Market Research on existing policies and study to device new policies in Insurance 1.1 - INTRODUCTION: Insurance was a concept developed to transfer person’s risks to another party there by protecting the insured person in the event of any uncertainty. Life insurance is playing a vital role in mobilizing savings from the public, but the rate of mobilization is very low, compared to our population. After LPG, government requires long run funds for economic development, to avail this government invited private people to participate in this. It was flooded with applications from major international insurers & Indian corporate, each seeking to reach out to vast market. At present 14 insurance players are there in Indian market. 1.2 - OBJECTIVES: ○ To identify interest of the peoples in private life insurance company. ○ To study marketability of life insurance products. ○ To study different life insurance policies and procedures and research the scope for newer types of policies. Diksuchi Study Center, Davanagre. 1
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Market Research on existing policies and study to device new policies in Insurance
1.1 - INTRODUCTION:
Insurance was a concept developed to transfer person’s risks to another party
there by protecting the insured person in the event of any uncertainty.
Life insurance is playing a vital role in mobilizing savings from the public, but the
rate of mobilization is very low, compared to our population. After LPG, government
requires long run funds for economic development, to avail this government invited
private people to participate in this. It was flooded with applications from major
international insurers & Indian corporate, each seeking to reach out to vast market. At
present 14 insurance players are there in Indian market.
1.2 - OBJECTIVES:
○ To identify interest of the peoples in private life insurance company.
○ To study marketability of life insurance products.
○ To study different life insurance policies and procedures and research the scope
for newer types of policies.
○ To study the customer’s interest and enlist their wants.
○ To device policies leading to better catering of customers.
1.3 - NEED FOR THE STUDY:
There is a considerable change in financial scenario of the nation due to LPG with
regard to this insurance industry playing a very important role (in collecting savings from
public). After LPG more number of private insurance companies have come to existence
to compete with LIC. So there are 14 insurance companies facing stiff competition
among them, in this view this study will help to develop suitable strategies and policies to
improve insurance business.
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1.4 - METHODOGY:
Data base:
The methodology entails systematic activities ranging from the source i.e., the
primary data. The primary data is collected through a field survey method.
Questionnaires are used; face-to-face interviews are carried out. Separate questionnaires
were pre-tested with the acquaintance and friends and then final drafts were prepared.
Both open ended and closed ended questionnaires were formed. Marketing
officers of Insurance companies were interviewed personally and their opinions were
recorded.
Secondary data is also made use of viz., Economic Times, Business world,
Business today magazines was of immense help.
STATISTICAL TOOLS:
Many graphs like pie charts, bar diagrams and tables have been depicted to
analyze and interpret the data, and various statistical techniques were used.
The data is collected by 2 methods:
1. Primary data
2. Secondary data.
Primary data is collected through survey method i.e. by preparing questionnaire and
interviewing persons directly and by interacting with the branch manager and other staff
members.
Secondary data, which is secondary in nature i.e. already, collected information. This
secondary data is collected through-
Books
Magazines, Journals.
Internet &
Published articles
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1.5 - SAMPLING DESIGN:
Sampling design is the sample size, which is taken for the purpose of study. It
was selected form Davangere city & sample size is 40, which were chosen randomly.
1.6 - SCOPE OF THE STUDY:
The scope of the study is the covered area for the purpose of study. The study is
limited to Davangere city Bajaj Allianz life insurance.
1.7 - LIMITAION OF THE STUDY:
Every study has one or the other limitations, which limits the study. The
following are the limitations of the study:
1. The main limitation is the time factor.
2. The study confined only to BajajAllianz private life insurance company
Davangere city.
3. Sample size may give biased answers.
4. The sample selected represents the whole of the population.
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2.1 – Meaning and definition:
Meaning:
The business of insurance is related to the protection of the economic value of
assets. Every asset has a value .The asset would have been created through the efforts of
the owner, in the expectation that, either through the income generated there from or
some other output. There is a normally expected lifetime for the asset during which time
it is expected to perform. The owner aware of this can so manage his affairs that by the
end of the lifetime, a substitute made available to ensure that the value or income is not
lost. However, if the asset gets lost earlier, being destroyed or made nonfunctional,
through an accident or other unfortunate event, the owner and those deriving benefits
there from suffer. Insurance is a mechanism that helps to reduce such adverse
consequences.
Definition:
In India, the Indian Contract Act, 1872 governs commercial contracts. Insurance
is a specialized type of contract, in that, apart form the usual essentials of a valid contract,
insurance contracts are subjected to additional principles viz. principle of utmost good
faith and principle of insurable interest. These apply to both life and non-life classes of
Insurance.
Life insurance is the only instrument, which not only fulfills the need of savings
but also guarantees the fulfillment of the savings plan.
Life insurance provides a wide range of plans to meet the life cycle needs. The
need of a person who desires to provide the family with a large sum on his death at a very
low cost can be met by availing whole life assurance plan. The person who wants to have
sum assured at his old age on maturity of the plan or wants to make the sum assured to be
provided to his family on death can avail of endowment plan. The need of children’s
education and marriage can be met by the insurance plan specially designed for
marriage/education. The maturity benefits are paid by way of survival benefits in regular
installments to meet the needs arising at various stages under money back plan.
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2.2 - Purpose & Need of Insurance
Assets are insured, because they are likely to be destroyed or made non-
functional, through an accidental occurrence. Such possible occurrences are called perils
and there could be difficulties. Living too long can be as much a problem as dying too
young. These risks which need to safeguard against. Insurance takes care.
Insurance only tries to reduce the impact of the risk on the owner of the
asset and those who depend on that asset. It compensates, may not be fully, the losses.
Only economic or financial losses can be compensated.
There are certain basic principles, which make it possible for insurance to
remain popular and a fair arrangement. The first is the fact that people are exposed to risk
and that the consequences of such risks are difficult for any one individual to bear. It
becomes bearable when the community shares the Burdon. The second is that no one
person should be in a position to make the happen. In other words, none in the group
should set fire to his assets and ask others to share the costs of damage. This would be
taking unfair advantage of an arrangement put into place to protect people from the risks
they are exposed to. The occurrence has to be random, accidental, and not the deliberate
creation of the insured person.
2.3 - Role of insurance in economic development:
For economic developments, investments are necessary. Investments are made out
of savings. A life insurance company is a major instrument for the mobilization of
savings of people, particularly from the middle and lower income groups. These savings
are channeled into investment for economic growth.
As on 31-3-2000, the total investment of the LIC exceeded 147,000 cores, of
which more than Rs.84, 000 cores were directly in Government (both Sate and Centre)
related securities, nearly Rs.12, 000 cores in the State Electricity Boards, Rs.16,000 cores
in housing loans and Rs.3,000 cores in water supply and sewerage systems. Other
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investment included road transport, setting up of industrial estates and directly financing
industry. Investment in the corporate sector (shares, debentures and term loans) exceeded
lives of the people and their economic well being. The LIC like other good life insurance
company, has huge funds, accumulated through the small payments of premium of
individuals, and is a powerful contributor for the economic development of the country.
A life insurance company’s strength lies in the fact that huge amounts are
collected and pooled together. These amounts come by way of premiums. Every premium
represents a risk that is covered by that premium. In effect, therefore, these vast amounts
represent pooling of risks. The funds are collected and held in trust for the benefit of the
policyholders. The management of life insurance companies is required to keep this
aspect in mind and make all its decision in ways that benefit community. This applies
companies would not be found investing in speculative ventures. Their investments, as in
the case of the LIC benefit the society at large.
In order to be amenable to statistical predictions, insurance risks must be handled
must be handled on a large scale. There is, in statistics, a “law of large numbers”. When
you toss a coin, the chance of ahead or tail coming up is half. If the coining is tossed 10
times, one cannot be sure that the head will come up 5 times. If the coin is tossed 1
million times, the number of heads will be closer to half a million proportionately than in
the case of 10. The variation will be less as a percentage. So also, the larger the chances
that the assumptions regarding the probability of the risk occurring, which is the basis of
premium calculation will be realized in practice.
2.4 - Insurance Act 1938:
In 1912, the Indian Life Insurance Companies Act and provident fund insurance
societies Act 1912 was passed. This was the first comprehensive legislation in India to
regulate the business of insurance. It has been observed that the provisions of Indian
Company’s Act did not meet the purpose. A further legislation was assed in 1928.
However, a comprehensive legislation was passed in 1938. The Insurance Act 1938,
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aimed “to consolidate and amend the law relating to the business of insurance” came into
force with effect from 1st July 1939. Important changes were effected in 1950, whereby
provisions were made for the abolition of the chief agents, special agents and principal
agents, the expensed were sought to be limited, investments were controlled much more,
the Insurance Association and Insurance Councils and also Tariff Advisory Committees
were formed as a matter of self-regulation. After nationalization of the insurance
business, the application of the Insurance Act to be nationalized LIC and the GIC and its
subsidiaries was limited. Further amendments have been made in the Insurance Act,
1938, through the IRDA Act, 1999, in view of the new circumstances arising out of the
opening up of the insurance industry in 2000.
2.5 - Insurance Regulatory and Development Authority Act 1999:
This Act was passed by Parliament in December 1999 and it received presidential
assent in January 2000.this Act provides for the establishment of the Authority protect the
interest of holders of insurance policies, to regulate, promote and ensure orderly growth
of insurance industry and for matters connected therewith or incidental there to. It also
sought to amend the Insurance Act, 1938, the Life Insurance Corporation Act 1956 and
the General insurance Business (Nationalization) Act 1972.Under this Act, an authority
called IRDA has been establishment. This is a corporate body established for the purpose
and objects as set out in the explanation to the title. The “Authority” replaces “controller”
under Insurance Act that if “Authority” is superceded by the Central Government, the
“Controller of Insurance” may be appointed till such time as “Authority” is reconstitute
Section 2(f) defines and intermediary or insurance intermediary ot include
insurance brokers, re-insurance brokers, insurance consultants, surveyors and loss
assessors. The Authority has the power and function to specify qualifications, code of
conduct and practical training for intermediaries and agents.
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3.1 - Introduction:
India successfully entered the liberalization of insurance era in 1999. Apparently,
the Indian insurance market is very important to the global community. In addition, India
has one of the top growth rates in either the life of general insurance industries in the
world. India, with a population of more than one billion is potentially going to be the
largest insurance market in the world may be next to China. The Indian insurance
industry has been underdeveloped throughout recent history. There were only 6 insurance
companies in India in the beginning of 2000. More importantly, regulation of the
insurance industry has not been able to keep pace with the rapid growth of Indian
insurance market and new products in the current market driven economy. As for
examples where are the specific regulation in areas such as crop insurance, credit
insurance, health insurance and return linked general insurance business. It is an
important task for Indian authorities to develop a well functioning insurance market,
which will not only provide security for Indian people and their corporations, but will
also enhance the development of the Indian economy.
It is well recognized that risk management and insurance provides five categories
of service that are critical to economic growth.
3.2 - ADVANTAGES AND DISADVANTAGES OF MORE FOREIGN
PARTCIPATION IN INDIAN INSURANCE MARKETS:
The advantages of more foreign participation in Indian insurance markets-
1. Improvement in customer service and value.
The Indian insurance industry is relatively new, especially in personal lines and in
a majority of commercial lines despite boasting for a long stint in the market.
With hundreds of years of meaningful experience, foreign insurance companies
are definitely able to provide new and diverse products that meet the needs of
Indian markets. There have been many favorable experiences in Indian. For
example many different types of new life insurance such as universal life
insurance and variable life insurance have been introduced in India more notable
most ,Indian insurance companies whether domestically owned or joint venture
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have recognizes that service competition should more important than price
competition. The concept of service competition is a result of foreign insurance
companies participation though joint venture. While adequate insurance premium
are important to consumers, consumer services are more critical the IRDA should
encourage insurance companies to focus on not only advocate premium but also
insurance services. No doubt domestic companies are still considered more
credible at market place but they have improved their service in reaction to
happening around. If liberalisation would not have happened the customer did not
have the option to precipitate improvement
2. Transfer of technological and know how
This is probably one of the most important reason why India should keep
allowing foreign institution to participate in Indian insurance market it is apparent
that large international companies have expertise in underwriting, marketing,
ratings, investment, and other operations. To ensure foreign technology and
expertise India should encourage domestic companies to learn and adopt new
technology and develop new product as long as domestic Insurance companies
stay competitive, foreign insurance companies need to utilize and transfer the
most advanced technology to India so as to compete with India’s domestic
insurance companies.
3. Additional external financial capital
It is true foreign insurance companies will provide capital inflows to Indian
domestic economy when the joint venture is first established. However it should be
noted that there would be capital outflows when the joint venture becomes profitable.
In the long run there may be more capital outflow than the capital inflow.
To reduce capital outflow India needs to provide stable economic and political
environment so that foreign insurance companies reinvest their profits in India.
4. Creation of beneficial domestic spillovers
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Foreign insurance companies can create some types of beneficial domestic
spillovers because foreign insurance companies realy on the services of Indian
companies through joint venture. Other backward linkages include banks, accounting
firms, law firms and BPO services.
India should capture this excellent opportunity and advance technology in
banks, accounting firms, law firms and BPO services to fulfill the needs of foreign
companies, including insurance companies. These are the internal wings of the value
chain. There can be both internal and external wings of the value chain. External
wings of value chain can be harnessed by tapping into the retrocession and
securitization markets in the country or hinterland of the foreign partner.
Disadvantages:
The concerns of more foreign participation in Indian insurance markets
It is critical that India recognizes these concerns and tries to minimize the
negative impact of the entrance of foreign insurance companies on the Indian economy or
on its domestic insurance companies.
1. Foreign insurer will dominate the domestic markets.
One possible method for insurers to dominate markets is dumping. That is
insurance can sell their products below cost to gain market share even if foreign insurer
has attempted or does attempted to gain market dominance by dumping, the effects seen
more likely to be positive than negative for citizens and the economy. While consumers
may enjoy the low cost of insurance in the short run, they may suffer large losses in the
long run when insurance companies go bankrupt. The reason is that some insurance
companies try to gain market share by offering below cost premiums and eventually
become insolvent. Unlike regular products, insurance provide futures services and
payments and thus, adequate premium are typical to the protection of consumers.
The decision maker should worry more about whether the presence of foreign
insurance companies will increase the quality of insurance products and services and
decrease the price, than dominating the domestic markets. At the same time, adeaquate
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premiums, rather than below cost premiums, will benefit consumers in the long run. The
IRDA should closely watch inadequate premiums or abnormally high promised interest
rates in life insurance policies.
2. Foreign insurers will service the market selectively.
Foreign insurers only service the market selectively is valid, although a
competitive system will eliminate this concern. It is not uncommon for insurers to service
only select markets. For example, without regulatory intervention, most insurance
companies in the developed countries would not sell insurance in the residual or high risk
automobile insurance market.
While most foreign or domestic insurers currently focus their efforts on the large
cities of India, they need to understand that they are required to sell insurance in the rural
areas, or north eastern states, that are not as populated or profitable. This kind of practice
may not be a major problem today because insurance needs are not great in the rural areas
and such states .However, the IRDA needs to make sure the future needs in those areas
are fulfilled. One way to solve this problem may lie in developing a plan similar to the
auto insurance plan in developed countries. Specifically the IRDA may develop a plan so
that all the insurance companies in India need to write their proportionate share of
insurance in the rural areas and neglected states based on the total volume written in the
big cities of India a mere regulatory lip service will give the willful errant a perpetual
escape route.
3. Market opening should await certain reforms
It is true that insurance regulations in India might not be 100% ready to regulate
either foreign or domestic insurance company in a deregulated and liberalized market.
However, India has recently passed many insurance laws and regulations to help
regulate insurance companies, insurance brokers and new products partly because of
entrance of foreign insurance companies.
More reforms, laws and regulations are needed to regulate the Indian insurance
industry. To have a healthy insurance industry, insurance laws and regulations need to be
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updated all the time. Regulatory inundation should not be as per the understanding and
convenience of the regulator of the day but as per the strategic requirement of the market.
3.3 - About IRDA
Insurance regulatory and development authority act 1999:
This act was passed by Parliament in December 1999 and it received presidential
assent in January 2000. This act provides for the establishment of the authority protect
the interest of holders of insurance policies, to regulate, promote and ensure orderly
growth of insurance industry and for matters connected therewith or incidental there to.
It also of sought to amend the Insurance Act, 1938, the Life Insurance Corporation Act
1956 and the General insurance Business (Nationalization) Act 1972. Under this Act, an
authority called IRDA has been establishment. This is a corporate body established for
the purpose and objects as set out in the explanation to the title. The “Authority” is
superceded by the Central Government, the “Controller of Insurance” may be appointed
till such time as “Authority” is reconstituted.
Section 2 (f) defines and intermediary or insurance intermediary to include insurance
brokers, re-insurance brokers, insurance consultants, surveyors and loss assessors. The
Authority has the power and function qualifications, code of conduct and practical
training for intermediaries and agents.
Duties, Powers and Functions of IRDA
Section 14 of IRDA Act, 1999 lays down the duties, powers and functions of IRDA.
(1) Subject to the provisions of this Act and any other law
for the time being in force, the authority shall have the duty to regulate, promote and
ensure orderly growth of the insurance business and re-insurance business.
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(2) Without prejudice to the generality of the provisions contained in sub-section the
powers and functions of the Authority shall include, -
(a) Issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration;
(b) Protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts of insurance;
(c) Specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents;
(d) Specifying the code of conduct for surveyors and loss assessors;
(e) Promoting efficiency in the conduct of insurance business.
(f) Promoting and regulating professional organizations
connected with the insurance and re-insurance business.
(g) Levying fees and other charges for carrying out the purposes of this Act;
(h) Calling for information from, undertaking inspection of, conducting enquiries and
investigations including audit of the insurers, intermediaries, insurance intermediaries
and other organizations connected with the insurance business.
(I) Control and regulation of the rates, advantages, terms and conditions that may be
offered by insurers in respect of general insurance business not so controlled and
regulated by the Tariff Advisory Committee under section 64U of the Insurance Act,
1938 (4 of 1938);
(j) Specifying the form and manner in which books of account shall be maintained and
insurers and other insurance intermediaries shall render statement of accounts;
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(k) Regulating investment of funds by insurance companies;
(l) Regulating maintenance of margin of solvency;
(m) Adjudication of disputes between insurers and intermediaries or insurance intermediaries;
(n) Supervising the functioning of the Tariff Advisory Committee;
(o) Specifying the percentage of premium income of the insurer to finance schemes for
promoting and regulating professional organizations referred to in clause (f);
(p) Specifying the percentage of life insurance business and general insurance business
to be undertaken by the insurer in the rural or social sector; and
(q) Exercising such other powers as may be prescribed
The IRDA has a cell that receives and looks into complaints from policyholders—
Life and Non-life grievances are handled separately.
The Cell plays a facilitative role by taking up such complaints with the respective
insurers.
Cases of delay/non-response in matters relating to policies and claims are taken
up with the insurers for speedy disposal.
Complaints relating to these are analyzed and insurers are advised to examine the
same. If required, their attention is called to specific issues for examination/re-
examination. However, if the insurer does not change its stand even after examination/re-
examination, the complainant is informed of the same. The Authority does not carry out
any adjudication. For this, the complainant would have to approach the appropriate
judicial channel.
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4.1 MEANING AND DEFINITION OF CONSUMER/CUSTOMER BEHAVIOR
The aim of marketing is to meet and satisfy target customers needs and wants. the
fields if consumer behavior studies how individuals, groups, and organizations select,
buy, use and dispose of goods and services, ideas or experiences to satisfy their needs and
desires.
In the other words Prof. Walter C.G. and Prof. Paul G .W, it is “the process where
the individual decide, whether, what, when, where, how and from whom to purchase
goods and services.” It encompasses the decision making process that proceeds and
determine purchase.
Understanding consumer behavior and knowing consumer are never simple. The
marketers must study there target customers wants, perception. Preferences and shopping
and buying behavior.
Type of customer
1. Impulsive customer
2. timid or nervous customer
3. snobbish customer
4. Deliberate customer
5. argumentative customer
6. Price minded customer
7. Talkative customer
8. Silent customer
9. Suspicious customer
10. Women customer
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4.2 THE MAJOR FACTORS AND DETERMINANTS OF BUYER BEHAVIOR :
I. CULTURAL FACTOR:
Diksuchi Study Center, Davanagre.
CULTURALCulturalSubcultureSocial; class
SOCIALReference GroupOpinion LeaderFamilyRoles and Statuses
ECONOMIC
Personal IncomeFamily Income Income ExpectationLiquid AssetsConsumer CreditStandard of Livingst
PERSONAL
Age and Life Cycle StageOccupationEconomic CircumstancesLife StylePersonality and Self Concept
ENVIRONMENTAL
PoliticalLegalTechnologicalEthical
PSYCHOLOGICALMotivationPerceptionLearningBelieves and AttitudesPersonality
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Cultural factors exert the broadest and deepest influences on consumer behavior.
The roles played by the buyer’s culture, subculture and social classes are particularly
important.
1. Culture
Culture is the most fundamental determinant of a person’s wants and behavior.
Culture refers to all those symbols, artifacts and behavioral patterns that are passed on
socially from one generation to the next, culture are specific to the areas in which they
evolve.
2. Subculture
Each subculture consists of smaller subculture that provides more specific information
and socialization for its members. Subculture includes nationalities, religion, racial
group and geographical region. Many subcultures make up important market segment
and marketers often design products and marketing program tailored to their needs.
3. Social class
Social class is relatively homogenous and enduring division in a society. Which are
hierarchically ordered and whose members share similar values interest and behaviors.
Social class do not reflect income along but also other indicators such as occupation
education and area of residence, social class differ in their dress, speech pattern,
recreational preferences and many other characteristics.
II. SOCIAL FACTORS
In addition cultural factors consumers’ behavior is influenced by such social factors
like reference group, opinion leader, family and roles and status.
1. Reference group
Reference groups are those groups, which an individual identified with to the extent
that those groups became a standard or normal, which influenced his behavior.
Reference group is a social and professional group that influences the individual
opinion, beliefs and aspiration. It is one that provides an individual with a sense of
identity, accomplishment and stability. Group influences is seem in brand reference
and choices.
2. Opinion leader:
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The individual to whom such reference is made by a person or person is the opinion
leader. The beliefs, preferences attitudes, action and behavior of the leader se a trend
and a pattern for other to follow in given situation. In every in timate reference group,
there is a reference person, an informal group leader. He is the innovator in the group
who first tries new ideas and products and them propagates them to his followers.
Marketers very often try to catch hold of the opinion leaders through ads and other
means of communication. If they succeed in selling their ideas and products to the
opinion leader then they have sold it to the entire group of followers behind them.`
3. Family
Family is the most important consumers buying organization in society and it has
been researched extensively. A family member of orientation consists of ones parents
and siblings. From parents live with their grown children their influences can be
substantial.
Marketers are interested in the roles and relatively influences of the husband wife and
children in the purchase of a large variety of products and services.
4. Roles and statuses.
A person participates in many group throughout life-family, clubs organization. The
person’s position in each group can be defined in terms of roles and status. A role
consists of the activities that a person is expected to perform.
Each role carries a status. A supreme court justice has more status than a sales
manager has more status than an office clerk, people choose products that
communicate their role and status in the society.
III. ECONOMIC
The purpose of demand creation activities require not only intensifying the desire of a
person to go in for brand but also to give him buying power which translates desire in to
actual purchase. The buying power depends on following factors.
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A. PERSONAL INCOME
Income means purchasing power. Gross income of a person is composed of
“disposal income” and “discretionary income”. The disposal personal income is the
balance after subtracting taxes and compulsory deduction from gross income. Any
change in disposal income will have change in consumer buying decision. Decline in
disposal income reduces the consumer spending: however, whom disposal income raises,
consumer spending not only rises but makes them to go in for more and more of luxuries.
“Discretionary income” is the income, which is available after meeting basic needs of
living. It is residual disposal income left after meeting all expenses essential to provide a
minimum subsistence needs to a family.
B. FAMILY INCOME
Since an individual is a part of his family, it is the aggregate income of all members
of the family, which determines the buying power of an individual. The surplus income in
the entire family, after deducting expenditure on basic needs of the family is made
available for buying durable. The size and life style of the family also have impact on a
family – buying behavior.
C. INCOME EXPECTATION
The behavior also depends on the expectation of the future income. If a person
expects future rise in his income, he purchases durable such as car, refrigerator, sofa-set,
etc. if his future income is likely to decline, he will restrict current expenditure to bare
necessities.
D. LIQUID ASSET
Liquid asset of consumer are the assets held in the money on near – money forms of
investments, for ex hard cash, and bank balance, share and bonds and saving certificates.
These liquid assets are building up to buy some consumer durable on to meet unexpected
future needs or contingencies.
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E. CONSUMER CREDIT
Paucity of consumer credit has its impact on consumer buying behavior,
consumer credit takes number of shapes like deferred payment, installment, hire purchase
arrangements and the like. Easy availability of consumer credit makes the consumer to go
in for that consumer durable.
F. STANDARD OF LIVING
The consumer behavior has the impact on the established standard of living to which
he is accustomed. Even if the consumer income goes down. The consumer spending will
not come down proportionately. Because, it is very difficult to come from an established
standard of living.
IV. PERSONAL:
A buyer’s decisions are also influenced by personal characteristics. These include the
buyer’s age and stage in the life cycle, occupation, economic circumstances, lifestyle and
personality and self-concept.
1. AGE AND STATE IN THE LIFE CYCLE:
People buy different goods and services over their lifetime. The consumption is
also shaped by the family life cycle. The stages of the family life cycle depend upon the
financial situation and typical product interests of each group marketers often choose life
cycle groups as their target market.
2. OCCUPATION.
A person’s occupation also influences his or her consumption pattern. Marketers
try to identify the occupational groups that have above average interest in their products
and services.
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3. ECONOMIC CIRCUMSTANCES:
Product choice is greatly affected by one’s economic circumstances. People’s
economic circumstances consist of their spend able income, savings and assets, debts,
borrowings power and attitude towards spending versus saving.
Marketer of the income – sensitive goods pay constant attention to trends in personal
income savings and interest rates. If economic indicator point to a recession, marketers
can take steps to redesign reposition and re-price their products so they continue to offer
value to target customer.
4. LIFE STYLE
People coming from the same subculture, social class and occupation may lead
quite different life styles.
A person’s life style is the person’s pattern of living in the world as expressed in
the person’s activity interest and opinions. Marketers search for relationships between
their products and life style groups and the marketers then the brand more clearly at the
achiever life style.
5. PERSONALITY AND SELF - CONCEPT
Each person has a distinct personality that influences his or her buying behavior.
Personality means a person’s distinguished psychological characteristics that lead to
relatively consistent and enduring responses to his or her environment.
Personality is usually described in terms of such traits as self confidence, dominance,
autonomy, deference, sociability, defensiveness and adaptability; personality can be
useful variable in analyzing consumer behavior provided that personality types can be
classified accurately and that strong co-relation exist between certain personality types
and product or brand choices.
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V. ENVIRONMENTAL FACTORS:
1. Political factors can influence the sale and purchase of products of one
company and another that indirectly affects the buying behavior.
2. Legal factors are the factors which are governed by the rules and
regulations of the government and the entry and exit of products may be
slow or fast and buying and declining may affect.
3. Technological factors may be another factor for improvements or
advances in new products or present products and this improvement in
technology may change the buying behavior pattern.
4. Ethical factors may be the rules and regulation or moral conduct of the
seller or the manufacturer with the product and services and of the
relations with the customers. This is the main factor for buying behavior
of the customers.
VI. PSYCHOLOGICAL FACTORS :
A person’s buying choices are influences by five major psychological factors.
1. MOTIVATION
A person as many needs at any given time. Some needs are biogenic tension such
as hunger, thrust, discomfort other needs is psychogenic, then arise from psychological
states of tension such as the need for recognition esteem or belonging. Most psychogenic
needs are not intensive enough to motivate the person to act on them immediately. A
need becomes a motive when it is aroused to a different level of intensity. A motive is
need that is sufficiently pressing to drive the person to act.
2. PERCEPTION
Perception gives the direction to be taken by the behavior. It is the meaning that
consumers give on the basis of its past experience consumers sense perceives the color
shape sound smell taste etc of its stimuli. The consumer has his own, selective exposure,
selective distortion, selective retention and selective action. i.e., the consumer as his own,
decision whenever messages broadcast by the marketers through their promotional tools.
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3. LEARNING
When people act they learn. Learning involves changes in an individual behavior
arising from experience. Most human behavior learnt. Learning theories believe that
learning is produced through the interplay of drives, stimuli, cues responses and
reinforcement.
‘Drive refers to an internal state of tension, which warrants action. A “cue” is an
environmental stimulus. Responses represent the person’s reaction to cues within his
environment. Reinforcement is the response reward.
4 BELIEVES AND ATTITUDES
Through doing and learning people acquire believes and attitudes. These in turn
influence their buying behavior.
A belief is the description throughout that a person holds about something.
Manufactures are very interested in the believes that people carry in their heads about
their products and services. These beliefs make up product and images and act on their
images.
An “attitude” is a person enduring favorable or unfavorable evaluations emotional
feelings and action tendencies toward some object or idea. People have attitudes toward
almost everything: religion, politics, clothes, music, food and so on. Attitudes put them in
to a frame of mind of liking or disliking an object, moving toward or way from it.
Attitudes lead people to behave in a fairly consistent way towards similar objects.
1. PERSONALITY
Personality refers to the essentials difference between one individual and another.
There fore, personality consists of mannerisms, habits, action that make a person an
individual and there by serve to make him distinct from every one else. Personality
interplay of three component namely, the “id, the ego, and super ego”.
The “id”, the source of all mental energy which drives as to action.
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The “ego”, the conscious directs of “id” impulses for finding satisfaction in
social accepted manner. It represents our basic impulses and total
satisfaction.
The “super ego”, the internal representation of what is socially approved our
conscience i e, it reflects our idealized behavior patter.
BUYING DECISION We can distinguish five roles people might play a buying decision,
1. INITIATOR: a person who first suggest the idea of buying the product or
service.
2. INFLUENCER: a person who view or advice influences the decision.
3. DECIDER: A person who decides on any component of a buying decisions:
whether to buy, what to buy, how to buy, where to buy.
4. BUYER: The person who makes the actual purchase.5. USER: the person who consumes or uses the products or service.
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5.1 Introduction
The purpose of all business is to create and retain the customers. Without
customers, their can be no business. Customer does not come on their own. They have to
become aware of availability of the goods or services on offer. Awareness is not enough.
It must be convenient to access the offer. The cost must be seen to be reasonable for the
benefits offered. An excellent produce does not guarantee that sales will happen, unless
people interest in that product come to know about it and find that the efforts to get it is
not too taxing. They will continue as customers when they are satisfied with what they
have got. Business, therefore, has to inform the likely customers through media that reach
them, make the goods and services available at convenient outlets and ensure that the
customers experience satisfaction while using them. Marketing is the activity that
comprises of all these. It focuses on the customers.
The marketer asks questions like what do people buy ,why do they buy (what are
the needs,) when and where do they buy, how do they buy, what are their preferences and
priority, what do they look for while buying, what are their concepts etc. the products
and the distributions are the design in a ways that try to match these requirements.
Studies over the years have developed ideas and concepts that help the marketers become
more effective in their function.
Marketing concepts relevant tangible products like motorcar, refrigerator and
cosmetics are not entirely applicable to the service business, like hotels, finance,
healthcare, credit cards or travel. Every service is different. The needs of their customers
are different. The ways of production the services are different. Every service is catering
to a different kind of need and is different in the internal dynamics of making the service
available. Those entering causality a department of the hospitals. The two places cannot
have the same ambience. Even in insurance, life is different from general. This chapter
deals with the some of the important concepts relating to marketing of life insurance
keeping in mind the responsibilities and functions of the agents.
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5.2 The distribution channel
A distribution channel is the route by which the product (or offer) prepared by the
producer reaches the ultimate consumer (or buyer). The distribution channel bridges the
distance between the producer (point of manufacturer) and the consumer (point of sale).
In the case of goods, the product manufacture in the factory passes through wholesalers,
stockiest and retailers, before it reaches the customer. In the case of life insurance, the
agent is equivalent of the retailer. The supervisor of agents, by whatever name called, is
an important part, because it is he who, by creating and training agents, makes the
channel effective. New agents widen the channel.
Equally important would be the other intermediaries, like brokers and insurance
consultant. Some life insurers are trying to eliminate intermediaries to save costs. Direct
selling is one such attempt. This is increasing in foreign countries. In India, people, by
and large know about life insurance, but still have a lot of wrong notions about it.
Personal contracts by agents may continue to be necessary for quite some time.
Another method being attempted is the use of the extensive network of branches of
banks. The customer of both banks and life insurers are practically from the same
segments of population. Through the same contact, the prospect can be helped to arrange
for both bank deposits and life insurance. There would be saving in infrastructure costs
and overhead. New insurers find this an easy way composite product having the elements
of both life insurance and banking. These trends have to develop.
5.3 Sold not bought:
Life insurance is not bought by anybody. General insurance is often bought
because there are compulsions under the law (motor vehicles) or from the financiers
asking for insurance as collateral security. In the case of tendency is to defer the decision.
The possibility of death is either ignores or not considered imminent. The requirements of
today take priority over the requirements if tomorrow. Even if not absolutely essential,
the requirements of today seen to be more compelling. Tomorrow never comes.
Superstitious belief and cultural or religious background often interfere with the process
of considering the usefulness of life insurance. There are notions about life insurance not
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being a good investment (yields are low, the money after 20 years is worth much less)
and so on. By the time some one realizes him the need for life insurance, the chances are
that he may not be in the best of health and the insurer may have doubts about the
insurability. Life insurance has to be had when in the best of health. Otherwise, the and
motivations of the former. The latter is likely to be a case of moral hazard and must be
looked at more insurer will refuse to grant the insurance cover. In this complex milieu,
people need to be persuaded that there is need to be concerned about the future and life
insurance is a necessity, not an option. Insurance has to be sold.
The person, who is met by an agent at his normal place or work or residence, is a better
risk than the who comes to the office and asks for insurance. The agent, who is the
primary underwriter, can study and report on the circumstances carefully.
5.4 The customer:
The service of life insurance happens at the time of claim, when people will
experience how the promises are being kept. Until then, it is a hope, a promise the
significance of which is vague. The customer in life insurance is not only the person who
bought the policy, but also the person who is making the claim. He is the one experience
the service. This difference is not only in death claim cases. Even the case of maturity
claim, where the claimant is the same as the policy holder of life insured, the two minds
sets are different. At the start, at the buying stage, the mind set is one of anxiety and fear
at the possibility of satisfaction that nothing untoward had happened, but also there could
be disappointment that the moneys could have been utilized elsewhere better.
Claimants of death benefits are persons different from the one who had taken out
the policy and perhaps know little about the circumstances and conditions under which
the policy was taken or had been looked after. They may not are familiar with their
entitlements under the policy. They an importantly member of the family. The insurers
will ask for information and documents of various kinds to decide on the admissibility of
the claim. There would be the insurance company, who helps the claimant in finding the
right information and in completing the formalities, will be providing great satisfaction. If
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the agent who sold the policy is not available for any reason, the office can depute
another person or another agent.
5.5 strengthening relationships:
The agent is the main intermediary between the customer and the insurer. The
customer agent link is stronger than the agent company link (this tends to be impersonal),
which in turn, is stronger than the customer is. A death claim provides a tremendous
opportunity to strengthen this link.
The agent is expected to keep in constant touch with his policy holders to become
aware of the changes in his situation including marriages, deaths of relatives, release of
mortgages. Anyone of them may necessitate some changes like to policy moneys or more
insurance. The contact conveys a message that the agent cares for the policyholder and
the family. An agent who is seen only at the time the policy was being bought, is likely to
be perceived as selfish, not concerned about the policyholder’s interests and therefore,
not believed. The agents show of concern could be interpreted as not genuine and
therefore, his promises not very dependable.
A study made by the insurance institute of India in 1987, by interviewing 2510
policyholders in 26 cities, had the following observations.
Agents do not maintain regular contact with policyholders, although they are seen
as available whenever necessary.
50% said that if they had any work to be done, they would go to the office directly
rather than get in touch with the agent.
Agents are perceives as knowledgeable, but also as concerned more with their
own benefits than those of policyholders.
These observations reflect badly on the agents.
5.6 Functions of agent:
The agent’s main function is to solicit and procure life insurance business for the
insurer, which has appointed him for that purpose. At the same time, he is trusted by
the prospects to advise him suitably keeping his circumstances and needs in mind. He
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is thus in the unique role of a person trusted by both parties to the transactions. His
functions would include.
Understand the prospect’s needs and persuade him to buy a plan of life
insurance that suits his interests best.
Complete the formalities (paper work, medical examination) necessary to get
policy expeditiously.
Keep in touch to ensure that changing circumstances are reflected in the
arrangements relating to premium payments, nomination and other necessary
alterations.
Facilitates quick settlement of claims.
Be totally honest with the prospects and the insurer.
The regulations framed by IRDA lay down a code of conduct, which incorporates
some of these concepts. The code says interalia that the agent shall.
Identify himself and the insurance company of which he is an agent.
Disclose the license to the prospect on demand.
Explain all available options to the prospect.
Recommend a suitable plan taking into account the needs of the prospect.
Disclose the scales of commission, if asked for by the prospect.
Explain the nature and importance of the information required in the
proposal form.
Impress upon the prospect the need to disclose all information.
Make all enquiries about the prospect.
Inform the insurer about any material facts, including habits that could
adversely affect the underwriting decision.
Convey to the prospect about the acceptance or rejection of the proposal.
Render necessary assistance to policyholders or clients or beneficiaries in
complying with requirements asked for by the insurer.
Advice policyholders to effect nomination.
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Make every attempt to ensure remittance of premiums by the
policyholders within the stipulated time, by giving notice orally and in
writing.
Not to induce prospects to submit wrong information.
Not to interfere with the proposals introduced by other insurance agents.
Not demand or receive from beneficiary, share of proceeds under an
insurance contract.
Not cause the termination of an existing policy with the view to effect a
new proposal.
5.7 Advertisements:
Life insurance is brought as a response to advertisements. Advertisements
are effective.
As reminders to intimate change of address, pay premium, make nominations etc.
As information on bonus declaration, special revival schemes, concessions, new
plans, etc.
To build corporate image as financially strong, as responsible social citizen, etc.
The regulations framed by the IRDA have made some stipulation about
advertisements by insurer as well as by intermediaries like agents. These stipulation
apply to all messages in the print and electronic media, hoardings, internet, leaflets,
business cards, etc., that urge others to buy life insurance. These stipulation, inter alia,
state that
Claims made about the benefits should not beyond the ability of the policy to
deliver.
Benefits described should match policy provisions
Words or phrases should not be used in such a way as to hide or minimize
the cost of hazards
Important exclusions, limitations and conditions of the contract should be
disclosed sufficiently.
Information should not be misleading.
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Illustrations about future benefits or assumptions should not be unrealistic or
unrealizable in the light or current performance
Benefits that are not guaranteed should not be referred to in ways that they
are not noticed
There should be no implication of sponsorship affiliation or approval that
does not exist
There should not be any unfair or incomplete comparisons with products of
competitors
Those who have received policy moneys on the death of the life insured, are the
best endorsements for a life insurer. They are the ones who have experienced what life
insurance means and know what is can do differently from other financial arrangement.
They know how it feels when a previously determine amount comes in at a time
foreclose mortgages and attach property. Satisfies claimants are powerful and effective
as is the most effective endorsement. In insurance it is particularly so. The word of
mouth is an endorsement, not only need for the life insurance, but also for the insurer
and the agent in particular.
5.8 Keeping customer happy:
A customer satisfied when the product meets his needs. In life insurance, this
happens at the time of the claim, which is a long way off. It is important to keep him
happy during this period, to avoid what is called ‘Cognitive Dissonance’. This arises
because of doubts about the decision to buy. In the case of life insurance, such doubts
may easily arise because others (friends and agent) will talk about better alternative plans,
better insurers, and so on. The only way to counter these possibilities is to be in touch
with the prospect and reassure him at every possible opportunity that the purchase he
made was not a mistake. In other words, the agent will be effectively repeating the sales
talk, overcoming objections, till the benefits are seen through claims.
Studies show that people are happy when they are recognized and respected and
not taken for granted. Recognition happens when one’s feelings, requirements etc., are
understood and not ignored. Agents can do lot in terms of recognizing people. One way
is to be available whenever the prospect or the policyholder has a point for clarification.
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These may happen during the policy term itself, when a change in job or place may raise
doubts as to the effected on the policy. Another say is to avoid denying the validity of his
thoughts. These are nothing more demeaning than to be discredited for one’s ideas. This
is important while handling objections during a sale. Recognition is high when the
thoughts of the other person are anticipated.
Two other factors, which make customers happy, are Responsiveness (willingness
to help) and Ease of Access. On both counts, agents can do much more than what the
insurer’s office can do. It is difficult for an office to be warm and personalized when
dealing with anybody. The agent can. Some agents do not let the policyholders go to the
office at all. They get everything done. Such agents are reinforcing the impressing that
the agent is trustworthy and can be depended upon to fulfill his promises. The image of
the insurer remains high.
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6.1 -Vision and Mission:
Vision
A household name in India teams up with a global conglomerate...(Or)
[
Combining a strong reputation in India and a global experience in
insurance business worldwide, Bajaj Auto and Allianz come together for
the Indian Operations...
Mission
To protect the interests of the policyholders, to regulate, promote and
ensure orderly growth of the insurance industry and for matters connected
therewith or incidental thereto.
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3.2
Sam Ghosh, (CEO Bajaj Allianz private ltd)
CEO of Bajaj Allianz Life Insurance said: "We are
confident that Bajaj Allianz Life Insurance will strengthen its
leadership position with Ajay’s (Head of Sales) dynamic
leadership. His tremendous track record in developing sales
leadership in existing and new markets will further
accelerate our growth in India & also enable us to become
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Market Research on existing policies and study to device new policies in Insurance
the market leader in the Life Insurance among the private
players”
6.2 - Introduction about Bajaj Auto Ltd
Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is the
largest manufacturer of two-wheelers and three-wheelers in India and one of the largest
manufacturer in the world.
A household name in India, Bajaj Auto has a strong brand image & brand loyalty
synonymous with quality & customer focus. With over 15,000 employees, the company
is a Rs. 4000 crore auto giant, is the largest 2/3-wheeler manufacturer in India and the 4th
largest in the world. AAA rated by Crisil, Bajaj Auto has been in operation for over 55
years. It has joined hands with Allianz to provide the Indian consumers with a distinct
option in terms of life insurance products.
As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has the
following to offer -
Financial strength and stability to support the Insurance Business.
A strong brand-equity.
A good market reputation as a world-class organization.
An extensive distribution network.
Adequate experience of running a large organization.
A 10 million strong base of retail customers using Bajaj products.
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Advanced Information Technology in extensive use.
Experience in the financial services industry through Bajaj Auto Finance Ltd
A STRONG INDIAN BRAND- HAMARA BAJAJ
One of the largest 2 & 3 wheeler manufacturer in the world
21 million+ vehicles on the roads across the globe
Managing funds of over Rs 4000 cr.
Bajaj Auto finance one of the largest auto finance cos. in India
Rs. 4,744 Cr. Turnover & Profits of 538 Cr. in 2002-03
It has joined hands with Allianz to provide the Indian consumers with a distinct
option in terms of life insurance products.
As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has the
following to offer -
Financial strength and stability to support the Insurance Business.
A strong brand-equity.
A good market reputation as a world-class organization.
An extensive distribution network.
Adequate experience of running a large organization.
6.3 - Allianz Group
Is one of the world's leading insurers and financial services providers.
Founded in 1890 in Berlin, Allianz is now present in over 70 countries with almost
174,000 employees. At the top of the international group is the holding company, Allianz
AG, with its head office in Munich.
Allianz Group provide its more than 60 million customers worldwide with a
comprehensive range of services in the areas of
Property and Casualty Insurance,
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Life and Health Insurance,
Asset Management and Banking.
ALLIANZ AG- A GLOBAL FINANCIAL POWERHOUSE
Worldwide 2nd by Gross Written Premiums of Rs.4, 46,654 cr.
3rd largest Assets under Management (AUM) & largest amongst Insurance cos. -
AUM of Rs.51, 96,959 cr.
12th largest corporation in the world
49.8 % of global business from Life Insurance
Established in 1890, 110 yrs of Insurance expertise
70 countries, 173,750 employees worldwide
6.4 - Why Bajaj Allianz Life Insurance?
An Impeccable track record across the globe in providing security and cover for
you and your family...
At Bajaj Allianz, realize that you seek an insurer whom you can trust your hard
earned money with.
Allianz AG with over 110 years of experience in over 70 countries and Bajaj
Auto, trusted for over 55 years in the Indian market, together are committed to offering
you financial solutions that provide all the security you need for your family and
yourself.
Bajaj Allianz brings to you several innovative products.
6.5 - Indian Operations:
Growing at a breakneck pace with a strong pan Indian presence Bajaj Allianz has
emerged as a strong player in India...
Bajaj Allianz Life Insurance Company Limited is a joint venture between two
leading conglomerates Allianz AG and Bajaj Auto Limited.
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Characterized by global presence with a local focus and driven by customer
orientation to establish high earning potential and financial strength, Bajaj Allianz Life
Insurance Co. Ltd. was incorporated on 12th March 2001. The company received the
Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3)
No 116 on 3rd August 2001 to conduct Life Insurance business in India.
Bajaj Allianz- THE PRESENT
Over 3,00,000 satisfied customers
Leading private sector insurance company in India
One of the fastest growing private sector life insurer in India
Accelerated Growth
Assets under management Rs 350 cr.
Shareholder capital base of Rs 250 cr.
Pan India network
Wide range of products to suit customers needs.
Decentralized organizational structure for increased response and service levels.
Highest standard of customer service & simplified claims process in the industry
6.6 - About Baja Allianz products:
Baja Allianz Life Insurance Company has developed insurance solutions that
cater to every segment and age-income profiles. Its products include InvestGain (a unique
life insurance plan where sustenance of income is combined in the same plan that also
pays a lump sum), Cash Gain (Money Back), Child Gain (Children’s plan), Risk Care
(Pure Term), Lifetime Care (whole life), Term Care (term with return of premium),
Swarna Vishranti (Retirement Plan), Protector (Mortgage term insurance plan), UnitGain
(Unit Linked Whole of Life Plan), UnitGain Single Premium, Unit Gain Plus & Unit
Gain Plus SP & Lifelong Gain Plan.
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Bajaj Allianz is poised for an accelerated growth in the market and has already
become the fastest growing private life insurance company in India. Bajaj Allianz has a
wide pan India presence of office network in 156 cities of the country and is aided with a
strong and trained Agency network of over 29,000 agents. Bajaj Allianz has also forged
strong Bank assurance and Corporate Agency relationships and continues to build on new
tie-ups for fast track growth and deep market penetration.
Bajaj Allianz has launched a slew of need-based products to cater to each varied needs of
the customer. Currently Bajaj Allianz has a product portfolio of 19 products and more
need-based products are in the pipeline
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6.7- Table showing Names of Private insurance company’s and their CEO’s
Market Research on existing policies and study to device new policies in Insurance
designed to provide you with maximum flexibility, so that you do not have to worry
about your changing needs.
Bajaj Allianz UnitGain Plus offers the unique option of combining the protection
of life insurance with the attractive prospects of investing in securities. You can choose
the investment funds you want to invest your money, providing you with an opportunity
to have a direct stake in the performance of the financial market. You also benefit from
attractive tax advantages and can protect your loved ones against unfortunate events.
How does the plan work?
The premiums paid are invested in fund/funds of your choice (depending on the
allocation rate) & units are allocated depending on the price of units for the fund/funds.
The value of your policy is the total value of units that you hold in the fund/funds. The
insurance cover and administration charges are deducted through cancellation of units.
The Fund Management Charge is priced in the unit value.
Minimum Sum Assured = 5 times the annual premium. Maximum Sum Assured = y
times the annual premium
The five funds offered are as under:
a. Equity Index Fund – The investment objective of this Fund is to provide
capital appreciation through investment in equities. The Plan is expected to match
the returns given by Nifty Index of the National Stock Exchange. This fund will
invest at least 85% in equities and maximum 15% in debt & cash.
b. Equity Plus Fund - The investment objective of this Fund is to provide
capital appreciation through investment in select equity stocks that have the
potential for high capital appreciation. This fund will invest at least 85% in
equities and maximum 15% in debt & cash instruments.
c. Debt Plus Fund - The investment objective of this Fund is to provide
accumulation of income through investment in high quality fixed income
securities like G-Secs, and corporate debt rates AA and above.
This fund will be invested fully in Debt Instruments & money market instruments.
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d. Balanced Plus Fund – This fund is a fund of funds. The investment
objective of this fund is to provide a balanced investment between long-term
capital appreciation and current income through investment in the Units of our
Equity index and Debt plus funds. The balanced fund will invest 30% to 50% in
the equity index fund and 50%to 70% in the debt plus fund.
e. Cash Plus Fund – The investment objective of this Plan is to have a fund
that guarantees invested capital through investments in liquid money market and
short term instruments like Commercial Papers, Certificate of Deposits, Money
Market Mutual Funds, and Bank FDs etc. The price of units in this fund is
guaranteed not to go down.100% of this fund will be invested in money market
instruments. The price of the units in this fund is guaranteed never to go down.
Flexibility – to manage your investments.
We offer you the flexibility to manage your investments. Initially, you can
allocate the premium into the 5 funds that are available in a proportion of your choice.
Subsequently, depending on the performance of funds, you can switch between funds and
also change the allocation of premium to various funds. We allow you three free switches
every policy year subject to a minimum switching amount of Rs. 5,000/- or the fund
value, whichever is lower. You can also change the proportion of premium allocation to
various funds at each policy anniversary.
Unmatched Flexibility- to suit your changing requirements
Bajaj Allianz UnitGain Plus offers you unmatched flexibility to suit the policy
according to your requirements.
Flexibility – In Premium payment: You have the flexibility to decide
how long you wish to pay the premiums and when you want to cash out the policy
benefits. You may choose to cash out the policy benefits at one shot or do it as
and when you require cash through partial surrender of units.
Flexibility - to Increase the Sum Assured: You have the option to
increase the Sum Assured without any medical tests every 3rd year upto 4 times.
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The quantum of increase would be 25% of the original sum assured or Rs. 1,
00,000/- whichever is lower. If you do not exercise an option when it is due, it
cannot be carried forward. This benefit will be available after age 18 and upto age
45. If the age is less than 18 at the start of the policy, all 4 increments will be
available from age 18. Apart from exercising the options to increase the Sum
Assured without medical tests, you can increase the Sum Assured anytime,
subject to medical underwriting (available upto age 60). In either case, the sum
assured after increase must be equal to or less than the maximum sum assured
available for the premium level chosen. You should give notice of increase in
death benefit 15 days before the yearly policy anniversary.
Flexibility - to Decrease the Sum Assured: You can decrease the
Sum Assured (in multiples of 1000) at any time to suit your changing needs. The
Sum Assured, after decrease, must be at least 5 times the annual premium. After a
decrease subsequent increases will be subject to underwriting.
Flexibility - to pay top ups: You may have received a bonus or some
lump sum money. You can use that to increase your investments in your policy.
98% of any amount paid as top-up is allocated to your funds.
Flexibility – to increase the level of Regular Premium
Payment: Your earnings grow over time, and so does your savings potential.
With Bajaj Allianz UnitGain Plus, you have the flexibility to increase your
regular premium amount at any time.
Assured Protection – even if you miss payment of your
premiums: Bajaj Allianz UnitGain Plus provides you with the unique feature
of continued protection even if you forget to pay your premiums. After payment
of 3 full years premiums, when premiums due are not paid, the policy will stay in
force with full benefits so long as there are enough units available for charging the
Cost of Insurance and additional benefits selected after deducting all applicable
charges.
Important Details of the ‘Bajaj Allianz UnitGain Plus’ Plan
Minimum Age at Entry: 0 (Risk commences at age 7, and ceases after age 70)
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Maximum Age at Entry: 60
The minimum age at entry for all additional benefits is 18 years.
The maximum age at entry for all additional benefits is 50 years.
All additional benefits are available till age 65.
Premium Payment Mode
For your convenience, we have provided 3 regular premium payment modes that
can be Yearly, Half-Yearly, and Quarterly. We also offer a monthly premium payment
mode with salary deduction schemes. In addition, you also have the option to pay top-ups
to increase your investments. The minimum premium is Rs. 15,000/- for the Annual
Mode, Rs. 7,500/- for Half Yearly, Rs. 3750/- for Quarterly, and Rs. 1,500/- for the
Monthly Mode. The minimum top-up premium is Rs. 5,000/-.
Partial and Full Withdrawals
UnitGain Plus offers you the full flexibility of full as well as partial withdrawals
by surrendering units, anytime after 3 full years premiums are paid. The surrenders are
paid out at the value of units, and there is no surrender penalty on partial or full
withdrawals after full 3 years’ premiums are paid.
Key Features
Guaranteed death benefit
Choice of 5 investment funds with flexible investment management: you can change
funds at any time.
Attractive investment alternative to fixed-interest securities.
Provision for full/partial withdrawals any time after three full years premiums are paid.
Unmatched flexibility- to match your changing needs.
Benefits
Death Benefit
Cash withdrawal option
UnitGain Plus SP
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The thumb rule for buying insurance is that your insurance needs are minimal in
your early earning years, increase with added responsibilities (Marriage, children, loans
etc.) and taper off by the time you retire. It is difficult to find a single insurance plan that
can take care of all your changing requirements in life – additional protection, more
money to invest, sudden requirement of cash or a steady post-retirement income.
With Bajaj Allianz UnitGain SP, you can invest in one life insurance plan that can
take care of all your changing requirements throughout your life. This plan has been
designed to provide you with maximum flexibility, so that you do not have to worry
about your changing needs.
Bajaj Allianz UnitGain SP offers the unique option of combining the protection of
life insurance with the attractive prospects of investing in securities. You can choose the
investment funds you want to invest your money, providing you with an opportunity to
have a direct stake in the performance of the financial markets. You also benefit from
attractive tax advantages and can protect your loved ones against unfortunate events.
The “Bajaj Allianz UnitGain SP Plan
The Bajaj Allianz UnitGain SP comes with a host of features to allow you to have
the best of all worlds –Protection and Investment with flexibility like never before.
Some of the key features of this plan are:
Convenient single premium payment, with option to pay top-ups later.
100% of the single premium/top-ups are allocated
Guaranteed death benefit
Choice of 5 investment funds with flexible investment management: you can
switch between funds at any time.
Attractive investment alternative to fixed-interest securities
Provision for full/partial withdrawals any time after the single premium is paid.
Unmatched flexibility –to match your changing needs.
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The five funds offered are as under:
a. Equity Fund – This fund provides the scope of high appreciation over a long term.
The fund will primarily invest in equities & is expected to match returns given by
NSE NIFTY. This fund will invest at least 90% in equities and maximum 10% in
cash.
b. Equity Gain Fund - The investment objective of this Fund is to provide capital
appreciation through investment in select equity stocks that have the potential for
high capital appreciation. This fund will invest at least 90% in equities and
maximum 10% in debt & cash instruments.
c. Debt Fund - This fund provides the scope for steady returns at low risk through
investment in high quality fixed income securities. This fund will be invested
fully in debt instruments.
d. Balanced Fund – The balanced fund is primarily for those who prefer a mix of
steady returns & growth. The balanced fund will invest 30% to 50% in the equity
fund and 50%to 70% in the debt fund.
e. Cash Fund – The cash fund will invest conservatively in money market & short-
term investments to ensure that return on investments shall never be negative.
100% of this fund will be invested in money market instruments. The price of the
units in this fund is guaranteed never to go down.
The investment advice on the Equity Gain Fund will be provided
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8.5 DISRIBUTION CHANNELS
Of the four elements of marketing mix viz. products, price, promotion and
placement or distribution; distribution channel is the most important and most powerful
element. The primary function of this element is to find out appropriate ways through
which goods or services have to be moved from the primary producer to the final
consumers. The success or failure of the company depends ultimately upon the efficiency
or inefficiency of its channels of distribution.
The word ‘channel’ is derived from a French word ‘canal’. In the field of
marketing, distribution channel is defined as a pathway composed of intermediaries or
middle men who perform such functions as required to ensure smooth and sequential
flow of goods and services from producers to final consumers with a view to achieve the
marketing objective of the company.
Producers normally use a number of marketing intermediaries for moving the
products or services to the ultimate users. There are different kinds of intermediaries
called by different name such as: sole selling agents, marketing agents, dealers, retailers,
authorized representatives, brokers, commission agents, jobbers etc. Distribution channel
is concerned with various activities such as movement and storage of goods, the legal,
promotional and financial activities involved in the transfer of ownership of goods from
producer to final consumers or users. A channel of distribution for a product is thus, a
route taken by the title of the goods moving from the producers to the final consumers or
industrial users.
8.5.1 ROLE AND IMPORTANCE OF DISTRIBUTION CHANNELS
A distribution channel plays a very decisive role in the successful marketing of
most of the goods, especially consumer goods. They perform a large variety of functions
in the field of marketing. The importance of distribution channels can be understood
clearly by analyzing the functions performed by them.
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1. The distribution channels bridge or link the manufacturers and the final
consumers or industrial users effectively and economically.
2. They break the bulk orders and cater to the small size requirements of the
individual consumers.
3. They assemble a large variety of goods manufactured by different manufacturers
and required by the people, store them intact and sort out them into small lots or
packages that are convenient to the small consumers.
4. The channel intermediaries perform physical handling activities such as
transportation, warehousing, inventory, management etc. They also finance the
inventory, undertake the risk and expenses of carrying stock, arrange for storage
of goods systematically and supply the goods to the buyers timely.
5. The intermediaries many times provide credit facilities to the buyers and make
advance payments to the manufacturers against their orders.
6. The intermediaries provide specialized services of personal selling. They help in
introducing new products in the market, promote the sale of these products
through their word of mouth communication and also provide pre-sale and after-
sale services to the consumers.
7. They also provide market intelligence and feed back to their suppliers including
the producers. The intermediaries are able to do this job authentically as they are
in constant and direct contact with the customers who actually use the goods.
8. The intermediaries assist in arriving at the price level acceptable to the producers
as well as the final consumers or users.
9. The intermediaries, in certain cases, go far beyond their conventional functions of
distribution or distribution plus service. They accept the responsibility for the
transfer of technology. For ex, they guide the farmers as to the applicability of
science and technology in the field of agriculture.
10. The intermediaries go near the consumers, study their requirements, guide them in
their buying decisions and render satisfactory service to them.
11. The channel decisions have a vital impact on the decisions in all other area of
marketing. Channel decisions determine the size of the sales force, type of sales
forces, the size and complexity of the marketing department etc. Once the
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company has developed a particular network of intermediaries, it cannot change
overnight the distribution system.
8.5.2 DISTRIBUTION CHANNEL POLICY AND STRATEGIES
We have discussed above the factors governing the choice of distribution
channels and choice of intermediaries. These factors give a general idea of the channel to
be chosen and the intermediates to be selected. But all these factors are not static. They
change time to time and some times they become dangerously dynamic. Therefore the
company must constantly review its channel policies and strategies and make sure that
they are not only adequate but are also best in the situation. Because of these things, we
have to conclude that the marketing policies and strategies can never be permanent. The
final test of a proper distribution policy and strategy must be the effectiveness and
economic in serving the customers and in achieving the objectives of the organization i.e.
consumer satisfaction and profit maximization.
Distribution Channels
Agency Channel through Insurance Consultants –
Corporate Agents & Brokers
Banc assurance
Group
Worksite Marketing
Financial Service Consultants
Introduction
The age of the respondents indicates that, large portion of the respondents
Were belongs to 40-50 age group, this age group people will cover under insurance.
Occupation wise, large portion belong to private and government employees.
The type of family here is divided family, very small portion belong to HUF
family.
Large portion of the respondents having 5000-10000 income level.
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As per survey number of earning members in the family is one and few are
responded as three members. All most all respondents invest >25% of their total income
in savings, only 10% of the people invest <25%.
Familiarity of the existence of private insurance companies is 50-50 i.e. 50% of
the respondents don’t know the existence of private insurance companies.
Type of the policies preferred by the respondents is High premium-High risk-
High return i.e. money back policies. Pattern of savings invested by the respondents is,
banks, LIC, others. And factors influenced to invest in insurance is first, tax benefit,
agents request and risk coverage.
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9.1. Age of the Respondents:
Understanding the age group dynamics plays a vital role in understanding the needs and interest of investment pattern which in turn can be used for drafting new policies.
Table No.9.1
Showing the different age group of the respondents
Tabulation Analysis:1. In the above table it shows that 40% of the people insured fall into the age
group of 40-50.2. 7 % are under 20-30.3. 11% under 30-40.4. 6% under 50-60.
Inference:1. Its evident that people in nearing retirement tend to think more of risk
coverage and can be addressed as major target among whole population.2. People of other age groups can be targeted using this prime target for
1. In the table it is clearly shows that large portion of the respondents were private and government employees i.e., 33% and 32% respectively,
2. 15% belongs to business.3. 20% belongs to others.
Inference:1. Regular salaried employees can be targeted as they have a fixed income
and can easily plan investments.2. Regular income employees form major chunk in the survey and population
which means market potentials are high
source : Table No.2
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9.3 FAMILY DETAILS OF THE RESPONDENTS:Responsibilities grow with the growth in the family, so do the security needs of people. famil
TABLE NO. 9.3
Showing distribution of respondents on the basis of their type if family
Type of family Respondents PercentageHUF 6 15Individual 34 85Total 40 100
Source: survey data
Tabulation Analysis:1. In the above table it is clearly shows that large portion of the respondents
were in the individual family i.e. 85%.2. 15% belongs to HUF group.
Inference:1. Majority families being nuclear we can device more policies for small families.2. Joint families can be targeted for group insurance.3. Non-HUF families will offer more investment as expenditures are less and
awareness can be easily created.
Source: Table No.3
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9.4 MONTHLY INCOME OF THE RESPONDENTS:It is necessary to study the income of level of the respondents, being how much
the Respondents earn and how much they invest in insurance.
TABLE NO. 9.4
Showing the distribution of the respondents on the basis of their monthly income
Tabulation Analysis:1. 50% of the respondents belong to 5000-10000 monthly income.2. 22% belongs to above 15000.3. 15% were belongs to 10000-15000.4. 13% were belongs to > 5000 income level.
Inference:1. Most of the population falls in the category of 5000 to 10,000 which is middle
class and these people need low investment plans which should be devised wisely for more returns and focused on savings for short terms
Source: Table No.4
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9.5 NUMBER OF EARNING MEMBERS IN THE FAMILY:
It is necessary to study the No. of earning members the family, being more number will lead to more income in turn more savings and more investment.
TABLE NO.9.5Showing number of earning members in the family.
Earning members Respondents Percentage1 27 682 11 27
More than 2 2 5Total 40 100
Source: survey dataTabulation analysis:
1. 68% respondents say earnings members in the family are one.2. 27% say two members.3. 5% say more than two
Inference:1. Single earning member families need lesser investment and better coverage.2. Multiple earning members can be targeted for higher risk policies and bigger
benefits
Source: Table No.5
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9.6 TOTAL PERCENTAGE AGE OF MONTHLY INCOME INVESTED:
It is necessary to study the percentage age of invested, monthly income savings and investment it will help to study the ability of savings finally it helps to analyze the interest of the people to invest in insurance.
TABLE NO. 9.6
Showing Percentage of income invested
Percentage of income invested Respondents Percentage
> 25 36 9025-50 4 10Total 40 100
Source: survey data
Tabulation Analysis:1. Large portion of the respondents i.e. 90% are investing less than > 25% of their
income.
2. Only 10% of the respondents were invest between 25%-50%.
Inference:
1. Many respondents invest less money which can be taken into consideration for creating policies that have lesser premiums and are long term for better benefits.
Source: Table No.6
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9.7 FEMILIARITY OF PRIVATE INSURANCE COMPANY:
It is necessary to know the familiarity of private insurance company because private insurance companies have recently emerged and many people don’t know their existence. So it is necessary to study the familiarity of private insurance company.
TABLE NO. 9.7
Showing distribution of respondents on the basis of familiarity and non-familiarity of private insurance company.
Tabulation Analysis:1. 52% of the total respondents were aware of existence of private insurance co.2. 48% are not aware of such.
Inference:1. Almost half of the population is not aware of the private sector, which indicates a
high potential to tap this population.2. People aware of private sector need to be educated of the benefits to market more
and develop investment plans for them.
Source: Table No.7
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9.8. TYPE OF INSURANCE POLICY, WHICH RESPONDENTS PREFER:
It is necessary to study because different respondents prefer different type of policies.
TABLE NO. 9.8
Showing distribution of respondents on the basis of likes of policies.
Type of policy Respondents PercentageLow Premium - High Risk - Low Return 5 13Medium Premium - High Risk -Low Return 13 32High Premium - High Risk - High Return 22 55Total 40 100
Source: survey data
Tabulation Analysis:1. Large portion of the respondents prefer –High premium-High risk-High return i.e.
(Money back policy) i.e. 55%.
2. 32% prefer Medium premium-High risk-Low return i.e. (endowment policy).
3. 13% prefer Low return-High risk- Low return.
Inference:
1. Based on income, preference and willingness to invest policies that can return high with suitable risk and premium factors can be re-drafted for targeting larger proportions of the population
Source: Table No.8
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9.9 PATTERN OF SAVINGS INVESTED IN DIFFERENT INVESTMENT:
It is necessary to study the pattern of investment because to know which is the popular investment made to the investor.
Tabulation Analysis:1. large portion of the respondents invested in LIC i.e. 34%.
2. 32% in bank deposits.
3. 10% in government bonds.
4. 5% mutual funds shares.
5. 1% in private insurance.
Inference:
1. Awareness campaigns and promotional activities can fetch more clients and can improve the business
Source: Table No .9
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9.10 FACTORS INFLUENCE TO THE RESPONDENTS TO INVEST IN THE LIFE INSURANCE:
It is necessary to study what factors would influence the investors to invest in life insurance and giving more important to those factors there by attracting the investors.
TABLE NO. 9.10
Showing different influenced to invest in life insurance.