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Analysis of insurance sector and
competitiveness with the special
reference to Bajaj Allianz Life Insurance
Company Ltd.
Submitted By
Company Guide: Designation
Mr. Sanjay Khandewal Sr. Divisional Branch Manager
Mr. Kedar Upadhyay Area Training Manager
Mr. Dhiraj Khichi Branch Training Manger
Faculty Guide:
Dr. Abha Purohit Ass. Professor (JIM)
Date of Submission: 18th July 2009
What Is Insurance ?
Meaning & Definitions.
Future is always uncertain and full of risk. It is not certain that what
is going to happen tomorrow. Therefore a man is always worried
about security of property and life. Insurance is a means of
meeting out loss caused by future risks and uncertainties.

“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.“

According to Patterson – “Insurance is an agreement between two

parties under which one party undertakes specified future risk of another
party and compensates the loss from that risk on payment of some
consideration known as premium payable by the later”.
Insurance provides:

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

Insurance business is divided into four


•Fire Insurance
•Miscellaneous Insurance
•Life Insurance
•Marine Insurance
Bombay mutual life assurance society is the first Indian owned life insurer
The Indian Life Assurance Companies Act enacted as the first statute to regulate the life
insurance business.

The Indian Insurance Companies Act enacted to enable the government to collect statistical
information about both life and non-life insurance businesses.

Earlier legislation consolidated and amended to by the Insurance Act with the objective of
protecting the interests of the insuring public.
1956 245 Indian and foreign insurers and provident societies taken over by the central
government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a
capital contribution of Rs. 5 Crore from the Government of India.

Malhotra committee was constituted under the chairmanship of former RBI chief R. N. Malhotra
to draw a blue print for insurance sector reforms.

Malhotra committee recommended reentry of private players.


IRDA (Insurance Regulatory and Development Authority) was set up as a regulator of the
insurance market in India.
In 1999, the Insurance Regulatory and Development Authority
(IRDA) was constituted as an autonomous body to regulate and
develop the insurance industry. The IRDA was incorporated as a
statutory body in April, 2000. The key objectives of the IRDA
include promotion of competition so as to enhance customer
satisfaction through increased consumer choice and lower
premiums, while ensuring the financial security of the
insurance market. The
Role of IRDA:
•Protecting the interests of policyholders.
•Establishing guidelines for the operations of insurers, and brokers.
•Specifying the code of conduct, qualifications, and training for
insurance intermediaries and agents.
•Promoting efficiency in the conduct of insurance business.
•Regulating the investment of funds by insurance companies.
•Specifying the percentage of business to be written by insurers in
rural sectors.
•Handling disputes between insurers and insurance intermediaries.
Bajaj Allianz Life Insurance Company Limited

Bajaj Life Insurance Company Ltd. Is one of India’s leading private

companies, which offers a range of individual and insurance solution? It is a
joint venture between Allianz se Limited and Bajaj auto. Bajaj auto l.t.d. is
India’s leading automobile company. Bajaj Auto Ltd. is the largest exporter of
two and three wheelers. With Kawasaki Heavy Industries of Japan, Bajaj
manufactures state-of-the-art range of two-wheelers. The brand, Pulsar is
continually dominating the Indian motorcycle market in the premium segment.
Its Discover DTSi is also a successful bike on Indian roads.

Bajaj Allianz Life Insurance

•Is the fastest growing private life insurance company in India.
•Currently has over 3,00,000 satisfied customers
•We have customer care centers in 155 cities with 28000 Insurance
Consultant providing the finest customer service.
•One of India's leading private life insurance companies
Bajaj Allianz Life Insurance

Bajaj Allianz Life Insurance Company Limited is one of the private

insurance companies in India. Bajaj Allianz Life Insurance is a union
between Allianz SE, one of the largest Insurance Company and Bajaj
Finserv. (recently demerged from Bajaj Auto.). Bajaj Auto Limited is 74%
shared holder in the company with the remaining 26% being held by
Allianz SE.
On 2001, the Bajaj Allianz Life Insurance was given the IRDA (Insurance
Regulatory and Development Authority) certification of Registration for
conducting the Life Insurance business (which also included the Health
Insurance business) in the country. Bajaj Allianz India is headquartered in
Pune. The company has its offices in 200 towns all over India.
Allianz SE is a leading insurance conglomerate globally and one of the
largest asset managers in the world, managing assets worth over a Trillion
(Over INR. 55, 00,000 Crores). Allianz SE has over 115 years of financial
experience and is present in over 70 countries around the world.
Existing Life Insurance
S.NO 101 23.10.2000
HDFC Standard Life Insurance Company Ltd.
1 104 15.11.2000 Max New York Life Insurance Co. Ltd.
2 105 24.11.2000 ICICI Prudential Life Insurance Company Ltd.
3 107 10.01.2001 Kotak Mahindra Old Mutual Life Insurance Limited
4 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
5 110 12.02.2001 Tata AIG Life Insurance Company Ltd.
6 111 30.03.2001 SBI Life Insurance Company Limited .
7 114 02.08.2001 ING Vysya Life Insurance Company Private Limited
8 116 03.08.2001 Bajaj Allianz Life Insurance Company Limited
9 117 06.08.2001 Metlife India Insurance Company Ltd.
10 133 04.09.2007 Future Generali India Life Insurance Company Limited
11 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.
12 121 03.01.2002 Reliance Life Insurance Company Limited.
13 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd.
14 127 06.02.2004 Sahara India Insurance Company Ltd.
15 128 17.11.2005 Shriram Life Insurance Company Ltd.
16 130 14.07.2006 Bharti AXA Life Insurance Company Ltd.
17 133 04.09.2007 Future Generali India Life Insurance Company Limited
18 135 19.12.2007 IDBI Fortis Life Insurance Company Ltd.
19 136 08.05.2008 Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.
20 138 27.06.2008 Aegon Religare Life Insurance Company Ltd.
21 140 27.06.2008 DLF Pramerica Life Insurance Company Ltd.
22 142 Star Union Dai-ichi Life Insurance Co. Ltd.,
Effective marketing strategies
A marketing strategy is a process that can allow an organization to concentrate its
(always limited) resources on the greatest opportunities to increase sales and achieve
a sustainable competitive advantage.
Marketing strategy as a key part of the general corporate strategy marketing strategy
is most effective when it is an integral component of corporate strategy, defining how
the organization will engage customers, prospects and competitors in the market
arena for success. It is partially derived from broader corporate strategies, corporate
missions, and corporate goals.

In the competitive market, insurance companies are being forced to adopt a strictly
professional approach in marketing. The insurance companies face the challenge of
changing the uninspiring public image of the industry. Some of the important marketing
elements are-
 The following factors influence the market and
 Marketing mix.
demand of product-
 The importance of relationship.  Government policies.
 Positioning..  Growth in population.
 Segmentation.  Changing age profile.
 Branding.  Income wise distribution of the population.
 Insuring service quality.  Level of insurance awareness.
 Effective pricing.  The pricing of the policies.
 Customer satisfaction research  The economic climate of the country.
Types of marketing strategies

Every marketing strategy is unique, but if we abstract from the individualizing details,
each can be reduced into a generic marketing strategy. There are a number of ways
of categorizing these generic strategies. A brief description of the most common
categorizing schemes is presented below:
Strategies based on market dominance - In this scheme, firms are classified based
on their market share or dominance of an industry. Typically there are three types of
market dominance strategies:
Porter generic strategies - strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm’s sustainable competitive advantage.
•Cost leadership
•Product differentiation
•Market segmentation
Innovation strategies :

This deals with the firm's rate of the new product development and business model
innovation. It asks whether the company is on the cutting edge of technology and business
innovation. There are three types:
•Close followers
•Late followers
Growth strategies:

In this scheme we ask the question, “How should the firm grow?”. There are a number of
different ways of answering that question, but the most common gives four answers:
•Horizontal integration
•Cost leadership
•Product differentiation
•Market segmentation
A more detailed schemes uses the categories:
•Vertical integration
ULIPs and its Features:
Unit linked insurance plans (ULIPs) are insurance plans that combine the benefit of investment
with insurance. They give the investor an option to put a part of their premium in various
investment portfolios and derive the benefits depending upon the performance of the funds
chosen by them. ULIPs were launched at an opportune time when stock markets had just taken
off. Being market- linked, they were major beneficiaries of the secular rise in stock markets.
ULIPs have gained high acceptance due to the attractive features they offer. These include:
1. Flexibility
1. Flexibility to choose Sum Assured.
2. Flexibility to choose premium amount.
3. Option to change level of Premium even after the plan has started (Top up facility).
4. Flexibility to change asset allocation by switching between funds.
2. Transparency
1. Changes in the plan & net amount invested are known to the customer.
2. Convenience of tracking one’s investment performance on a daily basis.
3. Liquidity
1. Option to withdraw money after few years (comfort required in case of exigency).
2. Low minimum tenure.
3. Partial / Systematic withdrawal allowed
4. Fund Options
1. A choice of funds (ranging from equity, debt, cash or a combination).
2. Option to choose fund mix based on desired asset allocation.
Stages in Policy Issuance
1) Proposal
A Proposal Stage is the First stage before the policy is issued at COPS. At this
stage, the application form is received by COPS, but it is pending for issuance
due to further clarifications required from the customer.
2) Login
A proposal which is complete i.e., duly filled with all necessary documents
attached to it & accepted by the Branch ops, is called a Login
3) Reject
An Application gets rejected at the Branch Ops level due to necessary details not
filled in the form or necessary documents not submitted is a Reject. It is then sent
back to the Advisor for completion.
4) Issuance
Issuance means a policy that is issued to the Customer by Central Ops.
5) Decline Status
When a customer refuses to take a policy post login but before Issuance is called
a Decline
6) Cancellation
When the cheque given by the customer bounces, it amounts to cancellation of
the policy.
Agency business model
In India insurance is sold through mainly four channels.
•Through branch
•Through agency
•Through financial institution
•Through banks

Functions of agency manager:

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

•Insurance companies are recruiting their advisors mainly through personal reference,
through advertisement, and through walk in interviews. None of the company is recruiting
their advisors through placement agencies.
•Those advisors who are recruited through personal references need more training
session and company has to put effort to make them active. Most of the companies are
giving training session to advisors to make them active. Companies are also providing
higher channel position and increasing incentives to make them active.
•Most of the insurance companies have started recruiting agency manager and high
posted people from professional colleges to improve efficiency of the insurance company.
•Insurance companies have forgotten their traditional products. Companies are totally
concentrating on selling ULIP products. Now insurance companies are selling their
products as an investment product not as life insurance products.
•Insurance companies are using their products mostly based on customer needs and
demands. Insurance companies are not doing enough market researches to know the
potential of the market.
•Most of the insurance companies are differentiating themselves from the competitors by
providing better service quality, better pricing of the product, advertisement and
promotional activities.
•Sales managers of most of the companies think that providing better service quality is the
best tool to compete in the market. Better service quality may be in the form-
•Issuing policy in time.
•Providing claims in time.
•Making customers aware about their status of policy.

Kothari C.R., (1999) Research Methodology, Wishwa Prakashan
Kotler P., (1999)Marketing Management Analysis, Planning, Implementation and
Control, New Delhi, Prentice Hall of India
Business today

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