TABLE & CONTENT

CHAPTER PREFACE PAGE NO.

CHAPTER 1 INTRODUCTION TO
INSURANCE

1.1 INTRODUCTION

1.4 FUNCTION OF LIFE INSURANCE

1.2 LIFE INSURANCE

1.3 TYPES OF LIFE INSURANCE

1.5 ROLE OF INSURANCE

1.6 IMPORTANCE OF INSURANCE

1.7 CONTROLING AUTHORITY

CHAPTER 2 INTRODUCTION TO INDIAN INSURANCE

INDUSTRY

2.1 INDIAN INSURANCE INDUSTRY

2.2 A BRIEF HISTORY OF INSURANCE SECTOR

2.3 MILESTONES IN THE INSURANCE SECTOR

2.4 LIST OF INSURANCE COMPANIES WORKS IN INDIA

2.5 HOW BIG IS THE INSURANCE MARKET?

2.6 INDIAN SCENERIO

CHAPTER 3 INTRODUCTION OF TATA

AIG

3.1 TATA GROUP

3.2 TATA GROUP IN INSURANCE

3.3 AIG
3.4 THE JOINT VENTURE- TATA-AIG

3.5 HOW COMPANY WORKS

CHAPTER 4 LEARNINGS FROM THE

PROJECT
CHAPTER 1
 INTRODUCTION TO INSURANCE

1.1. INTRODUCTION:-

"Insurance is a contract between two parties whereby one party called insurer
undertakes in

exchange for a fixed sum called premiums, to pay the other party called insured a
fixed amount

of money on the happening of a certain event." Insurance may be described as a

social device

to reduce or eliminate risk of life and property. Under the plan of insurance, a large
number of

people associate themselves by sharing risk, attached to individual. With the help of
Insurance,

large number of people exposed to a similar risk makes contributions to a common

fund out of

which the losses suffered by the unfortunate few, due to accidental events, are
made good.

Insurance is a tool by which fatalities of a small number are compensated out

of funds

collected from plenteous. Gradually as competition increased benefits given by

industry to its

customers increased by leaps and bounds. Insurance is a basic form of risk

management which

provides protection against possible loss to life or physical assets. Person who seeks
protection

against such loss is termed as insured, and company that promises to honor claim, in
case such

loss is actually incurred by insured, is termed as Insurer. In order to get insurance,

insured is

required to pay to insurance company a certain amount called premium. Premium is

collected

by insurance companies which acts as trustee to pool created through

contributions made by

persons seeking to protect themselves from common risk. Any loss to the insured
in case of

happening of an uncertain event is paid out of this pool. Insurance business is

divided into

following
parts:

• ​Life Insurance

• ​Property Insurance

• ​Health Insurance

• ​Auto Insurance

• ​Travel Insurance etc.

1.2. 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.

1.3. TYPES OF LIFE INSURANCE:

-

• ​Term Insurance
Policy

• ​Whole life Insurance

Policy

• ​Endowment Policy

• ​Pure Endowment
Policy

• ​Money Back Policy

Most of the products offered by Indian life insurers are developed and structured
around these "basic" policies and are usually an extension or a combination of these
policies.

Term Insurance Policy:- ​A term insurance policy is a pure ​risk cover ​for a specified
period of time. What this means is that the sum assured is payable only if the
policyholder dies within the policy term. For instance, if a person buys Rs 2 lakh policy
for 15-years, his family is entitled to the money if he dies within that 15-year period.
there is no element of savings or investment in such a policy. It is a 100 per cent risk
cover. It simply means that a person pays a certain premium to protect his family
against his sudden death. He forfeits the amount if he outlives the period of the policy.
This explains why the Term Insurance Policy comes at the lowest cost.

Whole life Insurance Policy:- ​As the name suggests, a Whole Life Policy is an
insurance cover

against death, irrespective of when it happens. Under this plan, the policyholder
pays regular
premiums until his death, following which the money is handed over to his
family.

This policy, however, fails to fulfill the additional needs of the insured during his
post-retirement

years. It doesn't take into account a person's increasing needs either. While the
insured buys the

policy at a young age, his requirements increase over time. By the time he dies, the
value of the

sum assured is too low to meet his family's needs. As a result of these drawbacks,
insurance firms

now offer either a modified Whole Life Policy or combine in with another type of
policy

Endowment Policy:- ​Combining risk cover with financial savings, endowment

policies is the

most popular policies in the world of life

insurance.

• ​In
an Endowment Policy, the sum assured is payable even if the insured
survives the policy term.
• ​If
the insured dies during the tenure of the policy, the insurance firm has to pay
the sum assured just as any other pure risk cover.

Pure Endowment Policy:- ​A pure endowment policy is also a form of financial saving,
whereby
if the person covered remains alive beyond the tenure of the policy, he gets back the
sum assured

with some other investment

benefits.

Money Back Policy:- ​These policies are structured to provide sums required as
anticipated

expenses (marriage, education, etc) over a stipulated period of time. With inflation
becoming a big

issue, companies have realized that sometimes the money value of the policy is
eroded. That is

why with-profit policies are also being introduced to offset some of the losses incurred on
account

of
inflation.

• ​A
portion of the sum assured is payable at regular intervals. On survival the
remainder of the sum assured is payable.
• ​In
case of death, the full sum assured is payable to the
insured.
• ​The premium is payable for a particular period of
time..

In addition to the basic policy, insurers offer various benefits such as double
endowment and marriage/ education endowment plans. The cost of such a policy is
slightly higher but worth its value.

1.4. FUNCTION & CHARACTERSTICS 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.

Sharing 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 of
people. All

the insured contribute the premiums towards a fund and out of which the persons
exposed to a

particular risk is
paid.

Small capital to cover larger risk:- ​Insurance relieves the businessmen from
security

investments, by paying small amount of premium against larger risks and

uncertainty.

Contribute towards the Development of country :- ​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

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

1.5. ROLE OF THE 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.

government gives tax relaxation on every life insurance

policy.

1.6. IMPORTANCE OF THE 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.

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 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 collection 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.
1.7. CONTROLING AUTHORITY:-
Insurance Regulatory & Development Authority is regulatory and development
authority

under Government of India in order to protect the interests of the policyholders and to
regulate,

promote and ensure orderly growth of the insurance industry. It is basically a ten
members'

team comprising of a Chairman, five full time members and four part-time
members, all

appointed by Government of India. This organization came into being in 1999 after
the bill of

IRDA was passed in the Indian

parliament​.

Composition of
Authority:-

As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development
Authority

(IRDA, which was constituted by an act of parliament) specify the

composition of

Authority. IRDA was constituted by an act of parliament. The Authority is a ten

member team

consisting
of:

(a) a
Chairman

(b) five whole-time

members

(c) four part-time

members

(all appointed by the Government of

India)

Powers and Functions of

IRDA:-

• ​It
issues the applicants in insurance arena, a certificate of registration as well as
renewal, modification, withdrawal, suspension or cancellation of such registrations.
• ​It
protects the interests of the policy holders in any insurance company in the
matters related to the assignment of policy, nomination by policy holders, insurable
interest, and resolution of insurance claim, submission value of policy and other
terms and proposals in the contract.
• ​It
also specifies obligatory credentials, code of conduct and practical instructions
for mediator as well as the insurance company. Apart from this, it also defines the
code of conduct for the surveyors and loss assessors involved with the insurance
business.
• ​Oneof the major functions of IRDA includes endorsing competence in the
insurance business. Apart from this, upholding and regulating professional
organizations in insurance and re-insurance business is also a major duty of
IRDA.
• ​IRDA is also entitled to for asking information, undertaking inspection and
investigating the audit of the insurers, mediators, insurance intermediaries and
other organizations related to the insurance sector.
• ​It
is also concerned with the regulation of the rates, profits, provisions and
conditions that may be offered by insurers in respect of general insurance
business if it is not controlled or regulated by the Tariff Advisory Committee.
• ​It is also entitled to supervise the functioning of the Tariff Advisory
 Committee.
• ​IRDAspecifies the terms and pattern in which books of accounts are to be
maintained and statement of accounts shall be provided by insurers and other
insurance mediators.
• ​It
also regulates investment of funds by insurance companies as well as the
maintenance of margin of solvency.
• ​It
is also empowered to be involved in the arbitration of disagreements between
insurers and intermediaries or insurance intermediaries.
• ​It
is meant to specify the proportion of premium income of the insurer to
finance policies.
• ​IRDA
also specifies the share of life insurance business and general insurance
business to be accepted by the insurer in the rural or social sector.

Impact of IRDA on Indian Insurance

Sector:-

The creation of IRDA has brought revolutionary changes in the Insurance sector. In last
10 years of its establishment the insurance sector has seen tremendous growth. When
IRDA came into being; only players in the insurance industry were Life Insurance
Corporation of India (LIC) and General Insurance Corporation of India (GIC), however
in last decade 23 new players have emerged in the field of insurance. The IRDA also
successfully deals with any discrepancy in the insurance sector.

CHAPTER
2

INTRODUCTION TO INDIAN INSURANCE INDUSTRY

2.1. INDIAN INSURANCE INDUSTRY:-

The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance
Corporation

Act, 1956 and General Insurance Business (Nationalization) Act, 1972, Insurance
Regulatory and

Development Authority (IRDA) Act, 1999 and other related Acts. With such a large
population

and the untapped market area of this population Insurance happens to be a very big
opportunity in

India. Today it stands as a business growing at the rate of 15-20 per cent annually.
Together with

banking services, it adds about 7 per cent to the country’s GDP .In spite of all this
growth the

statistics of the penetration of the insurance in the country is very poor. Nearly 80%
of Indian

populations are without Life insurance cover and the Health insurance. This is an
indicator that

growth potential for the insurance sector is immense in India. It was due to this
immense growth

that the regulations were introduced in the insurance sector and in continuation
“Malhotra

Committee” was constituted by the government in 1993 to examine the various

aspects of the

industry. The key element of the reform process was Participation of overseas insurance
companies

with 26% capital. Creating a more efficient and competitive financial system
suitable for the

requirements of the economy was the main idea behind this reform. Since then the
insurance

industry has gone through many sea changes .The competition LIC started facing
from these
companies were threatening to the existence of LIC .since the liberalization of the
industry the

insurance industry has never looked back and today stand as the one of the most
competitive and

exploring industry in India. The entry of the private players and the increased use of
the new

distribution are in the limelight today. The use of new distribution techniques and the IT
tools has

increased the scope of the industry in the

longer run.

2.2. A BRIEF HISTORY OF INDIAN INSURANCE MARKET:-

Insurance has a long history in India. In India, insurance has a deep-rooted history. It
finds mention

in the writings of Manu ( ​Manusmrithi )​ , ​Dharmasastra ​and Kautilya ( ​Arthasastra )​ . The

writings

talk in terms of pooling of resources that could be re-distributed in times of calamities

such as fire,

floods, epidemics and famine. This was probably a pre-cursor to modern day
insurance.

Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance
Company

began its operations in India. General Insurance was however a comparatively late
entrant in 1850

when Triton Insurance company set up its base in Kolkata. History of Insurance in
India can be

broadly bifurcated into three eras: a)- Pre Nationalization b)-

Nationalization and

c)- Post Nationalization. Life Insurance was the first to be nationalized in 1956. Life
Insurance
Corporation of India was formed by consolidating the operations of various insurance
companies.

General Insurance followed suit and was nationalized in 1973. General Insurance
Corporation of

India was set up as the controlling body with New India, United India, National and
Oriental as its

subsidiaries. The process of opening up the insurance sector was initiated against the
background

of Economic Reform process which commenced from 1991. For this purpose Malhotra
Committee

was formed during this year who submitted their report in 1994 and Insurance
Regulatory

Development Act (IRDA) was passed in 999. Resultantly Indian Insurance was opened
for private

companies and Private Insurance Company effectively started operations

from 2001.

2.3. MILESTONES IN THE INSURANCE

SECTOR:-

The business of life insurance in India in its existing form started in India in the year
1818 with

the establishment of the Oriental Life Insurance Company in Calcutta. Some of the
important

milestones in the life insurance business in India are given in the

following table.
Years Important milestones in the Indian life insurance business

1912: The Indian Life Assurance Companies Act came into force for regulating the
life
 insurance
business.

The Indian Insurance Companies Act was enacted for enabling the
government to

collect statistical information on both life and non-life insurance

businesses.

The earlier legislation consolidated the Insurance Act with the

aim of

safeguarding the interests of the insuring

public.

245 Indian and foreign insurers and provident societies were taken
over by the

central government and they got nationalized. LIC was formed by an

Act of

Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore
and that

too from the Government of

India.

2.4. LIST OF INSURANCE COMPANIES WORKS IN INDIA:-

Following is the list of all life insurance company granted permission by

IRDA.

1. Bajaj Allianz Life Insurance Company

Limited

2. Birla Sun Life Insurance Co.

Ltd

3. HDFC Standard Life Insurance Co.

Ltd

4. ICICI Prudential Life Insurance Co.

Ltd.

5. ING Vysya Life Insurance Company

Ltd.

6. Life Insurance Corporation of

India

7. Max New York Life Insurance Co.

Ltd

8. Met Life India Insurance Company

Ltd.

9. Kotak Mahindra Old Mutual Life Insurance

Limited

10. SBI Life Insurance Co.

Ltd

11. Tata AIG Life Insurance Company

Limited

12. Reliance Life Insurance Company

Limited.

13. Aviva Life Insurance Co. India Pvt.

Ltd.
14. Sahara India Life Insurance Co,
Ltd.

15. Shriram Life Insurance Co,

Ltd.

16. Bharti AXA Life Insurance Company

Ltd.

17. Future Generali Life Insurance Company

Ltd.

18. IDBI Fortis Life Insurance Company

Ltd.
19. Canara HSBC Oriental Bank of Commerce Life Insurance
Co. Ltd

20. AEGON Religare Life Insurance Company

Limited.

21. DLF Pramerica Life Insurance Co.

Ltd.

22. Star Union Dai-ichi Life Insurance Comp.

Ltd.

23.India First Life Insurance Company

Ltd.

2.5. HOW BIG IS THE INSURANCE MARKET?

The insurance sector was opened up for private participation four years ago. For years
now, the

private players are active in the liberalized environment. The insurance market have
witnessed

dynamic changes which includes presence of a fairly large number of insurers both life
and non-

life segment. Most of the private insurance companies have formed joint venture
partnering well

recognized foreign players across the globe. There are now 29 insurance companies
operating in

the Indian market – 14 private life insurers, nine private non-life insurers and six public
sector

companies. With many more joint ventures in the offing, the insurance industry in India
today

stands at a crossroads as competition intensifies and companies prepare survival

strategies in a

detariffed scenario. There is pressure from both within the country and outside on the
Government
to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which
would

help JV partners to bring in funds for expansion. There are opportunities in the pensions
sector

where regulations are being framed. Less than 10 % of Indians above the age of 60
receive

pensions. The IRDA has issued the first license for a standalone health company in the
country as

many more players wait to enter. The health insurance sector has tremendous growth
potential, and

as it matures and new players enter, product innovation and enhancement will increase.
The

deepening of the health database over time will also allow players to develop and price
products

for larger segments of society. Insurance is a Rs.400 billion business in India, and
together with

banking services adds about 7% to India's

Gap.
2.6. INDIAN SCENERIO:-

Indian economy is the 12th largest economy in the world, with a GDP of $1.25 trillion
and 3rd

largest in terms of purchasing power. With factors like a stable 8-9 per cent annual
growth,

rising foreign exchange reserves, a booming capital market and a rapidly expanding
FDI

inflows, it is on the hinge of an ever increasing growth curve. Indians have a tendency
to invest

in properties and gold followed by bank deposits. They selectively invest in shares
also but the

percentage is very small, 4-5%. This is itself is an indicator that growth potential for
the

insurance sector is very high. It’s a business growing at the rate of 15-20% per annum
and

presently is of the order of $47.9 billion. India is a vast market for life insurance that is
directly

proportional to the growth in premiums and an increase in life density. With the entry
of

private sector players backed by foreign expertise, Indian insurance market has
become more

vibrant. Competition in this market is increasing with company’s continuous effort to

lure the

customers with new product offerings. However, the market share of private insurance

companies remains very low, in the range of 10-15%. Even to this day, Life Insurance

Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of
government

still dominates the market, with price controls, limits on ownership, and other
restraints. The

upward growth trend started from 2000 was mainly due to economic policies adopted
by the

then Indian government. In this year everyone saw the initiation of an era of economic

liberalization and globalization in the Indian economy followed by several reforms and
long-

term policies that created a perfect roadmap for the success of Indian financial
markets.
CHAPTER
3

INTRODUCTION TO

TATA-AIGLIFE INSURANCE COMPANY

3.1. TATA GROUP:-

The Tata group comprises over 90 operating companies in seven business sectors:
communications

and information technology, engineering, materials, services, energy, consumer

products and

chemicals. The group has operations in more than 80 countries across six
continents, and its

companies export products and services to 85

countries.

The total revenue of Tata companies, taken together, was $67.4 billion (around
Rs319,534 crore) in 2009-10, with 57 per cent of this coming from business outside
India. Tata companies employ around 395,000 people worldwide. The Tata name has
been respected in India for 140 years for its adherence to strong values and business
ethics.

Every Tata company or enterprise operates independently. Each of these companies

has its own board of directors and shareholders, to whom it is answerable. There are
28 publicly listed Tata enterprises and they have a combined market capitalization of
about $97.99 billion (as on November 22, 2010), and a shareholder base of 3.4
million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy
Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels
and Tata Communications.

Founded by ​Jamsetji Tata ​in 1868, Tata’s early years were inspired by the spirit of
nationalism. It pioneered several industries of national importance in India: steel,
power, hospitality and airlines. In more recent times, its pioneering spirit has been
showcased by companies such as TCS, India’s first software company, and Tata
Motors, which made India’s first indigenously developed car, the Indica, in 1998 and
recently unveiled the world’s lowest-cost car, the Tata Nano.
3.2. TATA GROUP IN INSURANCE:-

The Late Sir Dorab ji Tata, was the founder Chairman of New India Assurance
Co. Ltd.,

established in 1919. Government of India took over the management of this company
as a part of

nationalization of general insurance companies in 1972. Not deterred by the move,

Tata group

have ventured into risk management services having tied up with AIG group, back in
1977, with

the incorporation of Tata AIG Risk Management Services

Pvt. Ltd.

3.3. AIG:-

American International Group, Inc. (AIG), is a major American insurance corporation

based at the

American International Building in New York City. The British headquarters are
located on

Fenchurch Street in London, continental Europe operations are based in La Defense,

Paris, and its

Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was
the 18th-

largest company in the

world.

Company Background: ​AIG’s history dates back to 1919, when Cornelius

Vander Starr

established an insurance agency in Shanghai, China. Starr was the first Westerner in
Shanghai to
sell insurance to the Chinese. • In 1962, Starr gave management of the
company's less than

successful U.S. holdings to Maurice R. \"Hank\" Greenberg, who shifted the company's
U.S. focus

from personal insurance to high.1969. American International Group, Inc is the leading
U.S. based

international insurance and financial services organization and the largest

underwriter of

commercial and industrial insurance in the United States. Its member companies
write a wide

range of commercial and personal insurance products through a variety of distribution

channels in

over 130 countries and jurisdictions throughout the world. AIG's Life Insurance
operations

comprise of the most extensive worldwide network of any life insurer. AIG's global
businesses

also include financial services and asset management, including aircraft leasing, financial
products,

trading and market making, consumer finance, savings

products.
3.4. THE JOINT VENTURE - TATA-AIG:-

Tata AIG Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent
has been

brought in by Tata Sons and the American partner brings in the balance 26 per cent.
Mr. George

Oommen has been named managing director of Tata AIG Life. Tata-AIG plans to
provide broad

array of life insurance plans to cover to both individuals and groups. The company
headquartered

in Mumbai, with branch operations in Delhi, Chennai, Hyderabad, Bangalore Calcutta,

Pune and

Chandigar
h.

Tata AIG Insurance Solutions is one of the leading insurance companies that provide
both life

insurance as well as general insurance. This pioneer company is a joint collaboration

between the

American International Group, Inc. (AIG) and Tata Group. They own the company in the
ratio of

26:74. It is a leading financial institution that has carved a niche for itself all over
the world.

Tata AIG Insurance provides facilities to both corporate and individuals. Starting its
operations on

April 1, 2001, it seeks to serve different categories of people. It acquired its license for
carrying out

operations in India on February 12, 2001. Tata AIG Insurance Solutions is one of
the most

prestigious organizations in the business world. It employs thousands of employees

and offers

various opportunities to people to build a prospective career. As a leading name in the

financial

world, it identifies the potential and experience of the individual. This insurance
company

identifies the client’s needs and works accordingly. It stresses on innovative aspect and
opening of

new
markets.

• ​Individual insurance.

• ​Small business
 insurance.

• ​Corporate
insurance.
3.5. PRODUCTS OF TATA-AIG LIFE INSURANCE COMPANY:-

RISK
PLANS

• ​Tata AIG Life Raksha

• ​Tata AIG Life Plus

• ​Assure Lifeline Plans

RETIREMENT PLANS

• ​Tata AIG Life Nirvana

• ​Tata AIG Life Nirvana Plus

• ​Tata AIG Life Assure Golden

Year

• ​Tata AIG Life Mahalife Gold

• ​Tata AIG Life Easy Retire

WEALTH PLANS

• ​Tata AIG Life Lakshya

Supreme

• ​Tata AIG Life Invest Assure Flexi

Supreme
 • ​Tata AIG Life Invest Assure Plus
Supreme

CHILD PLANS

• ​Tata AIG Life Starkid

• ​Tata AIG Life Assure Career

Builder

• ​Tata AIG Life Assure

Educare

• ​Tata AIG Life Assure 21 Money Saver

Plan

HEALTH PLANS

• ​Tata AIG Life Health First

• ​Tata AIG Life Health Protector

• ​Tata AIG Life Health Investor

• ​Tata AIG Life Hospi Cash

Back

SAVINGS
PLANS

• ​Tata AIG Life Maha

Guarantee

• ​Tata AIG Life Assure 10/20/30 Years Security &

 Growth

• ​Tata AIG Life Assure Golden

Years

• ​Tata AIG Life Shubh Life

3.6. How Company

Works:-

The TATA AIG life insurance company is an insurance company which basically work
on two types of channel.

1. ​TRADITIONAL CHANNEL :-

There are many insurance company which works on traditional channel of

marketing. The traditional channel is an old one and still useful in current scenario to
move business towards success due to its acceptability and ability. In traditional
channel a company has a branch manager under which many sales manager and
unit manager do their job and under the sales manager many agents perform their
work. In traditional channel there is fix payout of branch manager and sales
manager.

When we talk about insurance sector the traditional channel of marketing depends
on three basics pillars.

• ​Branch Manager :- ​An executive who is in charge of the branch office of a bank or
financial institution. A branch manager is responsible for all of the functions of a
branch office, like hiring employees, approving loans and lines of credit, marketing
the branch, building a rapport with the community in order to attract business and
assisting customers with account problems. A branch manager is also responsible
for making sure that the branch's goals and objectives are met in time.
 • ​Sales Manager or Unit Manager :- ​Responsible for the development and
performance of all sales activities in assigned market. Staffs and directs a sales
team and provides leadership towards the achievement of maximum profitability
and growth in line with company vision and values. Establishes plans and
strategies to expand the customer base in the marketing area and contributes to
the development of training and educational programs for clients and Account
Executives.

• ​Insurance Agent :- ​Insurance agents, who may be referred to as insurance sales

agents, help clients choose insurance policies that suit their needs. Clients include
individuals and families as well as businesses. Captive agents work for an
insurance company, and only sell that company's products.

ADVANTAGE OF TRADITIONAL CHANNEL:-

A. It is broadly
accepted.

B. Company provides a fix salary to its

member.

C. Company has internal control on this

channel.

LIMITATIONS OF TRADITIONAL CHANNEL:-

A. ​Lack of
motivation.

B. Partly utilization of business

capacity.
 2. ​B.S.P. CHANNEL :-

BSP Channel of marketing in TATA-AIG LIFE INSURANCE COMPANY is a new

concept of marketing

• ​BSP channel is a channel of marketing which is introduced by TATA-AIG life

insurance Company. TATA-AIG used it as an external channel to promoting its
business. In this cannel company find out a person who has a good team of agents
for business.

• ​The BSP channel is totally managed by the BSP himself and company never
gives them fixed Salary. Company always gives them commission on the basis of
their business

• ​The basic aim to use BSP channel for marketing by TATA AIG Life Insurance
Company is to the reduction in the company’s expenses and increasing the
business capacity of the company.

Often it has been seen that the traditional channels fail to approach some area like
typical rural areas for business, but BSP is a person who is well established and well
known face in his area. So he can increase companies business with the motive of
earn something for himself.

The structure of BSP channel is as

following.
An
d
B.S.
P.

B.A. AGENT

B.A
.

B.A. AGENTS

BSP (Business Service Partner):- ​BSP is a operator of external marketing channel

of TATA AIG life insurance Company which means “business service partner”. BSP is
the supreme authority in the companies external channel of marketing. any person
who has a team of minimum 10 peoples with him on first day can be a BSP of
company but company gives preference to those people who has their own office, a
team of minimum 10 people, a good and sound business background and a
accountable turnover of their business.

A BSP receive four types of payout from the

company.

1 ​Agent Identification and Recruitment

Fees :-

This is a onetime payout for BSP. It is provided to BSP for first five licensed agent
who get recruited by the BSP himself called a direct agent. In this payout
company gives Rs.500/new agent.

2 ​Development Bonus
:-

This is also a onetime payment. In this payout BSP earn commission on

development his team. This is based on agent’s commission which he receives
on the FYC of an insurance policy.

Commission of B.A. Bonus for BSP

1000 1000

5000 3500

10000 8500

3 ​Over Right Commission

:-
This is a monthly commission for BSP. At the end of every month BSP receives
this commission from the company. Company gives up to 35% commission to
BSP according to predefined payout structure. If a BSP has 60% active member
(earn minimum 1000 as their commission) then company gives 150% of this 35%
i.e. 52.5%.

4 ​Operational Expenses
:-
 This is also a monthly payment for BSP. Company gives this payment to
BSP by assuming that BSP has expenses to manage his team and etc.
company gives this payment to BSP on the basis of the no. of active
members (receives commission of minimum 1000 every month)in the team
of BSP.

No. of active member OPEX for BSP ​1-4 1200/member. 5-9

1500/member. 10-19 1750/member. 20-49 2000/member.
50-above 2200/member.

B.A. (Business
Associate):-

B.A. is a second position holder in the hierarchy of BSP channel which means
business associate. In this BSP channel B.A’s are recruited by BSP and it is
necessary that the B.A. has a team of minimum three people on first day.

The basic requirements to be a

B.A.:-

• ​He has to clear the IRDA

exam.

• ​Having a team of minimum three people on first day which have cleared the IRDA
exam.

• ​A contract in written with

company.

A B.A. receives the following types or payouts from the

company.

1 ​Development Bonus
:-

This is a onetime payment. In this payout BA earn commission on development

 his team. This is based on agent’s selling of product or on the FYP of an
insurance policy.

Business ​or FYP DB for BA

8000 1000 20000 4000 40000 9000
Etc
.

2 ​Over Right Commission

:-

This is a monthly payment for BA. In this over right commission a BA can
receives up to 30% of FYC of agents. If BA have a totally new team than
company gives it double i.e. 30%*2=60%. And if this BA have 5 active members
(sell policies of min. Rs. 1200/month) then company gives 150% of this 60% i.e.
90%.

3 ​Quarterly Bonus
:-

Company Gives up to 15% quarterly bonus on FYC of agents to BA

according to predefined structure.

4 ​Annual Bonus
:-

Company gives up to 15% annual bonus on FYC of agents to BA according to

predefined structure.

AGENT:-

An agent is the last stage of last member in BSP channel who sales the policies
(companies product). Agent receives commission from the company on the basis of
their performance. Any person who full fills the given requirements can join the
company as an agent.

• ​He has cleared the IRDA

exam.
• ​Having an authorized license given by the
company.
• ​Having completed the education till
graduation.

Payouts of
Agents:-
An agent simply gets only commission from the company as his compensation. The
commission is totally based on his selling or his performance. This commission is vary
from product to product. For example in

Mahalife Gold (Endowment

Plan)

Year percent

1​st ​year 27%

2​nd ​year 6.5%

3​rd ​year 6.5%

4​th ​-15​th ​year 5%

Invest Assured Flexi Supreme (ULIP

Plan)

Year Percentage

First year 6%

Second year 6%
Raksha (Term
Plan)

10
%

Etc
.

CHAPTER
4

Learning from the

project

A project is an in-depth study of particular subject which is having a wide analysis of

every area of subject. When we talk about the project of in the field of marketing
management in a particular company, it will defiantly contain all about

• ​Company.
• ​Company’s working
process.

• ​Company’s product.

And in last the most important thing which is “practical application” of various
marketing strategies.

During the SIP, I have learned the

following

1. ​Segmentation
:-
Segmentation is a process of dividing the whole market in two groups and selecting
those groups which have the population which is suitable for the product .

During the SIP my task is to make BSP but every person can’t be a prospect for
BSP because company gives preference to those person who have a good team
and a sound business background.

So here I have learned segmentation by selecting hot prospects of BSP from the
whole market

2. ​Targeting
:-

Targeting is a further stage of marketing after the segmentation. A target market is a

set of buyers having common needs that a marketing firm or a company wants to
serve. It is seems like segmentation but both are different. After segmentation we have
some options/ groups but in targeting we choose only those option/ groups which we
want to adopt as our target. In the SIP after segmentation, we have many options as
our prospects such as,

• ​CAs.

• ​BUSINESS FIRMS.

• ​INSURANCE/POSTOFFICE AGENTS.

• ​CONSULTANTS.

But in the process of targeting we left CAs and decide to

approach.

• ​BUSINESS FIRMS

• ​INSURANCE/POSTOFFICE AGENTS.

• ​CONSULTANTS.
So here I can say that I have learned
targeting.
3. ​Positioning
:-

Positioning is the process of making mindset of target market towards the product’s
quality and company’s offering in a positive way. In other words we can say that
positioning is selecting out the USPs of a product or a offer which can helpful to make
is sellable or acceptable.

During the SIP I have to position my offer in the mind of targeted person so that he
become agree to accept my offer .

For the purpose of positioning I founded some main points/ USPs for my offer
such as,

• ​A chance to be a part of TATA

group.

• ​Offer for a position equivalent to a branch

manager.

• ​A chance to be a team
leader.

• ​A chance to earn money without any monetary

investment.

• ​Offering various payouts from

company.

Etc
.

These are the points which I used to make a positive mindset about my offer to
my BSP prospects. So here I can say that I have learned positioning.

4. ​Taking Appointment
:-
Appointments mean taking a specific time for meeting from a person which is suitable
for him. The basic motive behind taking an appointment is Respect of privacy of
everyone, the assumption that everyone is busy and the feeling of treating every one
as a special one.

During the SIP my task of making BSPs is started with taking an appointment from
the clients. For this purpose I used the following process.

• ​Collects the data about cell/landline phone

number.

• ​Make a phone call.

• ​If necessary than make phone call

again.

• ​Take a specific time for meeting and be available that specific

time.

LIMITATION OF THE STUDY​:

• ​Time limitation

• ​B.S.P. can be search only in

Indore.

• ​Possibility of Error in segmentation &

targeting.

• ​Possibility of Error in data

collection.

• ​Don’t get proper response from potential

B.S.P.
 • ​Possibility of failure in converting potential B.S.P into
B.S.P..

• ​Respondents error
.

• ​Limited resources
6.2.
RFERENCES

For the references different books, journals, and newspapers have been used and different
websites have been used.

Name of
websites:

http://www.tata-aig.com/lifeinsura
nce

http://www.tata-aig-life.co
m/

https://apps.tata-aig-life.com/CP/news/current-ne
ws.jsp

http://www.irda.gov.in/ADMINCMS/cms/frmGeneral_List.aspx?DF=insprdts&mid
=27.1

http://www.economy
watch.com/insurance-overviewaccess

http://www.managementparadise.com/29381-distribution-channels-tata-
aig.html
Name of book and
journal:

✓ ​IC 33 Life
Insurance

✓ Tata AIG Life Insurance Company Ltd, India, CGAP Working Group on Micro
insurance

Name of
newspaper:

The
Hindu

The Economic
Times,

Business
Standard

Business
Bhaskar

6.2. BENEFITS TO THE COMPANY AND

US:
During the survey time sales have been done. It is a win-win Situation for both company
and me.

The benefits of this summer internship program are discussed

below.

1. Benefit to the
 company:

a ​2. Benefit to

us:

a) Doing internship in TATA AIG have given me immense experience in the insurance
industry

for these 45
days.

b) Interaction with the customers for survey and sales has developed our
marketing skills.

c) Working in the office premises has given exposure to corporate world and an experience in
working in

corporate
pressure

d) Learn how make tale call (open &

closing)

e) Segmentation, positioning, targeting in

market.