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Somnath Dash
PGDM BATCH 12
ROLL NUMBER-67
KIRLOSKAR INSTITUTE OF ADVANCEDMANAGEMENT STUDIES, HARIHAR
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Insurance is defined as the equitable transfer
of the risk of a loss, from one entity to
another, in exchange for payment
Insurance is to provide protection againstfuture risk, accidents and uncertainty.
Insurance cannot check the happening of the
risk,but can certainly provide for the losses
of risk.
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Primaryfunction
Provide
protection
Assessment Ofrisk
ProvideCertainty
Secondaryfunction
Prevention of
losses
Small capital tocover large risk
Contributetowards the
development of
larger industries
Functions of insurance
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Micro Insurance is the process of delivering andservicing relevant and affordable life insuranceproducts to the low-income socio economicstrata. The focus of our companys Microinsurance program is rural India, wheretraditionally the far-flung, lower and lowermiddle-income segments have had limited accessto life insurance services.
FOCUS AREA-The flagship product of microinsurance nowadays remains life insurance. It
can combine life insurance coverage (when thepolicyholder is alive) and a savings product,which makes it a particularly well adaptedservice in the context of microfinance.
MICROINSURANCE
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The most important feature for growth would bethe purchase factor. For simulating purchasesthe following approach is intended
Affordability: product premiums should be lowand affordable in comparison to competitors.Evolve effective and innovative schemes likepremiums on a daily ,weekly or monthlyinstallment basis.
Secured feeling- since we are going to be anovice in the field building of goodwill and trustwould be considered important by the companyin its march towards growth and prosperity.
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Company image- the company would furtherinvolve itself in promotional activities ,
trying to carve out a place in the minds ofthe consumer by involving with the localpeople , trying to understand theirsentiments and providing need basedproducts and services. The products would
be designed by a through market analysisbased on a sample questionnaire to be filledin by the local mass in order to customize totheir needs.
Finally the company intends to partner withan insurance company Tata AIG life insurancein its efforts to position itself as a strongplayer in the field of micro insurance.
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The TATA brand name symbolizes trust.
AIG is one of the oldest and largest
multinational in the field of insurance.
Tata AIG Lifes Micro agent retailing model
has also been the subject of a case study
report sponsored by ILO/CGAP (International
Labour Organisation / Consultative Group to
Assist the Poor) & the Munich Refoundation.
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Insurance Regulatory Development Authority
First step would be to get permission from this
regulatory body.
We are insured to the Life insurer sector We do not want to focus our competencies on
general insurance keeping in view our target
market where we find the growth potential to be
low and the amount of risk to be potentiallyhigher. But at the same time we would not limit
ourself to the life sector in future and may move
in to other related sectors like crop insurance
and farm machinery insurance.
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No plans available for Low level income
groups
95% of companies are Targeting on high level
Income group.Huge untapped market available.
Large no of people unaware of Micro
Insurance.
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Differentiation on the basis of:-
People - low level income people( immense potential of
growth based on this differentiation based on daily low
premiums)
Process-two people available for every 20 km, collection
agents can be financially poor students or people looking for
a part time.
Convenience- easy access to claims , through our 24 *7 tollfree number
Profit- high profit because of low premiums, larger volumes
and lower claims because of focus on servicing to the low risk
category.
Time- claims to be serviced within in 15 days, else company
would be laible for payment of penalty on the same.
Marketing Analysis to focus on target customer based onaffordability and need requirement
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Product Mix
-Promoting innovation in product portfolio, include thoseservices and schemes which are likely to get a positiveresponse in the future and which are given lesser
importance by competitors.
-Polices should not take care of generating premium onlybut also cover people from all walks of life.
-Insurances should be there as per requirement of thecustomer.
-Instant policy making
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Focus on social benefit. Give due weight age to the socially and
economically backward classes.
Discover uncovered market places
Maximize the mobilization of savings by offering lucrativeschemes.
Assign due weight age to interests of investors.
Maintain economy in business by promoting cost effectiveness.
Keep in mind the emerging trends in business environment.
Improve the quality of customer / user services.
Try to come with innovative strategies
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Word of mouth advertising
Media Advertsing
Personal Selling
Participating in some social welfare activities.
Sponsoring events and festivals of local importance.
Providing for promotions like waiver on premiumschemes by focusing on schemes like chainmarketing as followed In retail sector by companieslike Amway.
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Cost effectiveness
Restructuring of premium, leverage on smaller
premium use of schemes like daily depositswhich would contribute towards the premiumwithout bringing in the burden factor.
Rationalizing or optimizing the social costs.
Providing waiver on premiums on local festivals.
Paving avenues for channelizing the productiveinvestments
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People
-No matter what distribution strategy acompany adopts, customer relationship acts
as a base to maintain the customer on a
long-term basis.
-Give training to local people for creating
awareness and employment.
-A satisfied Customer is a salesman
forever.He would then act as a partner with
us and help us in our road to growth.
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Insurance for life, health, home, business crop nand farmimplements is a necessity for many people in the middle andlower income group specially in rural and semi urban areas.
As agents we need to focus on the local community andfind ways to get our name out there i.e. focus on need basedadvertisement and increase awareness towards insurance asan investment option.
Local Newspapers: selective(based on readership reviews
Post cards advertisements
Radio during Business hours.
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Television: focus on local channels based onTRP ,ads would be shown during prime time.
Local Sign Advertising: Billboards, Neon Signs,
Transit System Signs, etc.
Advertisements through ads on the back of
railway tickets and long tour bus services.
Local Movie Theatre: advertisements as
screen shots during intervals and before the
start of the movie
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