A

PROJECT REPORT
ON
A STUDY OF PENETRATION STRATEGY
FOR THE RURAL AREA
(SOLAPUR DISTRICT)
FOR
IFFCO TOKIO GENERAL
INSURANCE CO.LTD
A report submitted towards the partial fulfillment of the
Requirement of the award of
MATER DEGREE
IN
BUSINESS ADMINISTRATION
By
MR.DIPAK DATTATRAYA BARALE
UNDER THE GUIDANCE OF
MR.KADAM P.B

MBA DEPARTMENT
S.V.E.R.I’s
COLLEGE OF ENDINEERING, PANDHARPUR
2015-2017
 PREFACE

In M.B.A programme (3 rdsemester) SUMMER TRANINGPROJECT is compulsory. The

students are placed in different types of industrial undertaking whereinthey shall study and report on the
department of the unit.
The main objective behind industrial training at this level is to give a perspective about
the organization and functioning of management of the particular aspect in an industrial unit. Practical
knowledge is required in business so it is crucial and it must for every student.
Practical knowledge plays a vital role in the market and thus enables the student to know about the
functioning andworking of the unit. This training has given me something new that what I had done
during my study.
I had a great and wonderful experienced and knowledge at IFFCO-TOKIO GENERAL INSURANSE
CO.LTD.
 ACKNOWLEDGEMENT
A project cannot complete without taking guidance from others. There is always need of help
from another people. For untouched topic like General insurance, it is great pleaser for me to get help.
Firstly, I would like to thank Mr.Girish Malkanwar, Senior Area Manager ( Solapur ) for granted my
summer training programme. Solapur SBU. He is always ready to give knowledge about the office work.
I would like to thank Mr. Prerak Amin for giving me guidance about insurance sector.
I would also like to thank Mr. Amol Mali, (Bema Kenrdra Manager) for granted of summer
training programme. Also I am thankful to Mr. Yogesh Kulkarni with whom I got experience of real
marketing.
I would like to avail this opportunity to express my sincere thanks and profound gratitude to my
project guide Mr. P. B. Kadam whose valuable knowledge and guidance have me complete this project
successfully.
Last, I would like to thank all those people who help directly and indirectly preparing this project.
 INDEX
No Topic Page

1 Introduction to the study 1

2 General Insurance 2
2. General Insurance industry In India 3
1
2. Key Market Indicators 4
2
2. General Insurance 5
3
3 Introduction to company 6
3. IFFCO-TokioGeneral Insurance co. Ltd 6
1
3. IFFCO-Tokio Insurance services Limited 10
2
3. The Products 11
3
3. ITGI’ turnkey system 13
4
3. Company performance 14
5
4 Introduction to problem 15
5 Objectives 19
6 Methodology 20
7 Data collection and Analysis 21
8 Summary of Findings 30
9 Suggestion 33
10 Conclusion 35
11 Bibliography 36

1
TOPIC NO. 1
1.1 Introduction to the study

Insurance is age-old industry in India. Many nation listed general Insurance companies are
serving their services in all areas of India. After liberalization many private general Insurance companies
are arrived in the Indian market with foreign partnerships.
These companies are serving mostly in urban areas and high-income classes. They are not
fulfilling obligations towards rural areas. These companies believe that business in the rural area is not
profitable.
Rural Insurance should be looked upon as an opportunity and an obligation. A smaller bundle
of innovative products in sync with rural needs and perception and an efficient delivery system are the two
aspects that have to be developed in order to penetrate the rural markets.
It is advisable for these companies to carry out market research to find profitability in the rural
areas.
Products and services should be found out rural areas that can make the business profitable.
In this project research is carried out to identify the need of general Insurance in rural areas. Also the
services which are not serving properly by government companies and the marketing strategy for
implementation.
It is found out in this research that lack of agents and agency in the area result in small business
from rural areas. So more agents should be appointed so that there would be profit in future.
OBJTIVE AND IMPORTANCE OF THE STUDY

Before launching the product in rural market there is need to understand four P’s of marketing i.e.
product, place, price and promotion. Product of the company is obviously the general Insurance policies.
There are different policies for different sections. Industry has different policies while rural area has
different policies. Place of the company is rural area of solapur district of Maharashtra . Price means
Insurance premium paid by the insured person. Insurance company uses agents, brokers, and marketing
associate’s for selling the product which is called the promotion.
Main objectives of the study are to know possible strategy for penetration in the rural of solapur district.
Other objectives of the study are given bellow.

To know the awareness of general Insurance and products in the rural are. It is necessary to find
customer awareness about varies nationalized and private companies. Also the information about customer
awareness about different policies will help in making decision.
To know the awareness regarding the company. How many people know about the company is necessary
to know.
To know the ways of promoting the company’s Product in rural are
To know the need of different Product of general Insurance in rural area.
To know the service expected by customer
To get suggestion from the customer and analyses the suggestion for implementation.
SCOPE AND LIMITAION
SCOPE :

Limitaion:
1.2 General Insurance
Every asset has a value and the business of General Insurance is related to the protection of
economics value of asset. Asset would have been created through the efforts of owner, which can be in the
form of building, vehicles, machinery and other tangible properties. Since tangible property has a physical
shape and consistency, it is subjected to many risks ranging from fire, allied perils to theft and robbery.

Concept of Insurance has been extended beyond the coverage of tangible asset. Now the risk of
losses due to sudden changes in currency exchange rates, political disturbance, negligence and liability for
the damage can also be covered.

But if a person judiciously invests in Insurance for his property prior to any unexpected
contingency then he will be suitable compensated for his loss as soon as the extent of damage is
ascertained.

Few of the General Insurance policies are:

Property Insurance: The home is most valued possession. The policy is designed to cover the various
risk under a single policy. It provides protection for Property and interest of the insured and family.

Health Insurance: It provides cover, which takes care of medical expenses following hospitalization from
sudden illness or accident.

Personal Accident Insurance: This Insurance policy provides compensation for loss of the injury (partial
or permanent) caused by an accident. This includes reimbursement of cost of treatment and the use of
hospital facilities for the treatment.

Travel Insurance: The policy cover the insured against various eventualities while traveling abroad. It
cover the insured against personal accident, medical expenses and repatriation, loss of checked baggage,
passport etc.

Liability Insurance: This policy indemnifies the Directors or officers or other professional against loss
arising from claims made against them by reason of many wrong Act in their Official capacity.

Motor Insurance: Motor vehicles Act states that every motor vehicles plying on the road has to be
insured, with at least Liability only policy. There are two types of policy one covering the act of liability,
while other cover insures all liability and damage caused to one’s vehicles.
Since a single policy cannot meet the entire Insurance objective, one should have a portfolio of policies
covering all the needs.

2.1 General Insurance Industry in India

The general insurance Industry took roots in India way back in 1850, with the establishment of Triton
Insurance Company Ltd.in Calcutta. The central government nationalized the general insurance industry
in India and set up General Insurance Corporation of India (GIC) in November 72.107 Indian and foreign
insures which were operating in the country prior to nationalization were grouped into four operating
subsidiaries of GIC, namely, (i) National Insurance Company Limited;(ii) New India Assurance Company
Limited;(iii) Oriented Insurance Company Limited; and (iv) United India Insurance Company Limited.
All these four subsidiaries of GIC Company with one another and underwrote various classes of general
insurance business except aviation insurance of national airlines and crop insurance, which was handled
by the GIC.

MARKET SIZE :

During April 2015 to March 2016 period the general insurance industry recorded a 12 percent growth in
Gross Direct Premium underwritten in April 2016 at Rs.105.25billion(US $ 1.55 billion)

2.2 Key Market Indicators $16 billion

Size of market, life and-life $2408.25 billion (-1.5% as against 2011)

Total global insurance premium (as on 2011) Life 11.27%

Rate of Annual Growth year 2011-13 Non-life 23 %( premium underwritten in India and
abroad)

Geographical Restriction for new players none. Players can operate all over the country

Equity restriction for new Indian insurance

Company Foreign promoter can hold up to 26% of the

equity

Registration restriction composite Registration not available.

Number of Registered companies:

Type of business Public Sector Private Sector Total

Life insurance 1 12 13
General Insurance 6 8 14
Reinsurance 1 0 1
Total 08 20 28

2.3 General Insurers

Public Sector:
1. The New India Assurance Co. Ltd.

2. National Insurance Co. Ltd.

3. The Oriented Insurance Co. Ltd.

4. United India Insurance Co. Ltd.

Private sector:

1. Bajaj Allianz General Insurance Company Limited

2. ICICI Lombard General Insurance Co. Ltd.

3. IFFCO-Tokio General Insurance co. Ltd.

4. Reliance General Insurance Company Limited

5. Royal Sundaram Alliance Insurance co. Ltd.

6. TATA –AIG General Insurance Company Limited

7. Cholamandalam MS General Insurance co. Ltd.

8. HDFC Chubb General Insurance co. Ltd.

9. Export Credit & Guarantee Corporation

10. Agriculture Insurance Company of India Limited

Re – insurer

General Insurance Corporation of India Limited.

2.3Introduction to the Company
IFFCO-Tokio General Insurance co. Ltd. (ITGI)
IFFCO-Tokio General Insurance co. Ltd. (ITGI) is a joint venture between IFFCO and The
Tokio Marine and Fire Insurance co. Ltd, Japan. Incorporated on 4th December, 2000 and within this short
span it has become a leading Insurance co Company in India. ITGI is also the pioneer in launching
innovative products like “Sankat Haran Policy” for farmers. With the Corporate office in Gurgaon and
operating offices in 26 offices, ITGI is looking at expanding the market base of general insurance in India
by opening office in most major cities in India. The Company believes in educating the general masses
about insurance and bringing to the market simple and customized insurance policies. With a claim
process as simple and friendly as can be, it promise to give its policyholder “The Life They Deserve”. To
be approachable from all places, ITGI has also opened up call centers with a universal toll-free number
that can be accessed throughout India.

Indian farmers Fertilizer Co-operative Limited (IFFCO) is well known as a pioneer in large-
scale Fertilizer manufacturing and is the leading Fertilizer producer in the country. IFFCO has a
membership of about 35,000 Co-operatives at sate District and primary level spread in 22 states and 2
union Territories. The manufacturing plants are at Kalol, Kandle, Phulpur and Aonla which have been
consistently operating at a capacity utilization of more than 100% for the past several years.

The Tokio Marine &Fire insurance Co. Ltd. has over one hundred and twenty years of
experience in general insurance business and is the largest and oldest general insurance Company of
Japan. It is member of the large and highly diversified Mitsubishi group comprising of over 1500
companies. The Company is rated ‘AA’ (strong financial security characteristics) by the international
rating agency Standard & poor’s. Tokio Marine has been continuously serving as one of the important
reinsurance companies to the nationalized Indian insurance market.

ITGI Mission
 To win the TRUST of individual, Trend, Industry and Commerce and protect citizen, corporates,
cooperatives and international Investors in India.

ITGI vision

To be the INDUSTRY LEADER by Building customer satisfaction through fairness,

Transparency and Quick Response; Providing Innovative Products and Service to suit every Costumer’s
need;
Being Technology Driven Cost conscious and Pries competitive; creating a niche in the rural
segment.
ITGI Promoters

Indian Partners
INDIAN FARMERS FERTILIZER CO-OP LTD.
During mid-sixties the co-operative sector in India was responsible for distribution of 70 per cent of
fertilizers consumed in the country. This sector had adequate infrastructure to distribute fertilizers but had
no production faculties of its own and hence dependent on public/private sectors for supplies. To
overcome this lacuna and to bride the demand supply gap in the country, a new cooperative society was
conceived to specially cater to the requirement of farmers. It was a unique venture in which the farmers of
the country through their own co-operative societies created this new institution to safeguard their interest.
The number of co-operative societies associated with IFFCO has risen from 57 in 1967 to more than 36,
00 now.
KRISHAK BHARTI CO-OPERATIVE LTD.

Krishak bharti cooperative limited (KRIBHCO) ,a premier cooperative society for manufacture of
fertilizer, registered under Multi-state cooperative societies Act-1985,was promoted by the Govt. of India
IFFCO , NCDC and other agriculture co-operative societies spread all over the country.
KRIBHCO has setup a fertilizer complex to manufacture Urea, Ammonia & Bio- fertilizers at
Hazira in the state of Gujarat, on the bank of river Tapti, 15 Kms from Surat city on Surat- Hazira state
highway.

INDIAN POTASH LIMITED

The company was incorporated in 1995 as a consortium of importers of Muriatic of Potash

(MOP) who are primarily in the private sector. The company started in a small way in south India but very
soon expanded their marketing network to the whole of India.
On the recommendations of National Commission on Agriculture, the Government of India expanded the
equity base of the company with majority of equity holding are Board seats with cooperative and Public
sector fertilizer companies.
 Today, cooperative and State/central Public sector companies hold more than 90 per cent equity
with IFFCO as the largest shareholder with 33.98 per cent.
Indian Potash Limited (IPL) remained as the soul agency for import handling, distribution and
sales promotion of Potosi fertilizers in the country from 1970 to 1992 when import of Potosi fertilizers
was decontrolled and decanalised. However, the company continues to be one of the three states Trending
Enterprises and is also entrusted with the responsibility of maintaining buffer stock on behalf of Ministry
of Chemicals & fertilizers for decontrolled fertilizers.
IPL is register as a public Limited company under the companies Act 1956 and has its own
Memorandum and Articles of Association. Its annual turnover is USD 330 million (approx.) and it has an
uninterrupted record of making profit and paying dividend to the shareholder except for one year in its
history.

Foreign Partners

MALLEAASIA

As a part of Tokio Marine Group Vision which is to provide the customer with a total Risk
Management service, Millea Asia Pvt. Ltd has come into existence with a concrete plan to provide
maximum value to customers and shareholders by concreting on the strength of each company and from a
new insurance group which integrates with life, property & causality business under the integrates
management.
Millea Asia Pvt. Ltd consider the Asian market as top priority area and has assumed the role of regional
management headquarters and as a technical support center for the Asian subsidiaries/affiliates like ITGI.
Management skill and insurance technical knowledge is centered at this management entity and shared
with transferred to ITGI for the betterment in all respects.

TOKIO MARINE GROUP

Headquartered in Tokyo, japan Tokio Marine has a worldwide network in 41 countries or regions to meet
our customers’ various demands.
Over 3,400 employees, with different nationalities background and language work within a total of 35
subsidiaries and affiliated companies forming the Tokio Marine Group, in order to support our customers.
.2 IFFCO TOKIO Insurance Services Limited (ITIS)

IFFCO TOKIO General Insurance Company Limited (ITGI) has recently formed a wholly owned
subsidiary called IFFCO TOKIO Insurance Services Limited (ITIS) for the purpose of marketing and
distribution of Insurance product. To begin with it shall sell the General Insurance product of ITGI and
from there, grow on to become a one-stop financial solution provider.

The Company would comprise of well-trained marketing professionals. The objective is to offer world-
class services to the silent. Such a modal has been implemented to great success by Tokio Marine and fire
Insurance, which have operations in 41 countries across the world. The elite channel of marketing
professionals are set to redefine the way financial Services are offered to customer.
IT IS while consolidating marketing through the convention channels would also develop and implement
models of Insurance distribution with alternative channels like cooperatives, associations etc. It is
envisaged that the new outfit shall bring the spread and reach ITGI while at the same time ITGI can have a
more focused approach on the higher end general Insurancebusiness. The focus would be on the retail and
the SME sector.
ITIS would, to its marketing team offer an excellent pathway and a fast track growth by rewarding the
high performers and thus stimulating growth.
3.3 The products

Retail products

The products under the Retail Lines cater to the Insurance needs where the insured is an individual or
small/medium units.

Examples of Insurances which an individual may require to undertake:

Motor vehicle Insurances
Travels overseas Insurances
Home
Examples of Insurances small and medium units may require:

Trade protector
Office protector
Small and medium Enterprise package policy
In addition to the above the product offered are:

Health (of Group)

Critical Illness
Surgery protector
Personal Accident

One way ITGI achieved this rapid growth was by levering its reach as a fertilizer company to penetrate
India’s agricultural industry. One of the company’s most innovative policies, called “Sankat Haran”
(which translate as something that protect against troubles),provides farmers a free year of personal injury
coverage with each purchase of a 50kg bag fertilizer-and introduces those farmers to ITGI’s coverage for
indemnity against Personal Accident. To date over a million Indian farmers are covered under Sankat
Haran.

Commercial products

The products under the Commercial lines cater to the insurance needs of mainly industrial houses with
few exception which may also be applicable to Individuals or small and medium units.

Examples of some products under this category are as follows:

Standard Fire& Special Perils Policy

Burglary Policy

Engineering Policies

Liability Policies

3.4 ITGI’s Turnkey system

Integration with ITGI’s Turnkey system to let partners and agents process and issues Policies on demand,
at point of sale, with minimal training and without compromising security.

Customer need:

1) Quickly penetrate India’s wide-open market for personal and insurance lines by extending a turnkey
insurance administration application to windy distributed retail patterns and agents.

2) The ability to generate the insurance documentation at the point of sale without compromising the
security.

Solution

The front office System, an IBM Louts Notes and DominoTMbased application, the integrates with
ITGI’s turnkey System to let patterns and agents process and issue policies on demand, at point of sale,
with minimal training and without compromising security.

3.5 Company Performance

Financial Highlights
The financial highlights of the year’s operations are summarized below:

(Rs.in crores)

Year ended Year ended Year ended Year ended Year ended Year ended Year
ended Year ended

Particular 31.3.03 31.3.02 31.3.03 31.3.02 31.3.03 31.3.02

31.3.03 31.3.02

Gross written

Premium 103.52 36.14 18.42 3.34 91.39 31.02 213.33

70.51

Net Premium 16.86 2.07 8.52 1.53 44.65 9.53 70.03

13.13

Earned Premium 9.67 0.94 3.66 0.02 26.17 2.79 39.50

3.75

Interest 0.52 0.18 0.56 0.03 1.89 0.38 2.97

0.59

Total 10.19 1.12 4.22 0.05 28.06 3.17

42.47 4.34

Commission (26.00) (10.26) (1.42) (0.52) (7.07) (4.59)

(34.49) (15.37)

Incurred Claims 2.93 0.36 4.51 0.37 21.06 3.55 28.50

4.28

Expense of

Management 23.64 12.10 4.19 1.12 20.86 10.43 48.69

23.65

Total 0.57 2.20 7.28 0.97 34.85 9.39

42.70 12.56

Underwriting
Profit/ (Loss) 9.62 (107.92) (3.06) (0.92) (6.79) (6.22) (0.23)
(8.22)

Particular Year ended 31.3.2003 Year ended

31.3.2002

Underwriting Profit/ (Loss) (0.23) (8.22)

Interest 9.81 10.12

Other Expense (0.21) (0.17)

Profit before Tax 9.37 1.73

Provision for Tax 3.01 6.00

Profit after Tax 6.36 1.67

Proposed Dividend 2.26

Balance transferred to reserves 4.10 1.67

4 Introduction to the Problem

Most of people in India are living in rural area. Main business of the people is agriculture. Many small-
scale industries are also situated in rural area. They are giving higher contribution in the national income.
Many services are privilege is given to rural area by government. Newly formed government is also giving
priorities to this sector. Various government department, organizations and companies also provide
business services. Insurance is also one of services which are provided by the nationalized Insurance
companies rural area is high.
It is estimated that, in India, only 20 million out of 120 million insurable individuals purchased Insurance.
It implies that only 10% of the household (families) have access to Insurance. The average annual
premium paid in India is around $10(Rs.500) compared to $42 in Thailand and $1000 in stock Korea. The
total insurance premium collected on life and non-life insurance is seen mostly as a savings and tax
minimization instrument rather than as a finical protection tool. Of the life premium collected only 20% is
paid toward risk coverage and the rest towards savings.
As per provisional figure of Insurance Regulatory and Development Authority of India (IRDA) journal the
premium collected from 25.4 million new life polices, including group polices, issues during FY2002-03is
Rs 123.248 million. This indicated an averages premium of Rs.4180 per individual policy. On General
insurance, the premium collected on 41.85 million polices affected during 2002-03is Rs 142,793 million
indicating an average premium of Rs 3400.
The process of reform initiated some three years back has some achievements to this credit. The process
of liberalization has enhanced competition, providers a choice to the efficiency levels of the industry,
increased the coverage of insurance in terms of density and penetration, obligated the insures for
providing for the needs of rural; and social sectors , increased awareness about necessity of insurance , to
name a few. However, the achievements till date need to be built upon to further improve the efficiency of
insurance sector, thereby reducing the cost, and increase the penetration of the industry across the country.
The industry cannot afford rest on its laurels.
There is big scope for private insurance companies in the rural area. There are also obligations formed by
IRDA for private insurance companies toward rural area. Specifically the percentage of life insurance
business and general insurance business to be undertake by the insures in the rural or social sector The
Committee on reforms in the insurance sector ,while advocating opening up of the compliance of
minimum stipulations for underwriting business in the rural or social sector. This requirement for the
industry, both life and non-life insurers, is laid down in the regulars farmed by the Authority on
obligations of the insurers for the rural or social sectors. The amendments to the regulation were notified
by the Authority in October, 2002. Under the amendments, the term ‘rural sector’ has been redefined, and
the word ‘agricultural pursuits’, elaborated. The amendments also dwell on the ‘informal sector’.
Simultaneously, the obligations for life insures toward the rural sector have been raised. In keeping with
the need for insures to meet their obligations to the society, the Authority has further stipulated that in
terms of volume of business, no insurer shall write rural/social sector business less than that what was
recorded for the accounting year ended 31st March,2002. The amendments came in to effect from the
finical year 2002-03.

Regulations framed under IRDA Act, 1999

IRDA (Obligations of Insurers to or Rural or social Sector) Regulations, 2000 July 19, 2000
IRDA (Obligations of Insurers to or Rural or social Sector) Regulations, 2002 Oct 17, 2002

The Authority levied a penalty on Reliance General Insurance Co. Ltd. Under section 105B of the
Insurance Act, 1938 for not fulfilling the rural sector obligations under section 32B and 32C of the
Insurance Act, 1938.
Amendments to the Insurance Act, 1938 the much awaited Insurance (Amendments) Bill was passed in
both the House of Parliament and notified on 23 rd September , 2002. The major amendments incorporated
in the Act include co-operative societies recognized to carry on insurance business the amendments
provides for setting up co-operative exclusively for carrying on insurance business . The co-operative
would be subject to same paid up capital requirement, solvency requirements, and deposits with Reserve
Bank of India, maintenance of the account, audit etc. as in the case of other applicants. By nature of their
being engaged in the activity of disbursing credit and being closer to the rural markets, co-operative are
expected to help in the penetration of insurance cover to rural areas. The general insurance companies
have drawn up various strategies to improve insurance penetration and insurance density. Most of the
companies have tied up with banks either in the form of corporate agency or under the referral agreement
for utilizing the extensive and broad reaches, which the banks provide to market insurance products. For
the development of rural business, the insures are tying up with state cooperative Banks, state level
cooperative of cotton growers, Dairy Owners, sugar cooperative, etc. New need based packaged products
for rural market, such as woman’s self-help group, handloom weavers, artisans, tribal, etc. are also being
devised by the insures.
Overall, the extensive network built SHGs, Youth Clubs and Panchayats can be tapped and effectively
utilized by the insures to penetrate the rural pockets of the country. The growing purchasing power of the
rural segments coupled with opportunities which are opening up on account the IT, and telecom
revolutions, can be effectively utilized to ensure spread of insurance to these scoters. Insurance companies
need to translate these opportunities into actual sale of insurance products by building dedicated
distributed systems.
Meeting the obligations toward the rural social sectors, are taking these obligations beyond the context of
the statutory compliance is important. Business statistic furnished by the insures reveal that the Insurance
companies are somehow making are effort to meet the target as a year-end annual obligation. With the
changing profile of the populace in the rural and semi urban areas.This has been adequately demonstrated
by the manufacturing sectors, with their targeted marketing strategy. The experience needs to be
duplicated in the insurance sector as well. There are lesson to be drown from the success stories, as has
been demonstrated by the surveys/studies conducted.
Of the eight insures who have entered the insurance industry during the last three years, five insures have
meet, both the rural and social sector obligations. Out of these in case of three insures, whose first year of
operation comprised of a very short span, although the financial year 2020-03,was the third years of
operation, give the peculiarity of their situation, the said year was considered the second year for the
purpose of determining compliance with requirement of the rural and social sector obligation. In one
instance, the insure met with the social sector obligation. However, there was a minor shortfall in
compliance with the rural sector obligation. In respect of the two insurers who commenced operations
during the financial year 2002-03, compliance of the rural and the social sector obligation, on
proportionate basis, could not be ensured. These insurers are required to ensure compliance with the
shortfall in the financial year 2003-04. Companies like iffco-tokio have sold their products through both
National and State level Co-operatives of dairy owners,cotton growers, sugar Cooperatives and Banks.
The insurer’s efforts have a landmark in undertaking social sector business.
Keeping in view the obligations towards rural and increased competition in general Insurance sector, there
is need to find perfect strategy to penetrate in rural area. To finds appropriate marketing strategy it is
necessary to carry out marketing research.
6 METHODOLOGY
For the purpose of marketing research, questionnaire is prepared. The questionnaire is designed keeping in
view the objectives of the study. To make convenience to the respondent of the respondent of the rural
areas, the questionnaire is designed in Marathi and English language.

Universe (research area):

SOLAPUR DISTRICT (Pandharpur Area)

Respondents:

Men
Financial decision makers of the household
Women
Influencer in the financial decision making
As men are decision-makers in the rural area all respondents are men.
Different life stags
25-40 years
41-55 years
From the age 25 people think of taking Life and/ general Insurance. After the age of 40 their children are
also become decision influencer.
Income generating asset owners
Land, cattle, tractor owners etc.
Non-Income generating asset owners
Landless working as employees
In short, only those who have the power to make decision include in the research.

Research Approach

Respondents will be taken by convenience randomly from the place like bus-stand, railway-station, shops
etc.
For the shake of convenience some towns like Pandharpur ,Mangalwedha etc.

Data collection and Analysis

Table No: 01: Do you have life insurance policy?

Sr.No Particulars No. of Respondent Percentage

1 Yes 4 8

2 No 46 92

Total 50 100

No. of Respondent
8%

Yes
No

92%

Interpretation: Out of 50 respondents 4 have life insurance policy. This means that in the rural area
there is not enough awareness about life insurance policy.
Table No: 02: Do you have general insurance policy?

Sr.No Particulars No. of Respondent Percentage

1 Yes 41

2 No 9

Total 50 100

No. of Respondent
18%

Yes
No

82%

Out of 50 respondents 41 people have the general insurance policy? This means that in the rural area
there is good awareness about the general insurance policy with compare to life insurance policy.
 Table No: 03: How many general insurance policies do you have?

Particulars No. of Respondents Percentage

1 21 42

2 14 28

3 12 24

4 3 6

Total 50 100

Percentage

6%

24% 1
42% 2
3
4

28%
Out of 50 respondents 54 percent of people have only general insurance policy34, percent have tow
policies, 9 percent have 3 policies while 3 percent have 4 policies. That means majority of people have
only one policy.
Table No.04: Which policies are there in general insurance?
Majority of people who have general insurance policy have Auto (vehicles) policy, second number
policies are accident and house insurance policy.

Table No.05: Which company’s policies do you have?

The new India Assurance Co. Ltd. Has big market share in the rural area of Solapur district
According to survey.

Table NO:6 Do you know about IFFCO-Tokio General insurance company (ITGI)?

Out of 50 people only 12 people know about the company. Majority of the people don’t about
the Company.
Table .NO 07: How much premium do you pay for General insurance?
Most of people in the rural area paying premium has less than 5, 000 rupees.
Table NO.08: Does the government company provide good service?

32out of 50 people believe that government companies provide good service in the rural area.
Table NO.09: In which thing Government Company doesn’t provide good service?
 1 Faster receipt of policy.
2 Faster claim settlements.
3 Faster settlement of claim money.
4 other service (specify).

Many people say that government is not providing faster settlement of claim amount. This thing is
also connected with faster settlement of claim.

Table NO 11: Which service do you accept the most?

Out of 50 people excepting faster claim settlement.
 Table No12: How do you get information about the private Company?

Out of 50 people believe that information about the private Company is received from agents.

Table No 13: Why there is low trust in Private Company?

 1 Low advertisement
2 no office near place
3 less contact by agent
4 other reason (specify)

21 Out of 50 people believe that as there is no office near place, people have less trust Private
Companies. That means lack of office near place makes lack in trust Private Companies.

Table No.14:What Private Companies should do to get trust?

 1 Establishment of agency office at each taluka
2 Appointment of agent in each village
3 Appointment of co-operative societies as agents
4 Other solution

21 Out of 50 people believe that get customer trust Private Companies should appoint one agent in each
village.
 Table No.16: What can be the main advantage by appointing co-operative societies as agents?

1 Time can be saved

2 More information can be received
3 More trust on co-operative societies
4 other Advantage

24 out of 50 people believe that co-operative societies as agent are more reliable than ordinary agent.

Table No.17: Give rank out of according to you need to the policies below:
In this question, rank given by different respondents is collected. Then the total of one item e.g. Auto
is derived. This total derived 50 to get average rank. Average rank of all item below:
No policy Rank

1 Motor Insurance 20.68

2 Fire Insurance 4.26
3 personal accidents Insurance 2.52
4 Home Insurance 2.56
5 critical illnesses Insurance 2.98

According to this information we can say that more people shows intention to by personal accident
policy Home Insurance policy while less intention to by Fire policy.

Table No.18: Give rank according to you need to the policies below:
 1. No policy Rank

2. 1 Motor Insurance 3.64

3. 2 Fire Insurance 2.64
4. 3 personal accident Insurance 3.82
5. 4 Trade/shop Insurance 1.64
6. 5 Burglary Insurance 3.27

According to this information we can say that more tenders/shopkeepers show intention to by Trade/shop
Insurance policy while less intention to buy personal accident Insurance policy.
8 Summary of Findings

High awareness of insurance

Low awareness of general insurance
Most of people have one policy.
Most of people have auto [vehicle] policy
Most of people have policy from new India Assurance CO.Ltd.
Most of people are unaware about IFFCO-TOKIO General Insurance Company Limited .
Most of people pay premium of less than 5.000 Rupees
Most of people say that Government Company doesn’t provide fast payment of claim amount.
Most of people except from Company that is should provide fast payment of claim amount.
Most of people to get information about Private Company from agents.
Most of people believe that as there is no office near place, people have less trust on private Companies.
Most of people believe that customer trust Private Company should appoint one agent in each village.
Most of people believe that co-operatives society as agent is more reliable than ordinary agents.
People show intention to buy personal accident policy and Home Insurance policy while less intention to
buy fire policy.
Tenders/shopkeepers show intention to buy Trade/shop Insurance while less intention to buy personal
accident policy Insurance.
Life Insurance
Very few people have life insurance policy.
General Insurance
Awareness levels and depth of knowledge varies across General Insurance products
High Insurance related to vehicles.
Low for all other Insurance products.
Life Insurance
Synonymous to long term saving plan.
Tangible & definite benefit seen at the end of tenure
Pushed aggressively by agents
General Insurance
An unnecessary expense.
No long-term benefit perceived as no money back scheme in case of no claim.
Lack of sufficient push and effort from the channel due to
Lack of attractive commission for agents
Result in tendency to lapse in spite of initial subscription
Penetration of General Insurance
Higher Penetration of Insurance for products like tractors and cattle, taken on bank loans, as Insurance is a
perquisite
Vehicle Insurance Penetration on account of mandatory public liability Insurance
Poor Penetration for all other General Insurance products

BARRIERS
Poor comprehension of Insurance in terms of the key benefit and the process- what/why/how it works no
push
Sheer lack of promotion, education and information.
Week distribution channel
Inaccessibility of the agent.
Progress cumbersome
Stereotype belief in luck, coupled with uninterested attitude, therefore tendency to not purchase/renew
9 Suggestions

Indian insurance has begun a new growth phase with liberalization of the sector. The awareness on
insurance in rural India is low. There is a pressing need for increased awareness, suitable rural insurance
products, effective distribution systems and importantly, orientation of insurance product towards
financial risk protection. With low sum Assured and small premiums, the distribution cost of rural
insurance product is high compared to that of urban products. As in the case of micro credit, it is necessary
to have effective insurance distribution systems to serve the large un- serve rural market .Under the
present regulations there are obligatory minimum insurance business targets prescribed for achieving in
rural and social sectors .The targets are meant to encourage every insurer enter the rural insurance
market .However, it is to be seen whether a proactive approach will prevail on the part of insurers to
Indian rural market.
Based on findings of the research some Suggestions are given below:
One agent should be appointed for 5-10 villages in develop talukas like Pandharpur, Manglweda and
Sangola.
One agent office or agency should be there in each taluka.
More co-operative societies should be appointed as agents.
Customer should be given all services properly. Customer should be convinced that there would be faster
payment of claim amount.

STRATEGIES FOR SUCSUESS

Heighten need for insurance
Education on benefit of general insurance
… Though not a saving but a risk cover in case of adversities.
“A lifeline in times of adversity”
Ease of process – Subscription
- Renewal
-Claim settlement

Product
Need to promote agriculture pump set and cattle insurance among owners.
Also need to promote health and Personal accident policies, low awareness but high concerns.

Exiting owners and lapsers of general insurance would be an easier target.

Price

Referred channels are banks, co-operatives

Promotion

Participative information dissemination

“Through small cohesive groups at farmers meets, males, co-operatives society meets……”

Leverage current Participation of ITGI as a trustworthy organization and exploit the USPs of accessibility
and wide network of ITGI & channels fully.

For vehicles loans- tie ups with companies to insure while selling the vehicle.

Tie the Banks and co-operatives societies to sell general insurance policies.
10 conclusions

In must be borne in mind that India is a prominently rural country and will continue to be so in the near
future. New players may tend to favor the “creamy” layer of the urban population. But, in doing so, they
my will miss a large chunk of the insurable population. A strong case in point is the current business
composition of prominent market leader- the Life insurance Cooperation of India. The lion’s share of its
new business comes from the rural and semi-rural market. In a country of 1 billion people, mass marketing
is always a profitable and cost-effective option for gaining market share. The rural sector is a perfect case
mass marketing.

Competition in the rural areas tends to be “kinder and gentler” than that in urban areas, which can easily
be termed cutthroat And the generally smaller policy amounts in the rural areas would be more than offset
by the higher volume potential in these areas in contrast with urban areas. Identifying the right agents to
harness the full potential of the dynamic rural market will be imperative.

As far as reaching rural and semi-rural areas are concerned, all the players appear to be viewing it is a
necessary evil and more as a statutory requirement that need to be fulfilled.no players seems to be viewing
it as an opportunity. Consider this; according to NirmalaAyyar, retired chief (Data Control and
purification), LIC, “Do these (rural) people perception, rural markets can be a large opportunity in terms
of business size as well as profitable if one is able to carefully plan and tailor an entire business value
chain with a set of low-cost activates- right from product design to distribute advertising and promotion.