A

Project Study Report

On
Training Undertaken at
TATA AIG LIFE INS. CO. LTD, JHALAWAR
Titled
Agency business model of insurance companies
“competitive strategies”

Submitted in partial fulfilfilment for the Award of degree of

Master of Business Administration

Submitted By:- Submitted To:

Ashwani kant Shrivastva Aditi Dwivedi
MBA 2ed year Asstt.Prof.

2009-2011

GOVERNMENT ENGINEERING COLLAGE JHALAWAR

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Certificate

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 Declaration
I hereby declare that this report on “Agency business model of
insurance companies competitive strategies” has been
written and prepared by me during the academic year 2010-
2011.This project was done under the able guidance and supervision
of Prof. Mrs. Aditi Dwivedi, Faculty, Govt. Engeneering College,
Jhalawar and Mr. Manoj Kumar Bairwa, SM, TATA AIG Life
Insurance Company Ltd., Calicut in partial fulfillment of the
requirement for the Master Of Business Administration Degree
course of the Govt. Engeenering College, Jhalwar

I also declare that this project is the result of my own effort and has
not been submitted to any other institution for the award of any
Degree or Diploma.

Place: Jhalawar
Ashwani Kant Shriwastwa
09MBA013

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 Acknowledgements
If words are considered to be signs of gratitude then let these words
convey the very same
My sincere gratitude to TATA AIG Life for providing me with an
opportunity to work with TATA AIG Life and giving necessary
directions on doing this project to the best of my abilities.
I am highly indebted to Mr. Manoj Kumar Bairwa., Sales Manager
and company project guide, who has provided me with the necessary
information and also for the support extended out to me in the
completion of this report and his valuable suggestion and comments
on bringing out this report in the best way possible.
I also thank Prof. Mrs. Aditi Dwivedi, Faculty, Govt. Engeenering
College, Jhalawar, who has sincerely supported me with the valuable
insights into the completion of this project.
I am grateful to all faculty members of Govt. Engeenering College,
Jhalawar and my friends who have helped me in the successful
completion of this project.

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 Contents
Sr. No. Subjects Covered Pages
1. Project Proposed 9 – 11
1.1 Objective of the project
1.2 Methodology
1.3 Sampling
1.4 Limitations
2. Introduction 12 - 16
2.1 Definition of insurance
2.2 Functions of insurance
2.3 Definitions of life insurance
2.4 Role of life insurance
2.5 Importance of life insurance
3. Agency business model 17 - 19
3.1 Insurance agencies
3.2 Functions of agency manager
3.3 Operational work of insurance agency
4. Indian insurance industry 20 - 27
4.1 History
4.2 IRDA
4.3 Changing perception of customers
4.4 Changing face of Indian life insurance
industry
4.5 Possibilities
5. Global insurance industry 28 - 29
6. Functioning of insurance industry 30 - 36
6.1 Insurer’s business model
6.2 Investment management
6.3 Key ratios and terms
6.4 Requirements of an insurance risk
6.5 Various types of insurance products
7. Insurance and economy 37 - 39
8. TATA AIG Life insurance company 40 - 42
9. Distribution of insurance product 43 - 46
10. Effective marketing strategies for 47 - 52
insurance companies
11. Competitors of TATA AIG Life 53 - 62
12. Comparison of ULIP products 63 - 69

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 13. Questioner 70 - 71
14. Conclusions and findings 72 - 91
15. Recommendations 92

1. Introduction
The story of insurance is probably as old as the story of mankind.
Tendency of a human being to secure themselves against loss and
disaster has been from the starting of world. They sought to avert the
evil consequences of fire and flood and loss of life and were willing to
make some sort of sacrifice in order to achieve security. Though the
concept of insurance is largely a development of the recent past,
particularly after the industrial era – past few centuries – yet its
beginnings date back almost 6000 years as per records.

Insurance business is divided into four classes:

• Life Insurance

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 • Fire
• Marine
• Miscellaneous Insurance.

Insurance provides:
• Protection to investor.
• Accumulation of savings.
• Channeling these savings into sectors needing huge long term
investment.

Functions of insurance:
• Provide protection: The primary function of insurance is to
provide protection against future risk, accidents and
uncertainty. Insurance cannot check the happening of the risk,
but can certainly provide for the losses of risk. Insurance is
actually a protection against economic loss, by sharing the risk
with others.

• Collective bearing of risk: Insurance is an instrument to

share the financial loss of few among many others. Insurance is
a mean by which few losses are shared among larger number

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 of people. All the insured contribute the premiums towards a
fund and out of which the persons exposed to a particular risk is
paid.

• Assessment of risk: Insurance determines the probable

volume of risk by evaluating various factors that give rise to
risk. Risk is the basis for determining the premium rate also.

• Provide certainty: Insurance is a device, which helps to

change from uncertainty to certainty. Insurance is device
whereby the uncertain risks may be made more certain.

• Small capital to cover larger risk: Insurance relieves the

businessmen from security investments, by paying small
amount of premium against larger risks and uncertainty.

• Contributes towards the development of industries:

Insurance provides development opportunity to those larger
industries having more risks in their setting up. Even the
financial institutions may be prepared to give credit to sick
industrial units which have insured their assets including plant
and machinery.

• Means of savings and investment: Insurance serves as

savings and investment, insurance is a compulsory way of
savings and it restricts the unnecessary expenses by the

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 insured's For the purpose of availing income-tax exemptions
also, people invest in insurance.

• Source of earning foreign exchange: Insurance is an

international business. The country can earn foreign exchange
by way of issue of marine insurance policies and various other
ways.

• Risk free trade: Insurance promotes exports insurance, which

makes the foreign trade risk free with the help of different types
of policies under marine insurance cover.

Life insurance:
Life insurance is a contract under which the insurer (Insurance
Company) in
Consideration of a premium paid undertakes to pay a fixed sum of
money on
The death of the insured or on the expiry of a specified period of time
Whichever is earlier. In case of life insurance, the payment for life
insurance policy is certain. The Event insured against is sure to
happen only the time of its happening is not known. So life insurance
is known as ‘Life Assurance’. The subject matter of insurance is life of
human being. Life insurance provides risk coverage to the life of a
person. On death of the person insurance offers protection against
loss of income and compensate the titleholders of the policy.

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Roles of life insurance:

• Life insurance as an investment: - Insurance products yield

more than any other investment instruments and it also
provides added incentives or bonus offered by insurance
companies.

• Life insurance as risk cover: - Insurance is all about risk

cover and protection of life. Insurance provides a unique sense
of security that no other form of invest can provide.

• Life insurance as tax planning: - Insurance serves as an

excellent tax saving mechanism too.

Importance of life insurance:-

• Protection against untimely death: - Life insurance provides
protection to the dependents of the life insured and the family of
the assured in case of his untimely death. The dependents or
family members get a fixed sum of money in case of death of
the assured.

• Saving for old age: - After retirement the earning capacity of a

person reduces. Life insurance enables a person to enjoy
peace of mind and a sense of security in his/her old age.

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• Promotion of savings: - Life insurance encourages people to
save money compulsorily. When life policy is taken, the
assured is to pay premiums regularly to keep the policy in force
and he cannot get back the premiums, only surrender value can
be returned to him. In case of surrender of policy, the
policyholder gets the surrendered value only after the expiry of
duration of the policy.
• Initiates investments: - Life Insurance Corporation
encourages and mobilizes the public savings and canalizes the
same in various investments for the economic development of
the country. Life insurance is an important tool for the
mobilization and investment of small savings.
• Credit worthiness: - Life insurance policy can be used as a
security to raise loans. It improves the credit worthiness of
business.
• Social Security: - Life insurance is important for the society as
a whole also. Life insurance enables a person to provide for
education and marriage of children and for construction of
house. It helps a person to make financial base for future.
• Tax Benefit: - Under the Income Tax Act, premium paid is
allowed as a deduction from the total income under section
80C.

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 2. Indian insurance industry
History:
Life insurance came to India from England in 1818 when
oriental life insurance company started in Calcutta by Europeans.
After this many insurance companies had been started in India. But
these companies were looking after only the needs of European
community established in India. Indian people were not being insured
by these companies. First Indian life insurance company came as
Bombay mutual life insurance assurance. Second company was
Bharat insurance company came in 1896. After this the united India
in madras, national Indian and national insurance in Calcutta and the
co-operative assurance in Lahore were established in 1906.
To regulate Indian insurance business first insurance
act came in 1912 as life insurance company act and provident fund
act. These acts consist of premium rates tables and periodical
valuations of companies. In the first two decade of 20th century many
life insurance companies were started. So the insurance act came in
1938 to governing life and non life insurance companies and to
provide strict state control. In 1956 the life insurance business in
India was nationalized. In 1956 life insurance corporation of India
(LIC) was created to spreading life insurance much more widely
particularly in rural areas. In that year LIC had 5 zonal offices, 33
divisional offices and 212 branch offices. In 1957 the business of LIC
of sum assured of 200crores, 1000crores in 1970, and 7000crores in
1986.

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Indian regulatory development authority:
In 1999, the Insurance Regulatory and Development Authority (IRDA)
was constituted as an autonomous body to regulate and develop the
insurance industry. The IRDA was incorporated as a statutory body in
April, 2000. The key objectives of the IRDA include promotion of
competition so as to enhance customer satisfaction through
increased consumer choice and lower premiums, while ensuring the
financial security of the insurance market. The IRDA opened up the
market in August 2000 with the invitation for application for
registrations. Foreign companies were allowed ownership of up to
26%. The Authority has the power to frame regulations under Section
114A of the Insurance Act, 1938 and has from 2000 onwards framed
various regulations ranging from registration of companies for
carrying on insurance business to protection of policyholders’
interests.
Role of IRDA:
• Protecting the interests of policyholders.
• Establishing guidelines for the operations of insurers, and
brokers.
• Specifying the code of conduct, qualifications, and training for
insurance intermediaries and agents.
• Promoting efficiency in the conduct of insurance business.
• Regulating the investment of funds by insurance companies.

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 • Specifying the percentage of business to be written by insurers
in rural sectors.
• Handling disputes between insurers and insurance
intermediaries.

Changing perception of Indian customers:

Indian Insurance consumers are like Indian Voters, they are soft but
when time is right and ripe, they demand and seek necessary
changes. De-tariff of many Insurance Products are the reflection of
changing aspirations and growing demand of Indian consumers.

For historical years, Indian consumers were at receiving end.

Insurance Product was underwritten and was practically forced onto
consumers on a “Take-it-As-it-basis”. All that got changed with
passage of IRDA act in 1999. New insurance companies have come
into existence leading to open competition and hence better products
for customers.

Indian customers have become very sensitive to Coverage / Premium

as well as the Products (read Risk Solution), that is given to them.
There are not ready to accept any product, no matter even if that is
coming from the market leader, should that product is not serving the
purpose. A case in point is ULIP Product / Group Life and Credit Life
in Life Insurance segment and Travel / Family Floater Health and

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Liability Insurance in the Non-life segment are new age Avatar. The
new products are constantly being demanded by Indian consumers,
which is putting huge pressures on Insurance companies (Read Risk
Under-writers) and Brokers to respond.

Customers are looking at Insurance for covering Pure Risk now

which I have covered in my next section. Another good reason why
we are seeing quick changes in the buying behavior of Insurance
from mere Investment to risk mitigation is the cost of Replacement of
Goods (ROG) or Cost of Services (COS).
Now Indian customers are aware of insurance industry and insurance
products provided by companies. They have become more sensitive.
They would not accept any type of insurance product unless it fulfills
their requirements and needs. In historic day’s customers looking at
insurance products as a life cover which can provide security against
any unacceptable events, but now customers look at insurance
products as an investment as well as life cover. So today’s customers
wants good return from the insurance companies. The Indian
customer’s forms the pivot of each company’s strategy.

Investment of Indian household savings (as a % in different

sector)

BANK DEPOSITS 39%

CORP. BANKS 2%
SHARES AND DEBENTURES 1%

MUTUAL FUNDS 2%

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NBFC’S 3%
GOVT. BONDS 13%
INSURANCE 13%
PF/ RETIRE FUNDS 21%
CURRENCY 6%

Source: - www.
avivaindia.com

Changing face of Indian insurance industry:

After the Insurance Regulatory and Development Authority Act

have been passed there has been establishment of many private
insurance companies in India. Previously there was a monopoly
business for Life Insurance Corporation of India (L.I.C.) who was the
only life-insurance company for the people till 2000. L.I.C. still holds
71.4% of the market share in 2006. But after the introduction of
private life insurance companies there is a great competition in Indian
market now. Everyone is trying to capture the fresh market here and
penetrate it with aggressive marketing strategies. Today life-
insurance is not only limited up to just life risk cover and maturity
period bonuses but changed to greater return from the investments.
With the introduction of the unit linked insurance policies these
companies are investing the money in different investment
instruments like shares, bonds, debentures, government and other
securities. People are demanding for higher returns with the life risk
cover and private companies are giving 30-40% average growth per
annum. These life-insurance companies have every kind of policies

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suiting every need right from financial needs of, marriage, giving birth
and rearing up a child, his education, meeting daily financial needs of
life, pension solutions after retirement. These companies have every
aspects and needs of our life covered along with the death-benefit.

In India only 25% of the population

has life insurance. So Indian life-insurance market is the target
market of all the companies who either want to extend or diversify
their business. To tap the Indian market there has been tie-ups
between the major Indian companies with other International
insurance companies to start up their business. The government of
India has set up rules that no foreign insurance company can set up
their business individually here and they have to tie up with an Indian
company and this foreign insurance company can have an
investment of only 24% of the total start-up investment.

Indian insurance industry can be featured by:

• Low market penetration.

• Ever growing middle class component in population.

• Growth of customer’s interest with an increasing demand for

better insurance products.

• Application of information technology for business.

• Rebate from government in the form of tax incentives to be

insured.

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 Today, the Indian life insurance industry has a dozen
private players, each of which are making strides in raising
awareness levels, introducing innovative products and increasing the
penetration of life insurance in the vastly underinsured country.
Several of private insurers have introduced attractive products to
meet the needs of their target customers and in line with their
business objectives. The success of their effort is that they have
captured over 28% of premium income in five years.

The biggest beneficiary of the competition among life

insurers has been the customer. A wide range of products, customer
focused service and professional advice has become the mainstay of
the industry, and the Indian customer’s forms the pivot of each
company’s strategy. Penetration of life insurance is beginning to cut
across socio-economic classes and attract people who have never
purchased insurance before.
Life insurance is also now being regarded as a versatile
financial planning tool. Apart from the traditional term and saving
insurance policies, industry has seen the entry and growth of unit
linked products. This provides market linked returns and is among the
most flexible policies available today for investment. Now products
are priced, flexible, and realistic and sustain so people in better
position to understand the risk and benefits of the product and they
are accepting these innovative products.
So it is clear that the face of life insurance in India is
changing, but with the changes come a host of challenges and it is
only the credible players with a long term vision and a robust

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business strategy that will survive. Whatever the developments, the
future and the opportunities in this industry will surely be exciting.

There are 12 private players in Indian life insurance market.

6 bank owned insurers: - HDFC standard life, ICICI prudential, ING

Vysya, MetLife, OM Kotak, TATA AIG life.
6 independent insurers: - Aviva, ANP sanmar, Birla sun life, Bajaj
Allianz, Max New York life, Tata AIG.
Major international insurers are- Prudential
and Standard life from UK, Sun life of Canada, AIG, MetLife and New
York life of the US.

Increasing growth since liberalization:

YEAR LIC (in bn rs.) PRIVATE PLAYER
FY03 110 10
FY04 120 20
FY05 130 40
FY06 140 60
FY07 240 160

Source: - Insurance Industry (ICFAI publication

book)

Possibilities for insurance companies in India:

• Further deregulation of the market.

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 • Greater concern for the customers.
• Newer products and services.
• Competition and quality consciousness.
• Cost effective operations.
• Restructuring of the public sector.
• Consolidation of domestic insurance markets.
• Technology driven shift in product design.
• Actual operations and distribution.
• Convergence of financial services.

3. Global insurance industry

Globally, insurers increasingly are pressured by the demands of their
clients. The development of global insurance industry over the past
few years was influenced by booming stock markets which enabled
considerable capital gains to be made in non life business. Increase
in insurers equity capital increased underwriting capacity, while
demand did not develop at the same pace, resulting in decrease in
insurance policies prices. The stock market boom of the past few

years led to demand for unit linked insurance products.

The global insurance industry is growing at rapid pace. Most of

the markets are undergoing globalization. Lot of mergers and

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acquisition are taking place in the insurance world. The rapidity in the
industry, technological improvement has resulted in pressures on a
few economic parameters. The world insurance industry is at peak of
its globalization process.
Global insurance market is increasing by an average of six
percent per year since 1990. Insurance companies have collected
$2443.7 billion premium world wide according to the global
development of premium volume in 144 countries in 2005. $1521.3
has been generated as life insurance premium and $922.7 as non life
insurance premium. The US accounted for 35% of global life and non
life premium, Japan had global share of 21%, and UK was having
10% of global share.

Influence on Indian insurance industry:

In this era of globalization, insurance companies face a dynamic
global environment. Dramatic changes are taking place owing to the
internationalization of activities, appearance of new risk, new types of
covers to match with new risk situations, and unconventional and
innovative ideas on customer services. Low growth rates in
developed markets, changing customers needs, and the uncertain
economic conditions in the developing world are exerting pressure on
insurer’s resources and testing their ability to survive. Now the
existing insurers are facing difficulties from non-traditional
competitors those are entering the retail market with new approaches
and through new channels.

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 India has a rapidly growing middle class and this section can
afford to buy insurance products. This shows the attraction that the
Indian market holds for foreign insurers who have been putting
pressure on developing countries as well as on India to open up its
market.

Life insurance penetration as a % of GDP

United kingdom 8.9%
Japan 8.3%
Korea 7.3%
United states 4.1%
Malaysia 3.6%
India 3.0%
China 1.8%
Brazil 1.3%

Source: -
www.indianinsuranceresearch.com

4. Functioning of insurance industry:

Insurer’s business model:
Profit = earned premium + investment income - incurred loss -
underwriting expenses

Insurers make money in two ways: (1) through underwriting, the

processes by which insurers select the risks to insure and decide

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how much in premiums to charge for accepting those risks and (2) by
investing the premiums they collect from insured.

The most difficult aspect of the insurance business is the underwriting

of policies. Using a wide assortment of data, insurers predict the
likelihood that a claim will be made against their policies and price
products accordingly. To this end, insurers use actuarial science to
quantify the risks they are willing to assume and the premium they
will charge to assume them. Data is analyzed to fairly accurately
project the rate of future claims based on a given risk. Actuarial
science uses statistics and probability to analyze the risks associated
with the range of perils covered, and these scientific principles are
used to determine an insurer's overall exposure. Upon termination of
a given policy, the amount of premium collected and the investment
gains thereon minus the amount paid out in claims is the insurer's
underwriting profit on that policy.

An insurer's underwriting performance is measured in its combined

ratio. The loss ratio (incurred losses and loss-adjustment expenses
divided by net earned premium) is added to the expense ratio
(underwriting expenses divided by net premium written) to determine
the company's combined ratio. The combined ratio is a reflection of
the company's overall underwriting profitability. A combined ratio of
less than 100 percent indicates underwriting profitability, while
anything over 100 indicates an underwriting loss.

Insurance companies also earn investment profits on “float”. “Float”

or available reserve is the amount of money, at hand at any given
moment that an insurer has collected in insurance premiums but has

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not been paid out in claims. Insurers start investing insurance
premiums as soon as they are collected and continue to earn interest
on them until claims are paid out.

. Naturally, the “float” method is difficult to carry out in an

economically depressed period. Bear markets do cause insurers to
shift away from investments and to toughen up their underwriting
standards. So a poor economy generally means high insurance
premiums. This tendency to swing between profitable and
unprofitable periods over time is commonly known as the
"underwriting" or insurance cycle.

Finally, claims and loss handling is the materialized utility of

insurance. In managing the claims-handling function, insurers seek to
balance the elements of customer satisfaction, administrative
handling expenses, and claims overpayment leakages.

Investment management:
Investment operations are often considered incidental to the business
of insurance, and have traditionally viewed as secondary to
underwriting. In the past risk management was the most important
part of business, whereas today the focus has shifted to fund
management. Investment income is a large component of insurance
revenues, skilful and careful management of funds. Insurance is a
business of large numbers and generates huge amount of funds over
time. These funds arise out of policyholder funds in the case of life
insurance, and technical and free reserves in the non-life segments.
Time lag between the procurement of premium and the payment of

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claim provides an interval during which the funds can be deployed to
generate income. Insurance companies are among the largest
institutional investors in the world. Assets managed by insurance
companies are estimated to account for over 40% of the world’s top
ten asset managers.
Returns on investments influence the premium
rates and bonuses and hence investment income will continue to be
an important component of insurance company profits. In life
insurance, benefits from insurance profits accrue directly to policy
holders when it is passed on to him in the form of a bonus. In non life
insurance the benefits are indirect and mostly by the creation of an
investment portfolio. Investment income has to compensate for
underwriting results which are increasingly under pressure. In the
case of insurance, the difference between revenue and the expenses
is known as operating surplus.

Revenue =premium.
Expenses =sum of claims + commission payable on
procurement of business + operating expenses.
Operating surplus =revenue-expenses.

Net investment income includes income from trading in and holding

stock market securities including government securities, special
deposits with the central government, loans to several public utilities
and service providers in state government.
Insurance premium collected is converted in a pool of
fund then divided in to four expenses.

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 • To pay the expenses of the management.
• To pay agency commission.
• To pay for the claims.
• Surplus money will be invested in govt. securities.

Requirements of an insurance risk

Insurance normally insure only pure risks .However, not all pure risk
is insurable .certain requirements usually must be fulfilled before a
pure risk can be privately insured .From the view point of the insurer,
there are ideally six requirement of an insurable risk

• There must be a large number of exposure units

• The loss must be accidental and unintentional.

• The loss must be determinable and measurable.

• The loss should not be catastrophic.

• The chance of loss must be calculable.

• The premium must be economically feasible

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Comparison of Insurance with other Similar Factors
(1)Insurance and gambling compared

Insurance is often erroneously confused with gambling .There

are two important differences between them .First ,gambling creates
a new speculative risk ,while insurance is a technique for handling an
already existing pure risk .thus ,if you bet Rs 300 on a horse ,a new
speculative technique is created ,but if you pay Rs 300 to an insurer
for fire insurance ,the risk of fire is already present and is transferred
to the insurer by a contract. No new risk is created by the transaction.

The second difference between insurance and gambling is

that gambling is socially unproductive, because the winner’s gain
comes at the expense of the loser .In contract; insurance is always
socially productive, because neither the insurer nor the insured is
placed in a position where the gain of the winner comes at the
expense of the loser. The insurer and the insured have a common
interest in the prevention of a loss. Both parties win if the loss does
occur .Moreover, consistent gambling transaction generally never
restore the losers to their former financial position .In contract
,insurance contracts restore the insured’s financially in whole or in
part if a loss occurs

(2)Insurance and hedging compared

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 The concept of hedging is to transferring the risk to the
speculator through purchase of future contracts .An insurance
contract, however, is not the same thing as hedging .Although both
technique are similar in that risk is transferred by a contract, and no
new risk is created, there are some important difference between
them. First, an insurance transaction involves the transfer of
insurable risks, because the requirement of an insurable risk
generally can be met .However, hedging is a technique for handling
risks that are typically uninsurable ,such as protection against a
decline in the price agriculture products and raw materials.

A second difference between insurance and hedging is that

insurance and hedging is that insurance can reduce the objective risk
of an insurer by application of the law of large numbers. As the
number of exposure units increases, the insurer’s prediction of future
losses improves, because the relative variation of actual loss from
expected loss will decline .thus, many insurance transactions reduce
objective risk. In contract, hedging typically involves only risk
transfer , not risk reduction .The risk of adverse price fluctuation is
transferred because of superior knowledge of market conditions .The
risk is transferred, not reduced, and prediction of loss generally is not
based on the law of large numbers.

Various types of life insurance policies:-

• Endowment policies: This type of policy covers risk for a
specified period, and at the end of the maturity sum assured is

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 paid back to policyholder with the bonuses during the term of
the policy.
• Money back policies: This type of policy is for periodic
payments of partial survival benefits during the term of the
policy as long as the policy holder is alive.
• Group insurance: This type of insurance offers life
insurance protection under group policies to various groups
such as employers-employees, professionals, co-operatives etc
it also provides insurance coverage for people in certain
approved occupations at the lowest possible premium cost.
• Term life insurance policies: This type of insurance
covers risk only during the selected term period. If the policy
holder survives the term, risk cover comes to an end. These
types of policies are for those people who are unable to pay
larger premium required for endowment and whole life policies.
No surrender, loan or paid up values are in such policies.

• Whole life insurance policies: This type of policy runs as

long as the policyholder is alive and is covered for the entire life
of the policyholder. In this policy the insured amount and the
bonus is payable only to nominee on the death of policy holder.

• Joint life insurance policies: These policies are similar

to endowment policies in maturity benefits and risk cover, but
joint life policies cover two lives simultaneously such as married

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 couples. Sum assured is payable on the first death and again
on the death of survival during the term of the policy.

• Pension plan: a pension plan or annuity is an investment

over a certain number of years but does not provide any life
insurance cover. It offers a guaranteed income either for a life
or certain period.

• Unit linked insurance plan: ULIP is a kind of insurance

plan which provides life cover as well as return on premium
paid over a certain period of time. The investment is denoted as
units and represented by the value called as net asset value
(NAV).

5. Insurance and economy

• Indian economy is growing in reference to global market.
Business of insurance with its unique features has a special
place in Indian economy.
• It is a highly specialized technical business and customer is the
most concern people in this business, therefore this business is
able to spur the growth of infrastructure and act as a catalyst in
the overall development of Indian economy.
• The high volumes in the insurance business help spread risk
wider, allowing a lowering of the rates of the premium to be
charged and in turn, raising profits. When there is a bigger
base, the probabilities become more predictable, and with
system wide risks balanced out, profits improve. This explains

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 the current scenario of mergers, acquisitions, and globalization
of insurance.
• Insurance is a type of savings. Insurance is not only important
for tax benefits, but also for savings and for providing security.
It can be serving as an essential service which a welfare state
must make available to its people.
• Insurance play a crucial role in the commercial lives of nations
and act as the lubricants of economic activities. Insurance firms
help to spread the potentially financial consequences of risk
among the large number of entities, to mobilize and distribute
savings for productive use, facilitate investment, support and
encourage external trade, and protect economic entities against
external risk.

Insurance and economic growth mutually influences each other. As

the economy grows, the living standards of people increase. As a
consequence, the demand for life insurance increases. As the assets
of people and of business enterprises increase in the growth process,
the demand for general insurance also increases. In fact, as the
economy widens the demand for new types of insurance products
emerges. Insurance is no longer confined to product markets; they
also cover service industries. It is equally true that growth itself is
facilitated by insurance. A well-developed insurance sector promotes
economic growth by encouraging risk-taking. Risk is inherent in all
economic activities. Without some kind of cover against risk, some of
these activities will not be carried out at all. Also insurance and more
particularly life insurance is a mobilizer of long term savings and life

31
insurance companies are thus able to support infrastructure projects
which require long term funds. There is thus a mutually beneficial
interaction between insurance and economic growth. The low
income levels of the vast majority of population have been one of the
factors inhibiting a faster growth of insurance in India. To some
extent this is also compounded by certain attitudes to life. The
economy has moved on to a higher growth path. The average rate of
growth of the economy in the last three years was 8.1 per cent. This
strong growth will bring about significant changes in the insurance
industry.

At this point, it is important to note that not all activities can be

insured. If that were possible, it would completely negate
entrepreneurship. Professor Frank Knight in his celebrated book
“Risk Uncertainty and Profit” emphasized that profit is a consequence
of uncertainty. He made a distinction between quantifiable risk and
non-quantifiable risk. According to him, it is non-quantifiable risk that
leads to profit. He wrote “It is a world of change in which we live, and
a world of uncertainty. We live only by knowing something about the
future; while the problems of life or of conduct at least, arise from the
fact that we know so little. This is as true of business as of other
spheres of activity”. The real management challenges are
uninsurable risks. In the case of insurable risks, risk is avoided at a
cost.

32
 6 . COMPANY PROFILE

There are many companies and advisors to guide people regarding the selection
of a particular investment option. They analyze the market situation and refer a
suitable investment option for people. People can take their help if they want to
reduce their risks and increase their profits. There are even many investment
brokers and investment analysts to help people with the process of investment.

About the Tata Group:

33
The Tata Group comprises 98 operating companies in seven business sectors:
information systems and communications; engineering; materials; services;
energy; consumer products; and chemicals. The Group was founded by Jamsetji
Tata in the mid 19th century, a period when India had just set out on the road to
gaining independence from British rule. Consequently, Jamsetji Tata and those
who followed him aligned business opportunities with the objective of nation
building. This approach remains enshrined in the Group's ethos to this day.

The Tata Group is one of India's largest and most respected business
conglomerates, with revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the
equivalent of about 3.2 per cent of the country's GDP, and a market capitalization
of $72.8 billion as on January 10, 2008. Tata companies together employ some
289,500 people. The Group's 27 publicly listed enterprises — among them stand
out names such as Tata Steel, Tata Consultancy Services, Tata Motors and Tata
Tea — have a combined market capitalization that is the highest among Indian
business houses in the private sector, and a shareholder base of over 2.9 million.
The Tata Group has operations in more than 85 countries across six continents,
and its companies export products and services to 80 countries.

The Tata family of companies shares a set of five core values: integrity,
understanding, excellence, unity and responsibility. These values, which have
been part of the Group's beliefs and convictions from its earliest days, continue
to guide and drive the business decisions of Tata companies. The Group and its
enterprises have been steadfast and distinctive in their adherence to business
ethics and their commitment to corporate social responsibility. This is a legacy
that has earned the Group the trust of many millions of stakeholders in a
measure few business houses anywhere in the world can match.

About American International Group, Inc. (AIG)

American International Group, Inc. (AIG), a world leader in insurance and financial
services, is the leading international insurance organization with operations in more than
130 countries and jurisdictions. AIG companies serve commercial, institutional and
individual customers through the most extensive worldwide property-casualty and life
insurance networks of any insurer. In addition, AIG companies are leading providers of
retirement services, financial services and asset management around the world. AIG's
common stock is listed on the New York Stock Exchange, as well as the stock
exchanges in Paris, Switzerland and Tokyo.

34
About Tata Aig Life Insurance Company Ltd.
Tata AIG Life Insurance Company Limited, which is a joint venture between Tata
Group and American International Group, Inc. (AIG), offers a number of standard
and custom-made life insurance policies. Tata is one of the oldest and leading
business groups of India. Tata Group has had a long association with India's
insurance sector being the largest insurance company in India prior to the
nationalization. American International Group, Inc (AIG) is the leading U.S.
based international insurance and financial services organization.

Tata AIG General Insurance Company Limited (Tata AIG General) is a joint venture
company, formed by the Tata Group and American International Group, Inc. (AIG). Tata
AIG General combines the Tata Group’s pre-eminent leadership position in India and
AIG’s global presence as the world’s leading international insurance and financial
services organization. The Tata Group holds 74 per cent stake in the insurance venture
with AIG holding the balance 26 percent. Tata AIG General Insurance Company, which
started its operations in India on January 22, 2001, offers complete range of general
insurance for motor, home, accident & health, travel, energy, marine, property and
casualty, liability as well as several specialized financial lines.

According to The Economic Times, Tatas are more reputed than Google, Microsoft
(published on 11th May, 2009 in The Economic Times). They are at 11th position in the
trust factor, way ahead of Disney (21th), Google (23rd), TATA AIG (29th), Microsoft (30th),
INFOSYS (39th), Nokia (45th), L&T (47th), Maruti Suzuki (49th), Hindustan Unilever (70th),
& ITC (96th).

The list is made on the basis of admiration, trust and good feeling that consumers have
towards a company. Other Indian companies that are in the list of top 200 are Canara
Bank, HPCL, Wipro, Reliance, M&M, and Bharti Airtel, BPCL, Punjab National Bank.
The report revealed that corporate trust is higher in the emerging markets, while
companies in industrialized markets are trusted less.

Tata-AIG Life Insurance Company is a joint venture between the Tata Group
(74% equity stake) and American International Group Inc. (AIG) (26% equity
stake). The company offers a broad range of life insurance products to
individuals and groups. The products offered to individuals are variations of term
life with or without a savings element, e.g., endowment policies and money back
policies. Tata-AIG Life has been in operation since April 2001 (incorporated on

35
Aug 23, 2000). While the company itself is relatively new, the Tata group is
widely known in Indian households.

The Tata Group is one of the oldest and largest industrial conglomerates in India.
Established in 1868, it has interests in engineering, consumer products,
chemicals, financial services, hotels, information technology and
telecommunications. With over 80 companies, and with revenues close to 1.8%
of the country’s GDP, the Tata brand is very well respected across the
socioeconomic classes. Most importantly, it manufactures a large variety of
goods that are highly visible to low-income households, like consumer goods,
trucks and automobiles that bear the Tata logo. Having been around for over a
century, the name Tata introduces immediate credibility in its micro insurance
operations. Agents selling micro insurance products are able to assure potential
clients that such a large conglomerate would have little interest in stealing their
miniscule (in relative terms) premiums.

AIG is the one of the world’s largest insurers. Aside from its massive pool of in-
house technical capacity, it has experience working on micro insurance in
Uganda.7 Although Tata is the largest shareholder in Tata-AIG; AIG manages
the company with strategic guidance from AIG’s Hong Kong office. Tata-AIG was
among the few private sector insurance players to have a well-known, reputable
local brand, but it did not have a strategic banking alliance with domestic banks
or branch presence in smaller towns that could enable it to promote micro
insurance sales. As a result, its micro insurance strategy had to be developed
around other partner organizations to enable the insurer to penetrate rural areas.
Rural India comprises of over 650 000 villages with over half of them having a
population of less than 500. Even the state relies on NGOs to provide services to
remote and poorly connected locations. For Tata-AIG’s rural programme, it was
evident that the main partners would need to be NGOs. Fortunately, Tata has the
reputation of having contributed to community development over the years.
Substantial parts of the group’s profits go into a trust and several social
organizations across the country receive grants and assistance from these trusts.
The link with Tata helped to create a climate in which many NGOs were
favorably disposed towards Tata-AIG.

36
Although AIG was forced to find a local partner to get a license to do business in
India, the choice of
Tata, with its excellent reputation in the development community, made it an
invaluable partnership.
This was especially significant in India where many multinational corporations
have faced significant difficulties in entering the India market.

Tata-AIG embraced micro insurance as an opportunity, rather than purely as a

cost of doing business in India. Ian Watts, the CEO, envisioned a need for a
separate rural and social strategy and created a separate department, the de
facto micro insurance division. The importance of micro insurance is reflected in
the organizational chart. The CEO had the foresight to recognize that micro
insurance was not simply a matter of selling existing policies cheaply, but
required new products and distribution mechanisms. Crucially the CEO approved
of the distribution of resources towards micro insurance and the hiring of a
specialized micro insurance team. He gave it space to think creatively about how
the sustainable promotion and servicing of micro insurance products might work.
The CEO has been supportive of the micro insurance programme for a variety of
reasons. Most obviously, the insurer is compelled to meet the rural and social
sector obligations. That said, many insurers have simply seen the obligations as
a cost of doing business in India. They have responded to the obligations by
essentially selling only the required quantity of policies, and there are reports that
those have been poorly serviced. Tata-AIG could have responded in this way,
but instead saw micro insurance as a marketing opportunity. Although micro
insurance would not make much profit (if any) initially, it helps get Tata-AIG’s
brand name out into the market place. With India’s high growth rate, it is possible
that today’s micro insurance policyholder will be tomorrow’s high value client. In
particular, research by the National Council of Applied Economic Research has
predicted rising levels of overall wealth in both the rural and urban areas of India,
The IRDA is very concerned with the promotion of micro insurance. By engaging
so positively with micro insurance, Tata-AIG was able to strengthen its
relationship with the regulator. Its micro insurance programme has generated
considerable publicity for Tata-AIG because it is innovative. Much of the media in
India is hostile or at least suspicious of the multinational corporations. The micro
insurance activities helped promote a positive image of Tata-AIG.

Core Values:

37
Integrity: We must always conduct our business with fairness, honesty and
transparency, so that we can at all times stand public scrutiny. We will never
undermine the heritage of trust that comes with the Tata brand.

Entrepreneurship: we would encourage innovative ideas for individual and

organizational development. This thinking would be fostered, encouraged and
recognized for enhancing business. We would take delight in stretching our goals
and each of us would have a sense of ownership and responsibility for all our
business dealings.

Agility: We will encourage an organizational culture and structures that has

capacity for change. Flexibility and adaptability will be critical to our operations.
We will aim for nimble, flexible and customized responses at all times to all our
stakeholders.

Excellence: All our activities must be driven by a passion for excellence. We

must strive, uncompromisingly, to achieve the highest standards in our daily work
and in the quality of the goods and services we offer. We would endeavor to
achieve 'best in class' status in all our processes and results.

Unity: We must work cohesively with our colleagues, customers and partners
around the world, leveraging synergies and building strong networks based on
collaboration and mutual cooperation.

Mission:
To be a competitive value provider in international business for Group companies
and all our partners.

Vision:
Become a globally networked enterprise seizing opportunities worldwide to
generate USD 25 million annual profits by.

Vivid Description of Vision:

• Achieved aggressive and profitable growth of our 5 core businesses and

initiated new businesses

• Become a cohesive, integrated and synergized global entity providing

horizontal and vertical reach and infrastructure to all our partners
worldwide

• Consistently achieved customer delight by focusing on value adding

activities throughout our value chain

38
 • Achieved best partner status with Group Companies in international
business on a sustained basis

• A strong global supply base for world class goods and services

• Become a learning and knowledge rich organization acknowledged as

thought leaders in international business

• Institutionalized Tata Business Excellence Model and achieved best in

class status

• Effective and responsive systems and processes that will underpin our
business decisions to manage risks

• Become an exciting organization which attracts and retains best talent

worldwide for global competitiveness

• Become a proactive, integral and responsible member of our environment

and communities

Resources:

Besides company funds, the micro insurance team has been able to harness
external funds. In September 2002, DfID put out the bidding process for its
Financial Deepening Challenge Fund, a matching grant for which the private
sector could bid based on innovative ideas to each the poor. Tata-AIG bid for an
assistance of £89 500 ($168 620) and committed matching funds to the tune of
£104 000 ($195 520). The FDCF grant is being used for product development,
capacity building, and physical and communication infrastructure like vans and
the Internet portal.

Profit allocation and distribution:

Tata-AIG is private company and all profits generated by the company go to its
owners (shareholders). The exception to this is with endowment policies where
regulations require that 90% of profits must be returned to policyholders.

Partnerships:

Tata-AIG has NGO partnerships with over 50 NGOs. Over 40% of its 35 000
social sector policies were sold through the partner-agent model. In this model,
the NGO/MFI partner performs the sales and servicing functions, primarily for its
current microfinance clients. The two other models, the business associate

39
model and the CRIG model, account for the remaining 60% of the new business
and are described in more detail below.

TATA-AIG organizational chart:

40
 7. Agency business model

In India insurance is sold through mainly four channels.

• Through branch
• Through agency
• Through financial institution
• Through banks

Independent agency system means of selling and servicing property

and casualty insurance through agents who represent different
companies. The agents own the records of the policies they sell.

Insurance is now governed by a blend of statutes, administrative

agency regulations, and court decisions. State statutes often control
premium rates, prevent unfair practices by insurers, and guard
against the financial insolvency of insurers to protect insureds.

In most states, an administrative agency created by the state

legislature devises rules to cover procedural details that are missing
from the statutory framework. To do business in a state, an insurer
must obtain a license through a registration process. This process is
usually managed by the state administrative agency. The same state
agency may also be charged with the enforcement of insurance
regulations and statutes.

Administrative agency regulations are many and varied. Insurance

companies must submit to the governing agency yearly financial
reports regarding their economic stability. This requirement allows the

41
agency to anticipate potential insolvency and to protect the interests
of insureds. Agency regulations may specify the types of insurance
policies that are acceptable in the state, although many states make
these declarations in statutes. The administrative agency is also
responsible for reviewing the competence and ethics of insurance
company employees.

Insurance agencies:
Insurance agency can be defined as a group of insurance agents or
advisor. These agents or advisors create a distribution channel to sell
the different insurance products. These advisors are the strongest
distribution channel for an insurance agency. An advisor or agent
works as a third party or intermediate between insurance company
and customers. All the advisors in an agency work as a team. Main
work of insurance advisor or agent is to promote and sell different
insurance products of company.

Functions of agency manager:

a person who governs a group of insurance advisors is known as
agency manager. Success of an agency manager depends on the
success of their advisors. work of agency manager is to control the
advisors in an efficient way. Agency manager is like a creature of two
wings. He has to recruit advisors as well as to give sales to the
insurance company.
• To recruit advisors.
• Make them aware of different insurance products.

42
 • To give them training session.
• To motivate them for efficient work.
• To get maximum and efficient work from their advisors.

Operation work of insurance agency (TATA AIG

Life):
Every industry has an operational department which supports the
market division.

Front office partners (independent agents)

Develop insurance products Distribute product
CUSTOMERS Plan and manage company BUSINESS
PARTNERS
Fulfill and service product Claims
Back office provider Regulatory
institutions

In the reference to the TATA AIG Life insurance, development of

insurance products, distribution, planning services products and
claims are taken care by the head office. Back office providers are
those persons who take care of the operational part of the
organization and front office providers are the people who brings sell
to the organization. Back office has its own hierarchy which is
connected to head office, and every policy has to be processed to
head office. Unit for the operations is known as processing centre,

43
and processing centre within the city is known as mini processing
centre. Proposal forms come through front office and the verification
of the proposal is done by manually which is known as scrutiny. After
scrutiny the operational staff enters it in TATA AIG Life website,
which is done online. the entry of a proposal is done in a sequential
order starting with scrutiny, inwards, proposal wise inwards, cashier
entry, cashier entry approval, data entry and finally outwards. After
finishing all these operations policy issues from the head office of the
state.

8. Project proposed
Agency business model of different insurance companies-
competitive strategies.
Different agencies of different insurance companies are having some
strategies to survive in the market. Their strategies may be in the
form of:
• How they target their customers.
• How they make their advisors active.
• How they make their operational and sales department
effective.
• How they promote their employees.
• How they handle the conflict in agency.

44
Objective of the project: - Main objective of the project is to find
out the strategies of different insurance agencies and evaluate them.
Project is about to penetrate the competitors of TATA AIG life.
Conclusion of this project can give an idea of strategies of different
companies which may be helpful to the company. Now days all the
insurance companies in India are trying to establish themselves in the
competitive market. They are introducing innovative marketing
strategies to survive in the market. Many other private companies are
looking to enter in the Indian insurance market .so it is very essential
to a company to innovate their marketing strategies in terms of

• Recruiting their advisors

• To make their advisors active
• Well educated and capable employee in the agency
• Marketing of their products
• Deployment of their products
• Targeting the right and potential customers
• Differentiating from other companies
• Future plan of the company

This study consists of to find out the marketing strategies

of different insurance companies which are the competitors of
TATA AIG Life insurance. This research requires the interview of
branch managers of different insurance companies and find out
their branches are working in terms of above mentioned factors.

Methodology

45
Research is totally based on primary data. Secondary data can be
used only for the reference. Research has been done by primary data
collection, and primary data has been collected by meeting with the
branch and agency manager of different insurance agencies and
branches in Calicut. Data collection has been done through by giving
structured questioner. Research has been done after 27 branch
managers or agency manager. This study will be based on judgment
sampling and this research is skewed to organization level. This is an
exploratory type of research. And this research needs further study
also Research is a kind of pilot study.

Sampling
Sample size has been taken by judgment sampling. Judgment
sampling is a process in which the selection of a unit, from the
population is based on the pre judgment. This research requires the
survey of different insurance agencies in Calicut city. So research
concentrates on the branch or agency manager of different insurance
companies. So the selection of unit for this research has been judged
by the researcher. Sample size for this research is 27.

Limitations:
• Time limitation
• Research has been done only in Calicut.
• Companies did not disclose their secrets data and strategies.
• Possibility of Error in data collection.
• Possibility of Error in analysis of data due to small sample size.

46
 9. Distribution of insurance products

Insurance has to be sold the world over. The Touch point with the
ultimate customer is the distributor or the producer and the role
played by them in insurance markets is critical. It is the distributor
who makes the difference in terms of the quality of advice for choice
of product, servicing of policy post sale and settlement of claims. In
the Indian market, with their distinct cultural and social ethics, these
conditions will play a major role in shaping the distribution channels
and their effectiveness. In today's scenario, insurance companies
must move from selling insurance to marketing an essential financial
product. The distributors have to become trusted financial advisors

47
for the clients and trusted business associates for the insurance
Companies.

Challenges for insurance companies and intermediaries in

India-
• Building faith about company in the mind of clients.
• Building personal credibility with the clients.

Different distribution channels in India:-

A multi-channel strategy is better suited for the Indian market.

Indian insurance market is a combination of multiple markets.
Each of the markets requires a different approach. Apart from
geographical spread the socio-cultural and economic
segmentation of the market is very wide, exhibiting different traits
and needs. Different multi-distribution channels in India are as
follows

• Agents: Agents are the primary channel for distribution of

insurance. The public and private sector insurance companies
have their branches in almost all parts of the country and have
attracted local people to become their agents. Today's
insurance agent has to know which product will appeal to the
customer, and also know his competitor's products to be an
effective salesman who can sell his company, the product, and
himself to the customer. To the average customer, every new
company is the same. Perceptions about the public sector
companies are also cemented in his mind. So an insurance

48
 agent can play an important role to create a good image of
company.

• Banks: Banks in India are all pervasive, especially the public

sector banks. Many insurance companies are selling their
products through banks. Companies which are bank owned,
they are selling their products through their parent bank. The
public sector banks, with their vast branch networks, are helpful
to insurance companies. This channel of selling insurance is
known as Banc assurance.

INSURANCE COMPANY ASSOCIATE BANKS

ICICI prudential ICICI bank, bank of India,
Citibank, Allahabad bank, Federal
bank, south Indian bank, Punjab
and Maharashtra cooperative
bank
TATA AIG life State bank of India
Birla sun life Deutsche bank, Citibank, bank of
Rajasthan, Andhra bank
ING Vysya bank Vysya bank

49
Aviva life insurance ABN amro bank, canara bank
HDFC standard life Union bank, Indian bank
Met life Karnataka bank, j&k bank

Source: - Hindu Business Line, January 08,

2007
• Brokers: Now a day’s different financial institution are selling
insurance. These financial institutions are known as brokers.
They are taking some underwriting charges from the insurance
companies to sell their insurance products.
• Corporate agents: Corporate agency is a cross selling type
of channel. Insurance companies’ tie-up with business houses
in other industries to sell insurance either to their employees or
their customers. Insurance industry, during the past 2 years has
witnessed a number of such strategic tie-ups and alliances.
Corporate agents have become a major force to reckon with in
distributing insurance products. Such as- Bajaj Allianz tied up
with Maruti Udyog and Ford for auto insurance and Tata AIG
life has tied up with Tata tea, khaitan’s Williamson major and
bridge foundation for selling rural policies.
• Internet: In this technological world internet is also a channel
of selling insurance. This can be as direct marketing.

50
 10. Effective marketing strategies

Now the Indian consumer is knowledgeable and sensitive.

Consumers are increasingly more aware and are actively managing
their financial affairs. People are increasingly looking not just at
products, but at integrated financial solutions that can offer stability of
returns along with total protection. In view of this, the insurance
managers need to understand more about the details that go into the
introduction of insurance products to make it attractive in this

51
competitive market. So now days an insurance manager requires
leadership, commitment, creativity, and flexibility. "Every family in
every village in the country should feel safe and secure". This vision
alone will help to bring the new ideas to the insurance manager.

Financial, marketing and human resource polices of the

corporations influence the unit mangers to make decisions.
Performance of insurance company depends on the effectiveness of
such policies. Insurance corporations formulate and revise these
policies from time to time to ensure that the performance of the
managers is best for the organization.
In the competitive market, insurance companies are being forced to
adopt a strictly professional approach in marketing. The insurance
companies face the challenge of changing the uninspiring public
image of the industry. Some of the important marketing elements are-
• Marketing mix.
• The importance of relationship.
• Positioning.
• Value addition.
• Segmentation.
• Branding.
• Insuring service quality.
• Effective pricing.
• Customer satisfaction research.

52
The growth of insurance sector is governed largely by factors
external to it. The following factors influence the market and demand
of product-
• Government policies.
• Growth in population.
• Changing age profile.
• Income wise distribution of the population.
• Level of insurance awareness.
• The pricing of the policies.
• The economic climate of the country.
• The aversion to risk.
• Social and political features of the country.
• Growth scenario in the world.

Different companies adopt different approaches in their marketing

strategies. One approach is focus upon product quality which can
give confidence in the mind of customers that they are offered by
best featured products. And other approach is focusing on customer’s
needs, which involve a heavy investment in developing relationships
with policyholders. Under this approach customer can expect a range
of products and service offered to him. Third approach is market
segmentation under which the population can be divided into several
homogeneous products and groups, the effort should be tie clients to
the company by customized combination of coverage, easy payment
plans, risk management advice, and convenient and quick claim
handling.

53
An insurance product can be classified in three phases:
Core product: In insurance industry the core product is the policy
that provides protection to the customers.

Expected product: Because of competition customers start to

expect more from an insurance product. Then insurance companies
provide some tangible attributes in their product to differentiate from
competitors, such as-
• Brand
• Some additional features in existing product
• By providing instruction manual with the policy.

Augmented product: An insurance company can provide

different types of services to differentiate their products-
• Post sales services.
• Branches in different places for customers.
• Customer complaint management.
• Payment option convenient to customers.

The entry of private players and their foreign

partners has given domestic players a tough time, because the
opening up of the sector has not brought in only foreign players,
but also professional techniques and technologies. The present
scene in India is such that everyone is trying to put in the best

54
 efforts. There are marketing strategies more for survival than
growth. But the most important gift of privatization is the
introduction of customer-oriented services. Utmost care is being
taken to maximize customer satisfaction.

Success of an insurance company depends on four important

functions:-
• Identification of markets: Identification of markets means
need to understand the trends in culture and businesses
constantly, through conducting research and analysis.
Insurance companies can take this job on their own or assign it
to an external agency. Relying on an external agency can be
risky due to the questionable loyalty of the agents.

• Assessment of risks (of the insured and the insurance

corporation) and estimation of losses: Efficiency of
actuaries and assessors of the insurance policies in fixing
premiums and settling claims is foremost an important area for
achieving overall efficiency in operations. The quality of
assessing the risk and estimation of losses has the largest
claim on the performance of an insurance company. Well
trained, experienced and expert hands are needed for the
operations.
• Penetration into and exploitation of markets: Market
penetration or exploitation of a company can be identified with
the growth in number of policies in each type of insurance,

55
 growth rate in earnings or turnover, company’s market share,
increase in number of branches and divisions etc. Efforts of the
company as a whole and that of the divisions and branches are
assessed to measure the effectiveness.

• Control over investment and operating costs: Control over

resources such as men, machines, and materials at each level
of the organization provides measures of efficiency of a unit as
well as the organization. Investment control and expense
control are dealt separately and the effectiveness of
management’s’ decisions at various levels is to be assessed
separately

To find best prospects:

• Allocating marketing strategies against market potential.
• Estimating potential for specific products within local markets.
• Identifying high opportunity areas.
• Measuring agency performance relative to market potential.
• Optimizing your agency network against market potential.

Attributes to develop marketing strategies:

• Channel data: - Useful to know future buying preferences,
learning about products and purchase channels.
• Consumer attitudes.

56
 • Consumption data: - Useful to evaluate annual premiums,
number of annuities owned, value of annuities, and with which
company the current policy is held.

Effective strategies for insurance agents:

• Learn how to construct a mental image for success.

• Learn how to find a proper perspective and how to turn off all
the signals that cause people not to buy from you.
• Learn how to get and set more appointments.
• Learn how to convert a new lead into sales.
• Learn how to act when you meet a client for the first time.
• Learn how the order in which you explain the types of policies
can double your income.
• Take Easy steps to avoid delays in issuing policies.

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 11. Competitors of Tata Aig life insurance
ICICI prudential: ICICI prudential insurance is a joint venture of
ICICI bank and prudential plc a leading financial service group in the
UK. Total capital stands for Rs. 37.72 billion, with ICICI Bank holding
a stake of 74% and Prudential plc holding 26%. ICICI begin their
operations in December 2000 after receiving approval from IRDA.
Now ICICI prudential is having over 1000 offices, over 270000
advisors and 21bancassurance partners. ICICI Prudential was the
first life insurer in India to receive a National Insurer Financial
Strength rating of AAA from Fitch ratings. ICICI prudential is working
on the base of five core values-
• Integrity
• Customer first
• Boundary less
• Ownership
• Passion

Key features:

58
 • Understanding the needs of customers and offering them
superior products and service.
• Leveraging technology to service customers quickly,
efficiently and conveniently.
• Developing and implementing superior risk management and
investment strategies to offer sustainable and stable returns
to policyholders.
• Providing an enabling environment to foster growth and
learning for employees.

HDFC standard life insurance: HDFC Standard Life Insurance

Company Ltd. is one of India's leading private insurance companies.
It is a joint venture of Housing Development Finance Corporation
Limited, India's leading housing finance institution and a Group
Company of the Standard Life in UK. HDFC as on March 31, 2007
holds 81.9 per cent of equity venture. Gross premium income of the
HDFC for the year ending March 31, 2007 was Rs. 2, 856 crores and
new business premium income was Rs. 1,624 crores. The company
has covered over 8, 77,000 lives year ending March 31, 2007. HDFC
standard is having 1000 advisors in 11 towns.

Key features:

• Creating corporate agents through HDFC bank in India.

• Creating agents to provide total financial consultancy.
• Introducing low cost group schemes for companies and NGOs.

59
Reliance life insurance: Reliance Life Insurance Company Limited
is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai
Ambani Group. Reliance Capital is one of India’s leading private
sector financial services companies, and ranks among the top 3
private sector financial services and banking companies, in terms of
net worth. Reliance Capital has interests in asset management and
mutual funds, stock broking, life and general insurance, proprietary
investments, private equity and other activities in financial services.
Reliance Capital Limited (RCL) is a Non-Banking Financial Company
(NBFC) registered with the Reserve Bank of India under section 45-
IA of the Reserve Bank of India Act, 1934.

Aviva life insurance: Aviva is UK’s largest and the world’s fifth
largest insurance Group. It is one of the leading providers of life and
pensions products to Europe and has substantial businesses
elsewhere around the world. Aviva has a joint venture of Dabur, one
of India's oldest, and largest Group of companies. And country's
leading producer of traditional healthcare products. In accordance
with the government regulations Aviva holds a 26 per cent stake in
the joint venture and the Dabur group holds the balance 74 per cent
share. Aviva has 193 Branches in India (including rural branches)
supporting its distribution network. Through its Banc assurance
partner locations, Aviva products are available in more
than 2,795 locations across India. Aviva has a sales force of over
30000 financial planning advisors.

Key features:

60
 • Through the “Financial Health Check” (FHC) Aviva’s sales force
has been able to establish its credibility in the market. The FHC
is a free service administered by the FPAs for a need-based
analysis of the customer’s long-term savings and insurance
needs. Depending on the life stage and earnings of the
customer, the FHC assesses and recommends the right
insurance product for them.
• Introduced the concept of Banc assurance in India.
• Products to provide customers flexibility, transparency and
value for money.
• Differentiation in fund management operations.

MetLife insurance: MetLife India Insurance Company Limited is an

affiliate of MetLife, Inc. and was incorporated as a joint venture
between MetLife International Holdings, Inc.and The Jammu and
Kashmir Bank, M. Pallonji and Co. Private Limited and other private
investors. MetLife is one of the fastest growing life insurance
companies in the country. It offers a range of innovative products to
individuals and group customers at more than 600 locations through
its bank partners and company-owned offices. MetLife has more than
32,000 Financial Advisors. It has approximately 70 million customers
all over world. MetLife is working on the base of six core values-

• Innovation
• Long term relationship
• Customer centered and result focused vision
• Creating high performance organization

61
 • Working with integrity, fairness and financial prudence
• Partnering with internal and external customers

Max New York life insurance: Max New York Life Insurance
Company Ltd. is a joint venture between New York Life, a Fortune
100 company and Max India Limited, one of India's leading multi-
business corporations The Company's paid up capital is Rs. 907.4
crore. Max New York life is working on the base of six core values-

• Excellence,
• Honesty,
• Knowledge,
• Caring,
• Integrity

The Company practices a lot of importance on its selection process

of insurance advisors which comprises four stages - screening,
psychometric test, career seminar and final interview. 337 agent
advisors have qualified for the Million Dollar Round Table (MDRT)
membership in 2007 and Max New York Life has moved up to 21st
rank in MDRT global list.

Key features:

• Max New York Life has adopted prudent financial practices to

ensure safety of policyholder's funds.
• Investing significantly in its training programme and each agent
is trained for 152 hours as opposed to the mandatory 100 hours

62
 stipulated by the IRDA before beginning to sell in the
marketplace.
• Using a five-pronged strategy to pursue alternative channels of
distribution which include the franchisee model, rural business,
direct sales force involving group insurance and telemarketing
opportunities, banc assurance and corporate alliances.

Bharti Axa life insurance: Bharti Axa life insurance is a joint

venture between Bharti, one of India’s leading business groups with
interests in telecom, agri business and retail, and Axa world leader in
financial protection and wealth management. The joint venture
company has a 74% stake from Bharti and 26% stake of Axa. The
company started its operations in December 2006. Now company is
having over 5200 employees across over 12 states in the country.
Company is working on the base of five core values-

• Professionalism
• Innovation
• Team Spirit
• Pragmatism
• Integrity

Key features:

• Using multi-distribution, multi product platform techniques.

• Adapting AXA's best practices as a sound platform for
profitable growth.

63
 • Leveraging Bharti's local knowledge, infrastructure and
customer base.
• Delivering high levels of shareholder return.
• Building long term value with business partners by
enhancing the proposition to their customers.
• Retaining the best talent in India.

ING Vysya life insurance: ING Vysya Life Insurance Company

Limited a part of the ING group the world’s largest financial services
provider entered in the private life insurance industry in India in
September 2001.ING Vysya Life is currently present in 246 cities and
has a network of over 300 branches, staffed by 7,000 employees and
over 51,000 advisors, serving over 5.5 lakh customers. ING Vysya
Life has a diversified distribution channels,. While Tied Agency
remains the strongest channel, the Alternate Channels business
within ING Vysya Life is one of the fastest growing distribution
channels. ING Vysya Life has strengthened its position as the
unparallel leader in the life insurance industry in cooperative banks
tie ups. The company currently has tie ups with 130 cooperative
banks across the country. The Alternate Channels division has Banc
assurance, ING Vysya Bank, Corporate Agents and SMINCE. ING
Vysya is working on the base of five core values-

• Professionalism
• Entrepreneurial
• Trustworthy
• Approachable

64
 • Caring

Birla sun life insurance: Birla Sun Life Insurance Company Limited
(BSLI) is a joint venture between the Aditya Birla Group and the Sun
Life Financial Services of Canada. It started operations in March
2001 after receiving its registration license from IRDA in January
2001. Company is having more than 45 branches across India.

Key features:

• Focus on unit linked insurance products supported with

protection products to maintain leadership in product
innovation.
• Use of multi distribution channels- Direct Sales Force, Alternate
Channels and offering convenient channels of purchase to
customers.
• Web-enabled IT systems for superior customer services and
issuing policies on the internet.
• High degree of transparency in all business practices and
procedures.
• Working on operational Business Continuity Plan.

Market share of different insurance companies:

ICICI Prudential 9.1%

HDFC Standard 2.4%
TATA AIG Life 3.0%
Bajaj Allianz 4.2%
Aviva life insurance 1.3%
MetLife insurance 0.6%

65
Reliance life insurance 1.1%
Birla sun life insurance 1.0%
Max new York life insurance 2.3%
Bharti AXA life insurance 0.1%

ING Vysya 0.7%

Kotak Mahindra 0.9%

Source: - www.irdaindia.org

Growth in premiums of different insurance companies:-

Companies Premium up Premium up Growth %

to oct 07 to oct 06
(Rs.mill.) (Rs.mill.)
ICICI 31831.8 20808.5 53
Prudential
HDFC 10675.7 6595.7 61.9
Standard
TATA AIG Life 14717.4 8142.4 80.8
Bajaj Allianz 26498.1 15208.2 74.2
Aviva life 4586.8 3464.2 32.4
insurance
MetLife 2756.0 1162.7 137.0
insurance

66
Reliance life 8571.2 2803.7 205.7
insurance
Birla sun life 7595.4 3844.7 97.6
insurance
Max new York 6942.0 3720.4 86.6
life insurance
Bharti AXA life 258.7 1.1 22907.8
insurance

ING Vysya 3047.7 2086.7 46.1

Kotak 3476.6 2172.6 60.0
Mahindra

SWOT analysis of insurance industry:

67
 STRENG
• Premium rates are increasing
and so are commissions
• The variety of products are
increasing
• Customers expects more
services from their brokers
OPPORTUNIT
IES
• Ability to cross sell financial
services barely being tapped
• Technology is improving to that
point that paperless transactions
are available
• Client’s increasing need for
insurance consultant can open
new ways to service the client
and generate income
12. Questioner
68
WEAKNE
• Companies are slow respond to
changing needs
• Increasing trend of financial weakness
among the companies
• More competitors for agencies to
compete with banks & internet players
THREAT
S
• Increasing cost and need for
insurance might hit a point where a
backlash will occur
• Increasing expenses and lower profit
margins can hit smaller agencies and
insurance companies
Govt. Engeneering College ,
Subel Road , Jhalawar

Name-

Company-

Designation-

Contact no.-

The following questionnaire is for the purpose of our research project as a

part of our MBA curriculum on ‘Marketing Strategy of different Insurance
companies’. It is assured from us that any information given by the
company will not be disclosed by any means. With this assurance I expect
accurate data from company to help me for my project.
________________________________________________________________

1. How long you have been in insurance industry?

(a) < 2 years (b) 2-5 years (c) 5-8 years (d) >8 years

2. When did you join your present company?

(a) < 2 years (b) 2-5 years (c) 5-8 years (d) >8 years

3. Your designation while joining this company………………………..

……………………………………………………………………………….

4. How many advisors do you have?

(a) <250 (b) 250-400 (c) 400-550 (d) >550

5. On what basis do you recruit your advisor?

(a) Through personal reference
(b) Through advertisement
(c) Through walk in interviews
(d) Through placements agencies

6. How do you make them active?

(a)By increasing incentives
(b)By offering higher channel position

69
(c)By awarding non-cash prizes
(d)By giving training session

7. How many MBAs do you have in your agency?

(a) None (b) 1-3 (c) 4-6 (d) more than 6

8. On what products you are stressing more?

(a) Term insurance
(b) Unit linked products
(c) Money back products
(d) Endowment products

9. What is the basis of your product deployment?

(a) Profit oriented
(b) On customers need and demand
(c) On channel feedback from market
(d) By adding some additional benefits in current product

10. How do you differentiate your product from your competitors?

(a) By advertising and promotional activities
(b) By pricing of the product
(c) Based on the deployment of funds
(c) By providing better service quality

11. Your mode of interaction with customers.

(a) Direct marketing
(b) By telephonic contacts (creating database)
(c) Through advertisement
(d) Through online contacts

12. Which kind of strategies should an insurance company use to

compete in the market (in your view)?
(a) Better service quality
(b) Accordingly change in the pricing of product
(c) By increasing periodicity of interaction with advisors and
customers
(d) By providing extra benefits to advisors and customer

13. What is average total premium collection in your branch (in a

month)

70
(a) <2 Cr. (b) 2-4 Cr. (c) 4-5 Cr. (d) >5 Cr.

14. Other useful activities which you do in agency (if any, please
mention)……………………………………………………………………...
………………………………………………………………………………..
.
………………………………………………………………………………..
.

15. What are your future plans (please define)………………………….

………………………………………………………………………………..
………………………………………………………………………………..

13. Findings
71
Primary data has been collected by the survey of branch and agency
manager of different insurance companies in Calicut. sample size for
this research is 27.

Recruitment of advisors:- In insurance industry advisors play

most important role, and these advisors are recruited through
different ways. Mainly four ways for recruiting the advisors are-
1. Through personal references.
2. Through advertisements.
3. Through walk in interviews.
4. Through placement agencies.

Recruitment_Personalreference
Respons
e Frequency Percent
yes 24 88.9
no 3 11.1
Total 27 100.0

Recruitment_Advertisement

Respons
e Frequency Percent
yes 10 37.0
no 17 63.0
Total 27 100.0

Recruitment_Interviews
Respons
e Frequency Percent
yes 12 44.4
no 15 55.6
Total 27 100.0

72
 Recruitment_Placementagencies
Respons
e Frequency Percent
No 27 100.0

So most of the companies are recruiting their advisors through

personal reference and through advertisement, some companies are
recruiting their advisors through walk in interviews also, but none
company is recruiting their advisors through placement agencies.

Through placement agencies

Through walk in interviews

73
Making advisors active: To get efficient work from their advisors
companies do some practices to make them active. some practices
are-
1. By increasing incentives.
2. By offering higher channel position.
3. By awarding them non cash prizes.
4. By giving them training session.

Active_Incentives

Respons
e Frequency Percent
yes 7 25.9
no 20 74.1
Total 27 100.0

Active_Higherchannelposition
Respons
e Frequency Percent
yes 6 22.2
no 21 77.8
Total 27 100.0

Active_Noncashprizes
Respons
e Frequency Percent
yes 10 37.0
no 17 63.0
Total 27 100.0

74
 Active_Trainingsession
Respons
e Frequency Percent
Yes 14 51.9
No 13 48.1
Total 27 100.0

So most of the companies are giving training session and awarding

non cash prizes to make their advisors active, some of the
companies are increasing incentives and offering higher channel
position to make their advisors active.

Type of products: Different insurance companies are having

different categories of insurance products. Some product categories
are-
1. Term insurance products.

75
 2. Unit linked products.
3. Money back products.
4. Endowment products.

Products_Terminsurance

Respons
e Frequency Percent
yes 5 18.5
no 22 81.5
Total 27 100.0

Products_Unitlinked
Respons
e Frequency Percent
yes 26 96.3
no 1 3.7
Total 27 100.0

Products_Moneyback
Respons
e Frequency Percent
yes 1 3.7
no 26 96.3
Total 27 100.0

Products_Endowment
Respons
e Frequency Percent
yes 2 7.4
no 25 92.6
Total 27 100.0

76
So all the companies are promoting their unit linked products and
some companies are promoting rest of the products including unit
linked products.

Endowment products

Basis of product deployment: - All insurance companies are

deploying their products in various categories. Some of the tactics
are- Money back products
1. Profit oriented.
2. On customers need and demand.
3. On channel feedback from market.
4. By adding some additional benefits in current products.

Productdeployment_Profitoriented

Respon
se Frequency Percent
Yes Unit linked
6 products 22.2

77
No 21 77.8
Total 27 100.0

Productdeployment_Customersneed

Respon
se Frequency Percent
yes 20 74.1
no 7 25.9
Total 27 100.0

Productdeployment_Marketfeedback

Respon
se Frequency Percent
yes 2 7.4
no 25 92.6
Total 27 100.0

Productdeployment_Additionalbenefits

Respon
se Frequency Percent
yes 5 18.5
no 22 81.5
Total 27 100.0

So most of the companies are deploying their products based on the

customers need and demand.

78
 B

By adding extra benefits

Differentiation strategies: To make their products different

from their competitors companies are using some strategies which
are- On channel feed back from
1. By advertisement and promotional activities.
2. By pricing of market
the product.
3. Based on the deployment of the funds.
4. By providing better service quality.
differentiation_promotionalactivities

Respon
se Frequency Percent
Yes 4 14.8
No 23 85.2
Total 27 100.0
On customer need

79
 differentiation_pricing

Respon
se Frequency Percent
yes 13 48.1
no 14 51.9
Total 27 100.0

differentiation_deploymentoffunds

Respon
se Frequency Percent
yes 7 25.9
no 20 74.1
Total 27 100.0

differentiation_service

Respon
se Frequency Percent
yes 17 63.0
no 10 37.0
Total 27 100.0

So most of the companies are giving better service quality and better
pricing to differentiate their products from their competitors.

80
 By better service quality

Mode of interaction: There are different types of way to interact

with customers. Some of the important ways are-
1. Direct marketing.
2.Based ondatabase
By creating deployment of contact).
(telephonic funds
3. Through advertisement.
4. Through on line contacts.

Modeofinteraction_Direct

Response Frequency Percent

Yes 17 63.0
No 10 37.0
Total 27 100.0

By pricing of product

81
 Modeofinteraction_Telephone

Response Frequency Percent

yes 15 55.6
no 12 44.4
Total 27 100.0

Modeofinteraction_Advertisement

Response Frequency Percent

yes 1 3.7
no 26 96.3
Total 27 100.0

Modeofinteraction_Onlinecontacts

Response Frequency Percent

yes 1 3.7
no 26 96.3
Total 27 100.0

So almost all the companies are interacting with customers through

direct marketing and by telephonic contacts (creating database).

82
 Mod

Through online contacts

Strategy to compete in market: Most common strategies to

compete in the market for insurance companies are-
1. Better service quality.
2. Through advertisement
Change in pricing of products.
3. By increasing periodicity of interaction with advisors and
customers.
4. By providing extra benefits to advisors and customers.

Strategies_Service

Respons
e Frequency Percent
Yes 21 77.8
No 6 22.2
Total 27 100.0
By telephonic contacts

83
 Strategies_Pricing

Response Frequency Percent

yes 2 7.4
no 25 92.6
Total 27 100.0

Strategies_Interaction

Response Frequency Percent

yes 7 25.9
no 20 74.1
Total 27 100.0

Strategies_Extrabenefits

Response Frequency Percent

Yes 3 11.1
No 24 88.9
Total 27 100.0

So most of the insurance companies think that providing better

service quality is most suitable strategy to compete in the market.

84
 By providing extra benefits

Premium collection:-

By increasing periodicity
Premium Collection of
interaction
Premium Frequency Percent
less than 2 cr. 20 74.1
2 to 4 cr. 5 18.5
4 to 5 cr. 1 3.7
more than 5 cr. 1 3.7
Total 27 100.0

So most of the companies are collecting premium less than 2 crores.

at an agency or branch level in a month.
Change in pricing

85
 More than 5 cr.

Four to five crore

Two to four crore

86
Recruitment of advisors through personal reference and
making them active:-

Recrui

Companies, recruiting their advisors through personal reference are

doing practices to make them active in under mentioned numbers.

By increasing incentives- 6 (17.65%)

By awarding non cash prizes- 9 (26.47%)
By giving higher channel position- 5 (14.71%)
14 14 (41.78%)
By giving them training session-

So companies are concentrating on training session and awarding

non cash prizes to make their advisors active.

87
Recruitment of advisors through advertisement and
making them active:-

Recr

Companies, recruiting their advisors through advertisement are doing

practices to make them active in 5
under mentioned numbers.

By increasing incentives- 4 (26.67%)

By awarding non cash prizes- 4 (26.67%)
By giving higher channel position- 2 (13.33%)
By giving them training session- 5 (33.33%)

So companies, recruiting their advisors through advertisement are

concentrating on increasing incentive, awarding non cash prizes and
training session.

88
Recruitment of advisors through walk in interviews and
making them active:-

Recrui

Companies, recruiting their advisors through walk in interviews are

doing practices to make them active in under mentioned numbers.

By increasing incentives- 4 (23.52%)

By awarding non cash prizes- 6 (35.3%)
By giving higher channel position- 3 (17.6%)
By giving them training session- 4 (23.52%)

So companies, recruiting their advisors through advertisement are

concentrating on increasing incentive, awarding non cash prizes and
training session.

89
 Conclusion

• Insurance companies are recruiting their advisors mainly

through personal reference, through advertisement, and
through walk in interviews. None of the company is recruiting
their advisors through placement agencies. But some
companies have started recruiting their advisors through
placement agencies as a trial basis.

• Those advisors who are recruited through personal references

need more training session and company has to put effort to
make them active. Most of the companies are giving training
session to advisors to make them active. Only one or two
companies are providing higher channel position and increasing
incentives to make them active.

• Most of the insurance companies have started recruiting

agency manager and high posted people from professional
colleges to improve efficiency of the insurance company.

• Insurance companies have forgotten their traditional products.

Companies are totally concentrating on selling ULIP products.
Now insurance companies are selling their products as an
investment product not as life insurance products.

• Insurance companies are deploying their products mostly

based on customer needs and demands. Insurance companies
are not doing enough market researches to know the potential
of the market.

• Most of the insurance companies are differentiating themselves

from the competitors by providing better service quality. Some
companies are differentiating themselves providing better
pricing of the product.

90
• Branch managers of most of the companies think that providing
better service quality is the best tool to compete in the market.
Better service quality may be in the form-
1. Issuing policy in time.
2. Providing claims in time.
3. Making customers aware about their status of policy.

14. Recommendations
• TATA AIG Life should start recruiting advisors through
placement agencies. By practicing this TATA AIG Life will get
more capable advisors who can work efficiently. Inactive
advisors kind of thing would not happen.

• TATA AIG Life should also promote the term and endowment
insurance products including ULIP products. Because these are
basic insurance products. Promote products as life insurance
products not an as investment products.

• Somewhat the brand name of TATA AIG is harming the TATA

AIG Life insurance, because most of the people are not happy
with the service provide by TATA AIG bank, so it is necessary
to change the mentality of the people that TATA AIG Life
insurance is different from TATA AIG bank. TATA AIG Life
should promote their product features rather than promoting
their brand name.

• To increase awareness in rural market TATA AIG Life should

do some activities in villages and small towns. This can be
done by putting kiosk in fairs and festival melas organizing in
villages.

• TATA AIG Life can sell their products through charitable

institutions.

• TATA AIG Life should sell their products through head of the
villages or through panchayat in villages. People in villages

91
 believe on the head and panchayat so selling insurance will be
easier in villages.

• TATA AIG Life can introduce some special policies for the
farmers to tap the rural market, and pricing for these kinds of
products should be less so farmers can easily afford to take
policies.

• As TATA AIG Life is coming in general insurance so it can

introduced products like cattle insurance and water pump
insurance. It will also help to promote the products of TATA
AIG Life insurance.

15. References

Books Magazines News papers Internet

Insurance in India Business world The Hindu IRDA website

Insurance Magazines on Business Line Google search

distribution (ICFAI investment
Publications)

Insurance industry Economic Times Websites of

(ICFAI different insurance
Publications) companies

92