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WEST BENGAL UNIVERSITY OF TECHNOLOGY
SUMMER PROJECT REPORT
A Comparative Study of Insurance Offerings From
Bajaj Allianz Life Insurance Company Limited
&
HDFC Standard Life Insurance Co. Limited
AT
BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD
BY
AYAN PAUL
WBUT REGN NO: 081360710020 of 2008-2010
WBUT ROLL NO: 08136009084
ARMY INSTITUTE OF MANAGEMENT, KOLKATA
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CONTENTS
Certificate from Guides
Acknowledgements
Executive Summary
Chapter I : The Industry and The Company
1. The Industry Profile
2. The Company
Chapter II : The Project
1. Requirement of the project
2. Purpose and Scope Of Study
3. Methodology
Chapter III : Collection & Analysis of data
1. Data Collection
2. Data Analysis
Chapter IV : Findings & Recommendations Conclusion
Constraints & Limitations
Recommendations
Appendices & Annexure
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ARMY INSTITUTE OF MANAGEMENT KOLKATA
Under the aegis of Army Welfare Education Society Judges Court Road, Alipore, Kolkata - 700027
Phone: 2479-4494 / 2439-8335 / 7 / 8
GUIDANCE-cum-COMPLETION CERTIFICATE
This is to certify that Mr.Ayan Paul WBUT Regn.No: 081360710020 of 2007-
2009, WBUT Roll No : 08136009084 has undertaken the project titled
A Comparative Study of Insurance Offerings From Bajaj
Allianz Life Insurance Company Limited & HDFC Standard Life
Insurance Co. Limited under our guidance for two months from 4th
June 2009 to 2nd August 2009 at:
Bajaj Allianz Life Insurance, Kolkata and has completed the project successfully.
SIGNATURE:.. : EXTERNAL GUIDE: Mr. PRAVEEN JHA
DESIGNATION: SALES MANAGERBAJAJ ALLIANZ LIFE INSURANCE
Organization Seal
SIGNATURE:.INTERNAL GUIDE: Prof.A.K PANIARMY INSTITUTE OF MANAGEMENT,KOLKATA
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ACKNOWLEDGEMENT
I would like to express my gratitude towards all the people who guided me throughout, and
without whose guidance and support, this project would not have been completed
successfully.
I would specially like to thank my guide at Bajaj Allianz life Insurance Company Ltd.,
Mr. Praveen Jha, Sales Manager, for his continuous support, encouragement and guidance
during the project.
I express my sincere gratitude to my faculty guide, Prof. A.K Pani of Army Institute of
Management, Kolkata who has been a source of knowledge and inspiration for me.
I would like to thank all those people who have directly or indirectly helped me in the
successful completion of this project.
Ayan Paul
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Executive summary
This project is intended as a part of the academic requirement for completion of MBAprogram. As a precursor to this, I have preferred to work with Bajaj Allianz Life insuranceCompany to gain marketing insight and other intricacies of marketing activities through thesummer project by involving myself to the extent possible.
The purpose and scope of the study is to carry out a survey of Life Insurance product launched by the aforementioned company so that the dynamics of the insurance market
could be known and help the company to devise a suitable strategy so that they gain majormarket share.
All the required marketing ammunition have been deployed to arrive at a conclusivedecision, supported by suitable data collected directly from the field and also usingsecondary data.
A comparison of insurance offerings between Bajaj Allianz life insurance Pvt ltd. and HDFCStandard life insurance Co. Ltd has been done so that to understand the competitiveness of the products from Bajaj Allianz Life Insurance Pvt Ltd in the Life Insurance market.
A SWOT analysis has been carried out. It has depicted the strengths, weaknesses,opportunities and threats; on the basis of which the basic strategies have been built upon.
And also an on field survey has been done to understand the need and source of theinsurance policies.
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The IndustryWhat is life insurance?
Life insurance is a contract that pledges payment of an amount to the person assured (orhis nominee)
on the happening of the event insured against.
The contract is valid for payment of the insured amount during:
y The date of maturity, ory Specified dates at periodic intervals, or
y Unfortunate death, if it occurs earlier.Among other things, the contract also provides for the payment of premiumperiodically to the Corporation by the policyholder. Life insurance is universallyacknowledged to be an institution, which eliminates 'risk', substituting certainty foruncertainty and comes to the timely aid of the family in the unfortunate event of death of the breadwinner. By and large, life insurance is civilizations partial solutionto the problems caused by death. Life insurance, in short, is concerned with twohazards that stand across the life-path of every person:
y That of dying prematurely leaves a dependent family to fed for itself.y That of living till old age without visible means of support
Insurance sector reforms
In 1993, Malhotra Committee- headed by former Finance Secretary and RBIGovernor R.N. Malhotra-was formed to evaluate the Indian insurance industry andrecommend its future direction. The Malhotra committee was set up with theobjective of complementing the reforms initiated in the financial sector. Thereforms were aimed at creating a more efficient and competitive financial systemrecognizing that insurance is an important part of the overall financial system
where it was necessary to address the need for similar reforms. In 1994, thecommittee submitted the report and some of the key recommendations included:
Structure y
Government stake in the insurance Companies to be brought down to 50%.Government should take over the holdings of GIC and its subsidiaries so that thesesubsidiaries can act as independent corporations. All the insurance companiesshould be given greater freedom to operate.
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Competition y
Private Companies with a minimum paid up capital of Rs.1bn should be allowed toenter the sector. No Company should deal in both Life and General Insurancethrough a single entity. Foreign companies may be allowed to enter the industry incollaboration with the domestic companies. Postal Life Insurance should be allowedto operate in the rural market. Only one State Level Life Insurance Company shouldbe allowed to operate in each state.
Regulatory Body
The Insurance Act should be changed. An Insurance Regulatory body should be set up.Controller of Insurance- a part of the Finance Ministry- should be made independent.
Investments
Mandatory Investments of LIC Life Fund in government securities to be reduced from75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company(there current holdings to be brought down to this level over a period of time)
Customer service
LIC should pay interest on delays in payments beyond 30 days. Insurance companiesmust be encouraged to set up unit linked pension plans. Computerization of operations
and updating of technology should be carried out in the insurance industry.The committee felt the need to provide greater autonomy to insurance companies in
order to improve their performance and enable them to act as independent companieswith economic motives. For this purpose, it had proposed setting up an independent regulatory body- The Insurance Regulatory and Development Authority.
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill inParliament in December 1999. The IRDA since its incorporation as a statutory body inApril 2000 has fastidiously stuck to its schedule of framing regulations and registeringthe private sector insurance companies. Since being set up as an independent statutory
body the IRDA has put in a framework of globally compatible regulations. The otherdecision taken simultaneously to provide the supporting systems to the insurance sectorand in particular the life insurance companies was the launch of the IRDA online servicefor issue and renewal of licenses to agents. The approval of institutions for impartingtraining to agents has also ensured that the insurance companies would have a trainedworkforce of insurance agents in place to sell their products.
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The Insurance Regulatory and Development Authority (IRDA):
The IRDA since its incorporation as a statutory body has been framing regulations andregistering the private sector insurance companies. IRDA being an independent statutorybody has put a framework of globally compatible regulations Reforms in the Insurancesector were initiated with the passage of the IRDA Bill in Parliament in December 1999.The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurancecompanies. The other decision taken simultaneously to provide the supporting systemsto the insurance sector and in particular the life insurance companies was the launch of the IRDAs online service for issue and renewal of licenses to agents. The approval of institutions for imparting training to agents has also ensured that the insurancecompanies would have a trained workforce of insurance agents in place to sell theirproducts, which are expected to be introduced by early next year.
Life Insurance Market in India
The Life Insurance market in India is an underdeveloped market that was only tapped by
the state owned LIC till the entry of private insurers. The penetration of life insuranceproducts was 19 percent of the total 400 million of the insurable population. The stateowned LIC sold insurance as a tax instrument, not as a product giving protection. Most
customers were under- insured with no flexibility or transparency in the products. Withthe entry of the private insurers the rules of the game have changed.
A brief historyInsurance came to India from UK; with the establishment of the Oriental Life insuranceCorporation in 1818.The Indian life insurance company act 1912 was the first statutorybody that started to regulate the life insurance business in India. By 1956 about 154Indian, 16 foreign and 75 provident firms were been established in India. Then thecentral government took over these companies and as a result the LIC was formed. Sincethen LIC has worked towards spreading life insurance and building a wide network across the length and the breath of the country. After the liberalization the entrance of foreign players has added to the competition in the market. The General insurancebusiness in India, on the other hand, can trace its roots to the Triton Insurance CompanyLtd., the first general insurance company established in the year 1850 in Calcutta by the
British. In 1957 General Insurance Council, a wing of the Insurance Association of India,frames a code of conduct for ensuring fair conduct and sound business practices. In 1972The General Insurance Business (Nationalization) Act, 1972 nationalized the generalinsurance business in India with effect from 1st January 1973.It was after this that 107 insurers amalgamated and grouped into four companies viz.
the National Insurance Company Ltd., the New India Assurance Company Ltd., the
Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
incorporated as a company.
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INDUSTRY PROFILE
Insurance is a federal subject in India and has history dating back till 1818. Life andgeneral insurance in India is still a nascent sector with huge potential for various global
players with the life insurance premiums accounting to 2.5% of the country's GDP whilegeneral insurance premiums to 0.65% of India's GDP. The Insurance sector in India hasgone through a number of phases and changes, particularly in the recent years when theGovt. of India in 1999 opened up the insurance sector by allowing private companies tosolicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurancesector is considered as a booming market with every other global insurance companywanting to have a lion's share. Currently, the largest life insurance company in India isstill owned by the government.
With largest number of life insurance policies in force in the world, Insurance happens tobe a mega opportunity in India. Its a business growing at the rate of 15-20 per cent
annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the countrys GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP.
Yet, nearly 80 per cent of Indian population is without life insurance cover while healthinsurance and non-life insurance continues to be below international standards. And thispart of the population is also subject to weak social security and pension systems withhardly any old age income security. This itself is an indicator that growth potential forthe insurance sector is immense.
A well-developed and evolved insurance sector is needed for economic development as it
provides long term funds for infrastructure development and at the same timestrengthens the risk taking ability. It is estimated that over the next ten years Indiawould require investments of the order of one trillion US dollar. The Insurance sector, tosome extent, can enable investments in infrastructure development to sustain economicgrowth of the country.Insurance is a federal subject in India. There are two legislations that govern the sector-The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has tocome to a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sectorreveals the 360 degree turn witnessed over a period of almost two centuries.
With such a large population and the untapped market area of this population Insurancehappens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7percent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potentialfor the insurance sector is immense in India. It was due to this immense growth that the
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regulations were introduced in the insurance sector and in continuation MalhotraCommittee was constituted by the government in 1993 to examine the various aspectsof the industry. The key element of the reform process was Participation of overseasinsurance companies with 26% capital. Creating a more efficient and competitivefinancial system suitable for the requirements of the economy was the main idea behind
this reform. Since then the insurance industry has gone through many sea changes.The competition LIC started facing from these companies were threatening to theexistence of LIC. Since the liberalization of the industry the insurance industry has neverlooked back and today stand as the one of the most competitive and exploring industry inIndia. The entry of the private players and the increased use of the new distribution arein the limelight today.
India against the global markets
India is an under-insured market. Indias insurance market is still at an early stage of development. This is reflected in low penetration rates and low premiums per capita.
Global perspective India ranks 19th on the global stage
Insurable population ± only 10% of India¶s population have life
insurance Source:IRDA
India
...
China
Spain
Netherlands
Canada
S KoreaItaly
France
Germany
UK
Japan
USA
17
47
47
50
59
60112
164
171
247
479
1055
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The market share of various Life Insurance Companies in India
at the end of FY 2008
ICICI
26%
Bajaj
20%
SBI Life
12%
HDFC
8%
Birla
7%
Reliance
7%
Max New
5%
OM Kotak
4%
AVIVA
3%
Tata AIG
3%
MetLife
3%
ING
2%
Shriram
1% Bharti Axa
0%
The market share of various Life Insurance
Companies in India at the end of FY2008
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THE COMPANY
COMPANY PROFILE
BAJAJ ALLIANZ LIFE INSURANCE
Bajaj Allianz Life Insurance Company Limited is joint venture between Allianz SE of Germany and Bajaj Auto Limited.
It was incorporated on 12th March 2001. The company received the Insurance Regulatory
and Development Authority (IRDA) Certificate of Registration (R3) NO116 on 3rd August 2001 to conduct life insurance business in India.AG Allianz one of the largest insurers in the world has joined hands with Bajaj Auto one of the most trusted names in the automobile and household industry in India for a joint venture for their insurance operation in the country. This is one of the few companieswhich are engaged in both life insurance and non life insurance products under the nameBajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance CompanyLimited.The investment ratio between Bajaj and Allianz is 76:24 This company has a national network of 1007 offices all over India and the Head Office islocated in Pune.Bajaj Allianz Life Insurance has a pan-India presence of office network in over 876 towns of the country and is aided with a strong and trained Agency network of over 2,50,000Insurance Consultants with 875 MRDT qualifiers in the calendar year 2006-07. Bajaj
Allianz Life Insurance has also forged strong Bancassurance and Corporate Agencyrelationships and continues to build on new tie-ups for fast track growth and deep market penetration. With such high penetration Bajaj Allianz Life Insurance has more than 4million customers who have put their faith and investment into the fastest growing lifeinsurance company in India. Speed and growth are the mantras of their success. Our Teamis young, energetic and motivated with a passion to excel.
BAJAJ AUTO Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the world's4th largest two - and three-wheeler maker[citation needed]. It is based in Pune,Maharashtra, with plants in Akurdi and Chakan (near Pune),Waluj (near Aurangabad) and
Pantnagar in Uttaranchal. Bajaj Auto makes and exports motorscooters, motorcycles andthe auto rickshaw.The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1946 [1].Over the last decade, the company has successfully changed its image from a scootermanufacturer to a two wheeler manufacturer. Its product range encompasses Scooterettes,Scooters and Motorcycles. Its real growth in numbers has come in the last four years aftersuccessful introduction of a few models in the motorcycle segment.The company is headed by Rahul Bajaj who is worth more than US$1.5 billion.
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Company's history
Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading CorporationPrivate Limited. It started off by selling imported two- and three -wheelers in India. In
1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985, it startedproducing at Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicle andproduced and sold 1 million vehicles in a year.
Spin-offs and acquisitions
It has been reported that Bajaj is headed for a de-merger into two separate companies:Bajaj Auto and Bajaj Finance. It is expected that the sum of the parts created will be worth
more that the current whole, as was the case in the. de-merger of Reliance Industries.
In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holdingcompany of KTM Sportmotocycles AG). The two companies have signed a cooperation deal,by which KTM will provide the know-how for joint development of the water- cooled 4stroke 125 and 250 cc engines, and Bajaj will take over the distribution of KTM products inIndia and some other Southeast Asian nations.[3]. Bajaj Auto said it is open to take amajority stake in KTM and is also looking at other takeover opportunities. On the 8th of January 2008, Managing Director Rajiv Bajaj confirmed the collaboration and announcedBajaj Auto's intention to gradually increase their stake in KTM to 25
ALLIANZ SE GERMANY
Its core business and focus is insurance. With 102.6 billion of revenue during 2007,
Allianz is the largest international insurance and financial services organization in the
Allianz has recently (August 2008) announced plans to sell its ownership of Dresdner Bank
to Commerzbank, largely for shares. As a result of this proposed merger, Allianz will end up
with a 30% controlling stake in the combined Commerzbank/Dresdner.
Allianz is also the principal sponsor of the Swiss Open tennis tournament and owner of
Gornik Zabrze great football team
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Board of Directors
Chairman- Rahul Bajaj.
Director - Dr. Werner Zedelius.
Director - Sanjay Asher.
Director - Heinz Dollberg.
Director - Sanjiv Bajaj.
Director - Craig Ellis.
Director - Ranjit Gupta.
Director - Suraj Mehta.
Director - S.H.Khan.
Director - Dr.P.S.Palande.
Additional Director Manu Tandon.
Alternate Director Bruce Bowers.
MANAGEMENT TEAM
Chief Executive Officer - Kamesh Goyal.
Chief Financial Officer - Rajesh Viswanathan.
Chief Actuary - Anil Singh.
Appointed Actuary - Andrew Wakling.
Head of Sales (Strategic Initiative) - E C J Augustine
Chief Investment Officer G.B.Laddha.
Head Alternate Channels - Niraj Kumar.
Head Operations & Administration- V Philip.
Head Information Technology Ishita Mukherjee.
Company Secretary & Compliance Officer- Sameer Bakshi .
Head Bancassurance - A.S. Narayanan.
Head Marketing Akshay Mehrotra.
Head Internal Audit Neeraj jain.
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Key achievements in FY 2007-2008:-
1. Bajaj Allianz Life Insurance crosses 10 lac policies in this FY .
2 .Bajaj Allianz Life Insurance is only life insurance company in india who has receive most
accepted security certification of ISO 27001:2005 based on its compliance with the newstandards for data and information security set forth by ISO.3. The company is the largest private life insurer in the country in the terms of number of
policy sold during the year and is ranked 2nd among private life insurance in terms of newbusiness premium.4. Among the Top 50 Service Brands in Brand Equity, as per survey conducted by AC
Neilson ORG-MARG.5. The company company has reported an annualised premium of Rs 658 crore for the first quarter, an increase of 86% over the corresponding period last year. The total businesspremium received in the first quarter is Rs.729 crore.
Core values of Bajaj Allianz life insurance
1. Understanding the customer needs2. Meeting the customer requirements3. Ensuring optimal performance at lowest cost 4. Commitment to excellence
Bajaj Allianz stands for
1. Dynamic and successful organization2. A socially valued enterprise3. Business integrity
Vision
To be the best Life Insurance Company in India to buy from, work for and invest in.
Mission 1. To be in the top three new life insurance companies in India2. To have PAN India presence3.To provide highest: quality service by
ensuring: Highest customerretention in industryEvery customer will be contacted at least once a year We respond to customer/agent within 48 hours Embracetechnology to optimize efficiencies.
Work Culture of Bajaj Allianz life Bajaj Allianz Life is known for its stimulating environment with high levels of motivation,empowerment and recognition. It encourages an open and informal culture that valuesintegrity, commitment, teamwork and excellence in customer service. The Co. adopts apolicy of strong learning and development initiatives, which promotes day-to-day learningas well as decision- making. They believe their strength is their people, so they endeavor tosurpass their expectations and give them the best possible work environment and benefitsthat match the best in the industry.
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Requirement of the Project
As a part of the MBA program at Army Institute of Management, the West Bengal Universityof Technology (WBUT) requires students to undertake a summer Internship Project as part of the curriculum in the 3rd semester. The university has allotted 200 out of total 1000marks to the summer project, which is 20% of the entire 3rd semester syllabus. This clearlyshows the emphasis that the University puts on the Summer Internship Project.Besides the academic requirement, the summer training gives students ample exposure tothe functioning of an organization. This helps the students to prepare themselves as futuremanagers. The first hand experience of working in the corporate environment makes thestudent aware of the conventions and other intricacies of the profession. It provides aplatform for a safe testing of the theoretical knowledge that a student has gained throughclassroom study.
Purpose and Scope of Study
A comparison of insurance offerings between Bajaj Allianz life insurance Pvt ltd. and HDFCStandard life insurance Co. Ltd has been done so that to understand the competitiveness of the products from Bajaj Allianz Life Insurance Pvt Ltd in the Life Insurance market.
A SWOT analysis has been carried out. It has depicted the strengths, weaknesses,opportunities and threats; on the basis of which the basic strategies have been built upon.
And also an on field survey has been done to understand the need and source of theinsurance policies.
Geographically, the scope of the study is confined to the market in Kolkata but the strategysuggestion has wide implications considering the homogeneity of urban Indian markets.
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Methodology
Figure 1.The Marketing Research Process
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RESEARCH METHODOLOGY
Objective: The basic aim behind the project was to understand the working of the life
insurance sector and the growing potential for Bajaj Allianz life as a company. Along
with these, the study on the comparative analysis is carried out to understand the
product differences in insurance industry and analyze it. Set of recommendations and
suggestions have been made to reduce the gap between the existing and the potential of
Bajaj Allianz Insurance.
Data: For both the studies, both primary and secondary data have been collected.
Further, primary data and secondary data have been collected from other life
insurance players in the market and customers to get information about theirproduct, and other.
Research Approach: To collect information regarding the product, distribution and
promotion of life insurance as a financial service, interviews were carried out with
the senior heads of the various departments, personal meetings were held with the
peoples to fill up questionnaires.
Research Instrument : The primary data in the research has been carried out
through personal interviews for filling up questionnaires with the concerned people
for both the studies. And the secondary data has been collected through various
websites, journals, newspapers, cases etc.
Data Analysis: Primary and secondary data collected has been analyzed to derive
conclusions for the whole study. The data are presented through charts and graphs.
They have been analyzed to take out its importance and implications for the
recommendations to be made at the end of the report.
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CHAPTER SUMMARY
This chapter consists of data collection method and the data analysis procedure
applied. The whole chapter is divided into two broad categories. The first of the part
chapter consists of the data collection and the other part consists of data analysis.
Data for the following project was collected from primary sources. It is based onconvenience sampling, i.e. according to the convenience of sampler. I visited
different places in the core area allotted to me. I tried to meet with as many persons
as I could. For the comparatitive study I met with only one person I was allowed to
meet tried to collect the information I required or whatever they can provide me
with. And for the questionnaire a total of 150+ people were met.
After the data collection comes the data analysis part. Here, I have tried to analyzethe primary data collected using different pie and bar charts and have tried to get
some conclusion.
DATA COLLECTION Sampling procedure: Convenience sampling, according to the convenience of thesampler.
Source of information: Data was collected through primary sources.
Population considered: Population is the aggregate of all the elements defined prior
to the selection of sample. It must be defined in terms of elements, sampling units,
extent and time. For this project
Element : BAJAJ ALLAIAZ
Sampling Unit : Supermarkets; offices.
Extent : Kankurgachi, Shyambazar, Salt Lake, Dum Dum, Park Street.
Time: 10/06/08 to 25/06/08
Number of samples considered: 150+
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Collection And Analysis of Data
PRODUCT COMPARISON OF UNIT LINKED INSURANCE PRODUCT AND PENSION BEING
OFFERED BY BALIC LTD AND HDFC SLIC LTD.
BAJAJ ALIANZ LIFE INSURANCE CO
LTD ULIP UNIT GAIN PLUS GOLD
HDFC STANDARD LIFE INSURANCE CO
LTD- ULIP- UNIT LINKED ENHANCED
LIFE PROTECTION II
It says prospects of attractive returns
with investments in various mix of
securities to make a perfect plan.
It ensures that your family remains
financially independent even if the
investor is not around. It ensures a life of
respect and dignity
Guaranteed life coverage with flexibility
of choosing insurance cover according to
need.
It also provides life coverage with
increasing insurance cover every year
There are two options of calculating the
sum assured- Minimum & Maximum.
Minimum sum assured is calculated on 5
times the annualized premium whereas
the maximum sum assured is calculated
on basis of the age group.
Sum assured here is again based on two
options. Minimum is 50% of the term of
the policy, your chosen annual regular
premium or maximum of 20 times of
your chosen annual regular premium.
It offers 6 investment funds with It offers 7 funds which provides the
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complete flexibility to switch money
from one fund to the other to manage the
investments better.
potential for higher but more variable
returns over the term of the policy
and/or more stable returns with lower
long term potential
On maturity the fund value in respect of
regular premium and top up premium is
paid.
It has an additional feature wherein one
can take out the fund in periodic
installments (min of Rs.10000) over a
period of 5 years. The money remains
invested in funds as chosen by the
investor. However charges are
applicable.
It has 5 options of giving the death
benefits. One unique feature of this policy
is that even if 3 years of regular premium
is not being paid and the policy lapses,
fund value as on date of receipt of
intimation of death at the COs office will
be paid on death of the life assured
In case of death of the investor, the
greater of the current sum assured less
any withdrawals and the total fund value
is paid to the beneficiary. Thereafter the
policy terminates.
Surrender of the policy is applicable after
3 years from the date of commencement
of the policy. Surrender value of the
policy will be equal to the fund value less
Here again the surrender of the policy is
applicable after 3 years. There are 4
methods wherein the surrender value is
calculated.
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surrender charges, if any.
Additional rider facility is available under
this scheme which includes accident,
critical illness, hospital cash riders etc
No rider facility available
Partial withdrawal from this policy is
applicable after 3 years and the min
amount of withdrawal is Rs. 5000. No
charges involved. After 10 years full
withdrawal allowed without any charges.
Partial withdrawal from this policy is
applicable after 5 completed years and
the min amount of withdrawal is Rs.
10,000. After the 5th year the withdrawal
charges are nil.
Premium allocation charge varies from
25% to15% in policy year 1 to 6% in
policy years ranging from 2 to 5 and 2 %
from policy year 6 and above.
There are varied premium allocation
charges ranging from 35% to 2 %
depending on the premium size and
range and the policy years.
Fund management charges are applicable
and it provides only 3 free switches and
the rest being chargeable.
Applicable fund management charges
and it provides 24 switches in a policy
year and rest being chargeable
Tax benefits U/S 80C and U/S 10 (10D).
Additional tax benefits U/S 80D for the
riders available.
Tax benefit U/S 80C and U/S 10 (10D)
only
The premium allocation chart is as
follows:
1st Year of policy (amount in Rs)
The premium allocation chart is as
follows:
Regular Premium- Year 1 (in Rs)
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12,000-14,999 ------ 75%
15,000- 99,999 ----- 76%
1,00,000-2,49,000 80%
2,50,000 & above 85%
2nd Year to 5th Year
12,000-14,000 ---- 94%
15,000-99,999 ---- 94%
1,00,000-2,49,000-94%
2,50,000 & above -94%
6th Year Onwards
12,000-14,999 -----98%
15,000-99,999 -----98%
1,00,000-2,49,000-98%
2,50,000 & above -98%
12,000-1,99,999 -------- 65%
2,00,000-4,99,999 ----- 72%
5,00,000-9,99,999 ----- 79%
10,00,000-19,99,999 ----85%
20,00,000 & above ------91%
Regular premium Year 2
Same as rates applicable for year 1
3rd Year and above
12,000-1,99,999 ----------98%
2,00,000-4,99,999 --------98%
5,00,000-9,99,999 --------98%
10,00,000-19,9,999-------98%
20,00,000 & above -------98%
Minimum premium investment amount
is Rs. 12,000
Minimum premium investment amount
is Rs. 12,000
Minimum premium paying term is 3
years. Maximum is as chosen by the
customer.
Minimum premium paying term is 3
years.
Minimum term period is 10 years. Max
term is as chosen by the customer.
Minimum term period is 10 years and
maximum term is 30 years.
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Minimum age of entry is zero years but
life coverage will start from the 7th year.
Max age of entry is 60 years. 50 years in
case of riders.
Minimum age of entry is 18 years and
maximum age of 45 years.
Free look period is 15 days Free look period is 15 days
BAJAJ ALIANZ LIFE INSURANCE CO
LTD Unit Linked Asset Allocation
Pension Fund
HDFC STANDARD LIFE INSURANCE CO
LTD- Unit Linked Pension Plus
It is called Future Secure Prepare for
the future, secure your happiness
It says- Live a life of dignity & self
respect. It is designed to provide a
retirement income for life with the
freedom to maximize your investment
returns.
This plan comes with 2 alternatives-
Option A without life cover- It maximizes
the investment income or Option B with
life cover. Retirement age is taken at 60
years maximum.
Retirement age is flexible Between 50
years to 75 years. There is no life
coverage facility under this scheme
This fund has the option of 5 investment
funds with complete flexibility to switch
money from one fund to the other to
It has 6 funds which provide more stable
returns with lower long term potential.
The potential for higher but more
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manage the investments better. variable returns over the term of the
policy.
This eligibility criteria for this fund is
between 6 yrs to 40 yrs. Loyalty units
varies from 0.10% to 0.30%
The term period for this fund is between
10 years to 40 years. Loyalty units is at
0.10%
There are 3 Annuity options available
under this scheme. Annuity for life,
Annuity for life with 5, 10, 15 or 20
years payout. Annuity for life with
return of capital.
On maturity or vesting of the policy term
one can take up 1/3rd of the fund value
as tax free cash lump sum and the rest
can be converted into an annuity. The
annuities can be bought either from the
co or from outside.
The death benefit is calculated as per
the options chosen by the policy holder
On death, the nominee receives the unit
fund value. The policy gets terminated
there-after.
Surrender if any is applicable only after
3 years of the completion of the policy.
The surrender value of the policy is
equal to the fund value less surrender
charges applicable.
Surrender is possible after 3 years of
completion of the policy. Here also the
surrender value is the value of the units
in the fund. The surrender charge is
50% of the difference between the
regular premiums expected and those
paid in the first year of the contract.
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Loan facility is not available Loan facility is not available
Additional rider facility is available
under this scheme which includes
accident, critical illness, accidental
permanent/partial disability, hospital
cash riders
No rider facility available
Premium allocation charges vary from
20% to 0% varying on the annual
premium size and the policy years. Top
up premiums will have a premium
allocation charge of 2 %.
Premium allocation charges are higher
which varies from 50% to 1% depending
on the premium size and the policy
years. Top up premium charges varies
from 2.5% to 1 % again on the policy
years.
Applicable fund management charges
and it provides only 3 free switches a
year. Subsequent switches are
chargeable @ 5% or Rs. 100 whichever
is lower.
Applicable fund management charges
and it allows 24 free switches a year.
Eligible for tax benefits U/S 80CCC of the
IT Act 1961. Additional tax benefit for
the riders if applicable.
Eligible for tax benefits U/S 80CCC of the
IT Act 1961
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A Questionnaire
Name-
Address-
Age-
Present status A) Student B) Serviceman c) Housewife D) Child
If serviceman which sector he/she is serving?
Public sector
Private sector
Joint venture
Businessman
Public undertaking
Retired personnel
Annual Income
a) 100000 b) More than 1lakh c) 5lakh and above
Currently having life insurance or not? 2) Yes, b) no, c) going to pursue, d) is interested in the near future
Whom do you prefer as your insurance partner? LIC ( ) Private Insurance Company ( )
Does Brand matter to you while investing? Yes ( ) No ( )
Which factor do you think is more important while investing? Rank
it. Brand Name ____
o High Return ____o Safety ____ o Liquidity ____
Where do you invest more and feel comfortable? Rank It. o Banks ____
o Govt. securities ___ o Share market ____ o Insurance ____ o Post Office SS ___
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Why do you invest your money in insurance?
Tax Savings
Cover
Life Risk
Future Security
Pension
How do you rank these companies according to your
preferences?
o HDFC SLIC____
o ICICI Prudential ____
o Kotak Insurance ___
o Bajaj Allianz ____
o TATA AIG ____
o Birla Sunlife Insurance ____
Are you satisfied after your investment in private company?Yes ( ), No ( ), Somewhat ( )
Will you invest in private companies in future?Yes ( ), No ( )
Term preferred
a)3 years b)more than 3 years c)5years d)more than 10 years
Which kind of policies did him or she preferred?
A) Traditional policy B) Unit Linked policy
Sum Assured needed
a) 50000 b) 50001-100000 c) 100001-200000
Which plans does he preferred?a) Whole life plans
b) Endowment plans
c) Children plans
d) retire/pension plans
Have you invested in one insurance company or pursue different policies fromdifferent companies
a) Yes b) no
What is your suggestion regarding the different policies?
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A Questionnaire for Policy holder
Name:
Age group: (1)15-30 yrs (2) 30-45 yrs (3) 45- 60 yrs (4) 55 yrs & Above
occupation: (1)Business (2) Service (3) Housewife (4) Student (5) Professional
Gross annual income ( in Rs): o Below 50000
o 50000-100000
o 100000-300000
o 300000-500000
o Above 500000
Which plans does he preferred?
a) Whole life plans
b) Endowment plans
c) Children plans
d) retire/pension plans
Name the policy
How well you know about the policy
Where does you get to know about the policies
Does agent or broker bring to your notice about new product launched and
renewal due?
y Yes/no.
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Analysis of Data
Analysis of the Comparison Of products
From the above comparison it is quite obvious that both the products have certain unique
features in itself. They are mostly identical in almost all the important parameters. Charges
have been found to be higher on the competition product. This is one very important aspect
which most of the customers thinks about. Additional rider facility available in Bajaj
Allianz is one very important USP of the product. However the performance of the
plan/fund would purely depend on the proper fund allocation and how the fund manager
will churn the funds at its best to provide the best returns. It would also depend on the
asset allocation and the selection of the companies for investment by the fund manager.
The past performance of the plan would provide the best platform for the future fund
performance. However it is also obvious that future fund performance purely depend on
the growth of the economy and other factors.
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The SWOT ANALYSIS
The Pillars- Strengths
y The brand of the industry- Allianz Group
y The most amiable and co-operative team of employeesy Product designed specifically to meet the customers needs and demand.
y Strong agent network or distribution channelsy Wide variety of products
Weaknesses
y Indian public is not that matured now and seldom look at insurance as aninvestment option.
y The product brochure should be made more specific in terms of addl information oncompany allocation for equities.
y The brochures should have the touch of emotion as in HDFC SLIC
Opportunity
y Most of the private players in the market have not yet penetrated into the ruralareas. There is a lot of potential there. Bajaj Allianz can look for scopes to buildbusiness out there.
y As mentioned above, the team at Bajaj Allianz is quite efficient to convince their set of customers and insure their lives\and of their family members.
Threats
y The most significant threat is that now a days people have options to choose fromdifferent insurance companies. Thus one has to take care that there is no lacuna inthe customer service and it should be improvised on a time to time basis. Mis-sellingto be avoided at all circumstances. One satisfied customer can bring in thousands. If we are not the first to grab this opportunity- someone else will..
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o 56% of people are from private sector and are more concerned about theirfuture. put lots of money in investment for high gain.
o 14% of people were from public sector, having less saving and want to investment more in public sector for safety of their money.
o 14% were retired person, they are less interested in investing their saving,they can be recruited as a insurance consultant.
o 10% of people are businessman and are more interested in general insurance
then life insurance but potential customer are their who can invest in huge.
14%
56%4%
10%
2%14%
Investment on the basis of Profession
Public sector Private sector Joint venture
Buisinessman Public undertaking Retired personel
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26% in total people are there those who are interested in pursuing insurance policies,handsome target customer are there where the company can look in.
A total of 69% of people have already taken up Insurance policy.
As the time is passing by people of India are becoming aware of the value of their life. Sopeople are getting interested in taking up life insurance as it not only give them secuirity,but also it gives a security to their families.
The 10% of them who are not interested in taking up insurance policy has some reasonslike, they are being provided with medical coverage and life coverage by the company intheir pay package. Many of the 10% dont really know the value of their life. So they arereluctant to take up life insurance.
64%10%
16%
10%
Having Insurance Policy
Yes No Going to Pursue interested in Future
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o 69% of the people take their own decision before making any investment but theytoo need some advice from somewhere.
o Insurance advisor (15%) are important people to consult before investing, soadvisors should have the knowledge and trustworthy on whom investor can relyon. So company should recruit such advisor who can guide well and keep the
image of the company at high.o And rest 16%took advice from brokers, financial consultant, bankers or from
other sources
69%
7%
15%9%
Whom to consult for Insurnace
Own decision Financial Consultant Insurance Advisor Broker,banker,other
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y Most of the people did not look into other benefits of investment before investing.One of the reasons for that is they do not consult financial consultants or advisors orbrokers. 29% of people like to invest in insurance sector because of its liquidity.With introduction of Unit linked Insurance plans liquidity of insurance hadincreased in the market.
y 19% of people who still hold on to fixed deposits are changing their portfolio tounit-linked insurance. As fixed deposit rates are falling, the only near alternative togive higher return is unit-linked insurance or mutual funds.
y 16% of people invest in real estate because the real estate market in and aroundKolkata is on rise and value of houses have positive outlook with respect to returns.These people look for transparency and good track record in sector before investing.
y 12% of people who invest in equity out of which 85% are day traders, and 15% arelong-term investors in equity market.
y 7% prefer government bonds because of its constant returns but due to increaseand decrease in interest rate this financial year the government bonds are not ableto give satisfactory returns to its holders.7% people prefer Mutual funds as the risk
is diversified but the recent survey by RBI has quoted that mutual fund companiesare not able to disclose the risk factor on mutual fund scheme.
7%7%
29%
19%
9%
12%
16%
1%
Investment Type
Government Bond Mutual Fund Life insurance Fixed Deposit
NSC Equity Real Estate Other
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56%of people still think that public sector is safer for investing then of privatesector. The notion has change a bit after emergence of private company but need tobe change more than this. As with the emergence of the private companies in Life
Insurance sector and the different products or policies designed by them it can be
said that the private players are giving a good amount of competition to the publicsector companies.
As the data shows that already 44% of the life insurance has been eaten up by theprivate players, so in the next 5-10 years it can be possible that the private players
may take the lead.
56%
44%
Players
LIC Private
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30%
47%
17%6%
Factors Effecting Investment
Brand name High Return Safety Liquidity
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69%
31%
Awareness About Bajaj Allainz Life Insurance
Plans
Yes No