Prospects of MCG Clients of SBI Life

Summer Internship
Jamshedpur Region

Makers Desk: Ravish Kumar IMI Delhi PGDM040. 2012-14 batch SBI Life 5/27/2013

ACKNOWLEDGEMENT

If words are considered to be the signs of gratitude then let these words convey the very same.

My sincere gratitude to SBI Life for providing me with an opportunity to work with SBI Life and giving necessary directions on doing this project to the best of my abilities.

I am highly indebted to Mr. Debidas Parira, Area Sales Manager- Corporate Solutions Group and company project guide, who has provided me with the necessary information and also the support extended out to me in the completion of this report and his valuable suggestion and comments on bringing out this report in the best possible way.

I also thank Mr. Raghwendra Sinha, who gave me an opportunity to work on retail side of the insurance industry.

I extend my heartfelt thanks to Mr. Arnab Ghorai, ASM, Anupama Shukla, HR head and everyone who has in some or the other way helped me in the successful completion of this report.

Finally, my sincere thanks to all my friends and family members who gave their full fledged cooperation for the successful completion of this project.

It was indeed a learning experience for me.

Ravish Kumar

TABLE OF CONTENTS
Introduction .. 5 Executive summary.6 Objective of the Study.7 Concepts/Models introduced..8 Description of industry and Organization.10 Findings and Interpretation25 Conclusion3 7 Recommendation..3 7 Limitation of the Study.38 Scope for future Improvement..38 Retail Marketing (Jamshedpur)39 References...4 2

INTRODUCTION

Security has been a universal desire right from earliest civilizations. This quest for security has led to the concept of insurance. Insurance is a contract between two parties whereby one party called insurer undertakes, in exchange of a fixed sum called premium to pay the other party an assured sum of money on occurrence of a certain event. Life insurance protects against the economic loss in the event of death. A family is generally dependent for its food, clothing and shelter on the income brought by the bread earner of the family. So long as lives, that family is secure but the death of the person may put the family in a very difficult situation. Uncertainty of death is inherent in human life. It is this uncertainty that gives rise to necessity for some form of protection against the financial loss arising from death. Life insurance substitutes this uncertainty by certainty. Insurance sector plays a very important role in the development of any economy also, as it provides long term fund for infrastructure development and at the same time strengthens the risk taking ability.

An insurer, or insurance carrier, is a company selling the insurance; the insured or policy holder, is the person or entity buying the insurance policy. The amount of money to be charged for a certain amount of insurance coverage is called the premium.

Every asset has a fixed time period in which only they can be productive. After end of their fixed age they will get expire and they will not be productive. The owner of the asset knows about that thing and therefore he arranges things by which he can earn after expiry of his current asset. But there are chances that the assets can expire before their respective age. This can happen by accident or by any natural calamity. If assets expire before their life end time then it can inversely effect their owner and other persons also who are beneficiaries of this asset.

Insurance is such a system by which the bad results of such type of accidents and natural calamities can be reduced. Insurance is not securing the assets and also it cannot stop any kind of accident or natural calamity. It can only reduce the burden on their owner and other beneficiaries.
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Executive Summary:

The insurance is primarily a social device adopted by civilized society for mitigating the incidence of loss of income to families by unforeseen contingencies. Uncertainties have encouraged many corporate to go for the insurance. The part of SBI Life dealing with the insurance of corporate is Corporate Solution Group. SBI Life tries to educate people from corporate about the benefits of individual; insurance policies designed specially for company people. SBI Life has divided corporate into two groups Mid Corporate Group (MCG) and Corporate Account Group (CAG). The project was to find the prospects of MCG clients in Jamshedpur region. MCG clients were identified and market research was conducted with the help of questionnaire. Exploratory research was conducted and data collected were analyzed to reach at a conclusion for product fitment in MCG group. It was observed that products like keyman insurance or employer-employee scheme are not very popular among the corporate. But there is huge opportunity to engage the corporate and tap this market.

Objective of the Study: MCG (Mid Corporate Group)& CAG (Corporate Accounts Group) Accounts Analysis Product Suite Fitment:

1.

a. Insurance Buying behavioral patterns for each product such as Term : Keyman, Investment , Pension products b. Analysis of possible accounts for Employer Employee , Salary Saving Scheme & Keyman Insurance

2.

Account Patterns over the last 3 yrs

a. SB Ratings movements of each account MCG is under the wholesale banking of SBI which caters to the mid level corporate in India. All companies / firms whose annual sales / income exceed Rs 50 crore or whose fund based or non fund based requirement exceed Rs 10 crore are covered by MCG. CAG was set up in 1995 as the first strategic business unit to be created under Corporate Banking group of the bank. Over the years CAG has effectively met its strategic objectives of delivering best in class corporate banking services to the top most corporate in the country. Nearly 500 such corporate deals with CAG and the client list include industry leaders in every segment. CSG : The job profile of CSG unit of SBI Life is to cater the insurance needs of the MCG accounts through either Employer- Employee Insurance, Keyman Insurance or Group Insurance.

Concepts /Models introduced in the study:

Multi-Distribution Model SBI Life has a unique multi-distribution model encompassing vibrant Bancassurance, Retail Agency, Institutional Alliance and Corporate Solutions distribution channels. SBI Life extensively leverages the State Bank Group relationship as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBIs access to over 100 million accounts across the country provides a vibrant base for insurance penetration across every region and economic strata in the country, thus ensuring true financial inclusion. Agency Channel, comprising of the most productive force of over 80,000 Insurance Advisors, offers door to door insurance solutions to customers. Models / Concepts: 1. Term Assurance Policy - The term assurance policy offers payment only on death within the term. There is nothing available on maturity. This is ideal for family protection, especially for a young man. The premium is very low as only risk premium is collected and no savings element. Any breadwinner, on whom a family is dependent, can opt for this policy.

2. Pure Endowment - This policy offers payment only on survival, nothing on death. This takes care of retirement income only and not family protection. This caters to the needs of single person who has no dependents. Since such people are extremely rare, this policy is mostly available in combination.

3. Endowment Assurance The endowment policy is very popular in India. The endowment policy is a combination of Term Assurance and Pure Endowment. It thus takes care of family protection and retirement income, the twin needs of life insurance.

4. Whole Life Policy The Whole Life Policy is basically a Term Assurance Policy. The difference is that, in a term assurance policy, payment is made on death within the term. In a whole life policy, payment is made on death, whenever it may occur. The whole life policy is term assurance policy with an indefinite term. As there is a definite payment, the whole life policy is costlier than a term assurance policy.

5. Money Back Policy Under the money back policy, the entire maturity proceeds are not paid at the end. They are paid at the intervals of 4 or 5 years throughout the term. The periodical payments come in handy for some major expense or the other. Though some installments are released to the policyholders, the risk cover remains undiminished.

6. Annuities Annuities are not a plan of life insurance. Annuity is the reverse of life insurance. In a life insurance policy, the life insurance company is at risk. In an annuity the annuitant takes the risk. Annuities are pension plans. Before or after retirement, a person can pay and purchase a pension plan. The pension is paid according to the terms of the annuity.

7. Keyman Insurance- Life insurance was originally meant to protect the family from the loss on account of the death of the breadwinner. But a man is useful not only to his family but his employer as well. This has led to the rise of Keyman insurance. Keyman is a life insurance policy taken by a company on the life of an important employee or director who contributed in a major way to the continuance and growth of the company.

8. Unit Linked Policy Unit Linked plans are a way to invest in the market while availing the features of the insurance policy. In these plans the savings, portion of the amount paid by the unit-holders is invested by the insurer as desired by the unit-holders. In other words, the investment risk under linked plans are borne by the insured themselves, and not by the insurer as in the case of other plans of insurance

Description of Industry and Organization:

Introduction to Insurance:

When life insurance companies started operating in the middle of 20th century in the country, the evil play natural to all business had its sway. There was a lot of cut throat competition as well as profiteering. As a result Life Insurance Corporation of India (LIC) came into existence on 1st September, 1956 after nationalization of all the 245 companies engaged in life insurance business. However, Government made a paradigm shift in the economic policy by adopting the process of liberalization, privatization and globalization at the end of previous decade. Consequently, Insurance Regulatory and Development Authority (IRDA) has been established under IRDA Act, 1999 to regulate the insurance business in the country. As a result, private sector has been allowed entry both in general and life insurance sector in India. Life insurance industry expanded tremendously from 2000 onwards in terms of number of offices, number of agents, new business policies, premium income etc. Further, many new products (like ULIPs, pension plans etc.) and riders were provided by the life insurers to suit the requirements of various customers. The insurance is primarily a social device adopted by civilized society for mitigating the incidence of loss of income to families by unforeseen contingencies. In India, when life insurance companies started operating in the middle of 20th century the evil play natural to all business had its sway. There was a lot of cut throat competition as well as profiteering. The avowed social objective of insurance had been totally relegated to background. As a result Life Insurance Corporation of India (LIC) came into existence on 1st September, 1956 after nationalization of all the 245 companies engaged in life insurance business. From its very inception, the Corporation has made impressive growth always striving for further improvement. However, Government made a paradigm shift in the economic policy by adopting the process of liberalization, privatization and globalization at the end of previous decade. Consequently a committee was set up under the chairmanship of Mr. Malholtra, Ex-governor of RBI for undertaking various reforms in the insurance sector in the light of new economic policy. The Committee which submitted his report in 1993 recommended the establishment of a special regulatory agency along the lines of SEBI and opening of insurance industry for private sector. This was aggressively opposed by the various trade unions of then operating insurance companies which led to some delay in implementation of Malhotra Committees recommendations. However, the Government passed Insurance Regulatory and Development Authority (IRDA) Act in 1999 and established IRDA to regulate the insurance business in the country. As a result, private sector was allowed entry both in general and life insurance sector in India. IRDA also allowed foreign participation up to 26 per cent in equity shareholding of private companies.

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SBI Life Insurance:

SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74% of the total capital and BNP Paribas Cardif the remaining 26%. SBI Life Insurance has an authorized capital of Rs. 2,000 crores and a paid up capital of Rs 1,000 crores.

Vision, Mission and Values.

Vision: "To be the most trusted and preferred life insurance provider Mission: "To emerge as the leading company offering a comprehensive range of life insurance and pension products at competitive prices, ensuring high standards of customer satisfaction and world class operating efficiency, and become a model life insurance company in India in the post liberalization period".

Values: Trustworthiness Ambition Innovation Dynamism Excellence

MILESTONES

[2001-03] 1. Total premium (14 cr 2001-02 & 72 cr 2002-03). 2. Ranked 5th among private life insurers in 2002-03

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[2003-04] 1. 4th position among private life insurers. 2. Covered 14 lac group lives 3. Became leader in Banca with total premium 94.1 cr

[2004-05] 1. Emerged leader in no. of lives covered among private life insurers-29lac 2. Launched its first ULIP- HORIZON

[2005-06] 1. First private life insurer to make profit. 2. Crossed the 1000 crore premium mark. 3. Started state of the art central processing centre at BelapurNew Mumbai.

[2006-07] 1. Moved to 3rd position among private players. 2. Second consecutive year of profitability. 3. Leads private life insurance companies in lives covered-64, 90,000.

[2007-08] 1. First life insurer in India to receive the highest financial rating AAA from CRISIL. 2. Ranked amongst global top 5 life insurance companies in MDRT Membership. 3. Received 9001:2000 certifications for superior claim settlement process.

[2008-09] 1. Ranked 2nd in terms of first year premium collection. 2. Bagged Best Life Insurer 2008 award. 3. ICRA assigned iAAA rating indicating highest claim paying ability. 4. Ranked among global top 3 in MDRT membership.

[2009-10] 1. Crossed Rs 10,000 crore GWP

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2. Ranked 1st globally in MDRT. 3. Ranked No. 1 among private life insurance companies.

[2010-11] 1. NDTV Profit Business Leadership Award. 2. Ranked 1st globally in MDRT 3. Bloomberg UTV- Financial Leadership Award.

Parentage

Along with its 5 Associate Banks, State Bank Group has the unrivalled strength of over 18,000 branches across the country, arguably the largest in the world. BNP Paribas Cardif is the life and property & casualty insurance arm of BNP Paribas, one of the strongest banks in the world. BNP Paribas Group, having presence in more than 80 countries ranks highly in Retail Banking, Investment Solutions and Corporate & Investment Banking. BNP Paribas Cardif is one of the world leaders in creditor insurance and its life and non-life insurance units have received an AA rating from Standard & Poors. .

REGULATORY BODY OF INSURANCE IN INDIA

In 1993, the Government set up a committee under the chairmanship of R.N. Malhotra, a former Governor of RBI, to propose recommendations for reforms in the insurance sector. The objective was to compliment the reforms initiated in the financial sector. The committee submitted its report in 1994 wherein, among other things it recommended that the private sector be permitted to enter the insurance sector. They stated that foreign companies be allowed to enter by floating companies, preferably a joint venture with Indian partners.

Following the recommendation of the Malhotra committee report in 1999, the Insurance Regulatory and Development Authority 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 objective of IRDA include promotion of competition by introducing the enhanced expertise of foreign players so as to enhance consumer satisfaction through increased customer
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choice and lower premiums, while ensuring the financial security of the insurance market. The Insurance Regulatory & Development Authority (IRDA) is a national agency of the Government of India, based in Hyderabad. In 2010 Government of India ruled that the Unit Linked Insurance Plan (ULIPS) will be governed by IRDA and not the market regulator Securities and Exchange Board of India.

MISSION OF IRDA

To protect the interest of the policy holders, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected herewith or incidental thereto

ROLE OF IRDA

The law of India has the following expectations form IRDA: To protect the interest of and secure fair treatment to policyholders. To bring about speedy and orderly growth of the insurance industry for the benefit of the common man and to provide long term funds for accelerating growth of the economy. To set, promote, monitor and enforce high standards of integrity, financial soundness, fair dealing and competence of those it regulates. To ensure that insurance customers receive precise, clear and correct information about product and services and make them aware of their responsibilities & duties in this regard. To ensure speedy settlement of genuine claims, to prevent insurance fraud and other malpractices and put in place effective grievances redressal machinery.

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 To promote fairness, transparency and orderly conduct in financial markets dealing with insurance and build a reliable management information system to enforce high standard of financial soundness amongst market players. To take actions where such standard are inadequate or ineffectively enforced. To bring about optimum amount of self regulation in day to day working of the industry consistent with the requirement of prudential regulation.

LIST OF COMPANIES REGISTERED WITH IRDA

Following are the list of Life Insurance companies registered with IRDA.

Aegon Religare Life Insurance Company Ltd. Aviva Life Insurance Company India Ltd. Bajaj Alliance Life Insurance Company Limited. Bharti AXA Life Insurance Company Ltd. Birla Sun Life Insurance Company Ltd. Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. DLF Prameria Life Insurance Company Ltd. Future Generali India Life Insurance Company Limited. HDFC Standard Life Insurance Company Ltd. ICICI Prudential Life Insurance Company Limited. IDBI Fortis Life Insurance Company Ltd. ING Vysya Life Insurance Company Private Limited. Kotak Mahindra Old Mutual Life Insurance Limited. Life Insurance Corporation of India. Max New York Life Insurance Co. Ltd. Metlife India Insurance Company Ltd. Reliance Life Insurance Company Ltd. Sahara India Life Insurance Co. Ltd. SBI Life Insurance Company Ltd. Shriram Life Insurance Company Ltd. Star Union Dia-ichi Life Insurance Co. Ltd. Tata AIG Life Insurance Company Ltd. Edelweiss Tokyo life Insurance Co. Ltd. IndiaFirst Life Insurance Company Limited.

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Types of Insurance:

Life Insurance - Life insurance (or commonly Life assurance, especially in the Commonwealth) is a contract between an insured (insurance policy holder) and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses) are also sometimes included in the benefits. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion.

General Insurance - General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance. It is called property and casualty insurance in the U.S. and Canada and Non-Life Insurance in Continental Europe.

Products of SBI Life: 1. Protection Plans - There are several protection plans in SBI Life which are traditional non-participating pure term plan. Eg.-

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2. Savings Plan Example Smart Income Protect - SBI Life - Smart Income Protect is a savings plan with added advantage of life cover and regular cash inflow at the time you need. It is a participating traditional plan where you continue to pay your regular premiums over a period of 5, 10 or 15 years. Thereafter your payout period starts, where you get guaranteed regular annual payouts over a period of 15 years, meeting your various financial obligations.

Product Snapshot: Age^ at Entry Age^ at Maturity Sum Assured Policy Term Min: 8 years Min: 18 years Min: Rs.1,00,000/- ( 1,000/-) 5/10/15 years Max: 60 years Max: 65 years Max: No Limit

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Premium Frequency Payout Period Payout Frequency

Yearly / Half-yearly / Quarterly / Monthly# 15 years Yearly

Shubh Nivesh Key Features:

The basic purpose is to provide savings, income and

insurance cover.
Flexibility to receive the maturity amount as a lump sum or

as a regular income for a chosen period.

Single premium or regular premium paying options

available.
3 Riders: i) Preferred term rider

ii) Accidental Death Benefit rider iii) Accidental TPD rider

Option to receive the basic sum assured at regular interval

over a stipulated time period of 5/10/15/20 years.

Shubh Nivesh has two options:

i) Endowment Assuranc ii) Whole life Endowment

3. Unit Linked Plans: Example Smart Performer - Smart Performer, a Unit Linked, Non Participating insurance product that offers you the twin benefits of Higher than the highest of the daily NAV guarantee. Guarantee at maturity based on 5% Higher than Highest Guaranteed NAV during the first seven years or prevailing NAV at Maturity, whichever is higher, subject to conditions. Convenience through single premium (SP) or 5 years Premium Paying Term (PPT). It provides option to customize the product with Accidental Death Benefit.

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Product Snapshot Age at Entry* Age at Maturity Min: 9 years Max: 75 years Max: 65years

Premium Payment Term SP or 5 years Minimum Limited Premium Amounts (X 100) Yearly Half-yearly Quarterly Monthly Rs 50,000 Rs 44,000 Rs 36,000 Rs 20,000

Rs 60,000 Minimum Single No limits Premium (X 100) Maximum Limited/Single Premium Amounts Policy Term Premium Modes Sum Assured 10 years from the start of the subscription period. Single / Yearly / Half-yearly / Quarterly / Monthly*** Age/PPT For 5 yr PPT For SP

Minimum Maximum Minimum Maximum Below 45 10 * AP Yrs Between 45yrs & 60yrs 61 yrs and above Plan Options 7 * AP 20*AP 20*AP 1.25*SP 1.25*SP 5*SP 5*SP

7 * AP

7 * AP

1.25*SP

1.25*SP

2 Plan Options: 1. Secure Plan - All your funds would be invested in the Daily Protect Fund 2. Secure N Grow Plan - 80% of your funds would be invested in the Daily Protect Fund and 20% would be invested in the Index Fund

Smart Elite Key Features:

Provides the flexibility of Premium Paying Term (PPT) of 5,8,10 years or a single

premium.
No premium allocation charges from the 6 policy year onwards.
th

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 Two protection options available :- Gold & Platinum Accidental death and Accidental Total & Permanent Disability (TPD) benefit is an

internal part of the plan. Maturity benefit can be either paid in a lump sum or through settlement option which helps to get periodic installments of your maturity proceeds within 5 years (max) from the date of maturity. Different fund options to choose from: - Index fund, P/E managed fund, Balanced fund, Bond fund etc. Switching option, change in sum assured multiple factor, partial withdrawal.

11 years of steady growth:

Org Chart:

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Underwriting

A discipline that evaluates the risk associated with insuring a particular person or asset and uses that evaluation to set the premium pricing is Underwriting. Insurance underwriting helps in pricing life insurance, health insurance, property/casualty insurance and homeowners insurance. Underwriters use the computer applications and actuarial data to determine the term of the policy payment. High risk individuals have to pay more premiums to pay than low risk individual.

Concept of Financial Underwriting: Financial Underwriting is based on the concept that the life of the individual or the asset should be insured from any unfortunate event. To fulfill this, the company first needs to evaluate the value of the life of an individual or the asset. Conceptually the sum assured should be less than the value of the life insured. If the sum assured is more than the life insured than a person might intentionally harm the asset or the individual to get the benefit. Need for Financial Underwriting: The role of the underwriter is to insure that the sum assured applied for is justified and based on potential economic loss. It helps the insurer monitor and control risks, protect the portfolio and optimize the results of the insurance activity. An underwriter should judge the intension of the proposer and should be aware of the moral hazard of the proposer. If the proposal is made with an intention to seek undue advantage from the policy, then there is some moral hazard. One of the indicators of the moral hazard is the size of the proposal as compared to the income. Financial Underwriting Types: 1) Personal Insurance - Personal Insurance replaces lost earnings caused by premature death. This includes special needs such as mortgage life insurance and college funds. Multiples of income is usually used to justify personal insurance amounts; most individuals do not have as much insurance as they could qualify for, so amounts in excess of the tables should be analyzed carefully to be sure they are justified. 2) Keyman Insurance An employee is called the key employee of an organization if he/she has a significant role in the operation of the company. The value of a key employee must be evaluated based on the skills, contacts or knowledge.

Medical Underwriting is health insurance which evaluated the health of the life insured and based on that it suggests the coverage package. Medical underwriting uses the health report of the life insured to decide 2 things, whether to provide the insurance or not and what premium rate to be fixed for the plan. Cost of the insurance is determined using the mortality tables prepared by the actuaries. 3 main factors which are considered in the mortality tables are age,
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gender and use of tobacco. Underwriting practice varies from insurer to insurer, encouraging competition.

Actuarial Science: Actuarial Science is a discipline to access the risk associated with the insurance and finance sector by applying mathematical and statistical methods. Actuaries are professional who are qualified in this field by education and experience. Actuarial Science includes many interrelated subjects like mathematics, probability, statistics, finance, economics, computer programming etc. Initially Actuarial Science included only calculation of Premiums and Tables. Now the discipline has vast scope and is used for various other purposes. Actuarial Science became more critical in the late 17th century when the demand for long term insurance became more popular, insurance coverage like burial, life insurance and annuities. Theses long term coverage requires that money should be kept aside for future uncertainties. In case of long term insurance or annuities these saved money could be used. So it was necessary to ascertain the amount to be kept and the amount to invest. This led to the emergence of Present Value of a future sum. Certain aspects of Actuarial Science are as follows: In traditional life insurance the discipline, actuarial science concentrates on the analysis of the mortality, the production of tables and application of compound interest for the production of life insurance, endowment policies and annuities. Life insurance programs have been further extended to include facilities like credit and mortgage insurance, long term care insurance, key man insurance for small businesses and health savings accounts. In health care insurance, including employer-employee schemes and social science, actuarial science look out for mortality rate, disability rate, morbidity rate, fertility rate and other contingencies. Actuarial Science also helps in developing benefit structures, reimbursement standard and proposed government standards effect on the cost of health care. In pension industry, actuarial science helps in designing the pension plans and determining the cost of alternate strategies. The strategies are greatly influenced by short term and long term bond rates; status of the person and benefit arrangements; short and long term financial and economic trends. Benefit plans liabilities should be properly valued reflecting both the benefits for past and future services. Actuarial Science is also used in determining all kinds of benefits like survival benefits, death benefits and total and permanent disability benefits. It helps in program financing and performs demographic research on social insurance.

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Methodology:

The first part of my project is to determine the product which fits the profile of the MCG clients of SBI Life. The project is also about knowing the need of the MCG clients. Process: Research is mostly based on primary data collected from the clients. Secondary data has also been used during the research process. Research was done through questionnaire and personally interacting with the clients. The test unit for the research was clear and so the research was done through the exploratory research. Sample Design: As the number of clients in the Jamshedpur region was less and difficult to approach, sample was decided on the basis of convenient sampling. Sample size for the research is 20. Data Source: Primary data was collected with the help of questionnaire and personally interacting with the clients. Secondary data source used were: company websites, magazines.

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Findings and Interpretation:

Corporate Solution Group Analysis:

1. Awareness about the insurance policy in the company:

Yes No

75 25

Yes No

Interpretation:

As can be seen from the result that most of the employees (75%) of the company are aware about the insurance policy taken by the company. 2. Does it help in employee retention:

Yes No

90 10

25

Yes No

Interpretation: 90% of the companies have the view that insurance policy helps in retention of the employees. They think that it has a positive impact on the employees. 3. Reasons for opting an insurance company:

Company's Brand Image Past Record Lucrative returns Preferred by Employees Desired to try a new company

20 25 25 20 10

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Company's Brand Image Past Record Lucarative returns Preferred by Employees Desired to try a new company

Interpretation: Factors which prompted most of the companies to get an insurance policy are past records and lucrative returns. Companys brand image and employees benefit are also very important factors. 4. Factors which makes the insurance policy attractive:

Flexible premiums Additional Riders Long term benefits Increasing/Decreasing Policy features Adjustable death benefit Lower chargers

15 10 25 25 10 15

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Flexible premiums Additional Riders Long term benefits Increasing/Decreasing Policy features Adjustable death benefit Lower chargers

Interpretation: Most of the companies have a view that Long term benefit i.e. higher Sum Assured and more Death benefits are an important factor for availing insurance. Flexibility in the Sum Assured and other adjustable features in the policy are also important. 5. %. break up of employees age Below 25 Years 25 - 40 years 40 - 60 years Above 60 years 5% 60% 30% 5%

Below 25 Years 25 - 40 years 40 - 60 years Above 60 years

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Interpretation: From the chart it is clear that most of the employees are of the age 25-40. So these employees can take risk and hence ULIP products will be best fit for such employees. Products like Smart Performer or Smart Wealth Assure will be good. For the employees above 40 years, products with more security and also having the features of ULIP, should be given. 6. Gender: Male Female 70 30

Male Female

7. Annual range of salary:

< 2lakh 2 - 5lakh 5 - 7lakh 7 - 10lakh Above 10lakh

75% 10% 7% 5% 3%

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< 2lakh 2 - 5lakh 5 - 7lakh 7 - 10lakh Above 10lakh

Interpretation: As can be seen from the chart that the salary of most of the employees are below 2 lakhs. This is because all the companies were mid sized and employees were not paid much. So policies with fewer premiums could be of more attraction.

8. SBI Life Policy

YES NO

25% 75%

YES NO

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Interpretation: It is clear that a huge number of employees didnt have SBI Life policy. Many were even ignorant about the company. So there is a very good opportunity for SBI Life.

9. Popularity of Keyman among the industries: Type1 Type 2 Type 3 Type 4 Type 5 5% 12% 55% 18% 10%

Type1 Type 2 Type 3 Type 4 Type 5

Type 1: Availed the Keyman plan. Type 2: Never heard about the Keyman plans. Type 3: Heard about the Keyman plan. Type 4: Planned to take the policy. Type 5: Compared different Keyman plans but have not taken it. Interpretation: As shown in the chart, most of the companies have heard about the keyman plan but very few have taken it. Either they have decided about it and about to take the plan or they have compared with various other plans and have dropped the idea.

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10. Companies taken Keyman from one or the other company: Yes No Not revealed 10% 75% 15%

Yes No Not revealed

Interpretation: It shows that only 2 firms have taken Keyman Insurance, 15 have not taken it and 3 did not reveal it. 11. Is it an SBI Life policy? Yes No 0% 100%

Interpretation: Out of the 2 companies which have taken Keyman Insurance none have taken from SBI Life.

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12. Popularity of Employer-Employee among companies: Type 1 Type 2 Type 3 Type 4 Type 5 5% 15% 60% 10% 10%

Type 1 Type 2 Type 3 Type 4 Type 5

Type1: Already taken this plan. Type 2: Have considered taking this scheme. Type 3: Know about the Employer-Employee scheme. Type 4: Have compared this plan of different companies. Type 5: Never heard of this policy. Interpretation: As can be seen from the chart that most of the people have heard about the EmployerEmployee scheme. It is also evident that this scheme is more popular than Keyman plan.

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13. Companies which have taken E-E policy from any company: Yes No Not revealed 20% 65% 15%

Yes No Not revealed

Interpretation: From the data it is clear that out of 20 companies 4 have E-E policy from some company, 13 have not taken it and 3 did not tell about it. 14. Is it an SBI life E-E policy? Yes No 25 75

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Yes No

Interpretation: Out of the 4 companies which have done E-E, 1 has done from SBI Life and 3 from other company.

15. Do the companies have pension plans for the employees: Yes No 5% 95%

Yes No

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Interpretation: As we can see that only 5% of the companies have any pension plan available and hence there is good opportunity in this field.

16. Do you think that pension plans can be an option to attract and retain talented employees: Yes No 40 60

Yes No

Interpretation: Here also it can be seen that there is an opportunity in the field of pension plans as can be seen that 40% of the people think that pension plan could be good for companies.

Account Analysis: Keyman Insurance Importance of Keyman Insurance needs to be told properly to the deciding executive of a company. Keyman Insurance is not very popular among the associates of the companies. As it is a term plan so the companies think that it is waste of money. It needs to be made clear that this is a very good tool to retain their employees. Employer-Employee Employer Employee scheme is known by most of the companies and it is more popular than Keyman Insurance. It is also seen as a risk mitigation scheme.

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SB RATINGS MOVEMENTS

The bank was not willing to share the details regarding ratings of their MCG clients due to privacy concerns and so SB ratings movement could not be obtained.

Conclusion:

Analysis shows that Lucrative returns, and Past records are important factors for considering an insurance policy for a company. It can be noted that to promote and sell an insurance policy the factors which are very important are long term benefits and flexibility in policy features.

The data shows that awareness about Keyman insurance is there among the employees of the companies but the reach of SBI Life to these companies is very limited. Graphs also suggest that the workforce in these companies is young and hence there is a possibility of promoting ULIP plans in these companies. Employee Retention and Employee Attraction, such features can also be promoted and should be communicated well so that it helps in getting engaged with these companies. These features will help the companies understand the product fitment of Keyman and Employer-Employee policy.

Recommendation: There is a vast opportunity in the field of keyman insurance and employer-employee scheme and SBI Life should explore and get associated with these companies. As the workforces in these companies are young therefore there is a good scope for ULIP products. ULIP plans like Smart Performer should be promoted in these companies. Endowment plans with good returns like Smart Income Protect can also be promoted.

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Limitations of the study:

1. An exhaustive analysis could not be done due to unwillingness of some clients to disclose their secret data and strategies. 2. Possibility of error in data collection. 3. Possibility of error in analysis of data due to small sample size. 4. Time limitation due to busy schedule of the clients.

Scope for future Improvements:

The data shows that the awareness about Keyman Insurance, Employer employee Insurance and Pension Plans is good. Therefore there is a good scope and a more focused approach is needed on SBI Lifes part in order to have a greater market share in these schemes. I also found out that most of the employers are reluctant to take Keyman Insurance for their valuable employees because of its pure term nature therefore they should be convinced that Keyman policies are basically risk mitigation tool.

The main products which have been contributing in the business of CSG in this region are Smart Elite, Smart Performer, Shubh Nivesh, Smart Shield and Smart Income protect. So these individual schemes should be promoted in the corporate sector.

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Retail Marketing (Jamshedpur):

Objective: To engage high profile, experienced and talented members from different segments with SBI Life. Process: First the requirement was identified and based on the job requirement and the kind of work, different segments were made. 1. One of the segments was of the General insurance agents from the 4 government insurance companies New India Assurance Co. Ltd., National Insurance, United Insurance Co. Ltd. and Oriental Insurance Co. Ltd. Based on certain criterias like their total experience in insurance sector, experience in Life insurance etc. certain agents were selected for poaching. Main objective was to frame a team of talented and experienced agents who are from the above mentioned 4 government insurance companies of India. A small rough questionnaire was prepared and the agents were approached personally to get the basic information. Once the information was collected, agents were filtered based on certain criteria. After that the selected agents were approached telephonically or personally and were persuaded to get engaged with SBI Life.

Questionnaire:

General Insurance 1. 2 most important factors necessary to be a successful agent in General Insurance: a) b) 2. What do you think of Agency in General Insurance as a full time profession? 3. Do you Deal with Life Insurance also? 4. Total Experience in General Insurance sector. 6. Name 7. Mob 8. Address 39

Result: This helped in forming a pool of agents who strong hold in insurance sector with many contacts and who can work efficiently. 2. Another segment identified was of the high ranked Government Employees from different sectors. Employees approached belonged to following sectors: Drug and medicine department Mining department Block Education Department Income Tax Department Sales and Excise Duty Department Industrial Boiler Department Pollution Control Department Food Corporation of India Forest Department Purchase Department (Tata Steel / Tata Motors). Questionnaire:

Customer Satisfaction with SBI Life/SBI

1. Do you have an account with SBI Life/SBI? 2. Are you happy with the services provided by SBI?

3. Any suggestions to improve the services of SBI. 4. a) b) c) 5. Do you want to recommend anyone for the Agency in SBI Life: Name Ph: Name Ph: Name Ph: Name

6. Mob 7. Address 8. Designation 9. Work Experience -

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All the high ranked officers of the above mentioned sectors were approached personally to get their basic information as well as to know their interest in getting associated with SBI Life. A small rough questionnaire was prepared to interact with all the employees of the department. During the process of collecting the information the officers were convinced to get engaged with SBI Life. They were told about the benefits and hassles association with SBI Life. Few officers were contacted latter on as per their convenience. Result: Many powerful employees of important sectors got engaged with SBI Life. SBI Life will get benefitted by the name, fame and power of these officers.

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References:

ijmbs.com sbilife.co.in http://en.wikipedia.org/wiki/Insurance_Regulatory_and_Development_Authority http://en.wikipedia.org/wiki/Life_insurance

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