Dev Project Report 2010 Final

8/8/2019 Dev Project Report 2010 Final

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A Project Report on the Topic of

MARKET POTENTIAL OF TATA AIG LIFE INSURANCE IN BHOPAL

for

for Master of Business Administration

Submitted In Partial Fulfillment

Of the

Requirement of Master Degree in BusinessAdministration

SUBMITTED TO: -SUBMITTED BY: -

Dr.Rishi SharmaDevendra Thakur

HOD (MBA Dept.)MBA- 2nd SEMESTER

BARKATTULLAH UNIVERSITY

2010-2011

S.I.R.T. EXCELLENCE COLLEGE


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BHOPAL

Table of contents

CHAPTERS PREFACE PAGE NO.

ACKNOWLEDGEMENT 4

DECLARATION 5

EXECUTIVE SUMMARY 6

CHAPTER 1 INTRODUCTION TO INSURANCE 7-14

1.1 INTRODUCTION

1.2 FUNCTION & CHARACTERSTICS OF LIFE INSURANCE

1.3 LIFE INSURANCE

1.4 ROLE OF INSURANCE

1.5 IMPORTANT OF INSURANCE

1.6 INSURANCE CYCLE

CHAPTER 2 INTRODUCTION TO INDIAN INSURANCE INDUSTRY 15-22

2.1 INDIAN INSURANCE INDUSTRY

2.2 A BRIEF HISTORY OF INSURANCE SECTOR

2.3 HOW BIG INSURANCE MARKET IS

2.4 INDIAN SCENERIO

CHAPTER 3 INTRODUCTION OF TATA AIG 23-30

3.1 TATA GROUP

3.2 TATA GROUP IN INSURANCE

3.3 AIG

3.4 THE JOINT VENTURE

3.5 ABOUT THE TATA AIG & VISIONS,VALUES

3.6 ORGANIZATION OF TATA AIG


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SWOT ANALYSIS 30

CHAPTER

4

INTRODUCTION TO THE RESEARCH STUDY 31-43

4.1 OBJECTIVE OF THE PROJECT

4.2 DATA ANALYSING

4.3 METHODOLOGY

4.4 QUESTIONAIRE DESIGNING

4.5 LIMITATION OF THE STUDY

CHAPTER

5

RECOMMENDATION & BENIFIT 43-48

5.1 RECOMMENDATION TO THE COMPANY

5.2 BENEFITS TO THE COMPANY AND US

SUGGESTIONS

CHAPTER

6

CONCLUSION & BIBLIOGRAPHY 48-54

6.1 CONCLUSION

6.2 BIBLIOGRAPHY


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ACKNOWLEDGEMENT

am thankful to the S.I.R.T.EXCELLENCE BHOPAL. It is a great for me to express my deep

ense of respect t my faculty guide for his endless help, guidance and supervision. I would also like

o appreciate the help forwarded to me in this direction by the college in the form of library and

omputer lab.

hanks to Director Sir S.I.R.T.E, Advisor of MBA Prof. V.P. SINGH,

I am thankful to Dr. RISHI SHARMA, HOD, for

is kind support, also thanks to other faculty,

I want to thanks to my research guide Mr. Shailendra Saxena (UM

F TATA AIG LIFE INSURENCE.

And also pay lots of thanks to my parents to give me that

pportunity.


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DEVENDRA THAKU

MBA 2ND SEMESTE

DECLARATION

We hereby declare that project work on final report was carried out by us under the guidance o

r. Rishi Sir (HOD,MBA dept.) S.I.R.T.E. Project work is an original one and has not bee

ubmitted earlier either to this Barkatullah university or any other institution for fulfillment of th

ourse.

Date:

DEVENDRA THAKUR


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EXECUTIVE SUMMARY

his project has been a great learning experience for me; at the same time it gave me enough scope

mplement my analytical ability. Tata Group is one of the India's largest and most respected busine

roups. Tata Group's name is synonymous with India's industrialization. Tata AIG Insuran

olutions is one of the leading insurance companies that provide both life insurance as well a

eneral insurance. This pioneer company is a joint collaboration between the American Internation

Group, Inc. (AIG) and Tata Group. They own the company in the ratio of 26:74. It is a leadin

nancial institution that has carved a niche for itself all over the world. Tata AIG Insurance Compan

having different insurance policies. At the end of the project people will be knowledgeable abou

arious insurance organizations and different products taking into considerations hundred samp

zes in Bhopal city. Project is on the market potential study of Tata AIG Insurance Company

hopal city. To get to know a questionnaire has been prepared which contains open ended and clos

nded questions. Firstly pilot study has been done through hundred questionnaires. For collecting th

ata field survey method, personal interview technique has been used. Secondary data has bee

ollected from the company. The data collected are represented into suitable tabular forms f

rawing inferences. Quantitative techniques like averages, percentages, range, two-way tables, ch

quare tests analysis has been applied as per the requirement. The level of preference, perception o


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he customers about the product and company were identified by means of a scoring scheme. For th

epresentation of data various charts and graphs are used as per requirement. .


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.1. INTRODUCTION

nsurance is a contract between two parties whereby one party called insurer undertakes in exchang

or a fixed sum called premiums, to pay the other party called insured a fixed amount of money on th

appening of a certain event." Insurance may be described as a social device to reduce or elimina

sk of life and property. Under the plan of insurance, a large number of people associate themselv

CHAPTER 1

INTRODUCTION TO INSURANCE


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y sharing risk, attached to individual. With the help of Insurance, large number of people exposed

similar risk makes contributions to a common fund out of which the losses suffered by t

nfortunate few, due to accidental events, are made good. Insurance is a tool by which fatalities of

mall number are compensated out of funds collected from plenteous. Gradually as competitio

creased benefits given by industry to its customers increased by leaps and bounds. Insurance is

asic form of risk management which provides protection against possible loss to life or physic

ssets. Person who seeks protection against such loss is termed as insured, and company th

romises to honor claim, in case such loss is actually incurred by insured, is termed as Insurer. In ord

o get insurance, insured is required to pay to insurance company a certain amount called premium

remium is collected by insurance companies which acts as trustee to pool created throug

ontributions made by persons seeking to protect themselves from common risk. Any loss to th

sured in case of happening of an uncertain event is paid out of this pool. Insurance business

vided into four classes:

Life Insurance

Fire

Marine

Miscellaneous Insurance.

Insurance provides:

Protection to investor.

Accumulation of savings.

Channeling these savings into sectors needing huge long term investment.

1.FUNCTION & CHARACTERSTICS OF INSURANCE:


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Provide protection: The primary function of insurance is to provide protection against future ris

ccidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provid

or the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk wit

thers.

Collective bearing of risk: Insurance is an instrument to share the financial loss of few amon

many others. Insurance is a mean by which few losses are shared among larger number of people. Ahe insured contribute the premiums towards a fund and out of which the persons exposed to

articular risk is paid.

Assessment of risk: Insurance determines the probable volume of risk by evaluating various facto

hat give rise to risk. Risk is the basis for determining the premium rate also.

Provide certainty: Insurance is a device, which helps to change from uncertainty to certaint

surance is device whereby the uncertain risks may be made more certain.

Small capital to cover larger risk: Insurance relieves the businessmen from security investment

y paying small amount of premium against larger risks and uncertainty.

Contributes towards the development of industries: Insurance provides developme

pportunity to those larger industries having more risks in their setting up. Even the financ

stitutions may be prepared to give credit to sick industrial units which have insured their asse

cluding plant and machinery.

Means of savings and investment: Insurance serves as savings and investment, insurance is

ompulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpos

f availing income-tax exemptions also, people invest in insurance.

ource of earning foreign exchange: Insurance is an international business. The country can ea

oreign exchange by way of issue of marine insurance policies and various other ways.

isk free trade: Insurance promotes exports insurance, which makes the foreign trade risk free wi

he help of different types of policies under marine insurance cover.

Characteristics:


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ven the enumeration of the broad categories of service industries is sufficient to indicate their varie

f activities and economic characteristics. We shall now examine these industries in somewhat

more detail to ascertain the areas and extents of their similarities and differences, and to provide

more useful basis for discussing employment trends in later chapters. The general picture of th

ervice industries is one of small business units, organized as single proprietorships or partnership

mploying only a small number of workers in each establishment. Yet several important groups,

dustries depart systematically from this pattern: wholesale trade, a few selected lines of retail trad

otels, business services, motion pictures, insurance agents, finance, and real estate.'1 The l

ontains all the important service industries dealing with businesses (except legal and engineerin

ervices) and confirms our decision to treat them separately from the consumer service industries

he variety of characteristics displayed by the different service industries compels us to look more

osely at individual industries rather than attempt an over-all study. And the number of servic

dustries is such that we cannot both sample widely and penetrate deeply. These limitations will b

vident in later chapters, but we emphasize here how they arise out of the nature of our vast subjec

1 Each of these industries is relatively more localized geographically than the class of remainin

ervice industries, excluding domestic service(which however is somewhat concentrated in the South

dustrial Location and National Resources, National Resources Planning Board, December1942.


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.3. LIFE INSURANCE:

Life insurance is a contract under which the insurer (Insurance Company) in Consideration of

remium paid undertakes to pay a fixed sum of money on The death of the insured or on the expiry

specified period of time Whichever is earlier. In case of life insurance, the payment for life insuranc

olicy is certain. The Event insured against is sure to happen only the time of

s happening is not known. So life insurance is known as Life Assurance. The subject matter of

surance is life of human being. Life insurance provides risk coverage to the life of a person. On dea

f the person insurance offers protection against loss of income and compensate the titleholders of th

olicy.

.4. ROLES OF THE LIFE INSURANCE:

Life insurance as an investment: -

nsurance products yield more than any other investment instruments and it also provides adde

centives or bonus offered by insurance companies.

Life insurance as risk cover: -

nsurance is all about risk cover and protection of life. Insurance provides a unique sense of securi

hat no other form of invest can provide.

Life insurance as tax planning: -

nsurance serves as an excellent tax saving mechanism.

5. IMPORTANCE OF THE LIFE INSURANCE:

Protection against untimely death: -


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fe insurance provides protection to the dependents of the life insured and the family of the assure

case of his untimely death. The dependents or family members get a fixed sum of money in case

eath of the assured.

Saving for old age: -

fter retirement the earning capacity of a person reduces. Life insurance enables a person to enjo

eace of mind and a sense of security in his/her old age.

Promotion of savings: -

fe insurance encourages people to save money compulsorily. When life policy is taken, the assured

o pay premiums regularly to keep the policy in force and he cannot get back the premiums, on

urrender value can be returned to him. In case of surrender of policy, the policyholder gets th

urrendered value only after the expiry of duration of the policy.

nitiates investments: -

fe Insurance Corporation encourages and mobilizes the public savings and canalizes the same

arious investments for the economic development of the country. Life insurance is an important to

or the mobilization and investment of small savings.

Credit worthiness: -

fe insurance policy can be used as a security to raise loans. It improves the credit worthiness

usiness.

Social Security: -

fe insurance is important for the society as a whole also. Life insurance enables a person to provid

or education and marriage of children and for construction of house. It helps a person to mak

nancial base for future.

Tax Benefit: -

nder the Income Tax Act, premium paid is allowed as a deduction from the total income undection 80C.

.6. INSURANCE CYCLE:


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Policy Renewal/Change Options/Application:-

he Insurance Cycle begins each year with the insurance offer. Actuarial documents are publishe

nnually by the Risk Management Agency (RMA). The actuarial documents list the plan of insuranc

rop, type, variety, and practice that may be insured in a state and county, and show the amounts

surance, available insurance options, levels of coverage, price elections, applicable premium rate

nd subsidy amounts. The Special Provisions of Insurance list program calendar dates, and gener

nd special statements which may further define, limit, or modify coverage.

Sales Closing/Cancellation/Termination Dates:-

surance applications must be completed and signed no later than the sales closing date specified

he crop actuarial documents. Applications signed after the crop sales closing date may be rejected b

he insurance provider.

surance coverage is continuous and can be cancelled by either the insurance provider or t

olicyholder for the following crop year by providing a written notice to the other party no later tha

he cancellation date specified in the crop policy. For a policyholder insured the previous crop yea

ny changes he or she wishes to make to the policy coverage must be made on or before the cro

ales closing date. The policy will automatically renew for the subsequent crop year unless t

olicyholder cancels the policy in writing on or before the crop cancellation date. Insurance coverag

may be terminated by the insurance provider for the following crop year for nonpayment utstanding debt by providing a written notice to the policyholder no later than the termination da

pecified in the crop policy. The insurance provider may terminate coverage on a crop if no premium

arned for three consecutive years.

Acceptance:-


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pon receipt of a properly completed and timely submitted insurance application, the insuran

rovider will accept and process the application, unless the applicant is determined to be ineligib

nder the contract or Federal statute or regulation. The insurance provider will issue a summary

overage and the appropriate policy documents to the applicant. After the application is accepted, t

olicyholder may not cancel the policy for the initial crop year.

nsurance Attaches: -

or annual crops, insurance attaches annually when planting begins on the insurance unit. The cro

must be planted on or before the crop's published final planting date unless late or prevented plantin

rovisions apply. If prevented planting provisions apply, and the crop cannot be timely planted due

he causes specified in the crop provisions, such acreage may be eligible for a prevented plantin

ayment.

Acreage Reports:-

he policyholder must annually report for each insured crop in the county the number of insurable an

ninsurable acres planted or prevented from being planted if prevented planting is available for t

rop, the date the acreage was planted, share in the crop, the acreage location, farming practic

sed, and types or varieties planted to the insurance provider on or before the applicable acreag

eporting date specified in the crop actuarial documents.

Summary of Coverage:-

he insurance provider will process a properly completed and timely filed acreage report, and issue

he policyholder a summary of coverage that specifies the insured crop, the insured acres and amou

f insurance or guarantee for each insurance unit. The policyholder may make changes to the file

creage report, if permitted by the insurance provider.

Premium Billing:-

he annual premium is earned and payable at the time insurance coverage begins. The insuran

rovider shall issue a premium billing based upon the information contained in the acreage report

arlier than the premium billing date specified in the crop actuarial documents. The premium billi

ill specify the amount of premium and any administrative fees that may be due. If the premium

dministrative fees are not paid by the date specified in the actuarial documents or policy, t

surance provider may assess interest on the outstanding premium balance.


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Notice of Damage or Loss: -

written notice of damage or loss for each unit is to be filed by the policyholder within 72 hours of th

olicyholder's initial discovery of damage or loss but not later than 15 days after the calendar date f

he end of the insurance period unless otherwise stated in the individual crop policy. The policyhold

hould refer to the individual crop provisions for additional requirements in the event of damage

ss. These notifications provide the opportunity for the insurance provider to inspect the crop anetermine the extent of damage or potential production before the crop is harvested or otherwi

sposed of.

nspection:-

fter the insurance provider receives the written notice of damage or loss, it will be processed and,

ecessary, a loss adjuster will be sent to inspect the damaged crop and gather pertinent informati

oncerning the damage. If the policyholder wishes to destroy or not harvest the crop,the loss adjust

ill gather the appropriate information, conduct an appraisal to establish the crop's remaining val

nd complete any forms needed. If the crop has been harvested or will not be harvested by the end

he insurance period, and the policyholder wishes to file a claim for indemnity, the loss adjuster w

ather the appropriate information and assist the policyholder in filing the claim for indemnity. It is th

olicyholder's responsibility to establish the time, location, cause, and amount of any loss.

ndemnity Claim:-

fter the claim for indemnity is processed by the insurance provider, an indemnity check and

ummary of indemnity payment will be issued showing any deductions to the amount of indemnity f

utstanding premium, interest, or administrative fees.

Contract Change Date:-

hanges to the insurance program may be made by RMA from one year to the next. The insuran

rovider will notify the policyholder in writing of any changes to the policy, actuarial documents, or th

pecial Provisions of Insurance prior to the calendar date for contract changes specified in the cro

olicy. The policyholder will have the opportunity to review the changes and, if he/she desire

ontinue the insurance coverage for the following crop year, change the policy coverage, or cancel th

surance coverage. Any changes to the policy coverage that the policyholder makes must be made n

ter than the crop sales closing date. If the policyholder wishes to cancel the policy, a written notic

must be submitted to the insurance provider on or before the crop cancellation date.


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CHAPTER 2

INTRODUCTION

TO INDIAN

INSURANCE INDUSTRY


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http://www.reliancelife.com/default.asp


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.1. INDIAN INSURANCE INDUSTRY

The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Ac

956 and General Insurance Business (Nationalization) Act, 1972, Insurance Regulatory an

evelopment Authority (IRDA) Act, 1999 and other related Acts. With such a large population and t

ntapped market area of this population Insurance happens to be a very big opportunity in Indi

oday it stands as a business growing at the rate of 15-20 per cent annually. Together with banki

ervices, it adds about 7 per cent to the countrys . GDP .In spite of all this growth the statistics of t

enetration of the insurance in the country is very poor. Nearly 80% of Indian populations are witho

fe insurance cover and the Health insurance. This is an indicator that growth potential for t

surance sector is immense in India. It was due to this immense growth that the regulations we

troduced in the insurance sector and in continuation Malhotra Committee was constituted by t

overnment in 1993 to examine the various aspects of the industry. The key element of the refor

rocess was Participation of overseas insurance companies with 26% capital. Creating a more efficie

nd competitive financial system suitable for the requirements of the economy was the main ide

ehind this reform. Since then the insurance industry has gone through many sea changes .T

ompetition LIC started facing from these companies were threatening to the existence of LIC .sinc

he liberalization of the industry the insurance industry has never looked back and today stand as th

ne of the most competitive and exploring industry in India. The entry of the private players and th


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creased use of the new distribution are in the limelight today. The use of new distribution technique

nd the IT tools has increased the scope of the industry in the longer run.

2. A BRIEF HISTORY OF THE INSURANCE SECTOR:

The business of life insurance in India in its existing form started in India in the year 1818 with th

stablishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones

he life insurance business in India are given in the following table.

Years Important milestones in the Indian life insurance business

1912

:

The Indian Life Assurance Companies Act came into force for regulating the life

insurance business.

The Indian Insurance Companies Act was enacted for enabling the government

to collect statistical information on both life and non-life insurance businesses.

The earlier legislation consolidated the Insurance Act with the aim of

safeguarding the interests of the insuring public.

245 Indian and foreign insurers and provident societies were taken over by the

central government and they got nationalized. LIC was formed by an Act of

Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that

too from the Government of India.


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Table: 1

he General insurance business in India, on the other hand, can trace its roots to the Triton Insuranc

ompany Ltd., the first general insurance company established in the year 1850 in Calcutta by th

ritish. Some of the important milestones in the general insurance business in India are given in th

ollowing table


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Table: 2

1996 setting up of (interim) Insurance Regulatory Authority (IRA) Recommendations of the IRA. 1997

Mukherjee Committee Report submitted but not made public 1997 The Government gives greater

autonomy to LIC, GIC and its subsidiaries with regard to the restructuring of boards and flexibility in

nvestment norms aimed at channeling funds to the infrastructure sector. 1998 The cabinet decides t

llow 40% foreign equity in private insurance companies-26% to foreign companies and 14% to NRI

OCBs and FIIs

. 1999 The Standing Committee headed by Murali Deora decides that foreign equity in private

insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and

Development Authority (IRDA) Bill. 1999 Cabinet clears IRDA Bill. 2000 President gives Assent to the

IRDA Bill.

Years Important milestones in the Indian general insurance

business

1907: The Indian Mercantile Insurance Ltd. was set up which was the

first company of its type to transact all general insurance

business.

1957: General Insurance Council, an arm of the Insurance Association

of India, framed a code of conduct for guaranteeing fair

conduct and sound business patterns.

1968: The Insurance Act improved for regulating investments and set

minimal solvency levels and the Tariff Advisory Committee was

set up.

1972: The General Insurance Business (Nationalization) Act, 1972

nationalized the general insurance business in India. It was

with effect from 1st January 1973.


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3. INDIAN INSURANCE MARKET (HISTORY):

nsurance has a long history in India. Life Insurance in its current form was introduced in 1818 whe

riental Life Insurance Company began its operations in India. General Insurance was however

omparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. Histo

f Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalization b) Nationalizatio

nd c) Post Nationalization. Life Insurance was the first to be nationalized in 1956. Life Insuranc

orporation of India was formed by consolidating the operations of various insurance companie

eneral Insurance followed suit and was nationalized in 1973. General Insurance Corporation of Ind

as set up as the controlling body with New India, United India, National and Oriental as

ubsidiaries. The process of opening up the insurance sector was initiated against the background

conomic Reform process which commenced from 1991. For this purpose Malhotra Committee wa

ormed during this year who submitted their report in 1994 and Insurance Regulatory Developme

ct (IRDA) was passed in 999. Resultantly Indian Insurance was opened for private companies an

rivate Insurance Company effectively started operations from 2001.

4. HOW BIG IS THE INSURANCE MARKET?

The insurance sector was opened up for private participation four years ago. For years now, th

rivate players are active in the liberalized environment. The insurance market have witnesse

ynamic changes which includes presence of a fairly large number of insurers both life and non-li

egment. Most of the private insurance companies have formed joint venture partnering w

ecognized foreign players across the globe. There are now 29 insurance companies operating in t

dian market 14 private life insurers, nine private non-life insurers and six public sector companieWith many more joint ventures in the offing, the insurance industry in India today stands at

rossroads as competition intensifies and companies prepare survival strategies in a detariff

cenario. There is pressure from both within the country and outside on the Government to increas

he foreign direct investment (FDI) limit from the current 26% to 49%, which would help JV partners

ring in funds for expansion. There are opportunities in the pensions sector where regulations a

eing framed. Less than 10 % of Indians above the age of 60 receive pensions. The IRDA has issue

he first license for a standalone health company in the country as many more players wait to ente

he health insurance sector has tremendous growth potential, and as it matures and new playe


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nter, product innovation and enhancement will increase. The deepening of the health database ov

me will also allow players to develop and price products for larger segments of society. Insurance

Rs.400 billion business in India, and together with banking services adds about 7% to India's Gap.

5 INDIAN SCENERIO :-

dian economy is the 12th largest in the world, with a GDP of $1.25 trillion and 3rd largest in terms

urchasing power parity. With factors like a stable 8-9 per cent annual growth, rising foreign exchang

eserves, a booming capital market and a rapidly expanding FDI inflows, it is on the hinge of an ev

creasing growth curve. Indians have a tendency to invest in properties and gold followed by ba

eposits. They selectively invest in shares also but the percentage is very small--4-5%. This in itself

n indicator that growth potential for the insurance sector is immense. Its a business growing at th

ate of 15-20% per annum and presently is of the order of $47.9 billion. India is a vast market for li

surance that is directly proportional to the growth in premiums and an increase in life density. Wit

he entry of private sector players backed by foreign expertise, Indian insurance market has becom

more vibrant. Competition in this market is increasing with companys continuous effort to lure th

ustomers with new product offerings. However, the market share of private insurance companie

emains very low -- in the 10-15% range. Even to this day, Life Insurance Corporation (LIC) of Ind

ominates Indian insurance sector. The heavy hand of government still dominates the market, wi

rice controls, limits on ownership, and other restraints. The upward growth trend started from 200

as mainly due to economic policies adopted by the then Indian government. This year saw initiatio

f an era of economic liberalization and globalization in the Indian economy followed by sever

eforms and long-term policies that created a perfect roadmap for the success of Indian financi

markets.


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Figure: 1

he general insurance industry grew by 16% in 2006-07 as private insurers continued their robu

erformance, while public sector players like New India Assurance and Oriental Insurance improveheir show. Despite continuous fall in business of government-owned National Insurance, the 12 no

fe insurers collected Rs 20,378 crore in first year premium in the last fiscal compared to Rs 17,53

rore collected in 2005-06, according to data compiled by regulator IRDA. New India Assuran

ollected Rs 4,762 crore in premium and continued to lead the non-life sector by cornering 23.36%

he market. National Insurance was at the second spot by collecting Rs 3,524 crore in premium,

ecline of 7%, but had a market pie of 17.29%. Oriental Insurance mopped up Rs 3,518 crore

remium income after logging 16.6% growth in business to corner a market share of 17.26%. Anoth

SU insurer United India grew by a modest 6.8% to collect Rs 3,147 crore in premium and had 15.44

f the market. The eight private players expanded their business by 52% to collect Rs 5,427 crore

remium income and increased their combined market share to 26.6% from 20.2% a year ago. ICI

ombard led the private players by logging 80% growth in premium at Rs 1,592crore, followed by Baj

lianz, which grew by 50% to collect Rs 1,287 crore in premium. ICICI Lombard had a market share

81% and Bajaj Allianz had 6.31% of the market.


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CHAPTER 3

INTRODUCTION TO TATA AIG


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1 TATA AIG INSURANCE COMPANY

Tata Enterprises with 82 companies, spread over seven sectors and with an annual turnov

xceeding US $ 8.8 billion, employs more than 262,000 people. Tata Group has shown over years th

is a value driven company and has pioneering contributions in various fields including insuranc

viation, iron and steel. In terms of capital market performance as many as 40 listed Tata companie

ccount for nearly 5% of the total market capitalization of all listed companies. The Group has had

ng association with India's insurance sector having been the largest insurance company in India pri

o the nationalization of insurance.

2. TATA GROUP IN INSURANCE:

Tata AIG General Insurance Company Ltd, and Tata AIG Life Insurance Company Ltd., (collective

Tata AIG") are joint venture companies between the Tata group India's most trusted industrial hous

nd American International Group, Inc. (AIG), the leading U. S. based international insurance an

nancial services organization. The Late Sir Dorab Tata, was the founder Chairman of New Ind

ssurance Co. Ltd., a group company incorporated way back in 1919. Government of India took ov

he management of this company as a part of nationalization of general insurance companies in 197

ot deterred by the move, Tata group have ventured into risk management services having tied u

ith AIG group, back in 1977, with the incorporation of Tata AIG Risk Management Services Pvt. Lt

he Tata Group is one of India's largest and most respected business conglomerates, with revenues

006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about 3.2 per cent of the country's GD

nd a market capitalization of $72.2 billion as on December 6, 2007. Tata companies together emplo

ome 289,500 people.


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.3. AIG:

American International Group, Inc. (AIG), is a major American insurance corporation based at th

merican International Building in New York City. The British headquarters are located on Fenchur

treet in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is

ong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-largest company in th

orld.

ompany Background: AIGs history dates back to 1919, when Cornelius Vander Starr establishe

n insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance

he Chinese. In 1962, Starr gave management of the company's less than successful U.S. holdings

aurice R. \"Hank\" Greenberg, who shifted the company's U.S. focus from personal insurance

gh.1969. American International Group, Inc is the leading U.S. based international insurance an

nancial services organization and the largest underwriter of commercial and industrial insurance

he United States. Its member companies write a wide range of commercial and personal insuranc

roducts through a variety of distribution channels in over 130 countries and jurisdictions througho

he world. AIG's Life Insurance operations comprise of the most extensive worldwide network of an

fe insurer. AIG's global businesses also include financial services and asset management, includin

rcraft leasing, financial products, trading and market making, consumer finance, savings products.

4. THE JOINT VENTURE:

Tata AIG Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent has been brough

by Tata Sons and the American partner brings in the balance 26 per cent. Mr. George Oommen h

een named managing director of Tata AIG Life. Tata-AIG plans to provide broad array of life insuran


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ans to cover to both individuals and groups. The company headquartered in Mumbai, with bran

perations in Delhi, Chennai, Hyderabad, Bangalore Calcutta, Pune and Chandigarh.

5. ABOUT TATA-AIG:

Tata AIG Insurance Solutions is one of the leading insurance companies that provide both l

surance as well as general insurance. This pioneer company is a joint collaboration between th

merican International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of 26:7

is a leading financial institution that has carved a niche for itself all over the world. Tata A

surance provides facilities to both corporate and individuals. Starting its operations on April 1, 200

seeks to serve different categories of people. It acquired its license for carrying out operations

dia on February 12, 2001. Tata AIG Insurance Solutions is one of the most prestigious organization

the business world. It employs thousands of employees and offers various opportunities to people

uild a prospective career. As a leading name in the financial world, it identifies the potential an

xperience of the individual. This insurance company identifies the clients needs and wor

ccordingly. It stresses on innovative aspect and opening of new markets. It believes in new econom

nd latest Internet technology. Tata AIG Insurance offers a number of products for the Gener

surance holders. General insurance products include:

Individual insurance

Small business insurance

Corporate insurance

ata AIG Insurance offers flexible life insurance to the individuals, business organization and oth

ssociation. For the corporate, there are various insurance products like group pensions, employe

enefits, work place solutions and credit life. For the individuals, Tata AIG Insurance offers vario

roducts for adults, children and for retirement planning.


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VISIONS & VALUES

Our Vision

O BE THE DOMINANT LIFE, HEALTH AND PENSIONS PLAYER BUILT ON TRUST BY WORLD CLASS

EOPLE AND SERVICES.

his we hope to achieve by:

1. Understanding the needs of customers and offering them superior products and service.

2. Leveraging technology to service customers quickly, efficiently and conveniently.

3. Developing and implementing superior risk management and investment strategies to offer

sustainable and stable returns to our policyholders.

4. Providing an enabling environment to faster growth and learning for our employees.

5. And above all, building transparency in all our dealing.

he success of the Company will be founded in its unflinching commitment to score VALUES- Integrity

ustomer Ownership and Passion. Each of the Values describes what qualities of our people the way

e work. We do believe that we are on the threshold of exciting new opportunities, where we can pla

significant role in redefining and reshaping the sector. Given the quality of our parentage and the

ommitment of our team, there are no limits to our growth.


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Our Values

VERY MEMBER OF THE ICICI PRUDENTIAL TEAM IS COMMITTED TO 5 VALUES:

1. Integrity

2. Customer First

3. Boundary less

4. Ownership

5. Passion

hese VALUES shine forth in all we do, and have the keystones of our success.


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6 ORGANIZATION STRUCTURE OF TATA AIG :-


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CHAPTER 4

INTRODUCTION OF THE

RESEARCH STUDY


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.1. OBJECTIVE OF THE PROJECT:-

ain objective of the project is to find out the market potentialility of Tata AIG in Bhopal city. Project

bout to find out the competitors Tata AIG Life Insurance company. Nowadays all the insuran

ompanies in India are trying to establish themselves in the competitive market. They are introducin

novative marketing strategies to survive in the market. Many other private companies are looking

nter in the Indian insurance market.

To find out the market potentiality of Tata AIG in Bhopal city.

Main competitors of Tata AIG.

Which type of policies is preferable?

Most preferable plans in Bhopal city.

Which sector is most preferable public or private

Targeting the right and potential customers

Differentiating from other companies


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01

0

2

0

3

0

4

0

5

0

1

8

2

5

2

6

3

0

3

1

4

5

4

6

t

o

a

b

o

v

e

y

e

a

r

No Of respondent

DATA ANALYSING

a. Age wise classification:

Age No Of Respondent

18 25 11

26 30 22

31 45 44

46 to above 23

nterpretation: -

his chart shows that 44 people belong to age group of 31-45. So we can say adult more prefer

surance.


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02

0

4

0

6

0

8

0

M

a

l

e

F

e

m

a

l

e

No of Respondent

) Gender wise classification:

Gender No Of Respondent

Male 66

Female 34

nterpretation: -

his chart shows gender by classification that 66% male and 34% female have respondent .


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a. Occupation Wise classification:

Occupation No Of

Respondent

Serviceman 40

Businessman 25

Student 20

Housewives 15

nterpretation: -

his charts depicts that 40% servicemen and25% business men are respondent in my report.

b. Income wise classification:

Income No of

Members

40k 70k 17

70k 1 Lake 41

1 Lake to 3 Lakes 28


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3 Lacks 14

nterpretation: - 41% of people have tack insurance and is ranked number one by that percent of

espondent.

ue. 1 Are you Insured?

INSURED No. of respondent

YES 72

NO 28TOTAL 100

nterpretation: -

hat The 72% Respondent Have Insured Its Mean People Have Aware To The Insurance.


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ue. 2 Which kind of policies do you have?

NO POLICIES No. of Respondent

%

1 LIFE INSURANCE 18 25%2 HEALTH

INSURANCE8 11%

3 GENERALINSURANCE

10 14%

4 ALL OF THEM 36 50%5 TOTAL 72 100%

nterpretation: -

is clear from the chart that 50% people come to take all policies its mean customer have moware to the all type of insurance.

ue. 3 Are you aware all the plans and updates from company?

PLANS AND UPDATES No. of Respondent %

YES 48 67%

NO 24 33%


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TOTAL 72 100%

nterpretation: -

is clear from the chart that 48 people say yes and 24say no . Its mean customer have more awao the all plans and updates for the company.

ue. 4 Are you satisfy of the plans these company?

SATISFACTION No. of Respondent %

YES 56 78%

NO 16 22%

TOTAL 72 100%

nterpretation: -

is clear from the chart that 78% people say yes and 22% say no . Its mean customer have moatisfy to the plans for the company.


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ue. 5 How do you come to know about these company product?

NO SOURCE No. OFRESPONDENT

%

1 NEWS PAPER 14 19%2 AGENT 32 45%

3 ADVERTISMENT 14 19%4 MOUTH OF

SPREAD12 17%

5 TOTAL 72 100%

nterpretation: -

his chart shows that agent is the most communicational tool for insurance company.

.3. METHODOLOGY:

Research is totally based on primary data. Secondary data can be used only for the referenc

esearch has been done by primary data collection, and primary data has been collected by meeti


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ith the people in Bhopal. Data collection has been done through by giving structured questioner. Th

tudy will be based on sampling. This is an exploratory type of

esearch. The study was aimed at measuring the customers preference for life insurance compani

nd the comparison of various insurance policies of the various companies on basis of vario

arameters based on customers responses in Bhopal region only. The survey was done on hundre

eneral residents of the selected region. Methods adopted for surveys 1. Field survey method

ersonal interview technique 3. Secondary sources Biz company database. The data collected a

epresented into suitable tabular forms for drawing inferences. Quantitative techniques like average

ercentages, range, two-way tables, chi- square tests analysis are applied as per the requirement. T

vel of preference, perception of the customers about the product and company.

.4. Questionnaire Designing:

The project is on Market Potential Study of Tata AIG in Bhopal city. To know the market potentiali

f Tata AIG a questionnaire has been prepared. The questionnaire is having both open ended a

ose ended questions. It is also having ranking, multiple choice and check list type of questions. Fir

art of the questionnaire is the demographic part. Questionnaire has been prepared in such a way th

e can understand insurance policies are dependable on the occupation of a person or income level

person. Which type of investment do they prefer? For it cluster analysis will be used. Nowaday

rivate players are giving a good rate of return rather than the public player. So in which sect

private or public) do they like to invest and what is the reason behind that? To get to know the reaso

kert scale has been used. To get to know how much Tata AIG is preferable in Bhopal city a ranki

cale has been used where name of different major Insurance Companies have been given a

ccording to the ranking given by citizen we can get to know the potentiality of Tata AIG in Bhop

ty. There is different type of insurance policies in the market. Which type of policies do they pref

an understand from the questionnaire. Which life insurance policies of Tata AIG are most preferab

e can get from it. To know all of these cluster analysis will be used. Sample questionnaire has be

ttached with

.5. LIMITATION OF THE STUDY:

Time limitation

Research has been done only in Bhopal.


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Companies did not disclose their secrets data and strategies.

Possibility of Error in data collection.

Possibility of Error in analysis of data due to small sample size.

Respondents error

Limited resources


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.1. RECOMMENDATIONS TO THE COMPANY:

CHAPTER 5

RECOMMENDATION AND BENEFITT


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Being the best product player in the private sector, but still survey TATA AIG needs to improveme

egarding its premium charges and advertisement to its target customers.

) Premium charges

wing to its high premium charges (Tata AIG Apex Plan, Premium RS. 90000/-) customers perceptio

bout the companys product has become that its only for the upper middle class people. Where

ATA AIG do has some policy with low premium but the charges of allocation are too high. So we wou

ke to suggest slowing down its premium charges to some extend by reducing administration charge

nd other charges.

) Advertisement:

During survey we have found that due to lack of advertisements about the products and agen

elling the products in which they get high commissions customers are somewhere mislead and th

now about very few products though TATA AIG has wide range of variety of the products. So w

ould recommend TATA AIG to invest more in advertisement in form of TV commercials, pamphle

nd hoardings.

) Wrong perception:

AIG is on the edge of filing bankruptcy. So Tata AIG is also going to on the brink of filling bankruptc

ut insurance in India is a highly regulated industry. Any company that wants to set up an insuranc

usiness has to follow very stringent norms given by the Insurance Regulatory & Developme

uthority (IRDA). So company should take positive measure to remove this wrong perception from th

eople.

d) Sample size:

or this research study only hundred sample size has been taken. The result will be more appropria

a large sample size is considered.


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.2. BENEFITS TO THE COMPANY AND US:

During the survey time sales have been done. It is a win-win Situation for both company and me. Th

enefits of this summer internship program are discussed below.

1. Benefit to the company:

a) This survey has been done in Bhopal region on comparison of TATAAIGs product and

competitor can give an idea of this position in the market. As TATA AIG leads in most of th

parameters so it should continue to serve in the same manner.

b) The survey also shows the customers perception about TATA AIGs life Insurance product wi

which it can improve its impression better than now. c) The recommendation has given in th

report will help TATA AIG to position its product properly to the target customers d) Moreover th

sales has been done during this internship have done a good business for the company.

2. Benefit to us:

a) Doing internship in TATA AIG have given me immense experience in the insurance industry f

these fourteen weeks.

b) Interaction with the customers for survey and sales has developed our marketing skills.

c) Working in the office premises has given exposure to corporate world and an experience

orking in corporate pressure.

SUGGESTIONS :-


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Company Should take necessary steps to increase product awareness .

Improve Bonus Rate.

The Company Should Also consider their Competitors in the market.

Tata AIG has to increase the numbers of branches.

Tata AIG can come up with affordable and feasible policy for younger and retired people.

Company can target various sub-urban and rural insurable populations by policies for ru

people.

.There should be the transparency when you are explaining to the customer about the policy.Many persons are not explaining the truth or hide the thing which should be discussed.

There are many other ways of marketing the products but according to my point of view they

are more concentrating on the telephonic talk. Every time persons are talking on telephones.

When there is a presentation they should serve the people and offer them a glass of water. Sothat the people who came they feel free.

TATA AIG should give more advertise on the Television or through any other media.


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.1 CONCLUSION

ndian insurance sector is likely to register unprecedented growth of 200% and attain a size of R

000 billion ($51.2 billion) by 2009-10, in which a private sector insurance business will achieve

rowth rate of 140% as a result of aggressive marketing technique being adopted by them against 3

CHAPTER 6

CONCLUSION AND BIBLIODRAPHY


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0% growth rate of state owned insurance companies. The rural market offers tremendous grow

pportunities for insurance companies and insurers should develop viable and cost-effecti

stribution channels; build consumer awareness and confidence.

he state owned insurance companies such as LIC and GIC have limited number of policies to offer

heir subscribers while in case of private insurance companies, their policy numbers are many mo

nd the premium amount as well as the maturity period is much competitive as against those overnment insurance companies. The private sector insurance players have started exploring th

ural markets in which until recently, the state owned companies had the monopoly.

ere it can be concluded that the summer internship program, done for partial fulfillment of the MB

ourse in ICFAI University, in TATA AIG Life Insurance Co. Ltd. has been completed successfully.

ollowing are the achievements done during the summer internship from 24th February 2009 to 23

ay 2009.

a) Survey done with interest of TATA AIG has been conducted successfully and results a

scussed above.

) Sales done during the time have done great business to the company.

c) The experience gained during the internship has sharpen my skills and given a corpora

xposure.

6.2 . BIBLIOGRAPHY

For the references different books, journals, and newspapers have been used and different websit

ave been used.


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Name of websites:

www.tata-aig.com/lifeinsurance, access on 8th April 2009

www.tata-aiggeneral.com, access on 8thApril 2009

www.tata-aig-life.com, access on 8thApril 2009

www.mouthshut.com/product-reviews/Tata_AIG_General_Insuranceaccess on 10th April 2009

www.irdaindia.org/duties/htmlaccess on 15 April 2009

www.mydigitalfc.com/tata-aig-eyes-10-growth-motor-insurance-556.htm, access on 16thAp

2009

www.economy watch.com/insurance-overview access on 12 May 2009

www.managementparadise.com/29381-distribution-channels-tata-aig.html, access on 12 M

2009

www.andhra.net/27-Tata-AIG-General-60949.asp.htmaccess on 14th May 2009

www.marketresearch.com/product/disply.asp?productid=1475505access on 15thMay 2009

Name of book and journal:

Insurance Industry (ICFAI Publication)


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Business Research Method (ICFAI publication)

Tata AIG Life Insurance Company Ltd, India, CGAP Working Group on Micro insurance

Good and Bad Practices, Case Study No 14, James Roth and Vijay Athreye-September 2005

Privatization of the Insurance Market in India: From the British Raj to Monopoly Raj to Swara

Tapen Sinha, CRIS Discussion Paper Series 2002.X

ame of newspaper:

Asia Economy Watch 21sr March 2008

Business Line 20th September 20008

The Hindu Editorial 23 rd, 24th, 26th March 2009

The Economic Times, 17th September 2008, 23rd March 2009

Business Standard 17 march 2009, 18th April 2009

The Financial Express 17thApril, 14th May 2009

Documents

Dev Project Report 2010 Final