Market Potential Of TATA AIG In Cuttack

Submitted By : Sangram Keshari Das Redg. No. -057 BIMIT

CERTIFICATE BY GUIDE
This is to certify that the project work entitled Market Potential of Tata AIG Life in Cuttack is a piece of work done by Sangram Keshari Das ,student of Bhubaneswar Institute Of Management & Information Tecnology(BIMIT), under my guidance and supervision for the partial fulfillment of the MBA degree of Biju Pattnaik University Of Technology(BPUT), Bhubaneswar. To the best of my knowledge and belief the thesis embodies the work of the candidate herself and has been duly completed. Simultaneously, the thesis fulfills the requirements of the rules and regulations related to the summer internship of the institute and I am assured that the project is up-to the standard both in respect to the contents and language for being referred to the examiner.

Manoj Kumar Behera Faculty Guide

BIMIT, BBSR

TO WHOMSOEVER IT MAY CONCERN

This is to certify that the project entitled Market Potential of Tata AIG Life in Cuttack is a bonafide work of Sangram Keshari Das, a student of Bhubaneswar Institute Of Management & Information Tecnology(BIMIT), bearing Redg. No.0806275057, and was successfully conducted at Tata AIG Life, Bhubaneswar, for the partial fulfillment of the course Master In Business Administration(MBA) Of Biju Pattnaik University Of Technology(BPUT), Bhubaneswar.

Mr. Soumya Kanta Mishra Branch Manager Tata AIG Life BBSR

Declaration

I hereby declare that this report on Customers Perception Towards Tata AIG Life has been written and prepared by me during the academic year 20082009.This project was done under the able guidance and supervision of Manoj Kumar Behera, Faculty, BIMIT in partial fulfillment of the requirement for the Master Of Business Administration Degree course of the Biju Pattanaik University Of Technolgy(BPUT). 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.

Sangram Keshari Das Redg. No.- 0806275057 BIMIT

ACKNOWLEDGEMENT
I would like to express my gratitude to all those who gave me the possibilities to complete this thesis. I would like to thank , Mr.Soumya Kanta Mishra, Branch Manager, Tata AIG Life Insurance, Bhubaneswar and college authorities first for providing me the opportunity to work with one of the prestigious organization. I want to thank Mr. Saroj Kumar Sahoo,Sales Manager, Tata AIG Life,

Bhubaneswar for giving me permission to commence this thesis in the first instance, to do the necessary research work and for being my Company Guide. I also thank Ms. Srilekha Satpathy (Mentor) and all the faculty members of Bhubaneswar Institute Of Management & Information Tecnology(BIMIT) who has sincerely supported me with the valuable insights for this project. I am highly indebted to Mr. Manoj Kumar Behera(Faculty Guide), who has provided me with the necessary information and his valuable suggestion and comments on bringing out this report in the best possible way. Sangram Keshari Das Redg. No 0806275057 BIMIT

EXECUTIVE SUMMARY
This project has been a great learning experience for me; at the same time it gave me enough scope to implement my analytical ability. Tata Group is one of the India's largest and most respected business groups. Tata Group's name is synonymous with India's industrialization. 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 Company is having different insurance policies. At the end of the project people will be knowledgeable about various insurance organizations and different products taking into considerations hundred sample sizes in Cuttack city. Project is on the market potential study of Tata AIG Insurance Company in Cuttack city. To get to know a questionnaire has been prepared which contains open ended and close ended questions. Firstly pilot study has been done through hundred questionnaires. For collecting the data field survey method, personal interview technique has been used. Secondary data has been collected from the company & also from different credible website. The data collected are represented into suitable tabular forms for drawing inferences. Quantitative techniques like averages, percentages, range, two-way tables has been applied as per the requirement. The level of preference, perception of the customers about the product and company were identified by means of a scoring scheme. For the representation of data various charts and graphs are used as per requirement.

CONTENTS

Inroduction To Insurance Indian Insurance Industry - An Overview Introduction To Tata AIG Introduction Of Research Study Survey & Findings Recommendations & Benefits Conclusion & References Annexure

INTRODUCTION TO INSURANCE

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 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. 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 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 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 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.

Insurance is divided into two basic zones: General Insurance Life insurance

GENERAL INSURANCE : Insurance of the non life assets are called general insurance, this includes loss of asset against water, fire, earthquake etc. With the opening up of the Indian Market in Insurance sector for private players, in General Insurance the monopoly of the general Insurance public sectors companies has been broken. With the entrance of the new private player market innovative technique has been introduced to capture the market. In general Insurance around 17% of the market has been captured by the private players. General Insurance is a sector which alone has many type of insurance coverage in it like Fire Insurance, Marine Insurance, motor Insurance, Liability Insurance, Engineering Insurance etc. The Non Life Insurers: National Insurance Co. Ltd New Indian Assurance Co. Ltd Oriental Insurance Co. Ltd United India Insurance Co. Ltd Tata AIG General Insurance Co. Ltd Bajaj Allianz General Insurance Co. Ltd ICICI Lombard General Insurance Co. Ltd Reliance General Insurance Co. Ltd Bharti Axa General Insurance

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. 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. 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 channelizes 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.

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 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 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 Link 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).

INDIAN INSURANCE INDUSTRY

- An Overview

HISTORICAL PERSPECTIVE
The history of life insurance in India dates back to 1818 when it was conceived as a means to provide for English Widows. Interestingly in those days a higher premium was charged for Indian lives than the non - Indian lives, as Indian lives were considered more risky to cover. The Bombay Mutual Life Insurance Society started its business in 1870. It was the first company to charge the same premium for both Indian and non-Indian lives. The Oriental Assurance Company was established in 1880. The General insurance business in India, on the other hand, can trace its roots to Triton Insurance Company Limited, the first general insurance company established in the year 1850 in Calcutta by the British. Till the end of the nineteenth century insurance business was almost entirely in the hands of overseas companies. Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the Provident Fund Act of 1912. Several frauds during the 1920's and 1930's sullied insurance business in India. By 1938 there were 176 insurance companies. The first comprehensive legislation was introduced with the Insurance Act of 1938 that provided strict State Control over the insurance business. The insurance business grew at a faster pace after independence. Indian companies strengthened their hold on this business but despite the growth that was witnessed, insurance remained an urban phenomenon. The Government of India in 1956, brought together over 240 private life insurers and provident societies under one nationalized monopoly corporation and Life Insurance Corporation (LIC) was born. Nationalization was justified on the grounds that it would create the much needed funds for rapid industrialization. This was in conformity with the Government's chosen path of State led planning and development.

KEY MILESTONES

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended by the Insurance Act with the objective of protecting the interests of the insuring public. 1956: 245 Indian and foreign insurers along with provident societies were taken over by the central government and nationalized. LIC was formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.

INDUSTRY REFORMS
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurance

companies would have a trained workforce of insurance agents in place to sell their products.

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 on the pipeline, 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.420 billion business in India, and together with banking services adds about 7% to India's Gap. Gross premium collection is about 2% of Gap and has been growing by 20-25% per annum. India also has the highest number of life insurance policies in force in the world, and total investible funds with the LIC are almost 8% of GDP. Yet more than three-fourths of India's insurable population has no life insurance or pension cover. Health insurance of any kind is negligible and other forms of non-life insurance are much below international standards.

Changing face of Indian insurance industry:

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 customers 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.

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 customers forms the pivot of each companys 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 business strategy that will survive. Whatever the developments, the future and the opportunities in this industry will surely be exciting.

INTRODUCTION TO Tata-AIG

Tata AIG Life Insurance Company Ltd.

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership position in India and AIGs global presence as one of the worlds 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 per cent. Tata AIG Life provides insurance solutions to individuals and corporates. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001.
THE TATA GROUP

Tata is a rapidly growing business group based in India with significant international operations. Revenues in 2007-08 are USD 62.5 billion (around Rs. 251,543 crores), of which 61% was from business outside India. The Groups Net Profit for 2007-08 is USD 5.4 billion (around Rs. 21,578 crores). The Group employs around 350,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. The business operations of the Tata Group currently encompass seven business sectors Communications and Information Technology, Engineering, Materials, Services, Energy, Consumer Products and Chemicals. The Group's 28 publicly listed enterprises have a combined market capitalisation of around $60 billion, among the highest among Indian business houses, and a shareholder base of 2.9 million. The major companies in the Group include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels, Tata Teleservices and Tata Communications.

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 Ireland and Tokyo.

List of products offered by Tata AIG

Tradition Plan

Pure Savings Investment Protection

Raksha 1.Maha Life Gold -----

Pension
1.Nirvana Plus 2.Easy retire 3.Riders

Living Benefits
1.Health protector 2.Riders

Unit linked insurance plans (ULIPs)

Pure protection

Savings
1.Invest Assure Gold 2.Invest Assure II

Investment
1.Invest assure Optima 2.Invest assure flexi 3.Invest Assure Apex

Pension
1.Invest Assure Swarna Jeevan 2.InvestAssure Future

Living Benefits
1.Health investor

Children Plan
1.Career Builder 2.Starkid

INTRODUCTION OF THE RESEARCH STUDY

Project proposed
Market Potential Study of TATA AIG life Insurance in Cuttack City
OBJECTIVE OF THE PROJECT

Main objective of the project is to find out the market potentialility of Tata AIG in Cuttack city. Project is about to find out the competitors Tata AIG Life Insurance company. Nowadays 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.

To find out the market potentiality of Tata AIG in Cuttack city.

Main competitors of Tata AIG. Which type of policies is preferable?

Most preferable plans in Cuttack city.

Which sector is most preferable public or private Targeting the right and potential customers Differentiating from other companie

METHODOLOGY:
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 people in Cuttack. Data collection has been done through by giving structured questioner. This study will be based on sampling. This is an exploratory type of research. The study was aimed at measuring the customers preference for life insurance companies and the comparison of various insurance policies of the various companies on basis of various parameters based on customers responcse in Cuttack region only. The survey was done on hundred general residents of the selected region. Methods adopted for surveys

Field survey method

Personal interview technique Secondary sources viz company database The data collected are represented into suitable tabular forms for drawing inferences. Quantitative techniques like averages, percentages, range, two-way tables, chi- square tests analysis are applied as per the requirement. The level of preference, perception of the customers about the product and company were identified by means of a scoring scheme. For the representation of data various charts and graphs are used as per requirement.

LIMITATION OF THE STUDY

Time limitation

Research has been done only in Cuttack.

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. Respondents error

Limited resources

SURVEY & FINDINGS

Findings from the research Study

A study has been conducted till date. From the study through hundred questionnaires we got different data according to the questionnaire. The pilot study has been conducted in the Cuttack city by meeting the people personally. From the study we have got as below-

Occupation of respondents:

Occupation Service Business Professional Others

Table: 1

Numbers of respondents 60 20 18 2

Proportion Of Different Occupation

2% 18%

Serv ices Business Professional 20% 60% Others

(Fig-1 )Number of respondents according to the occupation

Number of respondents according to the income level : Income / Annum

50000-100000 100000-300000 300000-500000 500000-1000000 >1000000 Table: 2

No. Of Person
29 40 26 5 0

Income Level

5% 0% 26% 29% 50,000-1,00,000 1,00,000-3,00,000 3,00,000-5,00,000 5,00,000-10,00,000 > 10,00,000

40%

(Fig-2)Proportion of respondent according to the income level

Number Of Family Members Of Respodents :

No. Of Family Members

(A) (B) (C) (D) 1-4 4-8 8-12 12-16 Table: 3

No. Of Respodents
72 16 2 0

Proportion Of Different Occupation

80 70 60 50 40 30 20 10 0 A B C 16 2 0 D A B C D 72

(Fig-3) Number of dependent family members of the respondents

Different Sectors people like to invest their money:

Name Of Different Sectors

Fixed Deposite Post Office Deposite Mutual Fund Share Buying Insurance

NO. Of Respodents
55 18 25 10 63

Table: 4

Investment In Different Sector

11% 15% 32% 6% Fixed Deposite Post Office Deposite Mutual Fund Share Buying Insurance 36%

(Fig-4) Different sector people like Invest their money

Ratio of Insured and Uninsured person In Cuttack city:

Number of insured person 93 7

Number of Uninsured person

Insured & Uninsured Person

7%

93%

Insured Person Uninsured Person

(Fig- 5) Ratio of Insured and Uninsured person in Cuttack city

Preferred sector in Cuttack city:

Name Of Sectors
Public Sector Private Sector

Preffered No.
63 37

Table: 5

Insured & Uninsured Person

62% Public Sector Priv Sector ate 38%

(Fig: 6) Preferred Sector in Cuttack city

Investment in different Insurance Company in Cuttack City:

Name Of The Companies

LIC Bajaj Allianz ICICI Tata AIG Max Newyork Others Table: 6
Investment In Different Insurance Companies

No. Of Respodents
76 26 24 17 10 14

46% 8% LIC Bajaj Allianz ICICI 6% Tata AIG Max Newyork 16% 10% 14% Others

(Fig: 7) Investment in different insurance company in Cuttack city

People Planning For New Investment :

RESPONSE Planning Not planning Total NO. OF RESPONDENTS 83 17 100 Table: 7
People Planning For New Investment
Planning
Not Planning 17%

SHARE (%) 83% 17% 100%

Not Planning

Planning 83%

(Fig- 8) Planning For New Investment Only 17% of the customers contacted are not planning for new

investments presently.

Whereas, 83% of the customers are still planning for new investments

this can be a great potential for Tata AIG Life Insurance to take them on their favor.

Preferred Insurance Plan in Cuttack city :

Name Of Insurance Plan Unit Link Plan Money Back Plan Childrens Plan Indowment Plan Pension Plan Medi Claim Table: 8 No. Of Respodents 64 13 28 18 10 7

Preffered Insurance Plan

70 60 50 40 30 20 10 0

64

Unit Link Plan Mony Back Plan Child Plan 28 18 10 13 7 Indowment Plan Pension plan Medi claim

(Fig-9) Preferred Insurance Plan in Cuttack City

From the secondary data which has been got from the company we can understand how much proportion of people is using Tata AIG insurance product and other insurance companys products.

Market Share Of Insurance Companies In Cuttack

43% 1% 3% 5% LIC Bajaj Allianz ICICI Tata AIG 4% 8% 14% 12% Max Newyork Av a iv Birla Reliance SBI 10%

(Fig-10) Proportion of using insurance of different insurance companies

So in Cuttack city Tata AIG is having 10% market share among the private players.

Using of different insurance plan:

Using Different Product Of Tata AIG

Mahalife Gold

Inv Assure Optima est

Inv Assure Flexi est

inv Assure Apex est

Star Kid

Inv est Assure Flexi 12% Inv Assure est Optima 26%

Inv est Assure Apex 8%

Star Kid 6%

Mahalife Gold 48%

(Fig-11) Using of different insurance product of Tata AIG So most preferred plan of Tata AIG in Cuttack city is Maha life gold and Invest Assure Optima. Life Invest Assure is less preferred plan in Cuttack city.

REASONS FOR PREFERRING PUBLIC AND PRIVATE SECTOR:

To know the reasons why public sector or private sector is preferable we have given eight reasons and used Likert scale. According to the preference respondents gave their ranking.To find out the most preferable reason we have added all the values; they are given below.
Guaranteed Sector
Public Sector Privat e Sector

Govt. Undertakin g
381

Maximum Rate Of Return

283 288

Age Of Service The Company

322

Rate Of Return
365

Market Share
293

Loan Facilities
277

Securities

409

217

172

310

334

215

213

183

214

Table: 9
Reasons For Selecting Public Sector
Guaranteed Rate Of return Serv ice Loan Facilities Gov Undertaking t. Age Of the Company Securities Maximum Rate of Return Market Share

Market Share 11% Age Of the Company 12%

Loan Facilities 11%

Securities 16% Guaranteed Rate Of return 14%

Serv ice 11%

Maximum Rate of Return 11%

Gov Undertaking t. 14%

(Fig-12) Preferable reason for selecting public sector

Interpretation:
Firstly public sector is the most preferable because of security. Next preferable reason is Government undertaking.

Another reason is guaranteed rate of return.

Age of the company is also a preferable reason. So most of the people in the Cuttack city they want security and Government undertaking. People want the guaranteed rate of return means there is no hidden cost in the policy. It should be transparent. Age of the company is also a great factor because if a company survives for a long time in the then its a faith to the people that the company may not get out of the market suddenly. So invested money would be secured.

Reasons for preferring Private Sector:

Reason For Preferring Private Sector
Guaranteed Rate Of return Serv ice Loan Facilities Gov Undertaking t. Age Of the Company Securities Maximum Rate of Return Market Share

Market Share 11% Age Of the Company 12%

Loan Facilities 10%

Securities 11%

Serv ice 18%

Maximum Rate of Return 17%

Guaranteed Rate Of return 12% Gov Undertaking t. 9%

(Fig-13) Preferable reason for selecting private sector

Interpretation:
a) Private sector is preferable firstly for the service b) The next reason for selection of private sector is maximum rate of return.

Comparision Between Public & Private Sector

Public Sector
Securities Loan Facilities Market Share

Private Sector

Age Of The Com pany Se rvice

Maxim um Rate Of Return

Govt. Undertaking Guaranteed Rate Of Return 0 50 100 150 200 250 300 350 400 450

(Fig-14)Comparison between public sector and private sector of different factors

Interpretation:
From the bar diagram it can be interpreted that Public sector is most preferable than the private sector. From the bar diagram we can see that public sector gets more points than private sector in every factors except service and maximum rate of return. Most of the people preferred Public sector because of security which public sector provide more than private sector. A loan facility is not a vital for choosing public sector. Because it is seen from the graph difference between private and public is not more. Market share is not also playing the vital role for choosing the public sector. Age of the company has a small impact for choosing the public sector. According to the customer view service of the private sector is more preferable. According to the customers view maximum rate of return is offered by private sector. Government undertaking is a vital factor for choosing public sector. Most of the people believe on Government. So public sector is preferable. Guaranteed rate of return is also playing a vital role for choosing the public sector. Most of the people believe that there is no hidden cost in public sector so they can get a guaranteed rate of return.

Market Potential Analysis Of Tata AIG:

We have taken 100 sample size to know the market potential of Tata AIG. Out of 100 samples 10 are rejected because of unsufficient knowledge about industry. So remained sample size is 90. 10 leading insurance companies are taken to know the most preferred & least preferred companies. Most Preferred rank is 1 & least preferred rank is 10.

Companies Rank LIC Bajaj ICICI Tata AIG Aviva Birla SBI Max Reliance HDFC

1 36 12 11 8 3 3 8 5 3 1

2 24 20 16 12 4 2 5 2 2 3

3 22 23 27 10 3 2 1 2 -------

4 8 23 23 26 4 3 3 ----------

10

---- ---- ---- ---- ---- ---12 ---- ---- ---- ---- ---13 ---- ---- ---- ---- ---33 1 ---- ---- ---- ---16 40 20 ---- ---- ---12 38 26 2 ---2 3 9 31 28 ---2 1 2 8 32 35 3 ---- ---3 18 45 19 ---- ---2 10 10 64 Table: 10 (Out of 4954 points LIC got 186 points & Bajaj, ICICI, Tata AIG, Aviva, Birla, SBI, Max, Relience, HDFC got 273 pts, 281 pts, 337 pts, 496 pts, 531 pts, 563 pts, 689 pts, 767 pts, 831 pts respectively.)
It has been found that potentiality of the private sector is 38 % only where as public sector holding 62 % of market share in Cuttack . If only private sector is considered then these 9 leading private companies holding 38% of the insurance market in cuttack.

Sum Of Ranking 186 273 281 337 496 531 563 689 767 831

Companie s Sum Of Rankings Average Marks Marks Obtained Out Of 38%

Bajaj ICICI
273 3.03 7.97 6.75 281 3.12 7.88 6.5

Tata AIG
337 3.74 7.26 5.98

Aviv a
496 5.51 5.49 4.52

Birla
531 5.9 5.1 4.2

SBI
563 6.25 4.75 3.91

Max Reliance HDFC

689 7.65 3.35 2.76 767 8.52 2.48 2.04 831 9.23 1.77 1.46

Table: 11

( Marks= Number of factors + 1- Average, i.e. Marks= 11- Average)

Market potential Of Tata AIG in Cuttack is 5.98.

RECOMMENDATIONS AND BENEFITS

RECOMMENDATIONS TO THE COMPANY:

Being the best product player in the private sector, but still survey TATA AIG needs to improvement regarding its premium charges and advertisement to its target customers.

Premium charges:
Owing to its high premium charges (Tata AIG Apex Plan, Premium RS. 90000/-) customers perception about the companys product has become that its only for the upper middle class people. Whereas TATA AIG do has some policy with low premium but the charges of allocation are too high. So we would like to suggest slowing down its premium charges to some extend by reducing administration charges and other charges.

Advertisement: During survey we have found that due to lack of advertisements about the products and agents selling the products in which they get high commissions customers are somewhere mislead and they know about very few products though Tata AIG has wide range of variety of the products. So we would recommend Tata AIG to invest more in advertisement in form of TV commercials, pamphlets and hoardings.

Wrong perception: AIG is on the edge of filing bankruptcy. So Tata AIG is also going to on the brink of filling bankruptcy. But insurance in India is a highly regulated industry. Any company that wants to set up an insurance business has to follow very stringent norms given by the Insurance Regulatory & Development Authority (IRDA). So company should take positive measure to remove this wrong perception from the people.

Sample size: For this research study only hundred sample size has been taken. The result will be more appropriate if a large sample size is considered

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. Benefit to the company:

This survey has been done in Cuttack region on comparison of Tata AIGs product and its competitor can give an idea of this position in the market. As Tata AIG leads in most of the parameters so it should continue to serve in the same manner. The survey also shows the customers perception about Tata AIGs life Insurance product with which it can improve its impression better than now. The recommendation has given in this report will help Tata AIG to position its product properly to the target customers. Moreover the sales has been done during this internship have done a good business for the company

Benefit to us: Doing internship in TATA AIG have given me immense experience in the insurance

industry for these fourteen weeks. Interaction with the customers for survey and sales has developed our marketing skills. Working in the office premises has given exposure to corporate world and an

experience in working in corporate pressure.

CONCLUSION AND REFERENCES

CONCLUSION
Indian insurance sector is likely to register unprecedented growth of 200% and attain a size of Rs. 2000 billion ($51.2 billion) by 2009-10, in which a private sector insurance business will achieve a growth rate of 140% as a result of aggressive marketing technique being adopted by them against 35-40% growth rate of state owned insurance companies. The rural market offers tremendous growth opportunities for insurance companies and insurers should develop viable and cost-effective distribution channels; build consumer awareness and confidence. The state owned insurance companies such as LIC and GIC have limited number of policies to offer to their subscribers while in case of private insurance companies, their policy numbers are many more and the premium amount as well as the maturity period is much competitive as against those of government insurance companies. The private sector insurance players have started exploring the rural markets in which until recently, the state owned companies had the monopoly.

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

Website Referred :
www.tata-aig-life.com www.google.co.in www.irdaindia.org www.licindia.com www.apnainsurance.com www.insurancemall.in www.wikipedia.com www.insurancepandit.com

Books Reffered :
Life and Health Insurance by Kenneth Black & Harold Skipper Jr. (Published by Prentice Hall)

Manual of Insurance Laws (Published by Taxman) Principles of Risk Management and Insurance (Published by Pearson Education) Risk Management and Insurance by Williams, Jr., Smith and Young (Published by
McGraw Hill)

ANNEXURE : 1

QUESTIONNAIRE Market Potential & study of Tata AIG in Cuttack City

Dear Sir/Madam, We are conducting a survey on Market potential study of Tata AIG in Cuttack city by Insurance organizations. We hope for your kind co-operation. Name: Age: . Sex: Male [ ] Female [ ] Name and address of the Organization:. Contact Number: ... E-mail address: .. 1. Family Members: (Please tick) a) 1-4 [] d) 12-16 [] b) 4-8 e) 16> [] [] c) 8-12 []

2. Number of dependent family members: (Please Tick) a) 1-2 [] b) 2-4 [] c) 4-6 [] d) 6-8 [] e) More: 3. Occupation: (Please Tick) a) Service [] b) Business [] c) Professional d) Any other: ... 4. Annual Income: (Please Tick) a) 50000-100000 [ ] b) 100000-300000 d) 500000-1000000 [ ] e) 1000000 []

[ ] c) 300000-500000 [ ] [] c) Mutual fund []

5. In which would you like to invest? (Please Tick) a) Fixed deposit [] b) Post office [] d) Share buying [] e) Insurance policy [ ]

6. Do you have any insurance policy? (Please Tick) a) Yes [] b) No [] 7. Which sector do you prefer? (Please Tick) a) Public Sector [] b) Private Players [] 8. Why do you prefer public or private sector?
Reason Public Player Rating Least.Most 2 3 4 Private Player Rating Least.Most 2 3 4

1 Guarateed Rate Of Return Govt. Undertaking Maximum Rate Of Return Within a time limit Service Age of the Comapny Market Share Loan Facilities Security

9. Do you have any Insurance policy in the Following companies? (Please Tick) a) LIC c) ICICI 18. [] [] b) Tata AIG e) Max New York [] [] c) Birla Sun life [ ] f) Any Other: ..

Are You Planning For New Investment ? [] b) Not Planning [ ]

a) Planning

10. Rank different company according to your opinion. Most preferred rank is 1 and least preferred is 10 (Rank from 1 to 10)
LIC Tata AIG Life Insurance ICICI Prudential Aviva Life Insurance HDFC Standard Life SBI Life Insurance Bajaj Allianz Max Newyork Life Reliance Life Birla Sun Life

11. Which type of policy do you prefer? (Please Tick) a) Endowment Plan [ ] b) Money Back Plan d) Childs Plan [] e)Unit Link Plan f) Any Other: [] [] c) Pension plan []

Any Comments: . Thank you, for your kind co-operation. Signature: .. Date: ..