Value Chain Analysis

Life Insurance Industry

MNYL Vs Industry

Prepared by
Abhishek Kumar – Roll No
1
Sakshi Grover – Roll No 39
Samarth Gupta – Roll No
40
Industry Analysis
Dominant Player – LIC
Regulatory Body – IRDA
FDI route opened in – 1999
No. of Pvt. Players – 23
Indian Market – Nascent Stage
Average Break Even Point – 10 years
Nature of Business – Highly Capital Intensive
Current Category Penetration – XX %
Business Models
Agency Model: Brick and Mortar Model/ DST
 Self Managed Branch Offices – Better Customer Service / Better
Accessibility
 High Fixed Cost
 LIC / MNYL / Aviva

Bancassurance :
 Operations through Banca infrastructure
 ICICI Pru / HDFC Life / Canara HSBC Oriental Life

Brokers / Strategic Alliances:

 Strategic Alliance : Amway (Amsure)
 Broker: India Infoline, Peerless, Indiabulls, Karvy Brokers,
Religare etc
Upcoming Business Model
Online:
Paperless and cheapest way for Consumer as well as
company
Most reliable as only educated class is active in this
space
Still at its nascent stage
Factors that drive the purchase
behaviour
Trust
Purchase Exp
Premium Payment
Quality of Agent's Advise
Product Portfolio
Call Centre
Accessibility
Brand Recall
Online Presence
Claim Settlement
Value Curve (Option 1)
Value Curve (Option 2)
Four Action Framework
Reduce
No. Of Offices:
Reduction in fixed costs
 Benefits can be passed on to the customer by lesser charges

Bancassurance /Other strategic alliances tie up:

 Arrangements with retain chains for premium payment
 Tie Ups with Diagnostic Centres
 Contract with agencies : Feet on Street (FOS) in various cities

Improve Processes: Get maximum customers active

into ECS (Electronic Clearance System) mode
Raise
Brand Recall
 Appropriate customer communication
 Differentiation in brand image
 Brand Track
 Effective Campaigns

Quality of Agent’s Advise

 Competitive Advantage
 Invest in Training
 Provide career path to Agent Advisors
 Build Sales Force for maximum coverage
 Empower them with effective Sales Tools
Raise Contd..
Premium Payment Options
Tie Ups with retain chains
Tie ups with Agencies (providing cheque pick up facility
through their FOS
Drop Boxes
Eliminate
Non Value Added (NVA) Activities
Outsourcing customer services (front end & back end)
 Betterservices
 Cost efficiency

h
Create
 Trust
 Through TVC and other modes of communication
 Leverage on “Quality of Agent’s Advise” – Word of Mouth
Advertising works effectively in the industry
 Leverage on its claims efficiencies

 Online Presence
 Look across the time horizon – The future lies here

 Focus only to Mass and Mass Affluent (Blue Ocean)

 80% of the Business is realized by 20% of people
 Retention Programme – High acquisition costs
 Focus On Group Business (B2B)
 No focus on rural market (lower ticket size but high fixed costs)
Create Contd..
Clear focus on Traditional Life Insurance Products
(Blue Ocean)
People still apprehensive of market volatility
People prefer products that offer “guaranteed” returns
Higher persistency and business conservation – two key
parameters
New Value Curve
Thank You