A Project Report submitted in partial fulfillment of the requirement for the award of POST GRADUATE DIPLOMA in RISK & INSURANCE MANAGEMENT By A. Sai Rama Shanker (Roll No: 1225111401) Under the Guidance of Prof. K. Ashok



Certificate by the company on their letter head

This is to certify that _______________, MBA student (Enrollment No 1225109322), GITAM Institute of Management, GITAM University has done the project from 02 May 2012 to 12 June 2012 on ―___________________‖ in our Organization for submission in partial fulfillment for the award of Post Graduate Degree of Master of Business Administration by GITAM University and his/her work has been satisfactory.



I, A Sai Rama Shanker a student of Masters of Business Administration (MBA), GITAM Institute of Management (GIM), GITAM University, hereby declare that the project work entitled ―Study on Effectiveness of Agency Channel In General Insurance Marketing‖ initiated on 3rd May 2012 at Future Generali India Insurance Company Limited, Visakhapatnam is a genuine work done by me in partial fulfillment for the requirement of the degree of Masters of Business Administration. I confirm this has not been published or submitted elsewhere for the award of any degree in part or in full.

A Sai Rama Shankar Date:



This is to certify that the project Report titled ―Study on Effectiveness of Agency Channel In General Insurance Marketing‖ is an original work carried out by Mr. A Sai Rama Shankar (Enrollment No 1225111401), under my guidance and supervision, in partial fulfillment for the award of the degree of Masters of Business Administration, GITAM Institute of Management, GITAM University, Visakhapatnam, during the Academic year 2011-2013. This report has not been submitted to any other University or Institution for the award of any Degree/Diploma/Certificate.

Signature of Guide Prof. K. Ashok Chairperson Student affairs, GITAM Institute of Management Visakhapatnam



It is my pleasure to acknowledge and express my gratitude to all those who helped me throughout in the successful completion of this project. I am very thankful to Mr. N. Vinay Kumar Branch Head, of Future Generali India Insurance Company Limited, Visakhapatnam, for extending support throughout the project. I am thankful to Mr. P. Venkat Ramesh, Sales Manager, of Future Generali India Insurance Company Limited, Visakhapatnam, for guiding me in completing the project. I am thankful to Mr. Ajith Kumar, Underwriter, of Future Generali India Insurance Company Limited, Visakhapatnam, for teaching me the various concepts of insurance and working of an insurance company. I wish to express my gratitude to Prof K Siva Rama Krishna, Dean & Principal, GITAM Institute of Management, GITAM University, Visakhapatnam, for giving me this valuable opportunity to experience the work culture in an organization. I am grateful to Dr. K. Ashok, Senior Professor and Chair Person Student Affairs, GITAM Institute of Management, GITAM University, Visakhapatnam for his continuous guidance to accomplish this project work, successfully. I would like to express my sincere thanks to Mrs. K. Uma Devi, Program Coordinator, MBA, GITAM Institute of Management, GITAM University, Visakhapatnam for giving me this opportunity. I would like to express my sincere thanks to my class coordinator Mrs. G. Arti, Associate Professor, GITAM Institute of Management, GITAM University, Visakhapatnam for encouraging me in my endeavor. A Sai Rama Shanker Roll. No; 1225111401


Contents Page No.) Insurance b) Review of literature 2. Chapter IV: Data Analysis and Interpretation 5. Abstract 2. Chapter III: Methodology i) Need of Study ii) Objectives of Study iii) Scope of Study iv) Research Design v) Limitations 4.29 30 31 . Chapter I: Introduction to Insurance a. Annexure 07 08 . Chapter II: Organisational Profile i) Industry profile ii) Company Profile 3.30 09 . Bibliography 8. Chapter V: i) Findings ii) Suggestion iii) Conclusion 6.49 49 49 49 50 51 52 6 .47 48 . 1. Charts & Figures 7.36 32 33 37 -38 38 38 38 38 38 39 . List of Tables.

7 .Abstract Purpose: The purpose of the project is to understand the importance and effectiveness of the agency distribution channel in marketing and sales of general insurance products and services. branch head or sales manager of the 16 general insurance companies operating in Visakhapatnam. Findings: The agency distribution channel of the 16 general insurance companies contributes an average of 21% business to the company‘s whole business. Discount given on polices is the major problem faced by the agency channel. Methodology: Data is collected through distributing Questionnaires to the agency in charge.

Chapter-I: Introduction to Insurance 8 .

By paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event.  To pay a prefixed amount to the insured or his/her beneficiaries o the happening of a specific event.” In legal sense insurance can be defined as: “A contract under which the insurer (the company) in consideration of a certain sum of money paid (premium) by the insured (the person whose risk is insured) agrees to:  Make good of the loss suffered by the insured against a specific risk. The essence of insurance is collective bearing of all risks or pooling of risk. The insurance sector in India is growing at a speedy rate of 15-20% and together with banking services insurance services add about 7% to the country‘s GDP. Even today a giant share of Indian population nearly 80% is not under life insurance coverage. Insurance is basically a protection against a financial loss which can arise on the occurrence of an unexpected event. It can be found mentioned in the writings like Manusmrithi. Dharmasastra and Arthasastra." In financial sense insurance can be defined as: “A social device providing financiasl compensation to the insured for the consequences of adversities and the payment is paid by the insurer from the accumulated contributions (premiums) of all the parties participating in the arrangement. epidemics and famine 9 . These writings talks about pooling of resources and re-distributed of them in times of calamities such as fire. The insurance sector in India has shown immense growth potential. In the last completed financial year of 2011-2012 the insurance sector has shown a growth rate of 23%. Insurance companies collect premiums to provide for this protection. Brief History of Insurance In India insurance has a deep-rooted history. This clearly indicates the potential for insurance companies to grow their market in India. By entering into contract the Insurance Company agrees to pay the Policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called Insurance Premiums. Definition of insurance: In laymen‘s term insurance can be defined as: “A transfer of the risk of a loss.Insurance The insurance sector in India has come to a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. floods. In simple terms it is a contract between the person who buys Insurance and an Insurance company who sold the Policy. Today Insurance Companies in India have grown manifold. let alone health and non-life insurance policies. from insured (person taking insurance) to the insurer (the company) in exchange for a payment of certain sum of money (premium).

can trace its roots to the Triton Insurance Company Ltd. GIC incorporated as a company. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers‘ contracts.  1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. Act.  1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. Thereafter many changes have taken place in the insurance sector.  1957: General Insurance Council. on the other hand. and the United India Insurance Company Ltd. the Oriental Insurance Company Ltd. Malhotra Committee headed by former Finance Secretary and RBI Governor R. frames a code of conduct for ensuring fair conduct and sound business practices. There is a 26% equity cap for foreign partners in an insurance company. There is a proposal 10 .. the New India Assurance Company Ltd. In 1993. the National Insurance Company Ltd. a wing of the Insurance Association of India. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.  107 insurers amalgamated and grouped into four company‘s viz. lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. 5 crore from the Government of India. 1956. The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms.N. the first general insurance company established in the year 1850 in Calcutta by the British.  1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. the first company to transact all classes of general insurance business. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction.  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. 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.. 1972 nationalized the general insurance business in India with effect from 1st January 1973. Some of the important milestones in the general insurance business in India are:  1907: The Indian Mercantile Insurance Ltd. Insurance sector in India was liberalized in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill. The General insurance business in India. 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. set up.. with a capital contribution of Rs.and this can be considered as probable pre-cursor to modern day insurance.

new delivery systems and a greater awareness of risk will generate growth. Benefits of Insurance 1. insurance is still the most reliable tool an individual can use to plan for his future. a portion of premiums paid for life insurance policies are deducted from tax liability. life is fraught with tensions and apprehensions regarding the future and what it holds for the individual. However annuities received under certain pension plans are taxable. Encourages savings: An insurance scheme encourages thrift among individuals. India‘s insurance market will continue to experience major changes as its operating environment increasingly deregulates. Presently. 5. For a policy taken under the MWP act 1874. 2. there are 16 life insurance companies and 15 non-life insurance companies in the market. Purpose and Need of Insurance: 11 . 6. a mix of new products. The beneficiaries to an insurance claim amount are protected from the claims of creditors by affecting a valid assignment. But then it is essential that you plan for the future. Necessity of Insurance: The question contains the answer within itself. Despite all the planning and preparation one might make no one can accurately guarantee or predict how or when death might result and the circumstances that might ensue in its aftermath. 4. After all.to increase this limit to 49%. They can also be surrendered for meeting unexpected emergencies. competition will remain intense as private sector insurers and those about to enter India seek to win market share from the more established public sector entities. Based on the concept of sharing of losses. exemption is available for health insurance policy premiums. Life policies are accepted as a security for a loan. a trust is created for wife and children as beneficiaries. Money paid as claim including bonus under a life policy is exempted from payment of income tax. Furthermore. unlike other saving instruments. Tax relief: Under section 88 of income tax act. The changes 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 completely disregard his or her future and what it holds. wherein the saved money can be easily withdrawn. We are not saying that life and existence are constantly fraught with danger and uncertainty. The potential for growth of insurance industry in India is immense as nearly 80% of Indian population is without life insurance cover while health insurance and non-life insurance continues to be well below international standards. People generally regard insurance as a scheme when and where you have to lose a lot to gain a little. The opening up of the insurance sector has led to rapid growth of the sector. 3. On the one hand. On the other hand. It inculcates the habit of saving compulsory. (married women‘s property act). the society will benefit as catastrophic losses are spread globally. Similarly. Nevertheless. over the medium and long term.

sentimental attachments to family heirlooms. In case of human being death is certain. There has to be an uncertainty about the risk. lightening. The peril cannot be avoided through insurance.Assets are insured. All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. are perils. Insurance is in reality a protective cover against economic loss. through better safety and damage control management. Only economic consequences can be insured. we say that the asset is exposed to that risk. but the time of death is uncertain. etc. In case of a person who is terminally ill. It is a medium through which few losses are divided among larger number of people. If such perils can cause damage to the assets. It only compensates the losses-and that too. though not exactly known. The peril can sometimes be avoided. depending on the cost of the building and the contents in it. The risk to owner of a building. because of the peril of earthquake. because they are likely to be destroyed. by apportioning the risk with others. leadership of managers. 12 . innovative and creative abilities. the time of death is not uncertain. Risk is the basis for ascertaining the premium rate as well. not fully. Insurance only tries to reduce the impact of risk on the owner of the asset and those who depend on that asset. Perils are the events. Insurance is relevant only if there are uncertainties. breakdown.  Provide Certainty: Insurance is a device.  Primary Functions  Secondary Functions  Other Functions Primary functions of insurance:  Providing protection: The elementary purpose of insurance is to allow security against future risk. Insurance is done against the contingency that it may happen. Examples of noneconomic losses are love and affection of parents. insurance may not be possible. but can for sure allow for the losses arising with the risk.  Evaluating risk: Insurance fixes the likely volume of risk by assessing diverse factors that give rise to risk. flood. accidents and uncertainty. it cannot be insured against. Fire. through accidental occurrences. may be a few crores of rupees. Insurance does not protect the asset. which assists in changing uncertainty to certainty. The damage may or may not happen. Functions of Insurance Insurance services through its various activities perform various functions in the economy which can be classified as follows. It does not prevent its loss due to the peril.  Collective risk bearing: Insurance is an instrument to share the financial loss. The risk only means that there is a possibility of loss or damage. Such possible occurrences are called perils. etc. Risks are the consequential losses or damages. Insurance cannot arrest the risk from taking place. earthquake. He cannot be insured. If there is no uncertainty about occurrence of an event. If the loss is not financial.

13 .  Medium of earning foreign exchange – Being an international business. modify. IRDA has been framing regulations and registering the private sector insurance companies. making foreign trade risk free with the help of different types of policies under marine insurance cover. It launched the IRDA online service for issue and renewal of licenses to agents. withdraw. in the event of an unanticipated loss or disaster. there are 24 life insurance companies and 27 general insurance companies. installation of automatic sparkler or alarm systems. etc. There are loads of companies who are providing such customized insurance policies. Also to take the benefit of income tax exemptions. renew.  Helps in the development of larger industries: Insurance provides an opportunity to develop to those larger industries which have more risks in their setting up. Regulation of Insurance in India & IRDA In India the regulation and development of the insurance industry is carried down by Insurance Regulatory and Development Authority of India (IRDA).  Covering larger risks with small capital: Insurance assuages the businessmen from security investments. suspend or cancel such registration. people take up insurance as a good investment option. So far. This is done by paying small amount of premium against larger risks and dubiety.Secondary functions of insurance  Preventing losses: Insurance warns individuals and businessmen to embrace appropriate device to prevent unfortunate aftermaths of risk by observing safety instructions. any country can earn foreign exchange by way of issue of marine insurance policies and a different other ways. Powers. or reimbursement. restricting unnecessary expenses by the insured. There are different types of insurance policies under the sun cover almost anything that one might think of. The powers and functions of the Authority shall include: a) Issue to the applicant a certificate of registration. IRDA was set up as an independent regulatory authority. IRDA was established by government of India through Insurance Regulatory and Development Authority (IRDA) Bill in 1999. promote and ensure orderly growth of the insurance business and re-insurance business. Other functions of insurance  Is a savings and investment tool – Insurance is the best savings and investment option. 1999 lays down the duties. The Authority shall have the duty to regulate. Insurance provides indemnity.  Risk Free trade – Insurance boosts exports insurance. powers and functions of IRDA. Duties & Functions of IRDA The IRDA Act. Premium rates of most general insurance policies come under the purview of the government appointed Tariff Advisory Committee. which has put in place regulations in line with global norms.

m) Adjudication of disputes between insurers and intermediaries or insurance intermediaries. if the insurer does not change its stand even after examination/re-examination. n) Supervising the functioning of the Tariff Advisory Committee. e) Promoting efficiency in the conduct of insurance business. f) Promoting and regulating professional organisations connected with the insurance and re-insurance business. IRDA’s Cell for redressal of grievances of Policyholders The IRDA has a cell that receives and looks into complaints from policyholders—Life and Non-life grievances are handled separately. intermediaries. k) Regulating investment of funds by insurance companies. q) Exercising such other powers as may be prescribed. c) Specifying requisite qualifications. 14 . g) Levying fees and other charges. l) Regulating maintenance of margin of solvency. The Authority does not carry out any adjudicaton. the complainant would have to approach the appropriate judicial channel. The Cell plays a facilitative role by taking up such complaints with the respective insurers. If required. j) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries. Claims/policy contracts in dispute: Complaints relating to these are analysed and insurers are advised to examine the same. surrender value of policy and other terms and conditions of contracts of insurance. d) Specifying the code of conduct for surveyors and loss assessors. i) Control and regulation of the rates. insurance intermediaries and other organisations connected with the insurance business. the complainant is informed of the same. their attention is called to specific issues for examination/re-examination. settlement of insurance claim. Cases of delay/non-response: Cases of delay/non-response in matters relating to policies and claims are taken up with the insurers for speedy disposal. 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. h) Calling for information from. undertaking inspection of. For this.b) Protection of the interests of the policy holders in matters concerning assigning of policy. p) Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector. conducting enquiries and investigations including audit of the insurers. o) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations engaged in insurance and reinsurance business. nomination by policy holders. insurable interest. code of conduct and practical training for intermediary or insurance intermediaries and agents. advantages. However.

Birla Sun-Life Insurance Company Ltd.aegonreligare.bharti-axalife. SBI Life Insurance Company Ltd.newindia. Shriram Life Insurance Company Ltd.co.hdfclife.sbilife.com www.nationalinsuranceindia.co. ING Vysya Life Insurance Company Ltd.tata-aig. IndiaFirst Life Insurance Company Ltd. MetLife Insurance Company Ltd.inglife.canarahsbclife.List of Insurance Companies in India IRDA has provided till today registration for 27 general insurance companies including the Export Credit Guarantee Corporation of India and Agriculture Insurance Corporation of India and 24 life insurance companies.com www.com www. TATA AIG Life Insurance Company Ltd.com www.iciciprulife.in www.sudlife.edelweisstokio. Star Union Dai-ichi Life Insurance Company Ltd.idbifederal. Aviva Life Insurance Company India Ltd.com www.saharalife. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business.com www. The following are the insurance companies performing function in India.com www. Future Generali India Life Insurance Company Ltd. Edelweiss Tokio Life Insurance Company Ltd.com www. Bharti AXA Life Insurance Company Ltd. IDBI Federal Life Insurance Company Ltd.metlife.com www. GENERAL INSURERS Public Sector National Insurance Company Ltd.maxnewyorklife. Kotak Mahindra Old Mutual Life Insurance Company Ltd.com www.co. 15 Websites www.com www. Sahara India Life Insurance Company Ltd.com www.futuregenerali.reliancelife. New India Assurance Company Ltd.com www.indiafirstlife.com www. Table 1: List of Insurance Companies operating in India registered with IRDA LIFE INSURERS Public Sector Life Insurance Corporation of India Ltd.com www. Private Sector Bajaj Allianz Life Insurance Company Ltd. ICICI Prudential Life Insurance Company Ltd.kotak.birlasunlife. DLF Pramerica Life Insurance Company Ltd.licindia.in www.in www. Max New York Life Insurance Company Ltd.in www.com www.com www.in www.dlfpramericalife. In the registered companies 23 companies are private life insurance companies and 21 are private general insurance companies. Reliance Life Insurance Company Ltd.com www.avivaindia.in . Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.insurance.bajajallianz. HDFC Standard Life Insurance Company Ltd.shriramlife.com www.com www. AEGON Religare Life Insurance Company Ltd.

uiic. L&T General Insurance Company Ltd.co.magma-hdi. Raheja QBE General Insurance Company Ltd.com www.cholainsurance. Agriculture Insurance Company of India Ltd.org.in www.com www.in www. Life Insurance: ―Life insurance is a contract between two parties whereby one party agrees to pay to the other party.religarehealth.in www.apollomunichinsurance.in www.reliancegeneral.royalsundaram. Max Bupa Health Insurance Company Ltd.universalsompo. HDFC ERGO General Insurance Company Ltd. Bharti AXA General Insurance Company Ltd.co.starhealth.co.sbigeneral. a certain amount of money as premium to make good the loss of life arising out of an uncertain event of death in which the insured has interest‖.in www.rahejaqbe. REINSURER General Insurance Corporation of India www.maxbupa. Future Generali India Insurance Company Ltd. Apollo Munich Health Insurance Company Ltd.in www. IFFCO Tokio General Insurance Company Ltd. Cholamandalam MS General Insurance Company Ltd.ecgc.co.co. ICICI Lombard General Insurance Company Ltd.in www.bajajallianz.com www.com www.in www.bharti-axagi.hdfcergo. Religare Health Insurance Company Ltd. Royal Sundaram Alliance Insurance Company Ltd Tata AIG General Insurance Company Ltd.com www.Oriental Insurance Company Ltd.shriramgi.com Insurance Business Insurance business is classified into two classes: 1) Life insurance 2) Non-Life or General Insurance Life insurers transact life insurance business.ltinsurance.in www. Reliance General Insurance Company Ltd. SBI General Insurance Company Ltd.in www.gicofindia. Export Credit Insurers Export Credit Guarantee Corporation of India Ltd. general insurers transact the rest. Universal Sompo General Insurance Company Ltd.iffcotokio. 16 .icicilombard. No composites are permitted as per law.com www. Liberty Videocon General Insurance Company Ltd.orientalinsurance.com www. Magma HDI General Insurance Company Ltd.in www.futuregenerali. Shriram General Insurance Company Ltd.com www.tataaiginsurance.aicofindia.com www. Stand Alone Health Insurers Star Health and Allied Insurance Company Ltd.com www.com www. Private Sector Bajaj Allianz General Insurance Company Ltd.in www. United India Insurance Company Ltd.com www.

Fire Insurance: It is the insurance which covers losses and damages to the property caused by fire. the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is a ‗compensation‘ to make good of the loss.Though Human life cannot be valued. cyclone. storm. the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is by way of a ‗benefit‘ in the case of life insurance. The perils and losses covered under marine insurance are losses caused by seawater. pirates and rovers. a monetary sum could be determined to cover the losses. Non-Life/General Insurance can be further classified into five different classes: 1. stranding. Fire insurance is a specialized form of insurance which is designed to cover the cost of replacement. war. Hence in general insurance. and may also cover damage to nearby structures. civil strife. invasion. If there is any hospitalization is there then 17 . natural calamity. riots. 3. explosion and implosion. lightning. Motor Vehicle Insurance: It covers risk towards the owner and vehicle from an accident but also covers the financial liability which may arise from the accident injuring a third party along with the damage to the. Non-Life/General Insurance: ―General insurance is a contract between two parties whereby one party agrees to pay to the other party. personal property and expenses associated with not being able to live in or use the property if it is damaged. Hence in life insurance. Marine insurance has two branches:  Ocean Marine Insurance. military rising or rebellion or insurrection. mutiny. jettisons and barratry 2. In the absence of insurance a person has to pay large amount of money to the other party as repair costs of their vehicle besides spending on own vehicle. lightning. martial law. act of foreign enemy. hostilities or war. fog. Marine Insurance: Marine insurance can be defined as a contract whereby the insurer undertakes to indemnify the insured in a manner and to the extent thereby agreed upon against marine losses or maritime perils.  Inland Marine Insurance. reconstruction or repair beyond what is covered by the property insurance policy. Loss caused by loss by theft during or after the occurrence of fire. The losses covered in fire insurance are losses due to fire caused by earthquake. collision with other ship. Loss caused by burning of property by order of any public authority. theft etc. striking upon a sunken rock or icebergs. Policies cover damage to the building itself. a certain amount of money as premium to make good the loss of property arising out of an uncertain event of accident. Ocean marine insurance covers the perils of the sea whereas inland marine insurance is related to the inland risks on the land. a monetary sum could be determined which is based on loss of income in future years. rough weather. underground fire. in which the insured has interest‖. As the property of a person is quantifiable and can be valued and losses can be calculated.

motor vehicle insurance becomes essential in today‘s world. A person is said to have an insurable interest in the property if he is benefited by its existence and be prejudiced by its destruction.  Flood Insurance: Insurance providing coverage against losses and damages arisen from floods. It also covers losses/damages suffered by contractors and civil engineering projects. 4. larceny. Principles of Insurance The insurance business is guided by set of guidelines for proper. Principle of Insurable Interest The person getting an insurance policy must have an insurable interest in the property or life insured. Miscellaneous Insurance: The term miscellaneous insurance covers a large variety losses and damages arisen from various reasons and is designed to meet the peculiar requirements of the insured. The ownership of a 18 .  Crop Insurance: Insurance policy covering the losses of crop suffered by farmers due to natural disasters like drought. Thus. Health Insurance: It providing cover for financial losses associated with illness. Some of the miscellaneous insurance policies are:  Fidelity Guarantee insurance: Insurance providing cover to the employer against losses arising through fraud or embezzlement from employee. These guidelines help both the insured and insurer to form the insurance contract as well as to understand the basis of insurance. The presence of insurable interest is a legal requirement and without insurable interest the insurance contract is void. These guidelines are considered as the fundamental principles of insurance and are enumerated as follow: 1. robbery.  Earthquake Insurance: As the name itself suggests it is the insurance providing cover to the property against losses arisen due to earthquake. hail and floods or due to decline in prices of agricultural commodities. The extent of cover depends on the specifics of the policy and cover is provided as either direct payment or reimbursements for the expenses associated.the expenses go higher too. buffaloes and heifers. cows. Permanent total disability of the animals is also covered under the policy for extra payment of premium.  Engineering Insurance: Insurance providing cover for damage to mechanical and electrical equipment or machinery. 5.  Cattle Insurance: Insurance policies covering the losses arisen due to death of animals like bulls. smooth and transparent working. housebreaking and such similar acts. injuries and hospitalisation and expenses incurred for the use of health related services. The object of this principle is to prevent insurance from becoming a gambling contract.  Burglary Insurance: Insurance providing coverage against losses and damages of household goods and properties and personal effects due to theft.

An employer can insure the lives of his employees because of his pecuniary interest in them. It is obligatory on the part of both the parties in the contract to must disclose all material facts for the benefit of each other. Husband in the life of his wife or vice-versa. A creditor in the life of his debtor to the limit of the amount of his debt. Fire and Marine Insurance Under these contracts. In the same way. Principle of Utmost Good Faith This is the primary principle of insurance. A son in the life of his father on whom he is dependent.     Mortgagee to the extent of amount of loan he has given. A partner is the life of other partners in case of partnership. It is not necessary that he should have insurable interest at the time of maturity also. An agent in the goods of his principal. then the amount of premium will not be properly 19 . The policy will not become void because the husband ceases to have an insurable interest. following persons have insurable interest. It may or may not exist at the time of contract. A surety in the life of his principal to the extent of his guarantee. the persons taking up a policy should have insurable interest in the life of insured person at the time of taking up the policy. Insurable interest in different polices can be explained as follows: Life Insurance Following persons have insurable interest in life insurance contract:        An employer in the life of an employee during the course of employment. a creditor can insure the life of his debtor. In marine insurance. Wife and husband in each other‘s property. the insurance contract must be signed by both parties (insurer and insured) in an absolute good faith or belief or trust. because he does not have an insurable interest in it. A person cannot insure the property of a third party. insurable interest must exist at the time of loss. A dependent to the extent of support he is getting. 2. If some facts are withheld. In case of life insurance.property is not necessary for establishing insurable interest. Owner of the property in his property. The amount of premium is fixed on the basis of all the facts supplied to the insurance company. insurable interest must exist both at the time of contract and at the time of loss. According to this principle. A banker has an insurable interest in the property mortgaged to it against a loan. however. False information or non-disclosure of any important fact makes the contract avoidable at the discretion of the insurer. Later on the wife is divorced. Suppose a person gets an insurance policy on the life of his wife. In case of fire insurance.

The compensation payable and the loss suffered should be measurable in term of money. 3. The actual amount of loss suffered is compensated and the value of policy is only the maximum limit. In this case he will be benefited by the insurance which runs counter to the principle of indemnity. then the ownership right of such property shifts to the insurer. The insured cannot claim more than total loss from all the companies put together.settled. Because of fire. The maximum amount of compensation will be up to the value of the policy which is fixed at the time of contract.000 from R & C. Principle of Contribution Sometimes a property is insured with more than one company. A cannot claim a total sum of Rs. He/She will not earn profit from the contractor. 50. 20 .000 from either of companies from both companies to the extent of Rs. loss or injury. property is destroyed to the extent of Rs. The rights of claiming the loss are shifted to the insurer (Insurance Company). Principle of Indemnity The principle of indemnity is applicable to all types of insurance policies except life insurance. The value of the policy undertaken is fixed at the time of contract. If the insured party gets a compensation for the loss suffered by him. Now. 40. protection and compensation given against damage. 50. The total loss suffered by the insured will be contributed by different companies in the ratio of the value of policies issued by them. Principle of Subrogation The principle subrogation is corollary to the principle of indemnity. and Rs. insurance company can sue B on behalf of A because of making good the loss suffered by A. For example. 5. So companies make a contribution to restore the previous position of the insured. He gets an insurance policy for Rs. the insurance company steps into the shoes of A. He cannot claim the same loss from different companies.000 from S & Co. The principle of subrogation is applicable to all insurances other than the life insurance. The insured will be compensated only up to the amount of loss suffered by him/her. The insurer promises to help the insured in restoring the position before loss. The house is intentionally destroyed by B. he/she cannot claim the same amount of loss from any other party. Whenever there is a loss of property.000 with an insurance company. The insurer should also disclose the facts of the policy to the proposer. 50. The maximum amount of compensation will be up to the value of the policy. A person cannot be restored to a better position than before the loss occurred. A claims the loss from the insurance company. Indemnity means security. utmost good faith on the part of both the parties is a must. 4.000. 40. The insured will be compensated only up to the amount of loss suffered by him. H/She will not earn profit from the contractor. So. for example. According to it when the insured is compensated for the losses due to damage to his insured property. A has a property of one lakh rupees. A cannot sue B for getting the compensation because he has already been compensated by the insurance company. a gets his house insured for Rs. the loss is compensated.

000 from each. This principle is found very useful when the loss occurred due to series of events. then S & Co. the proximate or the nearest or the closest cause should be taken into consideration to decide the liability of the insurer. The insured must take all necessary steps to control and reduce the losses and to save what is left. However. will pay Rs. Principle of Mitigation of Loss According to this principle insured must always try his level best to minimize the loss of his insured property. Principle of Causa Proxima Principle of Proximate Cause means when a loss is caused by more than one causes. 7. The salient features of the act are     Constituting a Department of Insurance to supervise and control insurance business. The various acts which govern the Insurance business are as follows: The Indian Contract Act. The insurance business is governed by various legislations and acts directly or indirectly which are required to define the boundaries as well as to regulate the insurance business.000 from R & Co.20. Provision for initial deposits to allow only serious players in the field. the principle of Proximate Cause does not apply. In case he claims Rs. As insurance is a contract between the insurer and insured as well as the insurer uses agency as a channel of business this act plays an important role in insurance business. 21 . These acts and legislations are important for the smooth transaction of the insurance business and to protect both the insured and insurer. This principle makes the insured more careful in respect of this insured property. 1938: It is the first legislation passed regulating and governing all forms of insurance and the insurance business in India providing strict control to state. Whatever may be the reason of death the insurer is liable to pay the amount of insurance. in case of sudden events like fire etc. Compulsory registration of insurance companies & submission of annual financial returns. performance and termination of contracts and agency in India. The Insurance Act. 40. So this is known as the principle of contribution. 20. Compulsory investment of life fund to the extent of 55% in Government approved securities.000 to R & Co. in case of life insurance. Legislations Governing Insurance The insurance sector in India has gone through a full 360 degree in phases of being unregulated to completely regulated and currently being partly deregulated. 8. 1872: It is the law regulating and governing the formation.

Policy formats were standardized and premium tables were to be certified by an Actuary. 1988: This act was enacted to safeguard the financial interests of people who get injured or killed or suffer damages due to negligence of motorist and/or other risks associated with usage of motor vehicle. The General Insurance Business Act. The Life Insurance Corporation Act. prompt and economical redressal to the consumer‘s grievances and related matters. 1986: This act is designed to protect the interests of consumers by providing easy. performance and termination of marine insurance contract and to describe the perils and kind of cargo as well as vessels to be covered. Periodical Valuation was made compulsory to assess financial viability of the insurance companies. General Insuance Products: Non –life Policies can be broadly classified into:  Plans for Corporate/ Business  Plans for Individuals  Plans for Agriculturist 22 . According to this act it is mandatory for a motorist to insure against the risk of liability to the third parties. The Consumer Protection Act. The Motor Vehicle Act. restriction on payment of commission and licensing of agents were other important provisions to bring in a sort of professionalism in to this business. Provision was made for policyholders‘ director in the Board. 1963: This act was brought to codify the law relating the marine insurance and to regulate and set guidelines for initiation.    Prohibiting rebating. This act regulates all the life insurance business in India and lays the ground rules for the business. for the regulation and control of such business and for matters connected. 1972: This act was passed to make provision for the acquisition and transfer of shares of Indian insurance companies and undertakings of other existing insurers in order to serve better the needs of the economy by securing the development of general insurance business in the best interests of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment. The Maritime Insurance Act. 1956: This act was passed to nationalise the life insurance business in India by transferring all such businesses to a corporation established for such purpose and to provide regulation and control of the business of the corporation.

G.    Group Personal Accident Group critical illness Group Travel 23 . Credit Insurance. Dealers Employee policies Various policies available for employer to take care of employees or to meet legal obligations. Some of them are             Aviation Insurance Marine Hull Insurance Freight Forwarders Insurance Port Liabilities Film Insurance.P. Corporate Policies Specialty: These are the policies catered to meet special needs or needs of specific industries. Event Insurance Jewelers Block Policy Bankers Indemnity Policy Shopkeepers Policy Marine Cargo Policy Multi Peril Policy for L.Insurance Plans for Corporate‘s Agricultural Insurance Cattle & Crop Plans for Individuals Employee Home Specialty Contingency Property Office Travel Motor Accident Health Figure 1: Classification of general insurance products.

   Workmen's Compensation Keyman Insurance Overseas Travel insurance Policies for Office /manufacturing units: For protection of business.Frequent Corporate travelers Overseas Mediclaim Insurance.Employment & Studies Personal Accident Policy Policies for Individuals      Home Travel Motor Accident Health Home Insurance: There are wide range of policies and packages available. industrial units from contingencies               Fidelity Guarantee Insurance Policy Special Contingency Policy Plate Glass Insurance Neon Sign Insurance Fire Policy Burglary Policy Machinery Breakdown Policy Electronics Equipment Policy Consequential Loss Policy Contractors All Risk Policy Advanced Loss of Profit / Delay in Startup Policy Contractor Plant and Machinery Policy Mega Package Policies Marine cum Erection / Storage cum Erection Policy Health Insurance:       Group Personal Accident Policy Mediclaim Policy Overseas Mediclaim Insurance.Business &Holiday Overseas Mediclaim Insurance. They cover more than you’re your home and its contents. Some of the perils covered are:   Fire Explosion/Implosion 24 .

apparatus and pipes Missile Testing operations Leakage from Automatic Sprinkler Installations Lightning Loss caused by Storm. theft. etc Accidental death Permanent disability Hospital confinement allowance 25 . Heart Attack. The other perils included in some feature rich policies are:        Rent for alternative accommodation Loan repayment for home/car Public liability Baggage Insurance Home Appliances cover Personal Accident Loss of cash in transit Travel Insurance: There are various policies which cover International travel. Protection against the major life threatening illness like Cancer. Stroke. Auto Insurance Policies: They cover:    Repair / replacement of the parts of the vehicle Payment for the market value of the vehicle in case of a total loss. It covers the legal liability of insured towards third party personal injury and property damage arising out of an accident involving the insured vehicle. Malicious Damage cover Damages due to Impact by rail / road vehicle or animal Bursting and / or overflowing of water tanks. Tornado. Flood and Inundation Destruction by subsidence of part of the site on which the property stands or landslide Bush Fire Earthquakes and Terrorism are usually provided as add-ons due to the increase in frequency. Provide a daily allowance for each day of hospitalization.          Burglary Riot. strike and malicious acts. Hurricane. Strike. provided that the loss occurs due to an accident. student‘s overseas travel. earthquake. Kidney failure. riot. flood. Paralysis. travel to specific countries. domestic train travel. Cyclone. Health Insurance Policies: Health Insurance Policies may provide cover for:       Expensive medical care including pre & post hospitalisation expenses.

defines and measures their magnitude. services and programs to serve these markets and calls of everyone in the organization to ―Think and serve the customers‖. marketing mix is the set of marketing tools that firm uses to pursue its marketing objectives in the target markets.  Cattle Insurance: Insurance policies covering the losses arisen due to death of animals like bulls.Carthy ‗product. place. lightning. The above statement clearly puts forth the importance and insensibility of marketing to the overall functioning of the organization. Permanent total disability of the animals is also covered under the policy for extra payment of premium. storm.  Marketing of Insurance Marketing is so basic that it cannot be considered as a separate function. buffaloes and heifers.Other Insurance Policies       Baggage Insurance Mobile Phone Insurance Executive Travel Insurance Directors’ and officers’ Liability insurance Professional Indemnity Insurance Portable Equipment Insurance Agricultural Insurance: The insurance policies covering agricultural losses like crop loss or cattle loss. It is whole business seen from the point of view of its final result that is from the customer point of view business success is not determined by the producers but by the customers. decide as an appropriate product. To achieve the desired objectives in marketing a set of marketing tool are utilized by marketers. The cover is provided for in case where death caused by: o Accident which may be result of fire. process. inundation. determines which target markets the organization can best serve. tempest and famine o Diseases cropping up or contracted during the period of policy o Surgical operations o Strikes and riots Crop Insurance: Insurance policy covering the losses of crop suffered by farmers due to natural disasters like drought. and promotion‘ for a product in case of services additional 3 ‗P‘s are added ‗people.C. hail and floods or due to decline in prices of agricultural commodities. Marketing mix consists of everything the form can be collected in to group of variables known as 4 ‗p‘ s as proposed by M. cows. Marketing can be identified as a business function that identifies unsatisfied needs and wants. flood. tornado. earthquake. 26 . hurricane. cyclone. physical evidence‘. price.

newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. The TPA is to maintain databases of policyholders and issue them identity cards with unique identification numbers and handle all the post policy issue including claim statements. both the public and private sector insurance companies in India are using banks for the distribution of their products. It is also a sector. Hence. Channels of Distribution of Insurance As insurance being a service there are various channels are used for its distribution and selling of the insurance products i.Corporate Agent --------. They will have full time medical practitioners under their employment who will immediately take the decision on whether the ailment is covered under the policy. which see increased savings. which leads to benefits across the full spectrum. to the infrastructure sector. Company ---------------------------------. the TPA run a 24 hour toll free number which can be accessed from anywhere in the country.Agent -----------. Now a day‘s companies are also using internet to issue online policies as well as telesales to get the business directly. Public have immense faith in banks and they reached to household and enjoy considerable goodwill and access in the rural areas. 7. In India the Bancassurance came into focus only after the privatization of insurance sector. Third Party Administrator (TPA): Insurance Companies use another distribution channel known as third party administrator. to the economy. IRDA licenses and regulates the TPA‘s.e.Customer Company -----------. TPA license can be granted to any company registered under the Company‘ Act 1956. 6. by way of rigid entry norms and supervision Bancassurance: The provision of insurance and banking products and services through a common distribution channel or to a common client base is referred to as Bancassurance. 3.Third Party Administrator ----------.Auto-tie Up -----------.Banker ----------. policies.Customer Company ----------. In an under-insured economy.Broker -----------. The concept of Bancassurance was evolved in Europe in 1980‘s. 4.Customer Company -----------.Customer (Direct Marketing) Company ------------. from the individual who now have wider choices. frontline employee provide necessary services in fulfillment of policy issue process. In terms of infrastructure. 27 .Customer Company -----------. accept filled application with necessary documents along cash or cheque against premium account. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies. 2. Some of the channels used are: 1. which can look forward to long term funding being available.Customer Direct Marketing: Insurance Company will accept the insurance proposal from the persons approached to the branch offices or division offices directly.Customer Company -----------. 5. In branch office or at division office.Marketing of Insurance in India Insurance is in a manner of speaking the last frontier in the financial sector to open. such as serve application.

or negotiates insurance for compensation. The agency and appointment of agent is done under Indian Contract act 1872. fire. The insurance agent creates mutual trust between policy holders and the insurance company and renders continuous service to the policy holders.  The person must have a minimum qualification of 12th standard or equivalent in urban areas otherwise a pass in 10th standard or equivalent in rural areas. health. The training objective of the company is to provide sufficient knowledge on various policies of the company before the agents venture into the market.  Practical training of 50 hours at an IRDA approved training centers and 75 hours of training in case of composite insurance agency 28 . The corporate financial institution gets the license from the IRDA to act as a corporate agent to any insurance company in India. A corporate agent has backup support team of handling claims efficiently along with toll free claim service activation helpline. Auto-tie Up: It is tie up between the automobile dealers and the insurance companies. and tries to find the buyer the best policy by comparison shopping. The company offers commission to the agents on their business. Procedure to become an agent of the company The following are the required conditions to become an agent of the company based on IRDA guidelines  The person should be of 18 years at least. A broker sells. The agent has to register himself/herself with the IRDA and get license which is issued for 3 years. The company provides induction training to the recruited agents through special training centers located in various parts of the country. The broker and the brokerage is registered and regulated by the IRDA. household. A corporate agent may be specialized in any one of the insurance product or all of the insurance products such as motor. Insurance company recruits agents based on the norms and conditions of IRDA. solicits. marine. burglary and personnel accident insurance. Broker: An independent agent is the person who represents the buyer. whenever the automobile dealer makes sales the insurance cover is provided along with it. Agent/Agency: An Insurance Agent is a state-licensed professional who represents an insurance company in selling and servicing policies. Agent is the most prominent and oldest intermediary channel of insurance services. rather than the insurance company. There are about 300 brokerages are there in India registered by IRDA. travel.Corporate Agent: A corporate agent is an intermediary in the insurance distribution channel.

12. 4.99 New India. 29 .67 TATA AIG.1 L&T General. 3. 0.83 SBI General.61 Raheja QBE. 14. 14.27 National. 2.89 Royal Sundaram. 1. 2.69 United. 16.01AXA. 0.Market Share Of Non-Life Insurance Players Market Share 2010-11 (In %) Universal Sompo. 1.41 HDFC Ergo.82 Reliance.74 ICICI Lombard.01 Cholamandalam. 9.7 Future Generali. 1. 2.76 IFFCO Tokio.19 Oriental.3 Bharti Shriram. 3. 0. 6.04 Bajaj Allianz. 0.98 Chart 1: Pie chart showing the market share of general insurance companies in India for the financial year 2010-2011 based on the percentage of premium collected by each company.

ML). and Rhodes (CCR) model to measure the decision-making units‘ (DMU) operating efficiency. 343-359. They used Charnes. He reported that Headquarters contribution to customer loyalty through the delivery channel is higher than the contribution of the regional sales force. made a comparative study of the efficiency of direct marketing channel and indirect marketing channel in Tiwan's insurance sector. They reported that the efficiency score of a direct marketing channel is significantly higher than that of a comparable indirect marketing channel. 2009. 3 (4). Cooper. 30 . made a study about the agents role played by the agents in maintenance of customer loyalty using structural equation modeling (LISREL. 31(7).Review of Literature Chiang Ku Fan and Shu Wen Cheng in their study entitled "An efficiency comparison of direct and indirect channels in Taiwan insurance marketing" published in Direct Marketing: An International Journal.. 487-503. There is a significantly higher impact of image channel on customer loyalty than delivery channel. 1997. An external perspective" published in European Journal of Marketing. Tor Wallin Andreassen (1997) in their study entitled "The principal‘s and agents contribution to customer loyalty within an integrated service distribution channel. The efficiency relationship between the indirect marketing channel and the direct marketing channel is independent.

Chapter-II: Future Generali Insurance India Co. Ltd. Profile 31 .

. 32 . Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform. Today it stands as a business growing at the rate of 15-20 per cent annually. growth of international trade. 1938. saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players. with new players significantly enhancing product awareness and promoting consumer education and information.The competition LIC started facing from these companies were threatening to the existence of LIC. The entry of the private players and the increased use of the new distribution are in the limelight today. it adds about 7 per cent to the country‘s GDP . The key element of the reform process was Participation of overseas insurance companies with 26% capital. 1999 and other related Acts. Moreover. during 2010-11. Together with banking services. Since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. 1956 and General Insurance Business (Nationalisation) Act. Insurance Regulatory and Development Authority (IRDA) Act. Similar is the case of the four non-life insurance companies of public sector National Insurance Company Ltd. and uncertainty of natural calamities all these show the scope of general insurance. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance and increasing number of motor vehicles...Indian Insurance Industry Profile The Insurance sector in India governed by Insurance Act. Oriental Insurance Company Ltd. infrastructure development. 1972. insurance industry is a big opportunity area in India for national as well as foreign investors. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run. wealth formation. New India Assurance Company Ltd. The estimated life insurance premium in India grew by 4. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India.2 per cent in the year 2010 where as the in non-life insurance sector it is 8. the Life Insurance Corporation Act. The strong growth potential of the country has also made international players to look at the Indian insurance market. This is an indicator that growth potential for the insurance sector is immense in India. This impressive growth in the market has been driven by liberalization. With a huge population base and large untapped market. United India Insurance Company Ltd. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. Since then the insurance industry has gone through many sea changes . India is ranked 9th in life insurance business and ranked 19th in general insurance business among the 156 countries for which data are published by Swiss Re.1 per cent.In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation ―Malhotra Committee‖ was constituted by the government in 1993 to examine the various aspects of the industry.

Future Capital Holdings. Sports Bar and Bowling Co.000 people and is listed on the Indian stock exchanges. retail real estate development. Future Generali. The Spoon.Future Group believes in developing strong insights on Indian consumers and building businesses based on Indian ideas. group subsidiaries are present in consumer finance. The group‘s presence in Leisure & Entertainment segment is led through. It also operates popular shopping portal. a retail media initiative. eZone. retail media and logistics. Mumbai-based listed company Galaxy Entertainment Limited. Staples and Middle East-based Axiom Communications. providing logistics and distribution solutions to group companies and business partners and Future Media. US-based stationery products retailers. www. brand development. It also operates a consumer finance arm with branches in 150 locations. Big Bazaar is a hypermarket format that combines the look.‘ 33 . F123. Pantaloon Retail. the group operates over 12 million square feet of retail space in 71 cities and towns and 65 rural locations across India. the group‘s insurance venture in partnership with Italy‘s Generali Group. Home Town and rural retail chain. hotels and logistics. led by its founder and Group CEO. ‗Rewrite rules. the group operates Pantaloons. a brand development and IPR company. Copper Chimney and Gelato.Profile of Future Generali India Insurance Company Limited Future Generali is a joint venture between the India-based Future Group and the Italy-based Generali Group. Future Group‘s joint venture partners include. its marquee brand. real estate. Blue Foods the group operates around 100 restaurants and food courts through brands like Bombay Blues. Led by its flagship enterprise. insurance. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. as espoused in the group‘s core value of ‗Indianness.com. the group‘s financial arm.futurebazaar. Ltd. a fashion retail chain and Central. Planet Sports. and family entertainment centres. among others. Future Generali is present in India in both the Life and Non-Life businesses as Future Generali India Life Insurance Co. provides investment advisory to assets worth over $1 billion that are being invested in consumer brands and companies. and Future Generali India Insurance Co. touch and feel of Indian bazaars with the choice and convenience of modern retail. Through its partner company. In the lifestyle segment. FUTURE GROUP Future Group. home improvement chain. leisure and entertainment. Other group companies include. electronics retailer. The group‘s specialty retail formats include sportswear retailer. Retain values. Future Brands. In the value segment. is one of India‘s leading business houses with multiple businesses spanning across the consumption space. Ltd. While retail forms the core business activity of Future Group. Spaghetti Kitchen. capital. Headquartered in Mumbai (Bombay).‘ The group‘s corporate credo is. Kishore Biyani. Noodle Bar. Future Logistics. a chain of seamless malls. Pantaloon Retail employs around 30. Galaxy leading leisure chains. Mr. Aadhaar.

Its solidity derives from prudent investment management and a focus on achieving a correct match between risk and medium/long-term profitability. for all rules and regulations both internal and external.M. Established in Trieste in 1831.  It is present in 68 countries  It has 70 million clients worldwide  It has 85. with a 2009 total premium income of more than € 70 billion.000 people serving 70 million clients in 68 countries. The Group strategy aims to consolidate Generali‘s pre-eminence on its key markets and achieve a premier position on markets with high growth potential. Identity Card Since its establishment. Indianess: We understand India in all its diversity and different facets and will use for our local understanding to respond to our specific markets.THE GENERALI GROUP The Generali Group is a leading player in the global insurance and financial markets. 34 .employees. and ability to overcome all obstacles which come in the way of the achievement of our vision.  Generali Group is one of the leading insurance groups in Europe.STABLE  Fitch Ibca: AA.956 in Italy)  It has over € 400 billion of assets under management  High rating assigned by the international rating agencies:  A.322 employees (15. establishing its leadership in profitability. customers. today the Group is one of Europe‘s largest insurance providers and the European biggest Life insurer.NEGATIVE  Moody‘s: Aa3 STABLE Vision Statement: "Pledged to provide financial security to all people & enterprises through total insurance solutions" Values: Respect: for all our stakeholders. and positive thinking. the Generali Group has always held a reputation for its capital and financial strength. Nimbleness: A combination of speed and quality. "Can Do": An attitude which demonstrates our passion. BEST: A+ STABLE  Standard & Poor‘s: AA. It is also one of the world‘s top asset managers with assets totalling more than € 400 billion. the Group occupies a leadership position in Western Europe and an increasingly important place in Eastern Europe and Asia. With an employed sales force of more than 100. entrepreneurship. design our products and craft our processes.

168 18.74. (Amount Rs '000) 2010.33. Krishan Kant Rathi Mr. Prabhadevi. Tamarind House.291 Retrocession from Pool 4.99.426) Income from Investment 3. Delta Plaza. Moses Road.84. Kim Chai Ooi Dr. ICICI Bank Ltd. Auditors Singhi & Co FRN 3020 49E Chartered Accountants 101. Mumbai 400 025. Kishore Biyani Mr. Sergio Balbinot Mr.081.19.93. Roberto Gasso Dr.86.752 Net Incurred Claims 27. Veer Savarkar Marg . Krishnamoorthy Rao Designation Chairman Director Director Director Director Director Director Additional Director Additional Director Managing Director & Chief Executive Officer 1 2 3 4 5 6 7 8 9 10 Registered Office Address 001.049 1. Mahalaxmi.59. Dr E.850 1.G.437 Net written Premium 40. Turf Estate.72.21.736 Net earned Premium 32.697 16.523 24. Ground Floor. (Amount Rs '000) Gross written premium 61.386 35 G M Kapadia & Co FRN 104767W Chartered Accountants 36 B. Tamarind Lane. K.571 38.281 -1. Devi Singh Dr. Financial Highlights The highlights of financial results of the Company for the financial years 2010-11 and 200910 are as under: For the year ended 31st March For the year ended 31st March Particulars 2011.372 3.39. Vijay Biyani Mr.808 Underwriting Results -12.34. 414. AXIS Bank Ltd. G N Bajpai Mr. Bankers HDFC Bank Ltd. Rajan Saxena Mr.561 Management Expenses 19.82.Board of Directors Name of the Directors Mr. Fort Mumbai 400001.91. Mumbai 400011.36. .801 14.95.931 Net Commissions‘ -1.64.

Profit /Loss Before Tax Profit /Loss After Tax Number of Policies Issued Number of employees -8.199 -8.199 982 -8.041 -8.117 805 36 .95.

Chapter-III: Methodology 37 .

this report will address the effectiveness of the channel and put forward some points to address their problems. Objectives: The objective of this report is: 1. sales as well as marketing. To study and measure the effectiveness of the agency channel of Future Generali India Insurance Company Limited. 4. public sector and private sector both are considered for the study and data is collected from them. Scope: As agency channel and agents are important part of the insurance business. The primary data has been obtained by interaction with the branch managers or sales managers of the various general insurance companies through distribution of questionnaire to them and asking few questions to them. banks. 3. Visakhapatnam sin comparison to other general insurance companies in Visakhapatnam. direct selling through telesales. Research Design: Selection of Sample: All the general insurance companies operating in Visakhapatnam. To study the challenges and problem faced by the agency channel from agents as well as from within the company. This study is to understand the effectiveness and significance of agency channel as well as the role played by the agents in the insurance company‘s business i. the agency and agents somehow loosing the significance. 38 . 2.Need of the Study Development of various other distribution channels in insurance sector like third party administrators. The Questionnaire has been properly prepared in order to cover all the Information required for the study.e. Agents are the one who represents the company to the existing and prospective customers and create a mutual trust towards the company. Limitations of the Study: There was a time restriction of 45 days and the numbers of general insurance companies present in Visakhapatnam are only 15 public sector and private sector. the traditional and the oldest channel of distribution i. Data Collection method: The primary data for this project has been collected through the Questionnaire. Getting appointment and meeting the person from whom the data has to be taken was very difficult as most of the time they are in the field for business purpose. Some of the participants in the study are reluctant to give the data or needed much persuasion to comply. To first investigate the effectiveness of the agency channel in general insurance companies in marketing their products.e. Even though they are the face of the insurance company and contribute a major share in the company‘s business they are facing internal com petition from within the company‘s other channels. To make a comparative study among the companies taking premium collected and share of the business given by the agency channel in consideration as measuring parameters.

Chapter-IV: Data Analysis 39 .

By seeing the above graph it is clearly understood that an average of 30 agents are working for the agency channel of all the general insurance companies operating in Visakhapatnam and Ankapalli region. GI Co. Ltd 25 IFFC O Toki o GI Co.DATA ANALYSIS AND INTERPRETATION The data is collected from all the sixteen general insurance companies operating in Visakhapatnam public and private sector through questionnaires and analysed using the M. Ltd Chol ama ndal am MS GI Co. Ltd 54 Bajaj Allia nz GI Co. Ltd 25 Unit ed India Insur ance Co. Ltd. Ltd No. * In case of Bajaj Allianz General insurance co. Ltd 35 Orie ntal Insur ance Co. Ltd* ICICI Lom bard GI Co. Ltd which are operating in Vijayanagaram. Ltd* Co. Ltd 10 30 35 25 25 20 25 15 22 10 Futu re Gen erali India Insur ance Co. Tunni.S Excel 2007 software package. Ltd. Ltd 40 14 54 60 40 74 136 Univ Bhar ersal SBI Som ti AXA GI po GI Co. didn‘t provided any data. Ltd and SBI General Insurance Co. Ltd agents working outside Visakhapatnam and Ankapalli are also included. Ltd 20 Roya Relia l nce Sund GI aram Co. 1. Ltd* Ltd * 14 74 136 25 Chart 2: Number of agents working for the Agency channel of the companies. Ltd Ltd 60 15 Tata AIG GI Co. upto East and West Godavari region. The sales force used by the companies to sell their products only tells the importance of the agents in the insurance service. In comparison to other 40 . Number of agents working under the agency in charge? Agents Working in Agency Channel 160 140 120 Number of Agents 100 80 60 40 20 0 Nati onal Insur ance Co. of Agents 30 New India Assu ranc e Co. Ltd 22 HDF C ERG O GI Co. In the case of Bajaj Allianz General Insurance Co. Srikakulam. and SBI General Insurance Co. Co. ** Universal Sompo General Insurance Co.

41 .20 1.23 8.00 9.10 3. Ltd premium collected outside Visakhapatnam and Ankapalli are also included.20 0. The premium collected by the agency channel of Future Generali is Rs 3. 7.54 4. This tells the reach and penetration of the agents in a city like Visakhapatnam.40 0.23 4.1 crores.38 2. Has started its operations in Visakhapatnam in the year 2011 *** Universal Sompo General Insurance Co.80 3.50 0.00 3.00 0.7 crores and if we include the both it becomes Rs.1 Crore.00 8.20 1.10 0.50 2.19 crores and Reliance General insurance Rs 4.91 1.68 2.00 0. 2. * In case of Bajaj Allianz General insurance co.76 0.00 8.76 0.00 6.39 Unit New Nati Orie ed Roy Chol Baja IFFC HDF Futu SBI Indi ICICI Bhar onal ntal Indi al ama a Tata j O Reli C re Gen Insu Insu a Sun ndal Lom ti Allia Toki ance ERG Gen eral Assu AIG bard AXA ranc ranc Insu dara am nz* o O erali ** ranc e e ranc m MS e e Univ ersal Som po* ** Premium Collected 1. ** SBI General Insurance Co.40 0. Ltd and SBI General Insurance Co. By seeing the above graph it is clearly understood that the average premium collected by the agency channels of all the companies except Bajaj Allianz and SBI General is Rs. Premium collected by the agency channel for the financial year 2011-2012? Premium Collected (2010-2011) 10.39 Chart 3: Premium Collected by the Agency channel of the companies. didn‘t provide any data.5 crore third in the whole Visakhapatnam next to Bajaj Allianz Rs 8.68 0. Ltd.00 3.00 1.00 4. 1.80 2.54 0.38 0.companies Future Generali has 40 agents working for it in Visakhapatnam area and stand at 5th position.40 3.20 0. Ltd. 2.00 1.91 Crore Rs.00 5.00 2.40 1.

In the case of HDFC Ergo and TATA AIG the contribution is 70 & 80 percent respectively. 42 . didn‘t provide any data. Percentage contribution of the channel to the business of the branch/division? Business Provided to the Branch/Division 90 80 80 70 70 60 50 40 30 20 10 0 25 20 18 22 24 15 15 7 Unit New Nati Orie ed Roy Chol Baja IFFC HDF Futu SBI Indi ICICI Reli al Bha onal ntal Indi ama a Tata j O C re Gen Insu Insu a ndal Lom anc Sun rti Allia Toki ERG Gen eral Ass AIG bard e dara AXA ranc ranc Insu am nz* o O erali ** uran e e ranc m MS ce e 20 18 22 24 15 15 25 22 70 20 80 26 20 7 25 22 26 20 20 Percentage Univ ersa l Som po* ** Business Provided to the 25 branch/Division Chart 4: Percentage of business provided by the agency channel to the branch/division of the companies. Ltd and SBI General Insurance Co. This is a major portion of the business when there are other channels are operating for the company. Has started its operations in Visakhapatnam in the year 2011 *** Universal Sompo General Insurance Co. Ltd. The percentage of business contributed by the agency channel of Future Generali is 26% it more than quarter of company‘s business and third among the other companies. Ltd business from outside Visakhapatnam and Ankapalli are also included. This indicates the importance of the agency channel.3. * In case of Bajaj Allianz General insurance co. ** SBI General Insurance Co. Ltd. By seeing the above graph it is clearly understood that the average contribution of the agency channel to the business of the insurance companies is 21 percent.

From the above graph the ratio of motor to non-motor (i. The Non-motor insurance policies includes health. Ltd. Even though presence of auto-tie ups the agents are very successful in selling motor insurance and in some cases it is the major contributor to the agency‘s business. fire and miscellaneous) policies sold by the agency channel of each company can be clearly understood.4. The average ratio is 56% motor to 44% not motor. Has started its operations in Visakhapatnam in the year 2011 *** Universal Sompo General Insurance Co. Ltd business from outside Visakhapatnam and Ankapalli are also included. fire. Business mix of the agency channel (Motor to Non-motor ratio of policies sold)? Business Mix of the Agency 90 80 70 60 75 70 60 55 80 70 65 Percentage 60 50 40 30 20 10 0 55 50 50 40 60 40 32 68 45 40 25 60 30 40 20 45 45 50 50 55 30 35 Unit New Nati Orie ed Roy Chol Baja IFFC HDF Futu SBI Indi ICICI Reli al Bha onal ntal Indi ama a Tata j O C re Gen Insu Insu a ndal Lom anc Sun rti Allia Toki ERG Gen eral Assu AIG bard e dara AXA ranc ranc Insu am nz* o O erali ** ranc e e ranc m MS e e 55 45 60 40 75 25 32 68 70 30 80 20 40 60 60 40 55 45 50 50 50 50 40 60 45 55 70 30 65 35 Univ ersa l Som po* ** Motor Insurance Non-Motor Insurance Chart 5: Business mix of the agency channel * In case of Bajaj Allianz General insurance co. health. Ltd and SBI General Insurance Co. didn‘t provide any data. Ltd. marine and other miscellaneous policies but health and personal accident are the most sold one. ** SBI General Insurance Co. In the case of future Genrali the ratio is 45% Motor and 55% Non-motor 43 .e. personal accident. which employees get through their employers still agents have a good success in selling them. personal accident.

In the survey conducted the agency channel of all the companies agreed that discount given on the policies is the major problem for them while getting the business. Response No. The difference in the percentage of discount given on the policy premium by the other channels of the same company on same policy causes the loss of business for the agency channel. Of Respondents Percentage of Respondents Yes* 15 94 No 0 0 No response 1 6 Percentage of Companies Considering Discount as a Problem 0% 6% Yes No No response 94% Chart 6: Percentage of companies considering discount as a problem. Discount given on policy Table 2: Respondents considering discount as a major problem.5. Problems and Challenges faced by the agency channel a. 44 .

45 . Commission Table 3: Respondents considering commission as a problem. The income of the agents depends on the commission they get on the number of policies they sell. In the survey conducted the 63 % of the companies said that commission is a problem for them where as 31% are didn‘t agree to it. Of Respondents Percentage of Respondents Yes* 10 63 No 5 31 No response 1 6 Percentage of Companies Considering Commission as a Problem 6% Yes No No response 63% 31% Chart 7: Percentage of companies considering commission as a problem.b. Response No. Hence the percentage of commission plays a role on the performance of agents and agency.

46 . In the survey conducted the 75 % of the agencies of the companies said that agents working for more than one company‘s agency is a problem for them where as 12% didn‘t agree to it. Of Respondents Percentage of Respondents Yes 12 75 No 2 12.c. 12.5% 12.5 No response 2 12. The income of the agents depends on the commission and to earn more agents work for more than one company by taking up agency on any relative‘s name.5% 75% Yes No No response Chart 8: Percentage of companies considering agents working for more than one agency as a problem. Response No.5 Percentage of Companies Considering Agents Working for more than One Agency as a Problem. Agents working for more than one company Table 4: Respondents considering agents working for more than one agency as a problem. This affects the working of the agency and the revenue generated.

Lack of professionalism training Table 5: Respondents considering lack of professionalism in the agents. 47 .d. The attitude of the agent and his/her behaviour towards the company as well as towards existing and prospective customer impacts a lot to the number of sales made and revenue generation. Of Respondents Percentage of Respondents Yes 6 38 No 9 56 No response 1 6 Percentage of Companies Considering lack of Professionalism as a Problem 6% 38% Yes No No response 56% Chart 9: Percentage of companies considering lack of professionalism in agents as a Problem In the survey conducted the 38 % of the companies said that lack of professionalism in agents is a problem for them where as 56% didn‘t agree to it. Response No.


1. Some companies believe that even though the agents are technically proficient they lack professionalism which is stopping them to reach their full potential which in turn affects the channel and the business. quarterly or half yearly basis. Personality development programs along with technical training should be given to the agents. There is a lack of communication between the agency channel and other channels of a company which is giving rise to the problem of discounting factor. 49 . These figures are a very good for any agency channel. as well as to report claims and renewals.Findings  From the data analysis it has been found that the agency channel of all the insurance companies operating in vizag contribute an average 21% of business with an yearly average premium collection of Rs. The agency channel contributes a major portion of the total business of the companies. Online tools to report the daily work.7 crores. As well as commission on the policy sold is thought to be low. It‘s is the agent with whom the customer is always be in touch. Developing a healthy competition among the agents and rewarding them on monthly.    Suggestions      Developing a system to pass information to agents about the discount rates given by the other distribution channels of the company. Giving holiday offers or gifts on collecting specific target premiums. The motor to non-motor policies ratio is also an indicator of how effective the agency channel is in presence of the other channels. Lack of proper communication between the channels and professionalism is a hindrance to the business which can be over come easily by little effort. Conclusion From the project it can be inferred that the agency channel of distribution is one of the most reliable channel for sales and marketing of the insurance products and services. this is why some agents work for more than two companies.

Page No.List of Tables. Chart 8: Percentage of companies considering agents working for more than one agency as a problem. Table 5: Respondents considering lack of professionalism in the agents as a problem. Chart 7: Percentage of companies considering commission as a problem. Chart 9: Percentage of companies considering lack of professionalism in agents as a Problem Table 2: Respondents considering discount as a major problem. Table 4: Respondents considering agents working for more than one agency as a problem. Chart 1: Pie chart showing the market share of general insurance companies in India for the financial year 2010-2011 based on the percentage of premium collected by each company. Chart 4: Percentage of business provided by the agency channel to the branch/division of the Chart 5: Business mix of the agency channel Chart 6: Percentage of companies considering discount as a problem. 15 23 39 40 41 42 43 44 45 46 47 44 45 46 47 50 . Table 3: Respondents considering commission as a problem. Chart 2: Number of agents working for the Agency channel of the companies. Chart 3: Premium Collected by the Agency channel of the companies. Charts and Figures Table/Chart/Figure Table 1: List of Insurance Companies operating in India registered with IRDA Figure 1: Classification of general insurance products.

An efficiency comparison of direct and indirect channels in Taiwan insurance marketing.ask. Das.com Annexure 51 .org www.indiankanoon.Annula Report-2010-2011 IRDA Annula report -2010 2011 Websites: www.C. European Journal of Marketing. Sahoo & S. Direct Marketing: An International Journal. 343-359 Tor Wallin Andreassen. 2009. The principal‘s and agents contribution to customer loyalty within an integrated service distribution channel.in www.C. Himalaya Publishing House Articles: Chiang Ku Fan and Shu Wen Cheng. 31(7).irda.google.com Search engines: www.gov. Future Generali India Insurance Company Limited. 2010 Research Methodology Methods and techniques.investorwords.com www. Kothari.Bibliography Books: Jyotsna Seth & Nishwan Bhatia. 487-503. An external perspective. R. 2007 Elements of Banking and Insurance. New Agw International Publishers S. PHI Learning Private Limited C. 3 (4). 2009 Insurance Management Text and Cases.

Experience: _____ Years 5. If yes so what kind: ____________________ 11. Number of Agents Working for the Agency channel: ______ 6. Designation: _____________________________ 4. Discount given on policy: Yes No No No No b.Challenges/Problem faced by the agency channel a.Business mix: Motor Insurance _____% Non-Motor Insurance _____% 12. Is any assistance given to the agents: Yes 10. Name: _______________________________ 3. Company Name: ____________________________ 2. Premium collected through agency in financial year 2011-12: ______ Rs. Lack of professionalism Yes Date: ________ Place: ___________ No Signature: ___________ 52 . Area Covered by Agents Visalkhapatnam Vijaynagram Srikakulam Ankapali Other (specify) _________ 7. Commission on policy sold: Yes c. 8. Percentage contribution of agency to the company‘s business: _______ 9. Agents working for more than one company: Yes d.A Study on Effectiveness of Agency Channel of Distribution in Promotion of General Insurance Products 1.

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