eager to find ways and means of mitigating the consequences of undesirable accidents

Men came out with a solution for the same with an idea of Insurance.

A mechanism of reducing the adverse effects of an accident on an individual and

others associated with him was evolved; It was termed as life Insurance. Since life is

precious so most of the insurance activities were moving around it in the early days of

insurance sector. But with the growth of science and technology society advanced. Many

more things became important besides life. So the area of insurance sector expanded.

Today one is desirous of insuring oneself, ones kins and kiths and property. Hence the

scope of insurance is broadening. Insurance is being considered as an important area of

life. Ever the poorest one is keen to make future secured by insuring his own life and the

lives of other ones. Industrialists want to remain tension free by insuring their employees,

machines and goods.

Insurance sector is not only confined to secure life. It is also providing banking

service by collecting money for long-term planning of the Govt. and private companies.

Insurance is a tool for service class for saving themselves from the net of income tax.

Insurance is giving social service by creating consciousness towards saving and

granting loans for house constriction, procuring assets and for children education besides

its primary task of life insurance.


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The history of Insurance Sector in India is deep rooted. In the

early span of its history Govt. was the only player. But with the span of time many

private players also plunged into Insurance sector. Today it is full of challenges and

returns.

This project report deals with marketing strategies adopted by insurance company

reference to H.D.F.C. SLIC. The scope, challenges and mass reaction have been

highlighted with suggestions. It is specifically an academic part of M.B.A. Degree

course of Uttrakhand technical University.

What is Life Insurance?

Life insurance is a contract providing for payment of a sum of money to the person

assured or failing him to the person entitled to receive the same on the happening of

certain event.

Uncertainty of death is inherent in human life. It is this risk, which gives rise to the

necessity for some form of protection against the financial loss arising from death.

Insurance substitutes this uncertainty by certainty.

The objective of insurance is normally to provide

Family protection and/ or

Provision for old age.

Why Life Insurance?

You think twice before taking the plunge into buying insurance. Is buying

insurance a necessity now? Spending an 'extra' amount as premium at regular intervals

where you do not see immediate benefits does not seem a necessity at the moment. May

be later.


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Well you could be wrong. Buying Insurance cannot be compared

with any other form of investment. Insurance gives you a life long benefit and the returns

will definitely come but only when you need it the most i.e at the right time. Besides

buying insurance early in life is one of the wise decisions you could take. Because the premium you would be paying would comparatively lower. Insurance is not about

how much more it can offer you when the stock market is at its peak. It may not be an

attractive investment option. But weigh the pros and cons and consider how much more

it offers at a small price. Most important of all it provides you with that unique sense of

security that no other form of investment provides. It gives you a sense of financial

support especially during that time of crisis irrespective of the fluctuations in the stock

market. Insurance provides for your career goals right from your childhood

years.

If the earning member of the family is no more your child's educational needs

will not suffer. In fact his higher education too will be provided for. You need not spend

sleepless nights thinking about how to save for your child's marriage. Life Insurance will

take care of that typical once in a life time spending on marriages..

An accident or a disability may be devastating but an insurance policy can be of

utmost support for the family during such times too. Besides it provides for additional

benefits such as bonuses. You need not worry about your retirement years. The rising

prices, taxes, and your lifestyle will be taken care of easily. And you can relax and spend

your old age in comfort and peace.

Life insurance today plays a major role in ones life at various stages. Considering

the benefits it offers one cannot but give a thought to buying an insurance policy at theearliest.

Need for Life Insurance.


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The need for life insurance comes from the need to safeguard our

family. If you care for your familys need you will definitely consider insurance.

Today insurance has become even more important due to the disintegration of the

prevalent joint family system, a system in which a number of generations co-existed inharmony, and a system in which a sense of financial security was always there as there

were more earning members.

Times have changed and the nuclear family has emerged. Apart from other

pitfalls of a nuclear family, a high sense of insecurity is observed in it today besides, the

family has shrunk. Needs are increasing with time and fulfillment of these needs is a big

question mark.

How will you be able to satisfy all those needs? Better lifestyle, good education,

your long desired house. But again - you just cannot fritter away all your earnings. You

need to save a part of it for the future too - a wise decision. This is where insurance helps

you.

Factors such as fewer number of earning members, stress, pollution, increased

competition, higher ambitions etc are some of the reasons why insurance has gained

importance and where insurance plays a successful role.

Insurance provides a sense of security to the income earner as also to the family.

Buying insurance frees the individual from unnecessary financial burden that can

otherwise make him spend sleepless nights. The individual has a sense of consolation that

he has something to fall back on.

From the very beginning of your life, to your retirement age insurance can take

care of all your needs. Your child needs good education to mould him into a good citizen.

After his schooling he need to go for higher studies, to gain a professional edge over the

others - a necessity in this age where cut-throat competition is the rule. His career needs

have to be fulfilled.


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Insurance is a must also because of the uncertain future

adversities of life. Accidents, illnesses, disability etc are facts of life which can be

extremely devastating. Other than the hospitalization, medication bills these may run up

its the aftermath of the incident, the physical well being of the individual that has to betaken into consideration. Will the individual be in a position to earn as before? A

pertinent question. But what if he is not? Disability can be taken care of by insurance.

Your family will not have to go through the grind due to your present inability.

Moreover, retirement, an age when every individual has almost fulfilled his

responsibilities and looks forward to relaxing can be painful if not planned properly.

Have you considered the increasing inflation and taxes? Will your investment offer you

attractive returns under such circumstances? Will it take care of your family after you?

An insurance policy will definitely take care of these and a lot more.

Insurance today has opened up new vistas for every section of society. Even for the

village farmer insurance holds a lot of potential. Considering how dependent our

agricultural system is on the monsoon, the farmer sees a dim future. The uncertainty of

the monsoon too can be taken care of by insurance. Looking at the advantages of an

insurance policy a number of farmers have gone in for insurance. Insurance has become a

necessity today. It provides timely financial as also rewards with bonuses.

What does Life insurance provide?

The proceeds accruing from Life Insurance policy can be utilized for

1. Final expenses resulting from death.

2. Guaranteed maintenance of lifestyle.

3. Replacement of income.

4. Mortgage or liquidation payments.


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5. Costs of education.

6. Estate and other taxes.

7.

Continuity & security of interests.

Why is Insurance superior to other form of savings?

An immediate estate is created in favor of the policy holder.

Protection in case of death.

Liquidity in case of need easy loans are available.

Tax relief-income tax, wealth tax, etc.Policies can be offered as collateral security.

Policies can be taken under M.P.W. Act 1874, to protect against creditors.

Let us take an example to understand the need for Insurance:

Mr. Atul is 45 and self employed. His wife Nandini, who is a housewife, looks

after their two childrens aged 3 and 7 years. They stay in a rented accomodation, where

the rent is 15,000 rupees per month. Mr. Atul has taken up a loan of Rs 2 lakh. His

monthly earnings on average are 40,000 rupees. Mr. Atul passes away in an unfortunate

road accident. What are some of his financial implications of his death on his family?

There may be several financial implications on his family. Some of these are:

A.The monthly income, previously provided by Mr. Atul would stop.

B.His wife and childrens may have to seek financial assistance from other

relatives.

C.His wife may not have enough money to pay back the loan of Rs. 2 lakhs.

D.The family may have to move into a cheaper accommodation.

E.His widow may have to take up work to earn money.


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F.The education of his children may suffer.

This simple example illustrates the impact premature death can have on a family, where

the main earner has no life cover. Had Mr. Atul taken life cover, his family woud not

have faced such hardships in the event of his unfortunate death. A simple life insurance

policy could have provided Mr. Atuls family with a lump sum that could have been

invested to provide an income equal to all or part of his income.In simple words,

insurance protects against untimely losses. Insurance has been found useful in the lives of

persons both in the short term and long term. Short term needs like sudden medical costs

and long term needs like marriage expences etc can be met with using life insurance.

INSURANCE IN INDIA

Insurance is a federal subject in India and has a history dating back to 1818. Life and

general insurance in India is still a nascent sector with huge potential for various global

players with the life insurance premiums accounting to 2.5% of the country's GDP while

general insurance premiums to 0.65% of India's GDP. The Insurance sector in India has

gone through a number of phases and changes, particularly in the recent years when the

Govt. of India in 1999 opened up the insurance sector by allowing private companies to

solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector

is considered as a booming market with every other global insurance company wanting to

have a lion's share. Currently, the largest life insurance company in India is still owned

by the government.


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History of Insurance in India

Insurance in India has its history dating back till 1818, when Oriental Life Insurance

Company was started by Europeans in Kolkata to cater to the needs of European

community. Pre-independent era in India saw discrimination among the life of foreigners

and Indians with higher premiums being charged for the latter. It was only in the year

1870, Bombay Mutual Life Assurance Society, the first Indian insurance company

covered Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started mushrooming up. In

the year 1912, the Life Insurance Companies Act, and the Provident Fund Act werepassed to regulate the insurance business. The Life Insurance Companies Act, 1912 made

it necessary that the premium rate tables and periodical valuations of companies should

be certified by an actuary. However, the disparage still existed as discrimination between

Indian and foreign companies. The oldest existing insurance company in India is National

Insurance Company Ltd, which was founded in 1906 and is doing business even today.

Insurance industry, earlier comprised of only two state insurers. Life Insurers i.e. Life

Insurance Corporation of India (LIC) and General Insurers i.e. General Insurance

Corporation of India (GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked from parent

company and made as independent insurance companies: Oriental Insurance Company

Limited, New India Assurance Company Limited, National Insurance Company Limited

and United India Insurance Company Limited.


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INDIAN INSURANCE INDUSTRY:

Insurers

Insurance industry, as on 1.4.2000, comprised mainly two players: the state insurers:

Life Insurers:

y Life Insurance Corporation of India (LIC)

General Insurers:

y General Insurance Corporation of India (GIC) (with effect from Dec'2000, a

National Reinsurer)

GIC had four subsidary companies, namely ( with effect from Dec'2000, thesesubsidaries have been de-linked from the parent company and made as independentinsurance companies.

1. The Oriental Insurance Company Limited2. The New India Assurance Company Limited,3.National Insurance Company Limited4. United India Insurance Company Limited.

Yr: 2000-2001: ( From 2nd April '2000 to 31st December'2001)

Insurance Industry in the year 2000-2001 had 16 new entrants, namely:

Life Insurers:

S.No. RegistrationNumber

Date ofReg.

Name of the Company

1 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.

2 104 15.11.2000 Max New York Life Insurance Co. Ltd.

3 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.

4 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited

5 109 31.01.2001 Birla Sun Life Insurance Company Ltd.

6 110 12.02.2001 Tata AIG Life Insurance Company Ltd.


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7 111 30.03.2001 SBI Life Insurance Company Limited .

8 114 02.08.2001 ING Vysya Life Insurance Company Private Limited

9 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited

10 117 06.08.2001 Metlife India Insurance Company Ltd.

11 133 04.09.2007 Future Generali India Life Insurance Company Limited

12 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.

General Insurers :

S.No. Registration

Number

Date of

Registration

Name of the Company

1 102 23.10.2000 Royal Sundaram AllianceInsurance Company Limited

2 103 23.10.2000 Reliance General InsuranceCompany Limited.

3 106 04.12.2000 IFFCO Tokio General InsuranceCo. Ltd

4 108 22.01.2001 TATA AIG General InsuranceCompany Ltd.

5 113 02.05.2001 Bajaj Allianz General Insurance

Company Limited

6 115 03.08.2001 ICICI Lombard GeneralInsurance Company Limited.

7 131 03-08-2007 Apollo DKV Insurance CompanyLimited

8 132 04-09-2007 Future Generali India Insurance

Company Limited

9 134 16-11-2007 Universal Sompo GeneralInsurance Company Ltd.


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Yr: 2001-2002 : ( From 1st Jan 2001 to Dec. 2002)

Insurance Industry in this year, so far has 5new entrants; namely

Life Insurers:


Date of

Reg.Name of the Company

1 121 03.01.2002 AMP Sanmar Life Insurance Company Limited.

2 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.

General Insurers :


Date of

RegistrationName of the Company

1 123 15.07.2002 Cholamandalam GeneralInsurance Company Ltd.

2. 124 27.08.2002 Export Credit Guarantee

Corporation Ltd.

3. 125 27.08.2002 HDFC-Chubb General InsuranceCo. Ltd.

Yr: 2003-2004 : ( From 1st Jan 2003 till Date)

Insurance Industry in this year, so far has 1new entrants; namely

Life Insurers:


Date of

Reg.Name of the Company

1 127 06.02.2004 Sahara India Insurance Company Ltd.


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1) Life Insurance 2) Fire Insurance 3) Marine Insurance and 4)

Miscellaneous Insurance.

Life Insurers transact life insurance business; General Insurers transact the rest.

No composites are permitted as per law.

LEGISLATION (as on 1.4.2000):

Insurance is a federal subject in India. The primary legislation that deals with insurancebusiness in India is:

Insurance Act, 1938, and Insurance Regulatory & Development Authority Act, 1999.

INSURANCE REGULATORY DEVELOPMENT AUTHORITY

The opening up of the sector has been long standing and with the passing of the

IRDA bill a significant step has been taken.

IRDA is formed as an authority to protest the interests of holders of

insurance policies, to regulate promote and ensure orderly growth of insurance

industry and for matters connected therewith or incidental thereto.

With the IRDA, the focus shifted to the following:

The IRDA should give priority to health insurance while issuing certificates of

registration.

Policyholders funds will be invested in the social sector and infrastructure. The

percentage may be specified by the IRDA and such regulations will apply to all

insurers opening in the country.


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Insurers will be expected to undertake a certain percentage of

business in the rural or social sector and provide policies to persons residing in

rural areas, workers in the unorganized and informal economically basic;

In case of the insurers fail to meet the social sector obligation a fine of Rs 2.5 mn

would be imposed the first time. Subsequent failures would result in cancellation

of licenses.

RELATED ACTS

The insurance sector went through a full circle of phases from being unregulated to

completely regulated and then currently being partly deregulated. It is governed by a

number of acts, with the first one being the Insurance Act, 1938.

The Insurance Act, 1938

The Insurance Act, 1938 was the first legislation governing all forms of insurance to

provide strict state control over insurance business.

Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19 January 1956, that

life insurance in India was completely nationalized, through a Government ordinance; the

Life Insurance Corporation Act, 1956 effective from 1.9.1956 was enancted in the same

year to, inter-alia, form LIFE INSURANCE CORPORATION after nationalization of the

245 companies into one entity. There were 245 insurance companies of both Indian and

foreign origin in 1956. Nationalization was accomplished by the govt. acquisition of the

management of the companies. The Life Insurance Corporation of India was created on

1st September, 1956, as a result and has grown to be the largest insurance company in

India as of 2006.


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General Insurance Business (Nationalisation) Act, 1972

The General Insurance Business (Nationalisation) Act, 1972 was enacted to nationalise

the 100 odd general insurance companies and subsequently merging them into four

companies. All the companies were amalgamated into National Insurance, New India

Assurance, Oriental Insurance, United India Insurance which were headquartered in each

of the four metropolitan cities.

Insurance Regulatory and Development Authority (IRDA) Act, 1999

Till 1999, there were not any private insurance companies in Indian insurance sector. The

Govt. of India, then introduced the Insurance Regulatory and Development Authority Act

in 1999, thereby de-regulating the insurance sector and allowing private companies into

the insurance. Further, foreign investment was also allowed and capped at 26% holding

in the Indian insurance companies. In recent years many private players entered in the

Insurance sector of India. Companies with equal strength competing in the Indian

insurance market. Currently, in India only 2 million people (0.2 % of total population of 1

billion), are covered under Mediclaim, whereas in developed nations like USA about75 % of the total population are covered under some insurance scheme. With more and

more private players in the sector this scenario may change at a rapid pace.


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The Partnership:

HDFC and Standard Life first came together for a possible joint venture, to enter the Life

Insurance market, in January 1995. It was clear from the outset that both companies

shared similar values and beliefs and a strong relationship quickly formed. In October

1995

the companies signed a 3 year joint venture agreement.

Around this time Standard Life purchased a 5% stake in HDFC, further

strengthening the relationship.

The next three years were filled with uncertainty, due to changes in government

and ongoing delays in getting the IRDA (Insurance Regulatory and Development

Authority) Act passed in Parliament. Despite this both companies remained firmly

committed to the venture.

In October 1998, the joint venture agreement was renewed and additional resource

made available. Around this time standard Life purchased 2% of Infrastructure


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Development Finance Company Ltd (IDFC). Standard Life also started

to use the services of the HDFC treasury department to advise them upon their

investments in India.

Towards the end of 1999, the opening of the market looked very promising and

both companies agreed the time was right to move the operation to the next level.

Therefore, in January 2000 an expert team form the UK joined a hand picked team form

HDFC to form the core project team, based in Mumbai.

Around this time Standard Life purchased a further 5% stake in HDFC and a 5%

Stake in HDFC Bank.

In a further development Standard Life agreed to participate in the Asset

Management Company Promoted by HDFC to enter the mutual fund market. The Mutual

Fund was launched on 20th July 2000.

INCORPORATION OF HDFC STANDARD LIFE

INSURANCE COMPANY LIMITED:

The company was incorporated on august 2000 under the name of HDFC Standard

Life Insurance Company Limited.

Our ambition form as far back as October 1995 , was to be the first private

company to re-enter the life insurance market in India. On the 23rdof October 2000, this


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ambition was realized when HDFC Standard Life was the only life

company to be granted a certificate of registration.

HDFC are the main shareholders in HDFC standard Life, with 81.4%, while

Standard Life owns 18.6% Given Standard Lifes existing investment in the HDFC

Group, this is the maximum investment allowed under current regulations.

HDFC and Standard Life have a long and close relationship built upon shared values and

trust. The ambition of HDFC Standard Life is to mirror the success of the parent

companies and be the yardstick by which all other insurance companys in India and

measured.

Our Mission:

We aim to be the top new Life Insurance Company in the market. This does not just

mean being the largest or the most productive company in the market, rather it is a

combination of several things life;

Customer service of the highest order

Value for money for customers,

Professionalism in carrying out business

Innovative products to cater to different needs of different customers

Use of technology to improve service standards

Increasing market share


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Our Values:

SECURITY:

Providing long term financial security to our policy holders will be our

constant endeavour. We will do this by offering life insurance and pension products.

TRUST:

We appreciate the trust placed by our policy holders in us. Hence, we will aim to

manage their investments very carefully and life up to this trust.

INNOVATION:

Recognizing the different needs of our customers, we will be offering a range of

innovative products to meet these needs.

Our mission is to be the best new life Insurance Company in India and these are

the values that will guide us in this.


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SOME OF OURVALUED

BANCASSURANCE PARTNERS.

The Standard Life Assurance Company ("Standard Life") was established in 1825 and

the first Standard Life Assurance Company Act was passed by Parliament in 1832.

Standard Life was reincorporated as a mutual assurance company in 1925.

The Standard Life group originally operated only through branches or agencies of

the mutual company in the United Kingdom and certain other countries. Its Canadian


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branch was founded in 1833 and its Irish operations in 1838. This

largely remained the structure of the group until 1996, when it opened a branch in

Frankfurt, Germany with the aim of exporting its UK life assurance and pensions

operating model to capitalise on the opportunities presented by EC Directive 92/96/EEC(the Third Life Directive) and offer a product range in that market with features which

local providers were unable to offer. In the 1990s, the group also sought to diversify its

operations into areas which complemented its core life assurance and pensions business,

with the intention of positioning itself as a broad range financial services provider.

Banking, Healthcare & Investments

The group set up Standard Life Bank, its UK mortgage and retail savings banking

subsidiary, in 1998 and Standard Life Investments, which had previously been the in-

house investment management unit of the groups life assurance and pensions business,

was separated into a distinct legal entity in the same year, with the aim of establishing it

as an independent investment management business providing services to both the group

and third party retail and institutional clients. The group acquired Prime Health Limited

(subsequently renamed Standard Life Healthcare) in the United Kingdom in 2000.

Standard Life Healthcare expanded in March 2006 with the acquisition of the PMI

business of FirstAssist.

Standard Life Asia Limited/Joint ventures

The groups Hong Kong subsidiary, Standard Life Asia Limited (SL Asia), wasincorporated in 1999 as a joint venture and became a wholly-owned subsidiary of

Standard Life in 2002. The groups operations in Hong Kong were established to give the

group a presence in the Far East from which it could expand into China. The groups

joint ventures in India with Housing Development Finance Corporation Limited

(HDFC) were incorporated in 2000 (in relation to the life assurance and pensions joint


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venture) and 2003 (in relation to the investment management joint

venture). The groups joint venture in China with Tianjin Economic Development Area

General Company (TEDA) became operational in 2003.

Standard Life International Limited

The group also incorporated Standard Life International Limited (SLIL) in 2005

for the purposes of providing the group with an offshore vehicle, based in Ireland,

through which it could sell tax-efficient investment products into the United kingdom.

Sales of these products commenced in 2006.

service company

Following the groups strategic review in 2004, the group established a service

company structure for the provision of central corporate services to the groups business

units. Standard Life Employee Services Limited (SLESL) supplies a wide range of

central services to the rest of the group, including IT, facilities, legal and human

resources services, and employs staff working in the groups UK and Irish operations

(other than SLI, SLB and SLH, which employ their staff directly). This service company

structure was created to enable Standard Life to comply with regulatory restrictions on

the provision of non-insurance services and to exploit group-wide synergies.


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AWARDS AND ACCOLADES

2008

May, 2008

Received PCQuest Best IT Implementation Award 2008

HDFC Standard Life received the PCQuest Best IT Implementation Award 2008 for

Consultant Corner, the applications for its financial consultants, providing centralized

control over a vast geographical spread for key business units such as inventory,

training, licensing, etc. Read more about the Consultant Corner tool in the HDFC

SLinNewsSection.

HDFC Standard Life has won the PCQuest Best IT Implementation Award for two

years consequently. Last year, the company received the award for Wonders, its path-

breaking implementation of an enterprise-wide workflow system

March,2008

Silver Abby at Goafest 2008

HDFC Standard Life's radio spot for Pension Plans won a Silver Abby in the radio

writing craft category at the Goafest 2008 organised by the Advertising Agencies

Association of India (AAAI). The radio commercial Pata nahin chala touched

several changes in life in the blink of an eye through an old mans perspective. The

objective was drive awareness and ask people to invest in a pension plan to live life to

the fullest even after retirement, without compromising on ones self-respect.


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Laadli Media Award 2007

HDFC Standard Life received Laadli Media Award

2007 for its 'Big car' TV commercial. It showed how a

daughter wants to be more responsible towards her

family and asks her dad to upgrade to a bigger car by

offering him the extra money required to buy the car.

HDFC Standard Life received this award for two years

consecutively. In 2006, it won for the 'Papa' TV

commercial, which challenged the stereotype parents

saving only for their son's education or daughter's

wedding. The company took a bold step by showing

parents saving for their daughter's education abroad,

demonstrating progressive thinking.

Laadli Media Awards, instituted in 2007, by Population First, an NGO working on

women's rights and social development, is given to professionals in print and

electronic media and ad makers for gender sensitive news reports, articles, print, TV

ads, and films.

March,2008Unit Linked Savings Plan Tops Mint Best TV Ads Survey

The Unit Linked Savings Plan advertisement of HDFC Standard Life, one of the

leading private insurance companies in India, has topped Mints Top Television

Advertisement survey conducted, for February 2008. HDFC Standard Lifes Unit


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Linked Savings Plan advertisement was ranked 4th in terms of a combined score of ad

awareness and brand recall and 3rd in terms of ad diagnostic scores (likeability,

enjoyment, believability, and claim). The respondents were between 18 and 40 years.

Mints exclusive report, New voices in a makeover outlines the survey in detail.

February,2008

Deepak M Satwalekar Awarded QIMPRO Gold Standard Award 2007

Mr Deepak M Satwalekar, Managing Director and CEO, HDFC Standard Life,

received the QIMPRO Gold Standard Award 2007 in the business category at the 18th

annual Qimpro Awards function. The award celebrates excellence in individual

performance and highlights the quality achievements of extraordinary individuals in

an era of global competition and expectations.

January,2008

Sar Utha Ke Jiyo Among Indias 60 Glorious Advertising Moments

HDFC Standard Lifes advertising slogan honoured as one of 60 Glorious

Advertising & Marketing Moments' over the last 60 years in India, by 4Ps

Business and Marketing magazine. The magazine said that HDFC Standard Life is

one of the first private insurers to break the ice using the idea of self respect (Sar Utha

Ke Jiyo) instead of 'death' to convey its brand proposition. This was then, followed by

others including ICCI Prudential, thus giving HDFC Standard Life the credit o

bringing up one such glorious advertising and marketing moment in the last 60 years.


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2007

December,2007Pension Plan Tops Mints Survey of Best TV Ads

HDFC Standard Lifes pension plans topped the ad diagnostics and ranked eighth on ad

reach in a survey of new television advertisements in November, 2007, conducted by

Mint, the leading business newspaper of the Hindustan Times Group. Our pension

advertising was ranked first in terms of ad diagnostic scores (likeability, credibility,

enjoyment). The respondents were between 18 and 40 years. We were ranked 8th in

terms of a combined score of ad awareness and brand recall.

September,2007

Ranked Sixth Most Effective Advertisement

HDFC Standard Life was ranked 6 th amongst The 10 most effective adsin September

2007, according to the JuxtConsults Ad Box Office Monthly Monitor. We have moved

up from 56 th position in August 2007. JuxtConsults Ad Box Office is Indias biggest

monthly monitor of most effective television ads amongst urban consumers. The ranking

was based on the total effectiveness of the ad in connecting the brand with the consumers.

Sar Utha Ke Jiyo ranked 10 th in the Top 10 Top-of-mind ad slogans in September,

2007, according to the JuxtConsults Ad Box Office Monthly Monitor. The ranking wasbased on how much our ad slogan recalled top of mind in the daily ad clutter.

June,2007

Received PCQuest Best IT Implementation Award 2007


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HDFC Standard Life received the PCQuest Best IT Implementation Award 2007 for

Wonders, its path-breaking implementation of an enterprise-wide workflow system.

PCQuest, the leading IT publication from the CyberMedia Group identified six most

innovative IT implementation projects deployed successfully across India for the award.

The winners of the 4th PCQuest Best IT Implementation Awards were chosen from 250

nominations across 22 industries and 23 projects ranging from government, banking

finance and insurance, manufacturing, petroleum, and IT/ITES to poultry, travel and

tourism, real estate, construction, power and utilities.

April,2007

Received Three Awards at ADFEST 2007

HDFC Standard Lifes advertising created high awareness for our brand and bagged 2

silver and 1 bronze awards at the ADFEST 2007 National Awards organised by the

Advertising Agencies Association of India (AAAI), the premier advertising body in

India). The 3 awards are the highest won by any single brand in the financial services

business (including banking, mutual fund, insurance and other financial services).The 2 silvers were won in a category where the gold was not awarded to any brand. Thus

the silver was the best that any brand could have got. Our brand topped radio as a

medium across all brands - across all industries.

March,2007

Selected as 4Ps Power Brand 2007

HDFC Standard Life was selected as '4Ps Power Brand 2007,for being one of Indias

25 Best Startup Companies in an exclusive survey conducted by the ICMR (Indian

Council of Market Research) and 4Ps - Business and Marketing (a business and

marketing magazine published by Planman Media). The list of companies was prepared

based on innovative and new concepts rolled out to serve the Indian consumers. The


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research on the 25 best startups was based on the number of years since the company has

been established vis-a-vis the growth of the company.

January2007

Ranked 29th Most Trusted Indian Brand

HDFC Standard Life ranked 29th most trusted Indian Brands amongst the Top 50

Service Brands of 2006 according to a study conducted by the Brand Equity

Economic Times, the leading business publication of India. HDFC SL moved up 16

places to be positioned at number 29 (earlier at 45), the highest jump amongst all service

brands.

2006

August 2006

Selected as 4ps Power Brand 2006

HDFC Standard Life has been the '4Ps Power Brand 2006', for being one of

India's Top 25 'Most Innovative Companies' in an exclusive survey conducted by

ICMR (Indian Council of Market Research) and 4Ps - Business and Marketing (a

Business and Marketing magazine published by Planman Media). The survey highlighted

25 companies that have made India think differently and radically through their Business

and Marketing practices. HDFC Standard Life was the only company selected from the

insurance domain. Besides us, the lists included giants such as HLL, Microsoft, Nokia,

LG, Samsung, IBM, HP, ITC Group, Hero Honda, Bajaj Auto, Ranbaxy, ICICI Bank,

SBI Bank, Bennett, Coleman & Co. Ltd., Tata Group, Kingfisher Airlines, Bharti

Televentures, Pantaloon, General Electric, HPCL, Maruti, Anil Dhirubhai Ambani

Group, Reliance Industries, and CNBC TV 18.


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LIFE INSURANCE

Indian Promoter Foreign Promoter

ICICI Prudential Plc, UK

HDFC Standard Life, UK

Aditya Birla Group Sun Life Financial, Canada

Kotak Mahindra Finance Old Mutual Plc, South Africa

Max India New York Life

Tata Group American International Group, USA

Vyasya Bank ING Group, Netherland

Bajaj Auto Allianz AG

Sanmar Group AMP, Australia

SBI Cardiff, France

J&K Bank, Pallonji & Co. Metropolitan Life Insurance

Dabur India Aviva Plc


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GENERAL INSURANCE

Indian Promoter Foreign Promoter

ICICI Lombard Canada

Bajaj Auto Allianz AG

Cholamandalarn None

Investment Indian Farmers Fertilizers

Cooperative

Tokio Marine and Fire Insurance

Company

Reliance Industries None

Sundaram Finance Royal and Sun Life

Tata Group American International Group

HDFC Chubb, USA


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HDFC Standard Life realise that not everyone has the same kind of needs. Keeping this

in mind, we have a varied range of Products that you can choose from to suit all your

needs. These will help secure your future as well as the future of your family.

Protection Plans

You can protect your family against the loss of your income or the burden of a loan in the

event of your unfortunate demise, disability or sickness. These plans offer valuable peace

of mind at a small price.

Our Protection range includes

Term Assurance Plan

Loan Cover Term Assurance Plan

Home Loan Protection Plan

Investment Plans

Our investment products are well suited to meet your long-term needs.

Our Investment range includes

Single Premium Whole Of Life plan

Unit Linked Wealth Maximiser Plus

Pension Plans

Our Pension Plans help you secure your financial independence even after retirement.


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Our Pension range includes

Personal Pension Plan

Unit Linked Pension,

Unit Linked Pension Plus

Our Immediate Annuity plan will aid you in receiving income post retirement and

securing you financial independence.

Savings Plans

Our Savings Plans offer you flexible options to build savings for your future needs such

as buying a dream home or fulfilling your childrens immediate and future needs.

Our Savings range includes

Endowment Assurance Plan

Assurance Plan Savings Assurance Plan

Childrens Plan

Money Back

Unit Linked Endowment

Unit Linked Endowment Plus

Unit Linked Endowment Suvidha

Unit Linked Endowment Suvidha Plus

Unit Linked Endowment Plus II

Unit Linked Young Star

Unit Linked Young Star Plus

Unit Linked Young Star Suvidha


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Unit Linked Young Star Suvidha Plus

Unit Linked Young Star Plus II

Unit Linked Enhanced Life Protection II

SimpliLife

Plans Without Active Link Are ClosedFor Sale.

Before we discuss the plans in detail lets be accustomed to certain common terms like-

SA- SUM ASSURED:

It is the amount for which a person is insured, so it becomes the minimum amount,

which has to return to the insured as per the terms of the policy.

LA LIFE ASSURED:

He/She is the person who has taken the insurance cover.

PREMIUM:

These are the installment payable by the LA as against the SA. He can either make

monthly, half-yearly & yearly or even one time payment is allowed.


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GROWTH AND SURVIVAL STRATEGY FORINDIAN

INSURANCE COMPANIES IN

THE ERA OF EMERGING GLOBAL COMPETITION

There are insurance marketing strategies that can take any insurance agency from mediocre to

success when utilized correctly. Breaking into a new business climate and finding customers

hard work, but when equipped with innovative ideas and proven techniques, financial

markets sales personnel can become extremely successful. Getting an education and trainin

is very important in every industry, sales is certainly no exception. Those selling insurance w

want begin their careers with the very best tools of the trade and those with already establishe

businesses that are in need of a motivational push will also gain great benefits by researching

and learning new insurance marketing tips. This article serves to give a few helpful hints and

encourage those in this career to seek further and find the right system or push for their

business.

Key insurance marketing strategies will always include an in-depth review of the a valu

of follow-up. All successful sales agents understand that consumers need to be contacted aga

and again in order to make a vital connection. Also, great follow-up protocol lets the potentia

customer know that good, solid customer service will be part of the over-all package. Followsays to a consumer that they are important, thought of, and that their business would be great

appreciated. The consumer today not only wants a product at a great price, they also want a

personal relationship, especially when it comes to financial system sales, such as various

insurances. Letters and phone calls are gentle reminders that the salesperson intends to serve


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with his or her whole heart. And, once a sale is secured, a thank you call is strongly advised.

Those in this industry will also want to keep constant contact with existing customers, too. Th

competition is fierce today, and no one wants to loose a customer to the next guy or service to

come along. Clients that have had no contact for a period of time loose loyalty. Keep birthday

and anniversary postcards going into the home on a regular basis. Keeping a name before a

consumer will keep a name in their conscience. A small gift or token of appreciation is also a

means for keeping customers loyal. Christmas goody packages or dinner out certificates will

leave lasting impressions on consistent customers.

Consumers today value information. We live in the information age, and the savvy,

faithful customer is one that has knowledge about the products and services offered. The next

most valuable insurance marketing tips include the salesperson being the source of financial

information for the client. Newsletters, email updates, and notifications will keep customers

informed about issues surrounding insurance and other financial programs. There are creative

ways to approach these insurance marketing strategies. Newsletters could include contests,special interest areas for kids, safety concerns, and economic updates. There could even be an

area for customer spotlights, or encouraging testimonies of how the customers were helped

through the office. Of course, all new products and services should be showcased in any

informative hard copy or e-mail communication.

Community marketing is another great way to get advertising and name recognition.

Successful networkers join local community agencies, such as the local Chamber of Commer

and sign up to help in activities. This is a great way to get name and photographs listed in

newspaper articles and other media avenues. Also, charity work cannot only be greatly

beneficial to the community and those served, but may also open doors to communicating wi

other volunteers, who could be potential clients. People enjoy using services extended by like


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minded providers. Creating a sense of community is extremely important to insurance

marketing strategies.

There are other insurance marketing tips and resources available and insurance agents

may find investigating several options to be beneficial. Many marketing support companies

offer email or publication updates, sharing information and techniques that are proven to brin

in success. Agents may want to browse the Internet and find a few different insurance

marketing tips programs to choose from. Not only will these resources help keep salesperson

abreast of the latest strategies, but these support programs can also create a sense of commun

and an opportunity for agents to share their own struggles and challenges with others in the

field.

Perhaps the most important insurance marketing tips are tips that speak of integrity and

honest business dealings. There are so many scams in various industries today, consumers are

looking for products and services that they can trust. It is of the upmost importance that

Christian insurance agents conduct their businesses as unto the Lord, himself. God's Word isextremely clear about how He feels when there is misconduct in business transactions. "Lyin

lips are an abomination to the Lord: but they that deal truly are his delight." Building trust wi

be crucial to keeping a business growing in a stable direction.

Abstract

The liberalization of the Indian insurance sector has been the subject of much heated debate f

some years. The policy makers on one hand wanted competition, development and growth of

insurance sector, which is extremely essential for channeling the investments in to the

infrastructure sector. At the other end the policy makers had also the fear that the insurance


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premium, which are substantial, would seep out of the country; and thus in the nation's intere

they want to have a cautious approach of opening for foreign participation in this sector.

After a long discussion, confrences and fraction among some political parties, IRDA brought

consensus among factions of different political parties. Though some changes and some

restrictive clauses as regards to the foreign participation were included the IRDA has opened

the doors for the private entry into insurance.

The number of potential buyers of insurance is certainly attractive but much of this populatio

might not be accessible as it will take a long time for us to trust on private Sector insurance

companies and this would be the only major weapon in the hands of public sector insurance

companies to move ahead .Now it would be interesting to watch that how long domestic

companies can reap the fruits of being Indian and survive and expand in the immense

competition from foreign and private players.

Whether the insurer is old or new, private or public, expanding the market will present

multitude of challenges and opportunities.

The paper will analyze the likely impact of opening up India's insurance sector and will also

suggest growth & survival strategy for Indian Insurance companies.

BUSINESS AND SOCIAL OBJECTIVES

When LIC was formed in 1956 through the amalgamation of 225 private companies, its

business objectives complemented its social objectives. The main objective is to spread lifeinsurance to every nook and corner of the country especially rural areas, to socially and

economically backward classes and provide them reasonably-priced financial cover against

death.

Other objectives include encouraging people to save for the future by making insurance-linke


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savings more attractive and secure. The funds created are then utilized and invested for nation

building. The insurance business is conducted with the full realization that LIC is only a trust

of the insured public and priority is given to meet the needs that arise due to change in the

social and economic environments.

Even today after 50 years, the core value of social commitment has not changed. What have

changed in recent times are customers' expectations and the environment in which the life

insurance sector operates. This is due to globalization, which has opened up the insurance

sector to private players.

The liberalization of the Indian insurance sector has been the subject of much debate for som

years. The policy makers were in Dilemma. As some of the them wanted competition,

development and growth of insurance sector which is extremely essential for channeling the

investments in to the infrastructure sector. On the other end, others had the fears that the

insurance premium, which are substantial, would move out of the country, and wanted to hav

cautious approach of opening for foreign participation in the sector. Some have opinion that

large scale of operations; public sector bureaucracies and cumbersome procedures hampersnationalized insurers. Therefore, potential private entrants are given entry in this area so the

consumer will gain high customer service, speed and flexibility. They point out that their entr

will mean better products and choice for the consumer. The critics counter that the benefit wi

be slim, because new players will concentrate on affluent, urban customers as foreign banks d

until recently.

As one of the rare occurrences the entire debate was put on the back burner and the IRDA

succeed in making political consensus among fractions of different political parties. Though

some changes and some restrictive clauses as regards to the foreign participation were includ

the IRDA has opened the doors for the private entry into insurance.


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FEAROF DECLINING MARKET SHARE: AN UN REALISTIC FEAR

An often-voiced concern is that private players, especially foreign ones, will swamp the mark

grabbing a large share. A similar threat was overplayed in the case of basic telephone service

but still the dominance and market share of DoT has remain unaltered, even after the private

players started their operations. This hypothesis that the private players would swamp the

market has been disproved in many emerging markets worldwide not only in case of the

insurance but also in numerous different sectors (Power, Energy, Telecom, Insurance etc.). A

GIC and LIC are strong players in their respective business segments. So they may lose some

market share, but not business.

UNTAPPED OPPORTUNITIES: THE STRENGTH FORNATIONALIZED

INSURANCE

There is no doubt that the potential market for the buyers of insurance is significant in India a

offers a great scope of growth. While estimating the potential of the Indian insurance market

often tempt to look at it from the perspective of macro-economic variables such as the ratio o

premium to GDP, which is indeed comparatively low in India. For example, India's life

insurance premium as a percentage of GDP is 1.3% against 5.2% in the US, 6.5% in the UK

8% in South Korea. But the fact is that the large part of the India's (the number of potential

buyers of insurance) is certainly attractive. However, this ignores the difficulties of approach

this population. Much of the demand may not be accessible because of poor distribution, larg

distances or high costs relative to returns.

BENEFIT OF BEING NATIONALIZED

1.Distribution: Since distribution will be a key determinant of success for all insurance

companies regardless of age or ownership. The nationalized insurers currently have a large

reach and presence. New entrants cannot-and does not-expect to supplant or duplicate such a


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network. Building a distribution network is expensive and time consuming. This will restrict

new entrants to penetrate in the market easily.

2.Variety ofProduct: The product policies of Nationalized Insurance companies are varied

and focus the need of Indian customer. Thus even in small village there is a Nationalized

policyholder. New entrant can-not at the initial stage expect the penetration and variety of

product as the small amount of policies will increase their carrying cost.

3.Trust and Faith: Being government owned subsidiary and existent since 1956, people of

India have real faith and are confident in parting their valuable savings with Nationalized

Insurance Companies.

4.Large Work force of Agent: Being in operation from 1956,Nationalised Insurance

companies have large and scattered human resource, which is very important for targeting hu

mass. The same will not be possible for the new private entrants in the initial years, and if so

they will lack in experience and patience, which is foremost quality of an agent.

Despite of the above benefit there are many other areas in insurance sector where with plann

strategy the new entrants can penetrate themselves in the market.

OPPORTUNITIES FORNEW ENTRANTS

The new entrants would be best served by micro-level pronged strategies.

1. They can introduce innovative products offering a right mix of flexibility/risk/return

depending which will suit the appetite of the customers

2. They can target specific niches, which are poorly served or are not served at all.

3. Being the agrarian economy again there are immense opportunities for the new


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entrants to provide the liability and risks associated in this sector like weather insuranc

rainfall insurance, cyclone insurance, crop insurance etc.

4. The financial sector is aggressively targeting retail investors. Housing finance, auto

finance, credit cards and consumer loans all offer an opportunity for insurance compan

to introduce new products like creditor insurance etc. Similarly, organized sector sales

TVs, refrigerators, washing machines and audio systems. Only a negligible portion of

these purchases is insured. Potential buyers for most of this insurance lie in the middle

class. This may be huge market for new private entrants.

5. The lack of a comprehensive social security system combined with a willingness to

save in India will lead to a large demand for pension products. However, current

penetration is poor. Making pension products into attractive saving instruments would

require only simple innovations already prevalent in other markets. For example, their

returns might be tied to index-linked funds or a specific basket of equities. Buyers coul

be allowed to switch funds before the annuities begin and to invest different amounts a

different times

6. Health insurance is another segment with great potential because existing Indian

products are insufficient. By the end of the GIC's Mediclaim scheme covered only 2.5

million people. Indian products do not cover disability arising out of illness or disabilit

for over 100 weeks due to accident. Neither do they cover a potential loss of earnings

through disability.

GROWTH OF INSURANCE SECTORSINCE PRIVATE SECTORENTRY

The gains are obvious for anyone who has been closely monitoring the Indian insurance scen

The total premium collected by the insurers both life and non-life in the year 2003-2004 is

Rs.82, 415 crores (Rs.66, 288 crores in life and Rs. 16,127 crores in non-life) compared to Rs


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44, 985 crores (Rs.34, 898 crores in life and Rs. 10,087 crores in non-life) during the year 200

2001. This represents an 83% increase in the last three years over the base year 2000-01. Thi

what we have witnessed after the opening up of the sector. If we take the three year block pri

to the opening of the sector, we find that the total premium collected in 1997-98 was Rs.27, 0

crores (life: Rs.19354 crores; non-life Rs.7735 crores) which has grown to Rs.44, 985 by 200

2001 representing an increase of 66%. Insurance sector has obviously started growing at a rap

pace after the sector was opened up. The private sector accounts for nearly 13% of the first ye

premium market. The market share of the private players has to be seen in the context of this

enlarged market. There is also evidence to show that the rate of growth of public sector

undertakings had not shown any decline after the entry of the private sector companies. All o

them are obviously having a share of a larger market. The Credit for enlarging the market

should however, go to the private sector as they came up with an aggressive marketing strateg

to establish their presence.

Date Base

y

The total premium underwritten by life insurance companies in the country duringFY2004 was Rs 18,66,939.69 lakh ($4 billion) towards 286.26 lakh policies, recording

growth in premium and policies underwritten of 10.24 per cent and 12.83 per cent,

respectively over the previous year.

y The non life insurance market grew by about Rs 1,820 crore ($392.8 million) (13 per

cent) to record a premium of Rs 16,130 crore ($3.4 billion), a lot of which was because

the Rs 1,700 crore ($367 million) (17 per cent) growth in the miscellaneous business

such as motor, health, liability and aviation.

y The spectacular premium driver, motor grew by Rs 1,020 crore ($220 million) (20 per

cent); health by Rs 270 crore ($58.3 million) (27 per cent); liability by Rs 165 crore

($35.6 million) (100 per cent); aviation by Rs 90 crore ($19.4 million) (25 per cent).

y The traditional fire business grew by Rs 195 crore ($42 million) (6.5 per cent) and


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engineering grew by Rs 36 crore ($7.7 million) (5 per cent).

GROWTH STRATEGY FORNATIONALIZED INSURANCE COMPANIES

Most of the opportunities and challenges that we have discussed apply equally to existing and

new insurers. It must be emphasized that the opening of the insurance market is far from a ba

thing for nationalized insurers. With a strong presence, a wide network and considerable bran

equity, they are in a good position to tap the very same segments profitably, while improving

their product and service offerings. The Indian company should Leverage information

technology to service large numbers of customers efficiently and bring down overheads.

Technology can complement or supplement distribution channels cost-effectively. It can also

help improve customer service levels considerably.

Besides this, other areas can be focused to grow and survive in the Indian Market

1. Understanding Customer needs: Use data warehousing, management and mining to

gauge the profitability and potential of various customer and product segments and

ensure effective cross selling. Understanding the customer better will allow insurance

companies to design appropriate and-customized products, determine pricing correctly

and increase profitability.

2. High-level Training and Development: Ensure high levels of training and developm

not just for staff but also for agents and distribution organizations. Existing organizatio

will have to train staff for better service and flexibility, while all companies will have t

train employees to cope with new products and an intensive use of information

technology.

3. Alliance&Tieup: The importance of alliances and tie-ups means that companies will

have to integrate related but separate providers into their systems to ensure seamless


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delivery.

4. Agent Relationship: Build strong relationships with intermediaries such as agents.

5. Market Segmentation: They must segment the market carefully to arrive at the

appropriate products and pricing and should cater the needs of every individual.

6. Revamped Marketing Strategy: Worldwide, insurance products move along a

continuum from pure service products to pure commodity products then they could be

sold through the medical shops, groceries, novelty stores etc. Once communization,

popularity and awareness of the products are attained then the products can move toremote channels such as the telephone or direct mail. In the UK for example, retailer

Marks & Spencer now sells insurance products. At this point, buyers look for low price

Brand loyalty could shift from the insurer to the seller.


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These schemes are expected to yield better returns when compared to normal insurance

schemes. As the awareness level about these unique products is much lower, the companies

resort to educate the customers about the salient features of the products.

II-- VALUE FORMONEY (VFM)

The sea change since the sector opened up has been on the way the basic products have been

packaged innovatively, often tailor made to provide a bundle of benefits to the customers.

This is possible through the introduction of riders, which have added value to the risk cover

at minimal cost. Riders are nothing but add-ons coming along with the base policies for a

slightly additional premium. Riders have become the major instruments for the

organizations to lure the customers away from the competitors. The removal of 30% cap on

the premium of the base policy for the health riders alone has come as a shot in the arm for

many players since this is used as an Unique Selling Proposition by many private players vis

a vis the LIC. Later, LIC has also started announcing riders along with the main policies

dancing to the tune of the market forces. This could see many non-life players going out of

the business as life insurers offer a plethora of personal line products as add-ons. Riders can

also be availed by the existing policyholders.

III -- TAPPING THE NICHE MARKETS

Private insurers are concentrating much on designing attractive products by investing

heavily on research, studying life expectancy and health statistics across age groups, income

levels, professionals and regions on their own instead of relying on data with state insurers.

The products are designed with a technical team of actuaries and a product development

team working closely together to target the niche market. The innovations for the niche

markets are abound and to name a few..


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* MetLife India Insurance Company has recently launched a Charitable Trust Policy in

Kolkata, which has evoked a lot of interest especially among the Marwaris business

community who want to set up a temple in their name after their death. Similarly a Buy &

Sell Agreement cover from the same company permits a business enterprise to take out a life

plan on each of its partners, to ensure that the company continues.

* The other segments, which have attracted almost all the players, are the women and the

children segments. Though the State insurer has had a chunk of products sufficiently for a

longer time, it faces stiff competition from the private players in these segments.

* Tata AIG has offered a specialized life insurance package where the insured and the

employers of the insured have a say in it. Termed as Worksite Marketing, AIG, which has

adopted this practice in different places across the world, is spreading the concept in India

too. Worksite Marketing is a distribution method used to offer voluntary insurance products

(employee benefits) to employees at their place of work with the sponsorship or backing of

their employer, traditionally done on a deduction from the payroll. The policyholder carriesthe policy with himself throughout his life, even if it happens to change the organizations.

* Tata AIG General Insurance, for the first time in the country, has launched a specialized

product for Accountants (after tasting the success with specialized products such as

Directors and Officers policy in India) in its bid to segment the market for professional

indemnity policies. The policy has been designed with the assistance from Bombay

Chartered Accountants Society. This policy covers claims pertaining to professional

negligence, wrongful acts committed in the performance duties. It also provides for

coverage of all legal expenses incurred in defending such claims.

* Any other way to promote non-smoking? Or to reward those who give up smoking? Om


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Kotak Mahindra has taken an initiative by offering a term insurance plan - a pure protection

product - to non-smokers at much cheaper price. As against an annual premium of Rs.2400

on a Rs.10 lacs policy for a 10 year term for a 30 year old under the preferred term plan, the

regular term premium works out to Rs.3400 for a similar cover. Though there are

apprehensions in the industry circle about the success of the policy, the intention of the

company is quite appreciated.

* Even the unborn child's future can be safeguarded now. The offspring can be insured

against unfortunate congenital defects. State owned General Insurers have started

aggressively marketing these kinds of products.

IV-- THRUST TO THE RURAL MARKETS

Thanks to the norms stipulated by the regulator IRDA, all the players have turned their eyes

towards the rural market. Towards ensuring equitable distribution of insurance policies in

every nook and cranny of the country, IRDA stipulates the rural obligations to be met by the

players over the years.

The rural obligation on part of the new private insurance companies is incremental in nature.

It goes from 5% to 15% over the period of 5 years for life insurance and from 2% to 5% in

case of general insurance. IRDA has also defined what it meant by rural.

1. The place should have a population of less than 5000

2. Secondly, the density of the population should be less than 400 persons per square

kilometer.

3. 75% of the male population should be engaged in agricultural pursuit.

Of the 11 private sector life insurers, 10 companies substantially performed in the rural


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sector with the percentage of policies issued in the rural sector standing higher than 5% level

mentioned. Most of the non-life insurers achieved the base level of 2% gross premium from

rural sector. Since the penalty for not adhering to the obligation includes Rs.5 lacs penal fee

and upto 3 years of imprisonment of the Chief of the organization, all the companies are

swarming the rural market. The challenge lies in reaching the critical mass with the

redesigned products. And the organizations have been fairly successful in their efforts. For

instance, Om Kotak Life Insurance is successful in selling the single premium policy in rural

market. Reaching the doorsteps of the villagers through non-conventional channels like

Regional Rural Banks (RRBs), Co-operative banks, Self-Help Groups (SHGs), ITCs e-

choupal is also being tried by the players.

V -- TAPPING UNCONVENTIONAL DISTRIBUTION CHANNELS

Nevertheless all the players depend heavily on their agents force to reach out (LIC has

reached a figure of 8,50,000 agents and planned to increase it to 1 million by this year), they

are trying out other distribution channels also like banks and corporate agencies in additionto the channels mentioned above. The following table shows the strategic alliances the

insurers have entered into to distribute their products.

Sl.No Insurer Banks / Corporate Agencies

01Bajaj Alliance (General

Insurance)

Jammu & Kashmir Bank, Karur Vysya Bank,

Punjab & Sind Bank

02United India Insurance

Company Ltd.

Andhra Bank, Indian Bank, South India Bank,

Federal Bank

03New India Assurance Company

Ltd.

Punjab National Bank (General Insurance) Vijaya

Bank (Life Insurance)

04 SBI Life SBI branches and branches of its subsidiaries


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05 ICICI Prudential

Allahabad Bank, Bank of India, Citibank, Federal

Bank, Lord Krishna Bank, Punjab and

Maharashtra Co-operative Banks

06 LIC of India Corporation Bank, Oriental Bank of Commerce

07 MetlifeKarnataka Bank, Dhanalakshmi Bank, Jammu &

Kashmir Bank

08 AMP SanmarKerala based Co-operative Banks

Peruntalmanna Bank and Manjeri Bank

09 Birla SunLife

Citibank, Deutsche bank, IDBI Bank, Catholic

Syrian Bank, Bank of Rajasthan, Bank of Muscat

10 HDFC Standard Life Insurance Indian Bank, Union Bank

11 Dabur CGU LifeLakshmi Vilas Bank, Canara Bank, Amex, ABN

Amro Bank

LIC is also exploring ways to rope in Regional Rural Banks (RRBs) across the country.

Cross-selling could be another key strategy in selling insurance provided the restrictions on

the functioning of corporate agencies are lifted. Once the curbs are removed, the market may

see a wave of cross-selling. Royal Sundaram Alliance may offer household insurance with

Sundaram Housing Finance and sell customers of Sundaram Finance Mutual Fund a whole

range of insurance products. ICICI-Prudential and HDFC Standard will tie up with their

parent companies to use their network .

Once the much-awaited Insurance Brokers Regulations comes into force, the industry is

poised to change the way the insurance products are sold with the entry of brokers. While aninsurance agent represents an insurance company and offers only the products of that

company, an insurance broker is independent and represents a number of insurers. He can

also compare the benefits of different policies and premiums to find the best coverage for

the customer.


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VI -- CAUSE RELATED MARKETING (CRM)

Cause Related Marketing has become the order of the day in Insurance industry. By creating

a goodwill about the organizations, the insurers are making an attempt to change the

negative attitude of the people towards insurance products. For instance,

* Towards serving the society in a better way, LIC has adopted a novel way through its

Bima Grams policy. Accordingly, LIC pays 25% of the premium collected from the

villagers or Rs.25000 whichever is lesser for undertaking developmental work in the

villages provided,

- The population of the village is between 1000 and 5000

- Life insurance coverage for atleast one person in 75% of the households

- Acquisition of 100 new policies in a single year

* Iffco-Tokio General Insurance Company is planning to launch a novel insurance policySankat Karan for farmers in which for the every purchase of 50kg bag of fertilizers,

insurance worth Rs.4000 would be provided to the farmers. The policy will remain in force

for a period of 12 months from the date of purchase.

* Birla Sun Life Insurance has adopted 332 villages around Renukoot and actively involved

in improving the lives of the residents.

VII -- DE-TARIFFING IN GENERAL INSURANCE

Though the issue of de-tariffing in general insurance has been debated upon at length, the

response from the industry is quite mixed. By fixing a tariff for a product, Tariff Advisory


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Committee (TAC) maintains discipline in the market and makes sure that the insurance

companies do not resort to under pricing to gain market share. IRDA is now working on

detariffing the general insurance sector beginning with commercial vehicle business since it

constitutes more than two fifth of the non-life business volume. Both IRDA and TAC are

working out the modus operandi of the deregulations of motor premium. Sensing the

indifferent attitude of the private general insurers towards motor insurance, the Government

is contemplating on coming out with obligations to be met by the private insurers in this

segment (like rural business). Once the motor insurance premium is detariffed, the end user

is likely to see another cola war like.

CONCLUSION

Observing the trends the industry has been moving for the last two years, the commitment of

the players to take the business forward is quite apparent. With the increase in awareness

level about the insurance and the products, the day is not far off all the insurable population

in the country would have been brought under the insurance net. The Governments resolve

to continue with the reforms coupled with investor friendly IRDA's regulations will surely

take the business far.


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Introduction to Research

Research refers to a search for knowledge. Research is a scientific investigation.

According to Learner In Dictionary of Current English, Research is a careful

investigation or in guiiy especially through search for new facts in any branch of

knowledge.

According toR

edman and Morv, Research is a systematic efforts to gain newknowledge.

Research Methodology

Research methodology is away to systematically solve the problem. It may be

understood as science of study how research is done scientifically. In it researchergenerally adopt studying the research problem along with the logic behind them. It

is necessary for the researcher to know not only the research method / techniques

but also the methodology.

When we talk of Research Methodology, we not only talk of research

methods but also considers the logic behind the methods we use in the context of

our research study and explain why we are not using others. So the research result

is capable of being evaluated either by the researcher himself or by others.


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RESEARCH DESIGN

A research design is a type of blue print prepared depending on the various types

of blue print available for the collection, measurement and analysis of data. A research

design calls for developing of most efficient plan for gathering the needed information.

The design of a research is based on the purpose of the study.

A research design is the specification of the methods and procedures for acquiring the

information needed. It is overall operational pattern or framework of the project that

stipulates what information is to be collected from which source and by what procedures.

Types of Research

Exploratory Research

Descriptive Research

Marketing practitioners who generally use the term qualitative and quantitative

instead of exploratory or descriptive do generally not use these terms. But the terms

quantitative and qualitative suggest the character of the data under process by which they

are gathered rather than the fundamental objective than the research.

Exploratory Study

Exploratory Study is done to generate new ideas; respondents

should be given sufficient freedom to express themselves.

Sometimes a group of respondents is brought together and a focus group interview is

held.

An exploratory study is generally based on the secondary data that are already

available. It does not have a formal and rigid design as a researcher may have to change


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his focus or direction, depending on the availability of new ideas and

relationships among variables. This study is in the nature of preliminary investigation

whereas the researcher himself is not sufficiently knowledgeable and is, therefore unable

to frame detailed research questions. This study involves qualitative research design.

Qualitative Research Design

If the purpose is to get new ideas then qualitative research may be in order. The

choice for data collection techniques for the study includes.

Depth interview-It is a lengthy, non-structured interview between a respondent and a

highly trained interviewer. Respondents are encouraged to talk freely about their

activities, attitudes and interests, in addition to the product category and brand under

study.

Project Technique-It is designed to tap the underlying motives of individual despite

their unconscious rationalizations or efforts at conscious concealment. It consists of

variety of disguised tests.

Focus Groups- This group consists of 8 to 10 respondents who meet with a

moderator! analyst for a group discussion focused on a particular product or particular

category.

Descriptive Study

Descriptive Study is under taken in many circumstances. When the researcher is

interested in knowledge the characteristics of certain group such as sex; age; educational

level; occupation and income; interested in knowing the proportion of give population

who have behaved in a particular manner; making the projections of certain things; or

determining the relationship between two or more variables, descriptive study may be


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necessary.

Descriptive data are commonly used as directed bases for marketing decisions.

These are well structured. Design in such studies must be rigid and flexible and focus

attention on the following.

What the study is about arid why is it being made?

What techniques of gathering data will be adopted?

How much mate

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