A PROJECT REPORT ON MARKETING MIX OF IDBI FEDRAL LIFE
INSURANCE
Submitted in partial fulfillment of requirement of bachelor of
business administration (BBA) , Guru Jambeshwar University of
Science & Technology, Hisar. Under Guidance Of
Faculty Incharge Submitted ByMrs. Manpreet kaur Honika
UppalTrainingInchargeMr. Sachin Garg
Table of Content
ACKNOWLEDGMENT
I am greatly obliged to Mr Manas das, branch head IDBI federal
life insurance for his valuable guidance and unwavering support
during our internship period to complete our project. I am truly
grateful to him for the timely completion of my project.
I would also take this opportunity to express my gratitude to Mr
Sachin Garg for his guidance provided in this field in which he is
an expert.
I would also take this opportunity to thank my faculty guide
Mrs.Manpreet kaur of JIMSas without her encouragement as well as
monitoring this project would not have been possible.
ABSTRACT
The insurance industry of India consists of 51 insurance
companies of which 24 are in life insurance business and 27 are
non-life insurers. Among the life insurers, Life Insurance
Corporation (LIC) is the sole public sector company. Apart from
that, among the non-life insurers there are six public sector
insurers. In addition to these, there is sole national re-insurer,
namely, General Insurance Corporation of India. Other stakeholders
in Indian Insurance market include Agents (Individual and
Corporate), Brokers, Surveyors and Third Party Administrators
servicing Health Insurance claims.Out of 27 non-life insurance
companies, 4 private sector insurers are registered to underwrite
policies exclusively in Health, Personal Accident and Travel
insurance segments. They are Star Health and Allied Insurance
Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa
Health Insurance Company Ltd and Religare Health Insurance Company
Ltd. There sre two more specialized insurers belonging to public
sector, namely, Export Credit Guarantee Corporation of India for
Credit Insurance and Agriculture Insurance Company Ltd for Crop
InsuranceInsurance penetration of India .Market Share:
IDBI Federal Life Insurance Co Ltd. is a joint-venture of IDBI
Bank, India's premier development and commercial bank, Federal
Bank, one of India's leading private sector banks and Ageas, a
multinational insurance giant based out of Europe. In this venture,
IDBI Bank owns 48% equity while Federal Bank and Ageas own 26%
equity each. Having started in March 2008, in just five months of
inception, IDBI Federal became one of the fastest growing new
insurance companies by garnering Rs.100 Cr in premiums. Through a
continuous process of innovation in product and service delivery
IDBI Federal aims to deliver world-class wealth management,
protection and retirement solutions that provide value and
convenience to the Indian customer.
Objectives of the Internship: 1. Analysis of Customer Perception
of the insurance industry. 2. To suggest marketing methodologies to
increase business of IDBI-Federal Life Insurance. 3. To get hands
on experience of doing sales for the company.
EXECUTIVE SUMMARY
The insurance sector in India is still in its nascent stages.
But the Indians are an extremely risk averse race. Thus due to this
only the government entities have a good presence and brand
recognition in India and the others have a difficult time carving a
space out for themselves in the market.Since the industry is at its
early ages even now hence its constantly changing and evolving.
This makes it mandatory for the new players to tow the line and at
the same time constantly keep on evolving itself to meet the needs
of the consumers. In this sector the visibility of the brand
matters the most and is of utmost importance. Since, insurance is
the backup plan for more risky propositions like shares and stocks.
Hence the customers who want to go for these propositions too are
extremely risk averse. Hence there has to be products specifically
for this segment. And then expand furthermore into other segments
while keeping their base customers with them.
Keeping in mind the same these paper was done to study the
marketing mix of IDBI Federal life insurance solely depending on
the current marketing approaches and the expectation of the Indian
consumers in the insurance sector.
INTRODUCTIONThis industry thrives mostly on the desire of the
individual to reduce the uncertainties of the future. This
uncertainty can vary regarding various issues starting from their
life to commodities to their childs future as well as their present
income. In the current fiscal year the growth of BFSI i.e. the
banking financial and insurance sector hovering around 9% and the
Gross Domestic Product growth of the country at being around 4.7 %
in the fiscal year 2013-2014 the industry is facing a hard time as
the lower growth means lower disposable income in the hands of the
consumers. The increase in the inflation index also hasnt helped
the industry at any level. If anything it has made the returns look
less and less lucrative.HISTORY OF INSURANCE
The history of Insurance in India is deep-rooted. Since the
earliest times insurance has beencarried out in some form or the
other. Insurance in India has developed overtime and has taken
ideas from other countries- England in particular.The history of
insurance is divided into three phases as follows:-
PHASE I Pre LiberalizationPHASE II LiberalizationPHASE III Post
Liberalization
Phase I Pre- Liberalization1818- 1829 First Insurance company in
1818 the Oriental Life insurance company in Kolkata (then Calcutta)
was the first company to start a life insurance business in india.
However, the company failed in 1834. In 1829 the Madras Equitable
had begun transacting Life insurance business in Madras
Presidency.
1870Following the enactment of the British Insurance act 1870,
The last three decades of the nineteenth century saw the creation
of the Bombay Mutual, Oriental and Empire of India in the Bombay
Residency.
1912 The Indian Life Assurance Companies Act 1912 was the first
statutory measure to regulate Life Business.
1928The Indian Insurance Companies act 1928 gave the Government
the power to collect statically information above both life and non
life business transacted in Indian by Indian and foreigner
insurers, including provident insurance societies.
1938To protect the interest of the insuring public, the earlier
legislation was consolidated and amended by the Insurance Act 1938
which gave the Government effective control over the activities of
insurers.
1950s
In the 1950s, competition in the insurance business was very
high and there were allegations of unfair trade practices. The
government of India therefore decided to nationalize insurance
business.
1957
Formation of the General insurance Council (GI Council) : the GI
council represents the collective interests of the non-life
insurance companies in India. The council speaks out on issues of
common interest, participates in discussions related to policy
formation, and acts as an advocate for high standards of customer
service in the insurance industry.
1972
The General Insurance Business (Nationalization) Act 1972 was
passed. The General insurance Corporation of India was formed in
pursurance of Section 9(1) of GIBNA. It was incorporated on 22
November 1972 under the companies Act 1956 as a private company
limited by shares.
PHASE II-
Liberalization__________________________________________________________________________
The start of reformThe international payment crisis of the 1990s
forced the Government to re-think its industrial policies and
regulations.1993Malhotra Committee: In 1993 the government set up a
committee under chairmanship of RN Malhotra, the former Governor of
RBI, To make recommendation for the reform of the insurance
sector.
1999Formation of IRDA: following the recommendations of the
Malhotra committee report, The Insurance regulatory and Development
Authority was constituted as an autonomous body in 1999 to regulate
and develop the insurance industry. The IRDA was incorporated as a
statutory body in April 2000.
PHASE III Post LiberalizationRecommendations of Malhotra
Committee, the insurance sector were opened to private companies.
Foreign companies were also allowed to participate in Indian
Insurance market through joint ventures with Indian Companies.
Under current regulations for the foreign partner cannot hold more
than 26% stake in the joint venture.The key objective of the IRDA
includes the promotion of competition with a view to increasing
customer satisfaction through more consumer choice and lower
premiums, while ensuring the financial security of insurance
market. The IRDA has the power to make regulations under section
114A of insurance Act 1938. Since 2000 it has introduced various
regulations ranging from the registration of companies for carrying
on insurance business to the protection of policy holders
interest.
INSURANCE- COMPANIES IN INDIA
1. Life Insurance Corporation of india 2. ICICI Prudential. 3.
SBI Life Insurance company Limited 4. Reliance Life Insurance
company Ltd. 5. Max new York Life Insurance 6. HDFC Standard Life
7. Tata AIG Life Insurance 8. Bajaj Allianz Life Insurance 9. Birla
Sun life 10. Metlite India Life Insurance 11. ING Vyasa Life
insurance 12. Kotak Life Insurance 13. Aviva Life Insurance 14.
Bharti AXA life insurance 15. IDBI federal Life Insurance
LIST OF GENERAL INSURERS IN INDIA
1. Bajaj Allianz 2. ICICI Lombard 3. IFFCO Tokio 4. National
Insurance Company 5. The New India Assurance Company 6. Oriental
Insurance 7. Reliance General Insurance 8. Royal Sundaram Alliance
9. TATA AIG 10. United India Insurance 11. Cholamandalam 12. HDFC
ERGO 13. Export Credit Guarantee 14. Agriculture Insurance Co 15.
Star Health and allied Insurance 16. Apollo Munich health insurance
17. Future General 18. Universal Sompo 19. Shriram general
LIC has around 70% share in the premium being filed while all
the others put together has a share of 30 %.
This tremendous competitiveness of the industry has given rise
to high differentiation of the products and services. Innovation is
the new buzzword. Companies are trying to innovate across the
product life cycle to retain that edge.
Sponsors of IDBI Federal Life Insurance Co Ltd
IDBI Bank Ltd.is a Universal Bank with its operations driven by
a Cutting edge core Banking IT platform. The Bank offers
personalized banking and financial solutionsto its clients in the
retail and corporate banking arena through its large network of
Branches and ATMs, spread across length and breadth of India. They
have also set up an overseas branch at Dubai and have plans to open
representative offices in various other parts of Globe.
IDBI Bank is the youngest, new generation, public
sectoruniversal bank that rides on a cutting edge core banking
Information technology platform. This enables the Bank to offer
personalized banking and financial solutions to its clients. The
Bank had an aggregate balance sheet size of Rs. 3, 22,769 crore and
total business of Rs 4, 23,423 crore as on March 31, 2013. IDBI
Bank's operations during the financial year ended March 31, 2013
resulted in a net profit of Rs. 1882 crore continues to be, since
its inception, India's premier industrial development bank. It came
into being as on July 01, 1964 to support India's industrial
backbone. Today, it is amongst India's foremost Commercial banks,
with a wide range of innovative products and services, serving
retail and corporate customers in all corners of the country from
1201 branches and 2156 ATMs. The Bank offers its customers an
extensive range of diversified services including project finance,
term lending, working capital facilities, lease finance, venture
capital, loan syndication, corporate advisory services and legal
and technical advisory services to its corporate clients as well as
mortgages and personal loans to its retail clients. As part of its
development activities, IDBI Bank has been instrumental in
sponsoring the development of key institutions involved in India's
financial sector - National Stock Exchange of India Limited (NSE)
and National Securities Depository Ltd, SHCIL (Stock Holding
Corporation of India Ltd), CARE (Credit Analysis and Research
Ltd).
Federal Bankis one of India's leading private sector banks, with
a dominant presence in the state of Kerala. The history of Federal
bank dates back to the pre-independence era. Though initially it
was known as the Travancore Federal Bank, it gradually transformed
into a fully fledged bank under the able leadership of its founder,
Mr. KP Hormis. It has a strong network of over 1,142 branches and
1,312 ATMs spread across India. The bank provides over four million
retail customers with a wide variety of financial products. Federal
Bank is one of the first large Indian banks to have an entirely
automated and interconnected branch network. In addition to
interconnected branches and ATMs, the Bank has a wide range of
services like Internet Banking, Mobile Banking, Tele Banking, and
Any Where Banking, debit cards, online bill payment and call centre
facilities to offer round the clock banking convenience to its
customers.
The Bank has been a pioneer in providing innovative
technological solutions to its customers and the Bank has won
several awards and recommendations.
Ageasis an international insurance group with a heritage
spanning more than 180 years. Ranked among the top 20 insurance
companies in Europe, Ageas has chosen to concentrate its business
activities in Europe and Asia, which together make up the largest
share of the global insurance market. These are grouped around four
segments: Belgium, United Kingdom, Continental Europe and Asia and
served through a combination of wholly owned subsidiaries and
partnerships with strong financial institutions and key
distributors around the world. Ageas operates successful
partnerships in Belgium, UK, Luxembourg, Italy, Portugal, Turkey,
China, Malaysia, India and Thailand and has subsidiaries in France,
Hong Kong and UK.
Ageas is the market leader in Belgium for individual life and
employee benefits, as well as a leading non-life player through AG
Insurance. In the UK, Ageas has a strong presence as the fourth
largest player in private car insurance and the over 50's market.
Ageas employs more than 13,000 people and has annual inflows of
more than EUR 21 billion.
MARKETING MIX FOR IDBI FEDERAL BANK
Before embarking on the journey of understanding the marketing
mix of IDBI bank it is imperative for us to understand what a
marketing mix is. It consists of the 4 Ps and STP. The 4Ps are the
product, price, place and promotion. The important fact to notice
is that their importance is in their chronological order in a
decreasing way. The most important thing is the product.
The product is the most important of the 4Ps. The product has to
be very good to capture the market share.
Next important factor is the price. The pricing has always been
a very important factor as far as economists are concerned. There
is that famous demand curve and the estimation that tells us the
quantity that will be sold depending on what the price that is
being charged. But marketing is an extension of the branch of
economics. It states that it is not only price which decides the
sales but the value that a customer perceives that he will get from
the product. In the mind of the customer it has to be more than the
price he has paid for the product.
Then the most important component of our marketing strategy is
the place. The place has to be appropriate. The famous example that
has been quoted so frequently is that there is no point in trying
to sell summer wear in Alaska or Greenland or to an Eskimo to be
more precise with. Thus it is very important for us to understand
the people or place where we are trying to sell our
product.Promotion is the last but certainly not the least most
important factor. Promotional event and campaigning helps us in
reaching out to our target customer and convey our value
proposition. This is the way companies communicate with their
target customer and hence is extremely important for their sale
purpose. SEGMENTATION, TARGETING AND POSITIONING
In segmentation we decide which part of the population we want
to have as our target customer and whom we want to serve. This
depends on generally four parameters, namely: Psychographic,
demographic, geographical and behavioural characteristics. All
these characteristics generally the classification of the
population on the basis of their income, age, gender, attitudes,
preferences, and the place where they are reside. This in short
decides the target segment of our customers.
PRODUCTS THAT WERE INTRODUCED TO INTERNS
IDBI Federal Childsurance is a non-linked participating
endowment plan that ensures childs future financial needs are
fulfilled. It is designed to give customer guaranteed annual
payouts and aid the important milestones in their childs life.HOW
DOES THIS PLAN WORK1. Customer needs to decide the amount of
guaranteed annual payouts he would need which will depend on plans
for his childs future.2. Basis the amount of payouts, he would then
choose the Maturity Sum Assured (MSA). 3. Next, he would choose
when and for how long he would need the payouts the difference
between childs current age and the age at which the guaranteed
annual payouts should end, will be the policy term. This can help
plan his childs future better.
The tagline for this product is that your kid might look cute
while being angry now but he wont look so when hes 18.It makes us
think regarding the way we plan our future.The best example is that
in todays date a marriage might cost you around 5 lakh but after 18
years the same marriage is going to cost 33 lakh Indian rupees. So,
people have to keep in mind the inflation and cannot plan keeping
the present value of things in mind. This product takes care of the
above fact and hence the future planning efforts are unaffected by
unforeseen and unfortunate events.
IDBI Federal Wealthsurance Suvidha Growth Insurance Planis a
simple unit linked plan that helps customer take their first step
towards wealth creation and that too, with ease. Whats more, the
life cover with this plan provides financial protection for loved
ones.Wealthsurance Plans guarantees following: Financial protection
against uncertainty Partial withdrawals for emergency fund
requirements Guaranteed loyalty additions to boost your wealth
Flexible to switch funds and investment options Option to choose
how long you want to stay invested Get 2 Tax benefit of 80 C and
10(10 D).
IDBI Federal Incomesurance Guaranteed Money Back Insurance
Planis a non-linked non-participating money back plan which gives
customer guaranteed*returns on investment, so that they stop
worrying about the future. With Incomesurance, customer can
guarantee a secure future for their family even when they are not
around.HOW DOES THIS PLAN WORKIncomesurance is a simple plan with
guaranteed benefits. On payment of premiums for 5 years customer
will receive guaranteed annual payouts at the end of every year for
the next 5 years. At the time of purchasing the policy, he will
know exactly how much he will receive as guaranteed annual payouts.
The guaranteed annual payouts that will be received will depend on
two factors - the amount of annual premium that he will pay and
age.
IDBI Federal Lifesurance savings insurance plan is a fixed term
non-linked participating plan that provides twin benefits of
long-term savings and life cover.With Lifesurance Savings, small
savings will help customer realize the big dreams that he has for
himself and his family. This plan also offers the benefit of life
cover that will provide financial security to family in his
absence.
BENEFITS OF THIS PLAN Financial protection against uncertainty
Lump sum payout at maturity Guaranteed additions to safeguard as
per your need Flexible to choose options as per your need Bonuses
to boost your savings Get 2 Tax benefit of 80C and 10(10D)
PRICING AND CALCULATING THE PREMIUM
Pricing refers to the calculation of premium that will be
charged on the insurance policy.The pricing of the insurance policy
is an important decision for the insurance company and it will have
a number of prime objectives in mind in this respect.In addition to
being corned about charging premiums that are sufficient to meet
claims, expenses and produce profits at the desired level, the
company will also be keen to ensure that premiums are competitive
so that it does not lose business to other insurance companies in
the mortality tables.
PRICING ELEMENTSMortality rates:As mentioned already that
insurers use mortality tables to help calculate the premium. These
tables also contain mortality rates, which in simple words can be
defined as the probability that a certain individual will die
before their next birthday.
Loading:All companies incur expenses in going about their
business and insurance companies are no different. The premium is
the key source of income for an insurance company and so the
premium needs to convert the cost of meeting these expenses. The
addition of these expenses to the premium is called loading.
Income from investment of premium:The premium that is collected
by insurance companies for traditional plans are invested as
mandated in Insurance Act 1938. The profits they earn from their
investment can help to cover the insurance companys expenses and so
can be taken into account while considering the price.
Benefits promised:The pricing will depend upon the benefits
promised by the company. The larger the benefits offered by the
insurance company, the higher the premium will need to be cover the
cost of providing that benefit.With profit-policyholders pay a
slightly higher premium for the benefit of sharing in the bonuses
and are generally rewarded well by bonus declaration.
Premium Plan Being Taken:The policyholder can pay the premium in
a number of ways:
Single premium planIn this plan policy holder pays a single lump
sum payment at the inception of the policy. The premium amount
should be sufficient to meet the administrative and other expenses
during the entire term of the policy.
Level Premium PlanIn this type of plan policyholder pays the
same amount of premium for the entire duration of the policy. When
pricing this sort of policy the insurance company will need to
allow the time value of money i.e. it should be sufficient to meet
future claims.
Flexible Premium PlanInsurance companies also allow the
policyholder to choose a flexible premium payment plan, where the
policyholder can pay the premium amount at their convenience. They
can choose whether they wish the premium to remain the same over
the term or to change the amount of premium paid based on
affordability.
CALCULATING PREMIUM
The process of calculating the premium is as follows:Calculate
the risk premium
Based on risk premium, calculate the level premium
Deduct the expected interest on investments to calculate the net
premium
Add the loadings
Arrive at the gross premium to be charged
Calculate the risk premium:The life insurance premiums collected
by the insurance company are kept in a single pool, known as the
common fund or life fund. All the future claims on the company are
settled using this common fund. Therefore, the insurance company
has to make sure that there is enough in the common fund to meet
those claims. Determining the correct amount for the common fund is
a difficult task, as no one can accurately predict the future.
However, as we have seen, using the statistics on death rates from
previous years, insurance companies can now estimate fairly
accurately the probability of an individual dying before their next
birthday. This probability known as the mortality rate is used to
calculate the risk premium.The risk premium is calculated using the
mortality rates in the mortality table of the respective insurance
company. The formula is:Risk Premium = Mortality Rate * Sum
assuredThe risk premium is the premium that has to be charged just
to meet the claims of those who die during the year.Based on risk
premium, calculate the level premiumWith many life insurance
policies the insurance company charges the same amount of premium
for the entire policy term: it cannot be changed. Therefore, the
premium set will need to take into consideration the future
expenses and claims that the insurance company will have to pay. It
will also need to take into account the effects of ination, which
means that the value of money decreases over time, so the premium
the policyholder pays now will not hold the same value in later
years. This means that the cost of ination will be borne by the
insurance company in the later years of the policy. Consequently,
the premium will need to be set at a higher level than would appear
to be appropriate initially. The higher premium collected in the
early years is put into a reserve by the insurance company to meet
the cost of future claims and expenses.Calculate the net premiumThe
premium that is collected by the insurance companies for
traditional plans is invested in securities as mandated in the
Insurance Act 1938. The insurance companies earn interest as income
from their investments. This interest earned is also considered for
the premium calculation. The actuaries make an estimate of the
amount of interest that the investments are expected to earn. Based
on the estimate of these interest earnings the premium charge can
be reduced.Premium Interest Earnings = Net PremiumThere are some
important points to remember when thinking about how the premium is
adjusted for the interest earned on its investment: The premium is
invested, until it is required to pay claims; For level premiums,
the reserve funds are also invested; and The interest expected to
be earned also depends upon the term of the policy. Add loadingsA
further adjustment is made to the net premium in order to calculate
the gross premium (the actual premium that is paid by the
policyholder). This adjustment is to take account of the expenses
and prot of the insurance company. This process is known as
loading. The following items are added in loading: Administrative
expenses, such as the cost of running the building, employees
salaries, etc. Medical expenses incurred for medical underwriting;
Processing fee; Expenses involved in the renewal of the policy;
claim settlement expenses; Prot margin; and Bonus loading for
with-prot policiesArrive at gross premium to be chargedThe type of
policy whether it is a single premium plan, a level premium plan,
exible premium plan or an annually renewable plan will affect the
gross premium to be charged. For instance, when calculating the
premium for a single premium plan the insurance company will need
to determine how many policyholders are likely to take up the plan
and how many death claims it will expect to have to pay during the
policy term.Similarly, whether the premium is to be paid annually,
semi-annually, and quarterly or monthly will also need to be taken
into account. Most insurance companys rst calculate the premium for
annual payment, and then make a further adjustment for monthly
payment. Insurance companies generally collect a frequency loading
if the premium is not being paid annually.
PROMOTIOAL ACTIVITIES OF IDBI FEDERAL
Promotion is one of the four elements of marketing mix (product,
price, promotion, and place). It is the communication link between
sellers and buyers for the purpose of influencing, informing, or
persuading a potential buyer's purchasing decision.
The following are two types of promotion:
1. Above the line promotion: Promotion in mass media (e.g. TV,
radio, Newspapers, internet, mobile phones) in which the advertiser
pays an advertising agency to place the advertisements.
2. Below the Line Promotion: Much of this is intended to be
subtle enough for the consumer to be unaware that promotion is
taking place.
3. E.g., Sponsorship, testimonials, sales promotion,
merchandising, direct mail, personal selling, PR, trade shows
The specification of five elements creates a promotional mixor
promotional plan. These elements are personal selling, advertising,
sales promotion, direct marketing and publicity. A promotional mix
specifies how much attention to pay to each of the five
subcategories, and how much money to budget for each. A promotional
plan can have a wide range of objectives, including: sales
increases, new product acceptance, creation of brand equity
positioning, competitive retaliations, or creation of a corporate
image fundamentally, however there are three basic objectives of
promotion. These are:
1. To present information to consumers as well as others2. To
increase demand3. To differentiate a product.
Here we have to find out: how effectively advertisements
influence a person to buy the life insurance products The find
whether IDBI federal needs brand ambassador to reach the customer
effectively Identifying the role of advertisements for life
insurance productsFollowing are the main ways in which IDBI Federal
life Insurance company ltd promotes its products/services and
creates awareness in the market.
NEWSPAPER:
IDBI Federal has attained notice through many articles and
advertisements published in various national and regional
newspapers in India like the Economic Times, Times of India, The
Hindu , Samachar Jagat, Vir Arjun, Meghalaya Guardian etc. IDBI
Federal spends around Rs 1040 per sq.cm for promotional activities
through newspapers. They position the ads and articles in such a
way that it catches the eye of the reader as soon as they start
reading the newspaper.
HOARDINGS:
IDBI Federal has also tried making their potential customer
aware of their products and policies through billboards and
hoardings by positioning them in strategic locations. As of now,
the total number of hoardings which are put up in Hyderabad region
counts to a good 17 number. The total expenses spent by the company
for this promotional activity is Rs 4 Lakh.
PAMPHLETS:
Pamphlets are distributed across India at least 5 times in a
month without any cost. Its done to create maximum awareness about
the products/services.
MAGAZINES:
There is no specific magazine in which advertisement is given.
Its given in magazines depending upon their sales and reputed
magazines like Outlook, Money etc. The advertisement is given every
month at least once in any magazine.
TELEVISION:
Mainly, the advertisement is shown on cricket channels, Star
channels. The main promotions were done during FEB & MARCH
to:
1. Highlight the tax benefit2. To combat competition as all the
insurance companies would advertise during this time at a great
frequency. Also the company will soon start displaying their
advertisements on Satellite TV like SUN network,
etc.DISTRIBUTORS:
A strong network of distributors and parent advisors also helps
a lot in promoting products/services of IDBI Federal by word of
mouth. A Viral campaign is also run on the Internet by wherein
flash videos of working of products are explained in a very
humorous manner.
LOCAL EVENTS:
The overall costs associated with such events totals to Rs. 2,
00,000 per annum such events are mainly conducted in Apartments,
Schools, etc. Building an engagement process around the solution
being offered gives an additional boost to this cause. Spelling Bee
was a specially created spelling contest created to connect with
children. The engagement started with the spelling contest for kids
and gave natural opening for a discussion with parents about
financial planning for their childrens future needs like education.
This is a sort of channel marketing which IDBI Federal had adopted
to create awareness as well as to educate the future generation
about the company and the importance of saving.
Also IDBI Federal involved them in developing their business by
joining hands with SAMHITA, a community development organization
based out of Bhopal which works towards bringing financial literacy
to the underprivileged population in Madhya Pradesh. They believe
that such financial literacy among the under banked population will
help bring a holistic change in the way people perceive and
understand financial products and their utility at various stages
in their life.This will ultimately help bring them closer to
financial inclusion.
CLIENT NEEDSAs we have established, it is the responsibility of
the insurance agent to determine the legitimate needs of their
clients, priorities them and then to recommend suitable insurance
or savings products. The process involves the following steps:
Identifying needs Quantifying needs Prioritizing needs
1. Identifying needs: An insurance agent needs to collect and
analyse the following information: Details of the client in terms
of their nancial assets and liabilities; Marital status; Future
nancial goals of the client for themselves and their children;
Number and age of dependants; Employment status, i.e. their
existing grade and scope of promotion within their company; Income
which includes salary, business income and income from other
sources and investments (if any); Details of health status and
heredity medical conditions; and Existing protection, savings and
retirement provision (if any).
2. Quantifying needs: in the nancial planning process an
insurance agent needs to quantify each of the needs in
monetary-terms and then calculate suitable amounts that an
individual needs to save and invest for the future.
3. Prioritizing needs: the amount available for investment is
the clients income less their living and other expenses, i.e. the
monthly surplus available. The clients needs must be prioritized,
as their investment capacity may be limited and the total amount to
be spent may be more than the surplus funds available. The
insurance agent should suggest the best product mix, where limited
funds can be allocated to full fill the maximum needs of the
client. Prioritizing these needs helps the client to determine
which investment(s) can be deferred, and so the needs which are
given highest priority in the ranking are the ones for which
investment should be made rst.Client needs: real and perceivedIt is
important to understand that there are differences between real and
perceived needs. Real needs are the actual needs of a client which
should take priority over others, whereas perceived needs are
imagined or thought to be important by the client (for example
wanting to buy an expensive car when there is adequate public
transport and the client has insufficient savings or income to buy
one).Real needs are determined by the use of nancial planning
techniques and analysis. Perceived needs can be understood by
analyzing an individuals thoughts and desires. Lets have a look at
some of the problems faced by agents in advising clients about real
and perceived needs: Different nancial needs occur at different
stages of the lifecycle of an individual. However, when the time
comes for nancial planning, an investor might shy away from
actually making investments. A young man might aspire to have Rs.
10, 00,000 ten years from now, but for this he needs to sacrice
some of his leisure activities and save and invest regularly. The
second problem is that clients often fail to understand the
importance of saving for the future and do not appreciate the
benets that this will bring. They will want to give priority to
their present needs as opposed to their future intangible needs.
Individuals may not understand their real needs and may fail to
priorities them sensibly. There can be cases where an individual
might choose to invest in child plans rst, whereas their priority
need would be to provide nancial protection for their family in the
event of their premature death, illness or disability.The job of an
insurance agent is to help clients in identifying real needs:
Identication of real needsInsurance agents should help their
clients in understanding their real needs. This can be done by
educating them about the concept and importance of insurance.
Identication of current and future needsInsurance agents should
help their clients in understanding their current and future
needs.
Quantication and prioritization of needsOnce the needs are
identified, they must be quantified in terms of monetary value and
prioritized.
Financial planning reviewClients should meet with their agents
regularly to review whether their financial planning needs have
changed over time. If so, then new investments should be made to
suit the changed circumstances.
BENEFITS OF THE PROJECT TO THE COMPANY
Half of the work is simply done by knowing what the problem is
at hand and by knowing the weakness. By keeping them in mind the
operations and the marketing efforts can be streamlined by
customizing them according the needs of target customer.
It is a well known fact that one size doesnt fit all. Before
approaching a customer it is always a good idea to know the needs
of the customer before approaching them. This project tries to
point out the shortcomings and modifications in their marketing
approach.Problems Formulation To increase the brand awareness about
the company. To do the need analysis of the customer To design the
marketing mix in such a that the education of the common public
happens regarding the financial instrument ,Increase the financial
education ,Increase transparency and increase the trust quotient.
The increase in this awareness might lead to increase in customer
base. The economies of scale can be achieved by tapping into the
base of wary customers.
Therefore, the objectives of the company as of now should be 1.
More differentiation of the product 2. To identify target segments
more appropriately 3. To have customized strategies for every
segment
So the major challenges right now in front of IDBI are what the
general attitude towards various segments is and how to increase
the brand awareness of IDBI.
RESEARCH METHODOLOGY Data approaches:Questionnaire. Sample
size:100 Sample procedure:Convenience sampling. Research Design
:Descriptive.
Research design: Research design is simply the framework or plan
for a study, Used guide in collecting and analysing data. For the
study: for conducting that research I selected the Descriptive
research design.
Descriptive research design: Descriptive research is also called
Statistical Research. The main goal of this type of research is to
describe the data and characteristics about what is being studied.
The idea behind this type of research is to study frequencies,
averages, and other statistical calculations. Although this
research is highly accurate, it does not gather the causes behind a
situation. Descriptive research is mainly done when a researcher
wants to gain a better understanding of a topic. That is, analysis
of the past as opposed to the future.Descriptive research is the
exploration of the existing certain phenomena. The details of the
facts wont be known. The existing phenomenas facts are not known to
the persons.
Data Requirement Analysis:The data required is about the
investment pattern of the respondents, the income level under which
they fall, the respondents current status of having any insurance
policy, their awareness level if IDBI Federal and their likeness to
invest in IDBI Federal. Data Collection: The data is collected
through primary and secondary research. The data is collected
through primary research by doing field Survey in Delhi/NCR region
and secondary research through text books, websites, previous
studies etc. The scope of research is restricted to Delhi/NCR
region and the research approach descriptive method.
DATA SOURCE
Primary Data - Interviews, Group Discussions, and Structured
questionnaires is been used to collect Primary information on
customers and marketers.
Seconday Data Is collected from Business Magazines, Manual of
advertisements, Websites, Official Publication, Industry market
report, Local and International Newspapers, Articles, Journals,
Brochures and Books.
Questionnaire Design FormulationThe objective behind every
question is know the preferences and psychic of very customer. To
evaluate the attitude of consumers whether they believe that the
information provided to them of various products through internet
is sufficient and accurate. To analyze whether they are finding new
and improved modern ways to shop through internet is time saving or
difficult over traditional ways of shopping.
Sample DesignSample unitExtent - The samples for the survey will
be collected from New Delhi Sampling Frame -Sampling Technique -
Random Sampling procedure is used.Sample Size - The size of the
sample will be about 50 comprising respondents of different
socio-economic profile (Age/ Gender/ Occupation/ Income Level/
Rural or Urban/ Education Level).
LIMITATIONS OF THE RESAERCHThe sample size though carried out
amongst various age-groups has been limited to around 65.The data
collected is limited to the year 2014-15.
DATA ANALYSIS & INTERPRETATION
Q-1 Which of the following long-term savings you are aware of ?
a) Life Insurance b) Mutual Funds c) Fixed Deposits d) Securities
e) Post Office SavingsLong term saving %age share
Life Insurance28
Mutual Fund12
Fixed Deposit35
Securities10
Post Savings15
CONCLUSION As we can see maximum sample is intrested in saving
in fixed deposits with 35% share of sample .
Q-2 Do you have investment/ insurance plan on your
name?(Yes/No)__________Investment plan %age share
Yes48
No52
CONCLUSION As 52% of sample has not invested in life insurance
plans .
Q-3 If the answer to the above question is Yes, please mention
the details of the insurance policy
Term: _____ Maturity year: ____ Premium: _____ Insurance
coverage amount: _____________TERMPREMIUMINSURANCE COVERAGE%AGE
SHARE
0-5 yr10000-20000 p.a.1 lakh40
5-10 yr20000-40000 p.a.4 lakh18
10-15 yr40000-60000 p.a.9 lakh22
15-20 yr60000-80000 p.a.16 lakh8
Above 20- yrAbove 1 lakh p.a.Above 16 lakh12
CONCLUSIONAs we can see maximum people invest for period of 0-5
years .
Q-4 From which source did you come to know about life insurance?
a)Newspapers & magzines b) Radio c)Internet d)Tele-marketing
Others,specify_______________________
Sources%age Share
Newspaper & Magzines12
Radio28
Internet44
Tele-Marketing14
Others,specify2
CONCLUSION As maximum sample get awarness about the life
insurance product through internet with 45%.
Q-5 In which company you would like to purchase investment plan?
a) Goverment owned company public ltd. b) Private company c)
Foreign company
Companys%age share
Government owned co.60
Private co.22
Foreign co.18
CONCLUSION As per sample ,60% sample want to purchase insurance
in government owned public co.
Reasons for Investment %age Share
Safety25
Brand Name25
Good Track17
Good Return33
Q-6 Provide the reason behind choosing particular investment
company? a) Safety b) Brand Name c) Good Track d)Good Return
CONCLUSION As per sample most people want good return with
safety and brand name are also important aspect while reasons for
investment.
Q-7 How important would it be you to make a right choice of
brand? a)Not at all b)Equally important c) very important
Choice of making brand %age share
Not at all Important27
Equally Important45
Very Important28
CONCLUSIONAs maximum sample feel right brand plays equal
importance in selecting life insurance.
Q-8 Are you aware with the new unit link plane in the market?
a)Yes b)No Ulip plan % age share
Yes69
No31
CONCLUSION As per sample 69% people know about the unit linked
insurance plans
Q-10 How do you made your purchase decision for life insurance
product ? a)Consult other people to help choose best alternative
available b)Try to buy the same brand that my friends/colleagues
have bought c)Base my decision on the brand value of the company
& product
Purchase decision influencing factors%age share
Consult others to choose better33
Try to buy the same brand that friends have bought 45
Base my decision on brand value22
RECOMMENDATIONS
It should target the target the rural rich populace first and
should try and custumize service with accordance to the needs of
the poor .Especially women should be their next target as the
penetration in this segment is pretty low.
It should use banc assurance to its fullest use those banks
which have a good rural penetration to serve or sell its
products.
If it can tie up with SBI then there would be more credibility
to its products as people tend to have more trust in the rural
segment.
Extremely high class agents should be recruited as at the end of
the day they are the brand ambassadors for the organization.
Benchmarking the products against LIC and ICICI are going to
bring in the best results.
Companies abroad have started big data in a big way to carry out
analysis of which portions to approach in a geographical location
and how much to charge for premiums.
To create a pull approach rather than a push approach. To make
smokers and other people aware of the fact that even if they have
an earlier ailment that does not prevent them from having a health
insurance.
CONCLUSION
The right service model, a low cost platform, partnership with
an Indian PSB, focus on brand building, trust, good governance
along with customized products for the ever expanding client base
in India will help them in carving out their own space.
Getting associated with Insurance industry which is fastest
growing insurance company in India.
Learning all the important points which affects the pricing and
selling of companys product.
The high level of customer interaction and understanding the
different behavior associated with the client.
REFERENCES
http://www.idbifederal.com/Pages/home.aspx
http://www.idbi.com/index.asp
http://en.wikipedia.org/wiki/IDBI_Federal_Life_Insurance
http://www.ageas.com/
http://www.idbifederal.com/Products/Pages/default.aspx
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