Bajaj Allianz General Insurance Co. Ltd. LOVELY PROFESSIONAL UNIVERSITY DEPARTMENT OF MANAGEMENT Report on Summer Training “A STUDY OF STRATEGY AND FUNCTIONING OF FIELD FORCES IN BAJAJ ALLIANZ GENERAL INSURANCE ” Submitted to In partial fulfillment of the Requirements for the award of Degree of Master of Business Administration Submitted by: Name of the student Ankit Kumar University Roll No. S1803B32 (2 nd SEM) University Reg.No. 10810218 DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY 1
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Bajaj Allianz General Insurance Co. Ltd.
LOVELY PROFESSIONAL UNIVERSITY
DEPARTMENT OF MANAGEMENT
Report on Summer Training
“A STUDY OF STRATEGY AND FUNCTIONING OF FIELD FORCES IN
BAJAJ ALLIANZ GENERAL INSURANCE”
Submitted to
In partial fulfillment of the
Requirements for the award of Degree of
Master of Business Administration
Submitted by:
Name of the student Ankit Kumar
University Roll No. S1803B32 (2nd SEM)
University Reg.No. 10810218
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
1
Bajaj Allianz General Insurance Co. Ltd.
PHAGWARA
(2009)
CERTIFICATE
This is to certify that the project entitled “A STUDY OF STRATEGY AND
FUNCTIONING OF FIELD FORCES IN BAJAJ ALLIANZ GENERAL
INSURANCE”is a bonafide work of ANKIT KUMAR, a student of
Lovely Professional University, Chaheru, Phagwara (Punjab)-144402,
bearing Registration Number-10810218, and was successfully conducted
at BajajAllianz General Insurance Co.Ltd.,Ghaziabad Office, from
1st July 2009 to 14th August 2009, for the partial fulfillment of the
course M.B.A of Lovely Professional University,Phagwara (Punjab).
Mr. Rahul Tomar,
Direct Marketing Incharge
(Sales Manager)
BajajAllianz General Insurance,
2
Bajaj Allianz General Insurance Co. Ltd.
Ghaziabad.
ACKNOWLEDGEMENT
“No man is indispensable but there are certain mortal without whom the quality
work suffers their guidance becomes important in acquiring quality results”.
I would like to express my gratitude to all those who gave me the possibilities to
complete this thesis.I want to thank Sales Manager, Bajaj Allianz, Ghaziabad, Mr.
Rahul Tomer for giving me permission to commence this thesis in the first
instance, to do the necessary research work and for being my Company Guide.
With a deep sense of gratitude and humble submission I would like to express
my heartiest gratefulness to my Faculty Guide Lect. Rohit Duggal, whose help,
stimulating suggestions and encouragement helped me in all the times of research
for and writing of this thesis.
I am also grateful to my parents and friends who inspired me to put my best
efforts.
3
Bajaj Allianz General Insurance Co. Ltd.
Date: (ANKIT KUMAR)
Signature:
TABLE OF CONTENTS
Sr.No CONTENTS PAGE
1. INTRODUCTION 5
2. SECTOR PROFILE 10
3. COMPANY PROFILE 21
4. OBJECTIVES OF STUDY 31
5. RESEARCH METHODOLOGY 33
6. DATA ANALYSIS & INTERPRETATION 39
7. OBSERVATIONS & FINDING 50
8. SUGGESTION 52
9. BIBLIOGRAPHY 54
10. QUESTIONNIARE 55
4
Bajaj Allianz General Insurance Co. Ltd.
INTRODUCTION
5
Bajaj Allianz General Insurance Co. Ltd.
INTRODUCTION
A marketing strategy is a process that can allow an organization to concentrate its (always
limited) resources on the greatest opportunities to increase sales and achieve a sustainable
competitive advantage.
Marketing strategy as a key part of the general corporate strategy marketing strategy is most
effective when it is an integral component of corporate strategy, defining how the organization
will engage customers, prospects and competitors in the market arena for success. It is partially
derived from broader corporate strategies, corporate missions, and corporate goals. They should
flow from the firm's mission statement. They are also influenced by a range of micro
environmental factors.
Marketing strategy and sectarian tactics and actions:
A marketing strategy also serves as the foundation of a marketing plan. A marketing plan
contains a set of specific actions required to successfully implement a marketing strategy. For
example: "Use a low cost product to attract consumers. Once our organization, via our low cost
product, has established a relationship with consumers, our organization will sell additional,
higher-margin products and services that enhance the consumer's interaction with the low-cost
product or service."
A strategy consists of well thought out series of tactics. While it is possible to write a tactical
marketing plan without a sound, well-considered strategy, it is not recommended. Without a
6
Bajaj Allianz General Insurance Co. Ltd.
sound marketing strategy, a marketing plan has no foundation. Marketing strategies serve as the
fundamental underpinning of marketing plans designed to fill market needs and reach marketing
objectives[3]. It is important that these objectives have measurable results.
A good marketing strategy should integrate an organization's marketing goals, policies, and
action sequences (tactics) into a cohesive whole. Many companies cascade a strategy throughout
an organization, by creating strategy tactics that then become strategy goals for the next level or
group. Each group is expected to take that strategy goal and develop a set of tactics to achieve
that goal. This is why it is important to make each strategy goal measurable.
Marketing strategies are dynamic and interactive. They are partially planned and partially
unplanned. See strategy dynamics.
Types of marketing strategies
Every marketing strategy is unique, but if we abstract from the individualizing details, each can
be reduced into a generic marketing strategy. There are a number of ways of categorizing these
generic strategies. A brief description of the most common categorizing schemes is presented
below:
Strategies based on market dominance - In this scheme, firms are classified based on their market
share or dominance of an industry. Typically there are three types of market dominance
strategies:
• Leader
• Challenger
• Follower
Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength.
Strategic scope refers to the market penetration while strategic strength refers to the firm’s
sustainable competitive advantage.
7
Bajaj Allianz General Insurance Co. Ltd.
• Cost leadership
• Product differentiation
• Market segmentation
Innovation strategies - This deals with the firm's rate of the new product development and
business model innovation. It asks whether the company is on the cutting edge of technology and
business innovation. There are three types:
• Pioneers
• Close followers
• Late followers
Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are
a number of different ways of answering that question, but the most common gives four answers:
• Horizontal integration
• Vertical integration
• Diversification
• Intensification
A more detailed schemes uses the categories:
• Prospector
• Analyzer
• Defender
• Reactor
8
Bajaj Allianz General Insurance Co. Ltd.
• INSURANCE NEED
Why is insurance necessary? The question contains the answer within itself. After all, life is
fraught with tensions and apprehensions regarding the future and what it holds for the individual.
Despite all the planning and preparation one might make, no one can accurately guarantee or pre-
dict how or when death might result and the circumstances that might ensue in its aftermath.
We are not saying that life and existence are constantly fraught with danger and uncertainty. But
then it is essential that you plan for the future. The chances for a fatality or an injury to occur to
the average individual may not be particularly high but then no one can really afford to com-
pletely disregard his or her future and what it holds.
People generally regard insurance as a scheme when and where you have to lose a lot to gain a
little. Nevertheless, insurance is still the most reliable tool an individual can use to plan for his
future.
And just why is it necessary to plan for the future with Insurance?
An Overview
Insurance business is divided into four classes:
1) Life Insurance business
2) Fire
3) Marine
4) Miscellaneous Insurance.
Life Insurers transact life insurance business; the rest is transacted by General Insurers. No
composites are permitted as per law.
The business of Insurance essentially means defraying risks attached to any activity over time
(including life) and sharing the risks between various entities, both persons and organisations.
Insurance companies (ICs) are important players in financial markets as they collect and invest
large amounts of premium. Insurance products are multi purpose and offer the following
benefits:
1. Protection to the investors
2. Accumulate savings
9
Bajaj Allianz General Insurance Co. Ltd.
3. CHANNELISE SAVINGS INTO SECTORS NEEDING HUGE LONG TERM
INVESTMENTS.
SECTOR PROFILE
10
Bajaj Allianz General Insurance Co. Ltd.
Brief History of the Insurance Sector
The business of life insurance in India in its existing form started in India in the year 1818 with
the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important
milestones in the life insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to collect
statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956: 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 crore from the Government of India. The General insurance business
in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first
general insurance company established in the year 1850 in Calcutta by the British.
Some of the important milestones in the general insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of
general insurance business.
11
Bajaj Allianz General Insurance Co. Ltd.
1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of
conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum solvency
margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general
insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and
grouped into four companies’ viz. the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd. And the United India Insurance
Company Ltd. GIC incorporated as a company.
12
Bajaj Allianz General Insurance Co. Ltd.
INSURANCE SECTOR
The opening up of Insurance sector was a part of the on going liberalization in the financial
sector of India. The changing face of the financial sector and the entry of several companies in
the field of life and non life Insurance segment are one of the key results of these liberalization
efforts. Insurance business by way of generating premium income adds significantly to be the
GDP. Over the past three years, more than thirty companies have expressed interest in doing
business in India. The IRDA (Insurance Regulatory Development Authority) is the regulatory
authority, which looks over all related aspects of the insurance business. The provisions of the
IRDA bill acknowledge many issues related to insurance sector. The IRDA bill provides
guidance for three levels of players - Insurance Company, Insurance brokers and Insurance
agent. Life Insurance sector is one of the key areas where enormous business potential exists. In
India currently the life insurance premium as a percentage of GDP is 1.3 % against, 5.2 per cent
in the US.
General Insurance
General Insurance is another segment, which has been growing at a faster pace. But as per the
current comparative statistics, the general insurance premium has been lower than life insurance.
General Insurance premium as a percentage of GDP was a mere 0.5 'per cent in 1996. In the
General Insurance Business, General Insurance Corporation (GIC) and its four subsidiaries viz.
New India Insurance, Oriental Insurance, National Insurance and United India Insurance, are
13
Bajaj Allianz General Insurance Co. Ltd.
doing major business. The General Insurance Industry has been growing at a rate of 19 percent
per year.
The entry of several private insurance companies, particularly international insurance companies,
through joint ventures, will speed up the process of insurance mobilization. The competition will
unleash new schemes and benefits, which will give consumers a better Chance to save as well as
insure. The regulatory system in India is relatively new and takes some more time to make the
Insurance sector a perfectly competitive one. Insurance Regulatory Authority of India issued
regulations on 15 subjects which included appointed. Actuary, actuarial report, Insurance agents,
Solvency margins, reinsurance, registration of Insurers, and obligation of insurers to rural and
social sector, investment and accounting procedure. The reform in Insurance in India is guided
by factors like availability of a variety of products at a competitive price, improvement in the
quality of customer services etc. Also the employment opportunities in the Insurance sector wil1
increase as major players set their business plans in India. The policy of the government to open
up the financial sector and the Insurance sector is expected to bring greater FDI inflow into the
country. The increase in the investment limit in this vital sector has generated considerable
business interests among the foreign Insurance companies" Their entry wil1 certainly change the
Insurance sector considerably.
Insurance Sector Reforms:
In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R.N.
Malhotra was formed to evaluate the Indian insurance industry and recommend its future,
direction. The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector.
In 1994, the committee submitted the report and some of the key recommendations included:
Structure:
1. Government stake in the insurance Companies to be brought down to 50%.
14
Bajaj Allianz General Insurance Co. Ltd.
2. Government should take over the holdings of GlC and its subsidiaries so that these
subsidiaries can act as independent corporations.
3. All the insurance companies should be given greater freedom to operate.
Competition:
1. Private Companies with a minimum paid up capital of Rs. 1 bn should be allowed to enter the
industry.
2. No Company should deal in both Life and General Insurance through a single entity.
3. Foreign companies may be allowed to enter the industry in collaboration with the domestic
companies.
4. Postal General Insurance should be allowed to operate in the rural market.
5. Only one State Level General Insurance Company should be allowed to operate in each state.
Regulatory Body:
1. The Insurance Act should be changed.
2.
3. An Insurance Regulatory body should be set up.
Controller of Insurance (Currently a part from the Finance Ministry) should be made
independent.
15
Bajaj Allianz General Insurance Co. Ltd.
Investment:
1.Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to
50%.
2. GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings
to be brought down to this level over a period of time.)
Customer Service:
1. LIC should pay interest on delays in payments beyond 30 days.
2. Insurance companies must be encouraged to set up unit linked pension plans.
3. Computerization of operations and updating of technology to be carried out in the
insurance industry.
16
Bajaj Allianz General Insurance Co. Ltd.
The committee emphasized that in order to improve the customer Services and increase the
coverage of the insurance industry should open up to competition. But at the same time, the
committee felt the need to exercise caution as any failure on the part of new players could ruin
the public confidence in the industry. Hence, it was decided to allow competition in a limited
way by stipulating the minimum capital requirement of Rs. 100 crores. The committee felt the
need to provide greater autonomy to insurance companies in order to improve.
INSURANCE INDUSTRY: CLASSIFICATION
SOME PLAYERS IN THE INDUSTRY:
17
Bajaj Allianz General Insurance Co. Ltd.
Life InsuranceGeneral Insurance
Life Insurance Corporation of India General Insurance Corporation of India.
1. Oriental Insurance Company Ltd.
2. New India Assurance Company Ltd.
3. National Insurance Company Ltd.
4. United India Insurance Company Ltd.
New EntrantsICICI Prudential Life Insurance Ltd. Bajaj Allianz General Insurance Company
Ltd.Tata AIG Life Insurance Corporation Ltd. Reliance General Insurance Company Ltd.ING Vysya Life Insurance Corporation Ltd. Tata AIG General Insurance Company Ltd.Om Kotak Mahindra Life Insurance
Corporation Ltd.
MaxNewYork Life Insurance Ltd
Royal Sundaram Alliance Insurance
Company
Ltd.
18
Bajaj Allianz General Insurance Co. Ltd.
MARKET SHARE
In the FY2008 ICICI Lombard and Bajaj Allianz have witnessed aggressive growth by
making the retail segment their target segment ,aggressive growth strategies and huge
distribution network.The general insurance industry has witnessed the entry of many non-
traditional players .IRDA has issued a license to the Rajan Raheja Group(RRG) for setting
up a general insurance joint veture with Australia’s QBE Insurance Group.Last two years
have seen the emergence of special institutions,such as ECGC,Star Health&Allied
Insurance ,Appolo DKV and Agriculture Insurance Co.
Business mix of Bajaj Allianz
Motor insurance has the biggest share in general insurance market and show a high growth
over three years. Corporate ex-health shown a low depression in Fy 2006-07 and high
depression in Fy2007-08.Health insurance shows positive trend in all these FY’s.
19
Bajaj Allianz General Insurance Co. Ltd.
COMPANY PROFILE
20
Bajaj Allianz General Insurance Co. Ltd.
Bajaj Allianz General Insurance Company Limited
Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Finserv
Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy a reputation
of expertise, stability and strength.
Bajaj Allianz General Insurance received the Insurance Regulatory and Development Author-
ity (IRDA) certificate of Registration on 2nd May, 2001 to conduct General Insurance busi-
ness (including Health Insurance business) in India. The Company has an authorized and paid
up capital of Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26% is held
by Allianz, SE.
As on 31st March 2009, Bajaj Allianz General Insurance maintained its premier position in
the industry by achieving growth as well as profitability. The company garnered a premium
income of Rs. 2866 crore, achieving a growth of 11 % over the last year. Bajaj Allianz has
made a profit before tax of Rs. 149.8 crore and has become the only private insurer to cross
the Rs.100 crore mark in profit before tax in the last three years. The profit after tax was Rs.95
crores, which is also the highest by any private insurer.
Bajaj Allianz today has a countrywide network connected through the latest technology for
quick communication and response in over 200 towns spread across the length and breadth of
the country. From Surat to Siliguri and Jammu to Thiruvananthapuram, all the offices are in-
terconnected with the Head Office at Pune.
Vision
• To be the first choice insurer for customers
• To be the preferred employer for staff in the insurance industry.
• To be the number one insurer for creating shareholder value
MissionAs a responsible, customer focused market leader, we will strive to understand the insurance
21
Bajaj Allianz General Insurance Co. Ltd.
needs of the consumers and translate it into affordable products that deliver value for money.
A Partnership Based on Synergy.
Bajaj Allianz General Insurance offers technical excellence in all areas of General and Health
Insurance as well as Risk Management. This partnership successfully combines Bajaj
Finserv's in-depth understanding of the local market and extensive distribution network with
the global experience and technical expertise of the Allianz Group. As a registered Indian
Insurance Company and a capital base of Rs. 110 crores, the company is fully licensed to
underwrite all lines of general insurance business including health insurance.
Achievements Bajaj Allianz has received "iAAA rating, from ICRA Limited, an associate of Moody's