Amol Bakshi Swapnil Gharat Dhanashree Kitukale Nihaal Jelkie Ajita Ranade Vikram Joshi

Group No. 6

Tejas Badheka Sachin Gupta Advait Khadse Rohan Pai Mayuresh Sanap Prafull Thakur
JBIMS Marketing presentation

Indias insurance sector is expected to grow even faster than the countrys overall economic growth, opening up new business avenues across the industry Growth Factors in Indian Insurance Industry Low life insurance penetration rate

Rising awareness of the need of insurance

Favourable foreign investment policies

Increased capital raising options

Group No. 6

JBIMS Marketing presentation

Product Development Strategy

Retirement Plan to target growing middle age segment Platinum plan to target HNIs Students plan to target increasing category of students going abroad for education

Objective
To understand the current market

A quantum leap in growth rate from 20% to 50%

Increase in the customer base growth by 50%

Group No. 6

JBIMS Marketing presentation

Industry growing at 19-20% GDP contribution 4% Penetration in Urban Area 65% Rural Area 40% Total Market Premium - $80 billion Opportunities Key Challenges Rising income levels
Low interest rates Strengthening core product proposition

Less training for agents

Tax challenges

Opportunity in health and pensions

Group No. 6

JBIMS Marketing presentation

Term
- Provides life insurance coverage for a specified term - Does not accumulate cash value - 3 key factors 1. Face Amount 2.Premium to be paid 3. Length of coverage - Common types 1. Annual Renewable term 2. Level Term 3. Decreasing Term

Whole Life
- Provides guaranteed insurance protection for the entire life - Higher premiums than term insurance - Carry tax deferred cash value component - Advantages 1. Guaranteed death benefits and cash value 2. Fixed, predictable annual premiums 3. Mortality expense charges - Disadvantages 1. Inflexibility of premiums 2. Not competitive IRR

Single Premium
- Requires insured to pay a one-time premium
- Companies charge a large amount if insured takes out money out during first few years

Endowment
- Lump sum is paid after a specified sum or on death - More expensive than whole life and universal - Cumulative cash value of policy equals death benefit - Common Types 1. Traditional with profits 2. Unit-linked 3.Full 4. Low-Cost

- Insured may take a loan against this policy

Group No. 6

JBIMS Marketing presentation

 IRDA is the controlling and regulatory apex body in the country for insurance sector and its chairman and members are appointed by Government of India

Duties, Powers and Functions of IRDA

Code of conduct Efficiency Fees Registration Protection

Qualification

Information

Terms of business

Books of accounts

Group No. 6

JBIMS Marketing presentation

 Propose a regulation strategy of bundling multiple insurance products together Term Plan + Health Plan Health plan takes care of you when you are still alive. Term Plan takes care of your loved ones after you die Term plan + Retirement Plan Retirement insurance ensures that you or your family members receive a regular pension amount post a retirement date

The combo products will help to increase the penetration of multiple insurance products

Group No. 6

JBIMS Marketing presentation

Group No. 6

JBIMS Marketing presentation

 Insurance penetration is defined as the ratio of total premium collected to the total Gross Domestic Product (GDP) of an economy Insurance density is defined as the ratio of total premium to the total population in the country and is expressed in currency units

Group No. 6

JBIMS Marketing presentation

 Indias largest and most popular Insurance Company Has gained consumer trust and credibility over time

Insurance provider with the most reliable brand names Has plans for children to students to corporate executives to senior citizens First to introduce a 24x7 dedicated, toll free customer line

Indias most trusted private sector insurance provider First insurance company to receive a National Insurer Financial Strength of rating AAA

Group No. 6

JBIMS Marketing presentation

 An insurance provider with the highest financial strength First private sector insurance provider to make highest profit for 3 consecutive years since 2007 Offers plans for segments from urban to mid urban to rural divisions Indias first insurance provider with business continuity plan Model is based on disaster management principles

The master of group solution insurance plans Specializes in offering a wide range of solutions for groups and individuals

Group No. 6

JBIMS Marketing presentation

LIC Regular Premium Single Premium Renewal Premium Total Premium

Private 64.60% 35.40% 80.50% 19.40% 69.90% 30.10% 70.70% 29.30% [1pp] [-1pp] 357 lakh [-3.5%] Rs 85 Cr. [-22%] 7.35% [-1pp] 97.42% 11546 84.4 lakh [-24%] Rs 679 Cr. [34%] 17.53% [-.5pp] 89.30% 1251 All except HDFC

New Policies count

Reinsurance premium ceded Operating ratio [operations, training to develop distribution channels, capital req. under solvency margin]

Claims Settled

No. of Micro insurance agents

[Lives covered 1.02 Cr.] 800:1 No

Penalty levied by IRDA for failure to follow guidelines

Group No. 6

JBIMS Marketing presentation

Group No. 6

JBIMS Marketing presentation

Group No. 6

JBIMS Marketing presentation

LIC Total Insurance Premium Individual Biz. From Agents Banks Others Brokers Direct Selling Group Biz. From Agents Banks Others Brokers Direct Selling 1712 139.6 9 25.7 37167 41266 1098 92 17 264 202889 Cr.

ICICI 14021 Cr.

HDFC 10202 Cr.

SBI 13133 Cr.

MAXLIFE 6390 Cr.

1375 1132 157 168 218

582 1869 188 134 129

1730 1485 46 81 2

640 690 226 26 127

250.4 261.43 2.53 875.24

2.02 2.47 1.84 18.6 905.4

141.7 1861.55 13.5 5.3 1165.95 -

1.93

7.65 184.5

Group No. 6

JBIMS Marketing presentation

24 registered life insurers

Insurance provider LIC India ICICI Prudential HDFC Standard SBI Life Max-Network Bajaj-Allianz Birla-Sun life Reliance-Life TATA-AIG ING-Vysya MetLife Aviva Canara-HSBC-OBC Kotak-Mahindra Bharti Axa Life Others Market Share 63.47 5.88 5.66 4.4 3.14 2.73 2.46 2.3 1.27 1.27 1.05 1.02 0.99 0.99 0.41 2.96

NEW PARADIGMS
Innovative products Smart marketing Aggressive distribution

Private bank led insurers have fared much better than insurers dependent on agency distribution in volumes Overall ticket sizes have remained flat for private insurers but bank led insurers have done better with growth in average ticket sizes aiding overall volumes Low margin single premium products have fuelled growth in past, although easier to sell they impair long term profitability

Group No. 6

JBIMS Marketing presentation

Term Plans Children's Plans Retirement Plans

Savings & Investment Plans

Health Plans
Group No. 6

JBIMS Marketing presentation

Term Plans

Children's Plans Economic support and funding major milestones such as education

Retirement Plans Monetary security and financial independence even after retirement

Savings & Investment Plans Dual benefit of protection and long term savings

Health Plans

Plan Details

Safeguarding family's financial independence and security against uncertainties

Securing health costs and financial independenc e despite illnesses

HDFC 1. Term Offerin Assurance gs Plan 2. Premium Guarantee Plan

1. Children's Plan 2. Young Star Super II

Personal Pension Plan

1. Money 1. HDFC Critical Back Plan 2. Endowm Care Plan ent 2. HDFC Assuranc SurgiCare e Plan Plan
JBIMS Marketing presentation

Group No. 6

Group No. 6

JBIMS Marketing presentation

Strong Presence across India: 481 branches 5000+ partner branches 3,000 Front Line Sales (FLS) serving partner bank branches

Group No. 6

JBIMS Marketing presentation

Group No. 6

JBIMS Marketing presentation

Tapping the ones at the bottom of pyramid I.e Extreme niche clientele

No insurance companies are providing risk management & insurance services to this particular segment

The Three pronged Pyramid Strategy

Increasing the base of current target audience

Currently all the consumers are focusing on the Urban Middle & this has led to over concentration of this market

Exploiting the opportunity of middle age group [30-50 yrs]

The retirement needs of this age group is not being met by proper value proposition by current products

Group No. 6

JBIMS Marketing presentation

World Bank Report says the rural population in India is 83.3 crores. Insurance Penetration slipped to 4.1 %

Group No. 6

JBIMS Marketing presentation

The Three pronged Pyramid Strategy

To be launched in phase one Focuses on students going abroad It allows us to bundle other Portfolio companies of HDFC argo This allows us to earn extra revenue through earning commission income

To be launched in phase Two Extremely high end consumers We sell customized structured insurance products It allows us increase our premium per policy The mortality cost is very less in the product

To be launched in phase Three Allows us to tap the wealth of rising middle income group We sell retirement plan products They are products sold at Annual pemium of less then Rs 2000

Phase wise implementation allows us quantum growth in next four years

Group No. 6

JBIMS Marketing presentation

Current lagging of Indian education scenario Emerging middle class considers education as the best inheritance that they can provide Thus no compromise on education of child Increase aspiration to have global exposure & education

Growth rate of indian economy Growing breed of HNIs Also need to sustain the same lifestyle for family Want of customized, discreet financial service, thus we calculate an plan Need for an extremely niche product with special benefit services which allows them to differentiate Increased banking penetration Increased size of middle age & middle class income segment Various government schemes related to tax benefits Aadhar drive initiated by government

Group No. 6

JBIMS Marketing presentation

Can be sold through existing channels distribution through agents and banks Can be sold through various education consultant & travel agents We can tap the current HDFC channel of education loans called Credila Once Successful we can then later implement the same to localloans

Need to create a separate professional channels Can be sold through high end CFP & wealth management channels Can be sold to various corporate banking clients We can tap the current HDFC channel of wealth management and Imperia Banking

Banking correspondence Leverage the highly technosavy IT networks Can be sold through other large network of HDFC banks which have high lending exposure Developing a new force of Agents to sell the insurance products

Group No. 6

JBIMS Marketing presentation

Group No. 6

JBIMS Marketing presentation

Step 1 : Identifying the Target Audiences

Student Insurance Age group 15 30 and their parents Individuals looking to seek degrees abroad

HNI Insurance

People with high earning potential Top management and heads of organizations

Retirement Plan (Jeevan Aadhar)

People with middle Age group [30-50 years] People from private sectors

Group No. 6

JBIMS Marketing presentation

Step 2 : Determining Communication Objectives

Attention Interest Desire Action Student Insurance
Celebrity Endorsements Catchy Advertising Offered with application forms Int.. Sales Points

HNI Insurance

Direct Sales

Elite and exclusivity

Gold club members

Relationship managers

Retirement Plan (Jeevan Aadhar)

Personal Selling

Emotional Advertising

Future security advertisements

Sales points

Group No. 6

JBIMS Marketing presentation

Step 3 : Designing a Message

Content Structure Format Sources

Student Insurance

Rational Appeal / Emotional Appeal Makes students feel responsible Celebrity Endorsement Rational Appeal Custom structure and format Through a personal relationship manager Emotional Appeal Concentrates on future planning Through reliable institutions

HNI Insurance

Retirement Plan (Jeevan Aadhar)

Group No. 6

JBIMS Marketing presentation

Step 4 : Selecting Communication Channels

Student Insurance Television Educational Institutes Educational Consultancies Banks for loans

HNI Insurance

Personal Relationship Managers Print Advertisements

Retirement Plan (Jeevan Aadhar)

Boards, hoardings Banks Television

Group No. 6

JBIMS Marketing presentation

Step 5 : Establishing Marketing Communications Budget

As a percent of sales : Student Insurance

4
As a percent of sales

HNI Insurance

1
As a percent of sales

Retirement Plan (Jeevan Aadhar)

9
Group No. 6 JBIMS Marketing presentation

Step 6 : Developing and Managing marketing communications mix

Student Insurance

Advertising Personal Selling Direct Marketing

HNI Insurance

Advertising Direct Marketing

Retirement Plan (Jeevan Aadhar)

Advertising Personal Selling Direct Marketing

Group No. 6

JBIMS Marketing presentation

Step 7 & 8 : Measure results and Manage

Student Insurance Compare YoY growth with revenue targets Extend market research opportunities and control

HNI Insurance

Compare sales with revenue targets Engage profit sharing model with relationship managers

Retirement Plan (Jeevan Aadhar)

Compare sustained YoY growth with revenue targets Engage more sales force

Group No. 6

JBIMS Marketing presentation

Current motto of HDFC life insurance is Sar utha ke jiyo! Conveys the idea of living your life with dignity and self respect The idea of self respect connects strongly to each of the current segments For students going abroad, the insurance will insure the students against uncertainties In case of HNIs, the insurance will allow the family members to live a lavish lifestyle
Group No. 6 JBIMS Marketing presentation

Operating Expenses/Total Premium decreasing from 18.7% to 12.2% over a period of three years.

Group No. 6

JBIMS Marketing presentation

Assumptions: 10% of Students and 1% HNIs go for our products initially growing incrementally 100 80 60 40 20 0

Major Costs Major Costs Higher Commissions for HNI Business Operating Expenses in Students and HNIs Products

Major Revenue Streams Retirement Plans

Change in PBT

Total Income (Million Rs)

900000 750000 600000 450000 300000 150000 0

Change in PBT
2014 15 16 17 18

Total Income (Million Rs)

Group No. 6

JBIMS Marketing presentation