55738860 bajaj allianz insurance

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COMPARATIVE STUDY OF

BAJAJ-ALLIANZ

WITH LIC & ICICI PRUDENTIAL

PROJECT REPORT

2011

SUBMITTED BY

PUNEET GUPTA

In the partial flfill!ent "f the re#ire!ent "f

Ma$ter "f B$ine$$ A%!ini$trati"n &2010'2012(

T)JO*N BUSINESS SC*OO+

BANGA+ORE


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AC,NO-+EDGEMENT

At the outset, I would like to express my deep sense of gratitude and sincere

thanks to Pr"f) S), Na.a/ Principal, T)JO*N B$ine$$ Sh""l Banal"re

for providing an opportunity to discover the corporate world, froma close

perspective.

Once again Pr"f) S), Na.a/ My Principal and internal guide for this project to

whom I am deeply grateful for his constant support and guidance without which

it would not have een possile for me to complete this project in time.

I take this opportunity to extend my sincere gratitude to Mr) 3i$h4a!itra

3er!a &Sale$ Manaer( for giving me an opportunity to undertake internship

training and the project on the topic Organi!ation "tudy.

I extend my sincere gratitude to Mr) Sh.a! +al Pan%e. for his directions,

suggestions and information provided which were of utmost importance for the

successful completion of the project.

I convey my gratitude to all the staff memers of Ba5a5 Allian6 +ife In$rane

C") +t% for their kind co#operation and guidance through out my project.

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INDE71 I%&'O()*&IO% +

istory of Insurance -

&ypes of Insurance $

Overview of /ife Insurance "ector in India 0

Indian Insurance Industry $

2 I'(A $1

8*OMPA%2 P'O3I/4"

5ajaj Allian! 6+

/ife Insurance *orporation of India 77

I*I*I Prudential +8

9 *OMPA'A&I94 "&)(2 +1

Market "hare Analysis :8

*omparison on the 5asis of Attriutes :

: '4"4A'* M4&O(O/O;2 -

; A%A/2"I" -+

< 3I%(I%;" 0$

= *O%*/)"IO% 07

> '4*OMM4%(A&IO%" 0+

10 5I5/IO;'AP2 0-

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INTRODUCTION

Insurance is a social device where uncertain risks of individuals may e

comined in a group and thus made more certain # small periodic

contriutions y the individuals provide a found out of which those who

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suffer losses may e reimursed. In addition to eing a means to protect

oneself, the insurance Industry is an efficient conduit for the saving of

people to e channeled towards economic growth. In India, the Insurance

Industry- is more than +8 years old. &oday, it is monopoli!ed y two

P")


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the other party called insured a fixed amount of money on the happening

of a certain event.>

?Insurance is a protection against financial loss arising on the happening

of an unexpected event. Insurance companies collect premiums to

provide for this protection. A loss is paid out of the premiums collected

from the insuring pulic and the Insurance *ompanies act as trustees to

the amount collected.@

3or example, in a /ife Policy, y paying a premium to the Insurer, the

family of the insured person receives a fixed compensation on the death

of the insured. It is a system y which the losses suffered y a few are

spread over many, exposed to similar risks. Insurance is desired to

safeguard oneself and one


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Insurance has een around since ancient times. &he 5aylonians and

Phoenicians had ocean marine insurance to protect a merchant against

losses incurred when a ship did not reach its intended destination with its

load of goods or did not return with payment. &his form of insurance,

called respondent, evolved ecause the goods on oard often were used

as collateral for a loan. &he lender charged the orrower interest on the

loan and levied an additional sum, thepremium, to cover the cost of the

respondent contract. If the ship reached its destination and returned, the

merchant received payment for the goods and in turn paid the

moneylender. If the ship failed to return, the det was cancelled. &his

system was profitale to lenders ecause many respondent contracts were

sold, and dets were paid more often than cancelled.

In ancient 'ome, associations had a form of insurance for their memers.

4ach memer made regular payments to the association in return for

coverage of funeral expenses or for assistance to family memers who

were injured or ill.

Insurance also existed in -th#century 4ngland, which was then one of

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owned y 4dward /loyd. Private investors would examine the list and

sign their name y the entries they were willing to guarantee for a fee.

&hese private investors were the first insurance underwriters, and the

coffee house ecame the world center of marine insurance. &oday the

organi!ation is known as /loyds of /ondon, and it rings together

individuals, most often working in syndicates, who write all types of

insurance.

Insurance in the modern form originated in the Mediterranean during 7th

century. &he earliest references to insurance have een found in 5aylonia,

the ;reeks and the 'omans. &he use of insurance appeared in the account

of %orth Italian merchant anks who then dominated the international

trade in 4urope at that time. Marine insurance is the oldest form of

insurance followed y life insurance and fire insurance. &he patterns that

have een used in 4ngland followed in other countries also in these kinds

of insurance

&he oldest and the earliest records of marine policy relates to a

Mediterranean voyage in 67-. In the year 788, a ook written y a

merchant of 3lorence, indicates premium rates charged for the shipments

y sea from /ondon to Pisa.

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&he early developments of life insurance were closely linked with that of

marine insurance. &he first insurers of life were the marine insurance

underwriters who started issuing life insurance policies on the life of

master and crew of the ship, and the merchants. &he early insurance

contracts took the nature of policies for a short period only. &he

underwriters issued annuities and pension for a fixed period or for life to

provide relief to widows on the death of their husands. &he first life

insurance policy was issued on une 0, +06, on the life of Billiam

;ions for a period of $ months.

&he history of life insurance in India dates ack to 00 when it was

conceived as a means to provide for 4nglish Bidows. Interestingly in

those days a higher premium was charged for Indian lives than the non#

Indian lives as Indian lives were considered more risky for coverage. &he

5omay Mutual /ife Insurance "ociety started its usiness in 0-8. It

was the first company to charge same premium for oth Indian and non#

Indian lives. &he Oriental Assurance *ompany was estalished in 008.

&he first general insurance company# &ital Insurance *ompany /imited

was estalished in 0+8. &ill the end of nineteenth century insurance

usiness was almost entirely in the hands of overseas companies.

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Insurance regulation formally egan in India with the passing of the /ife

Insurance *ompanies Act of 1$ and the Provident 3und Act of 1$.

"everal frauds during $8


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and grouped into four companies# %ational Insurance *ompany /td., &he

%ew India Assurance *ompany /td., &he Oriental Insurance *ompany

/td. and )nited India Insurance *ompany /td. &hese were susidiaries

of the ;eneral Insurance *orporation of India C;I*D.

TYPES O? INSURANCE

GENERA+ INSURANCE@

&he asis for general insurance is >tran$fer "f ri$/>.

&his means that the insurer agrees to compensate you if you suffer a loss.

Bithout the insurance you would have to pay for that loss yourself.


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Oviously this contract is made on the asis that the insurance company

calculates the risk that you, or the total numer of people uying

insurance, will cost more in payouts than what is received in premiums.

&his is determined y the use of statistics and the information you

disclose on your application for insurance.

Thi$ inl%e$@

*OME CONTENTS@It can either e >defined event> i.e. the policy

covers loss or damage from a list of >defined> events, e.g. storm or fireE

or >accidental loss or damage> i.e. all accidental loss with some

exclusions.

MOTOR 3E*IC+E@It can either e >comprehensive> i.e. it covers any

damage to your car as well as damage to the other car or another personthird party property> i.e. it covers damage caused y your car

to another personthird party fire and theft i.e. it covers

damage partly for damage caused y your car to another person


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INCOME PROTECTION@ Bith this type of insurance the insurer

agrees to pay you a specified amount of money, usually in monthly

payments, in the event that you ecome disaled and unale to work.

Along the same lines you can purchase >trauma insurance> to cover a

medical trauma such as a heart attack.

Also in the modern day world a numer of utility specific insurance

policies are eing launched y the various players in the insurance

market in an effort to stay one step ahead of their competitors. ence to

make the (efinition of ;eneral Insurance inclusive we can say that all

the policies which do not fall under /ife Insurance category fall under the

;eneral Insurance category.

+I?E INSURANCE@

/ife insurance is insurance that will protect your family andFor specified

dependents in the event of the policy holderGs death. In general, it is an

essential component in planning for the future.

&here are many options with coverage, depending on your situation. And

there are three main categories of life insuranceH term life, universal life,

and whole life insurance.

&erm life is the simplest and least expensive type of policy. It


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insurance with no cash value account. A term life policy has only one

functionH to pay a specific lump sum to whomever you


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during that period. "ince term life insurance has no cash value, the

amount of protection in this policy is e=ual to its death enefit. &here are

three asic forms of term life insuranceH level term, decreasing term, and

increasing term.

+E3E+ TERM +I?E INSURANCE@

/evel term life insurance provides an e=ual amount of protection for a

period of time. 3or example, an 's +8,888 ten#year level term life

insurance policy pays out 's +8,888 of coverage until the ten years are

over. At the end of the ten years this level term life insurance policy

would expire, and would pay out no enefits.

DECREASING TERM +I?E INSURANCE@

(ecreasing term life insurance is a policy where the enefit amount

decreases gradually over the term of the protection. A 68 year 's $88,888

decreasing term policy, for example, wound pays an 's $88,888 enefit

at the eginning of the policy. &his amount would gradually decline over

the 68#year term and would pay out 's 8 at the end of the term.

INCREASING TERM +I?E INSURANCE@

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Increasing term life insurance policies provide a payout enefit that

gradually increases at periodic intervals. &hese increase amounts are

usually a percentage of the original amount.. Bhen changing the policy,

your premium term life insurance ratesare ased on either your current

age, or the age when you originally took out the policy. (epending on

how your policy is set up, you could e paying much lower interest rates

that you would have normally =ualified for.

-*O+E +I?E INSURANCE@

Bhole life insurance is a popular life insuranceplan ecause it provides

permanent protection, provided premiums are paid. &he advantages of

whole life insurance plans are cash values, maturity at age 88, and living

enefits. Also the policy


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of 88. &he premium rate for a whole life insurance is ased on the

assumption that the insured would e paying premiums until the age of

88. &his means that at age 88, the cash value of the policy has come to

the point when it e=uals the face amount of the policy. At this point the

policy has completely matured, no more premiums are owned, and the

policy is completely paid out to the policy owner.

UNI3ERSA+ +I?E INSURANCE@

)niversal life insurance is a variation of whole and term life insurance,

with added flexiility and transparency. &his added flexiility allows the

policy owner to determine the amount and fre=uency of premium

payments and to adjust the enefit payout amount up or down to reflect

changes in needs... )niversal life insurance policies remain in force as

long as there enough cash value to pay the monthly mortality expenses,

regardless of whether or not thepolicyowner pays the premium.

O3ER3IE- O? T*E +I?E INSURANCE SECTOR IN

INDIA

-
http://www.1stinsurancequotes.com/variable-universal-life-insurance.htmhttp://www.1stinsurancequotes.com/variable-universal-life-insurance.htm


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Bith largest numer of life insurance policies in force in the world,

Insurance happens to e a mega opportunity in India. ItGs a usiness

growing at the rate of +#$8 per cent annually and presently is of the

order of 's 7+8 illion. &ogether with anking services, it adds aout -

per cent to the countryGs ;(P. ;ross premium collection is nearly $ per

cent of ;(P and funds availale with /I* for investments are 0 per cent

of ;(P.2et, nearly 08 per cent of Indian population is without life

insurance cover, health insurance and non#life insurance continue to e

elow international standards. And this part of the population is also

suject to weak social security and pension systems with hardly any old

age income security. &his is an indicator that growth potential for the

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 time strengthens the risk

taking aility. It is estimated that over the next ten years India would

re=uire investments of the order of one trillion )" dollars. &he Insurance

sector, to some extent, can enale investments in infrastructure

development to sustain economic growth of the country. Bith a large

capital outlay and long gestation periods, infrastructure projects are

fraught with a multitude of risks throughout the development,

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construction and operation stages. &hese include risks associated with

project implementation, including geological risks, maintenance,

commercial and political risks. Bithout covering these risks the financial

institutions are not willing to commit funds to the sector, especially

ecause the financing of most private projects is on a limited or non#

recourse asis. Insurance companies not only provide risk cover to

infrastructure projects, they also contriute long#term funds. In fact,

insurance companies are an ideal source of long term det and e=uity for

infrastructure projects. Bith long term liaility, they get a good asset#

liaility match y investing their funds in such projects. I'(A

regulations re=uire insurance companies to invest not less than + percent

of their funds in infrastructure and social sectors. International Insurance

companies also invest their funds in such projects. Insurance is a federal

suject in India. &here are two legislations that govern the sector# &he

Insurance Act# 160 and the I'(A Act# 111. &he ;overnment of India

lierali!ed the insurance sector in March $888with the passage of the

Insurance 'egulatory and (evelopment Authority CI'(AD 5ill, lifting all

entry restrictions for private players and allowing foreign players to enter

the market with some limits on direct foreign ownership. )nder the

current guidelines, there is a $: percent e=uity cap for foreign partners in

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an insurance company. &here is a proposal to increase this limit to 71

percent. Premium rates of most general *ommittee. &he opening up of

the sector is likely to lead to greater spread and deepening of insurance in

India and this may also include restructuring and revitali!ing of the

pulic sector companies. A host of private insurance companies operating

in oth life and non#life segments have started selling their insurance

policies since $88.

INDIAN INSURANCE INDUSTRY

Insurance industry, as on .7.$888, comprised mainly two playersH

/ife InsurersH

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/ife Insurance *orporation of India C/I*D

;eneral InsurersH

;eneral Insurance *orporation of India C;I*D Cwith effect from

(ec


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S)N". Re)

N!er

Date "f

Re)

Na!e "f the C"!pan.

8 $6.8.$888 (3* "tandard /ife Insurance

*ompany /td.

$ 87 +..$888 Max %ew 2ork /ife Insurance *o.

/td.

6 8+ $7..$888 I*I*I Prudential /ife Insurance

*ompany /td.

7 8- 8.8.$88 otak Mahindra Old Mutual /ife

Insurance /imited

+ 81 6.8.$88 5irla "un /ife Insurance *ompany

/td.

: 8 $.8$.$88 &ata AI; /ife Insurance *ompany

/td.

- 68.86.$88 "5I /ife Insurance *ompany

/imited.

0 7 8$.80.$88 I%; 9ysya /ife Insurance

*ompany Private /imited

1 : 86.80.$88 5ajaj Allian! /ife Insurance

*ompany /imited

8 - 8:.80.$88 Metlife India Insurance *ompany

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Pvt. /td.

;eneral Insurers H

S)N"

.

Rei$trati"

n N!er

Date "f

Rei$trati"

n

Na!e "f the

C"!pan.

8$ $6.8.$888 'oyal "undaram

Alliance Insurance

*ompany /imited

$ 86 $6.8.$888 'eliance ;eneral

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Insurance *ompany

/imited.

6 8: 87.$.$888 I33*O &okio

;eneral Insurance

*o. /td

7 80 $$.8.$88 &A&A AI; ;eneral

Insurance *ompany

/td.

+ 6 8$.8+.$88 5ajaj Allian!

;eneral Insurance

*ompany /imited

: + 86.80.$88 I*I*I /omard

;eneral Insurance

*ompany /imited.

2rH $88#$88$ H C3rom st an $88 to (ec. $88$D

Insurance Industry in this year, so far has +new entrantsE namely

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/ife InsurersH

S)N

")

Re)

N!er

Date "f

Re)

Na!e "f the C"!pan.

$ 86.8.$88

$

AMP "anmar /ife Insurance

*ompany /imited.

$ $$ 7.8+.$88

$

Aviva /ife Insurance *o. India

Pvt. /td.

;eneral Insurers H

S)N"

)

Rei$trati"

n N!er

Date "f

Rei$trati"

n

Na!e "f the

C"!pan.

$6 +.8-.$88$ *holamandalam

;eneral Insurance

*ompany /td.

$. $7 $-.80.$88$ 4xport *redit

;uarantee

*orporation /td.

6. $+ $-.80.$88$ (3*#*hu

$+


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;eneral Insurance

*o. /td.

2rH $886#$887 H C3rom st an $886 till (ateD

Insurance Industry in this year, so far has new entrantsE namely

/ife InsurersH

S)N") Rei$trati"n

N!er

Na!e "f the C"!pan.

$- "ahara India Insurance

*ompany /td.

2rH $887#$88+ H

Insurance Industry in this year, so far has new entrantsE namely

/ife InsurersH

$:


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S)N") Rei$trati"n

N!er

Date "f Re) Na!e "f the C"!pan.

$0 -..$88+ "hriram /ife Insurance

*ompany /td.

I%")'A%*4 5)"I%44"H

Insurance usiness is divided into four classesH

D /ife Insurance

$D 3ire Insurance

6D Marine Insurance and

7D Miscellaneous Insurance.

/ife Insurers transact life insurance usinessE ;eneral Insurers transact

the rest.

%o composites are permitted as per law.

$-


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T*E INSURANCE REGU+ATORY AND

DE3E+OPMENTAUT*ORITY &IRDA(

A faster development and wider impact of the insurance industry were to

e achieved through a process of insurance reforms resulting in the

lierali!ation of the market and in the passage of the Insurance

'egulatory and (evelopment Authority CI'(AD Act, 111. &he reforms

procedures recogni!ed simultaneously the need for development of the

sector in addition to the traditional concept of regulation and thus

conferred on the Authority the oligation to develop the sector as well.

OBJECTI3ES

&o protect the interest of and secure fair treatment to

policyholdersH

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&o ring aout speedy and orderly growth of the insurance

industry, for the enefit of the common man, and to provide long

terms funds for accelerating growth of the economyE

&o set, promote, monitor and enforce high standards of integrity,

financial soundness, fair dealing and competence of those it

regulatesH

&o ensure that insurance customers receive precise, clear and

correct information aout products and services and make them

aware of their responsiilities and duties in this regardE

&o ensure speedy settlement of genuine claims, to prevent

insurance frauds and other malpractices and put in place effective

grievances redressed machineryE

&o promote fairness, transparency and orderly conduct in financial

markets dealing with insurance and uild a reliale management

information system to enforce high standards of financial

soundness amongst market players.

IRDA PO-ERES AND ?UNCTIONS

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"uject to the provisions of I'(A Act C118D, I'(A willH regulate,

promote and ensure orderly growth of the insurance usiness and re#

insurance usiness, which will include the following main functions

CexcerptsDH

Issue to the applicant a certificate of registration, renew, modify,

withdraw, suspend or cancel such registrationE

Protection of the interest of the policy holders in matters

concerning assigning off policy, nomination y policy holders,

insurale interest, settlement of insurance claim, surrender value of

policy and others terms and conditions of contracts of insuranceE

"pecifying re=uisite =ualifications, code of conduct and practical

training for intermediary or insurance intermediaries and agents.

Promoting and regulation professional organi!ations connected

with the insurance and re#insurance usinessE

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/evying fees and other charges for carrying out the purposes of the

ActE

*alling for information from, undertaking inspection of,

conducting en=uiries and investigations including audit of the

insurers, intermediaries, insurance intermediaries and other

organi!ations connected with the insurance usinessE

"pecifying the percentage of life insurance and general insurance

usiness to e undertaken y the insurer in the rural or social

sector.

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I'(A has so far granted registration to $ private life insurance

companies and 1 general insurance companies. If the existing pulic

sector insurance companies are included, there are currently 6 insurance

companies in the life side and 6 companies operating in general

insurance usiness. ;eneral Insurance *orporation has een approved as

the >Indian rein surer> for underwriting only reinsurance usiness.

PROTECTION O? T*E INTEREST O? PO+ICY *O+DERS

I'(A has the responsiility of protecting the interest of insurance

policyholders. &owards achieving this ojective, the Authority has taken

the following stepsH

I'(A has notified Protection of Policyholders Interest 'egulations

$88 to provide forH policy proposal documents in easily

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understandale languageE claims procedure in oth life and non#

lifeE setting up of grievance redress machineryE speedy settlement

of claimsE and policyholders< servicing. &he 'egulation also

provides for payment of interest y insurers for the delay in

settlement of claim.

&he insurers are re=uired to maintain solvency margins so that they

are in a position to meet their oligations towards policyholders

with regard to payment of claims.

It is oligatory on the part of the insurance companies to disclose

clearly the enefits, terms and conditions under the policy. &he

advertisements issued y the insurers should not mislead the

insuring pulic.

All insurers are re=uired to set up proper grievance redress

machinery in their head office and at their other offices.

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BAJAJ'A++IAN@ COMPANY PRO?I+E

Ba5a5 Allian6 +ife In$rane C") +t%) is a union etween Allian6 AG

the worldGs leading insurer and Ba5a5 At"one of IndiaGs most respected

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names. Allian6 AG is a leading insurance conglomerate gloally and

largest asset manager in the world, managing assets worth over 101

illion 4uros C's. 71, 07,+:8 croresD. Allian! A; has more than 8 years

of financial experience in over -8 countries and 5ajaj Auto, trusted over

++ years in Indian market, are committed to offer financial solutions that

provide all the security the customers need y offering various products.

Ba5a5 Allian6 General In$rane C") +t%) is a joint venture etween

Ba5a5At"and Allian6 AGof ;ermany. 5oth enjoy a reputation of

expertise, staility and strength.

5ajaj Allian! ;eneral Insurance received the Insurance 'egulatory and

(evelopment Authority CI'(AD certificate of 'egistration C'6D on May

$, $88 to conduct ;eneral Insurance usiness Cincluding ealth

Insurance usinessD in India. &he *ompany is authori!ed and has paid up

capital of 's 8 crores. 5ajaj Auto holds -7J and the remaining $:J is

held y Allian! A;, ;ermany.

In its first year of operations, the company has ac=uired %o. status

among the private non#life insurers. As on March 6, $886.5ajaj Allian!

;eneral Insurance maintained its leadership position y garnering a

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premium income of 's.688 *rores. 5ajaj Allian! also ecame one of the

few companies to make a profit in its first full year of operations. 5ajaj

Allian! made a profit after tax of 's.1.: crores.

5ajaj Allian! today has a network in more than 70+ cities spread across

the length and readth of the country. 3rom "urat to "iliguri and ammu

to &hiruvananthapuram, all the offices are interconnected with the ead

Office at Pune.

In the first half of the financial year, $887#8+, 5ajaj Allian! garnered a

premium income of 's. 78+ crores, achieving a growth of 07J and

registered a +$J growth in net profits of 's.$8 *rores over the last year

for the same period. In the financial year $886#87, the premium earned

was 's.708 *rores, and the profit !oomed y $+J to 's. $.: *rores

3ISION

K &o e the first choice insurer for customers.

K &o e the preferred employer for staff in the insurance industry.

K &o e the numer one insurer for creating shareholder value.

MISSION

As a responsile, customer focused market leader, 5ajaj Allian! is

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determined to understand the insurance needs of the consumers and

translate it into affordale products that deliver value for money.

A++IAN GROUP

Allian! ;roup is one of the world


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5ajaj Allian! /ife has offices now in over 70+ towns across the country

enaling customer to uy our products and get =uality efficient service

almost anywhere across the country.

A++IAN AG' A G+OBA+ ?INANCIA+ PO-ER*OUSE

Borldwide $nd y ;ross Britten Premiums # 's.7, 7:,:+7 cr.

6rd largest Assets )nder Management CA)MD L largest amongst.

Insurance cos. # A)M of 's.+, 1:,1+1 cr.

$th largest corporation in the world.

71.0 J of gloal usiness from /ife Insurance.

4stalished in 018, 8 yrs of Insurance expertise.

-8 countriesE -6,-+8 employees worldwide.

BAJAJ AUTO

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5ajaj Auto /td, the flagship company of the 's. 0888 crore 5ajaj group

is the largest manufacturer of two#wheelers and three#wheelers in India

and one of the largest in the world.

A household name in India, 5ajaj Auto has a strong rand image L rand

loyalty synonymous with =uality L customer focus.

AN STRONG INDIAN BRAND' *AMARA BAJAJ

One of the largest $ L 6 wheeler manufacturers in the world.

$ million vehicles on the roads across the gloe.

Managing funds of over 's 7888 cr.

5ajaj Auto finance one of the largest auto finance companies in

India.

's. 7,-77 cr. turnover L profits of +60 cr. in $88$#86.

It has joined hands with Allian! to provide Indian consumers with

a distinct option in terms of life insurance products.

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As a promoter of 5ajaj Allian! /ife Insurance *o. /td., 5ajaj Auto

has the following to offer N

3inancial strength and staility to support the Insurance

5usiness.

A strong rand#e=uity.

A good market reputation as a world class organi!ation.

An extensive distriution network.

Ade=uate experience of running a large organi!ation.

Ba5a5 Allian6 +ife In$rane C"!pan.has developed insurance

solutions that cater to every segment and age#income profiles. 3or

companies it provides comprehensive


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"ingle Premium, )nit ;ain Plus, )nit ;ain Plus "P, /ifelong ;ain Plan,

)nit ;ain "ingle Pension L )nit ;ain 4asy Pension Plans.

SUPERIOR TEC*NO+OGY

In order to ensure speedy and accurate processing of your needs, it has

estalished world class technology, with renowned insurance software,

which networks all its offices and intermediaries#

)sing the Be, policies can e issued from any office across the country

for retail products.

)ni=ue, user friendly software is developed to make the process of

issue of policies and claims settlement simpler Ce.g. online

insurance of marine policy certificateD.

UNIUE ?ORMS O? RIS, CO3ER

"pecial PA cover for Amaranth pilgrims.

3ilm insurance.

4vent management cover.

"ports L 4ntertainment Insurance Package.

7$


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RIS, AND MANAGEMENT

Its methodology is tried, tested and proven the world over and involvesH

'isk identificationH Inspections.

'isk analysisH Portfolio review and gap analysis.

'isk retention.

'isk &ransferH &o an insurer as well as re insurer Cas re=uiredD.

*reation of need ased products.

Ongoing dialogue and proclivity.

76


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77


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COMPANY PRO?I+E

+I?E INSURANCE CORPORATION O? INDIA

&+IC(

/ife Insurance *orporation of India C/I*D was formed in "eptemer,

1+: y an Act of Parliament, vi!., /ife Insurance *orporation Act, 1+:,

with capital contriution from the ;overnment of India. &he then 3inance

Minister, "hri *.(. (eshmukh, while piloting the ill, outlined the

ojectives of /I* thusH to conduct the usiness with the utmost economy,

an spirit of trusteeshipE to charge premium no higher than warranted y

strict actuarial considerationsE to invest the funds for otaining maximum

yield for the< policy holders consistent with safety of the capitalE to render

prompt and efficient service to policy holders, therey making insurance

7+


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widely popular. "ince nationali!ation, /I* has uilt up a vast network of

$,870 ranches, 88 divisions and - !onal offices spread over the

country. &he /ife Insurance *orporation of India also< transacts usiness

aroad and has offices in 3iji, Mauritius and )nited ingdom. /I* is

associated with joint ventures aroad in the field of insurance, namely,

en#India ,Assurance *ompany /imited, %airoiE )nited Oriental

Assurance *ompany /imited, uala /umpur and /ife Insurance

*orporation CInternationalD 4.*. 5ahrain. &he *orporation has registered

a joint venture company in $:th(ecemer, $888 in athmandu, %epal y

the name of /ife Insurance *orporation C%epalD /imited in collaoration

with 9ishal ;roup /imited, a local industrial ;roup. An off#shore

company /.I.*. CMauritiusD Off#shore /imited has also een set up in

$88 to tap the African insurance market.

GENERA+ INSURANCE

;eneral insurance usiness in the country was nationali!ed with effect

from st anuary, 1-6 y the ;eneral Insurance 5usiness

C%ationali!ationD Act, 1-$. More than 88 non#life insurance companies

including ranches of foreign companies operating within vi!., the

7:


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%ational Insurance *ompany /td., the %ew India Assurance *ompany

/td., the Oriental Insurance *ompany /td., and the )nited India

Insurance *ompany /td. with head offices at *alcutta, 5omay, %ew

(elhi and Madras, respectively. ;eneral Insurance *orporation C;I*D

which was the holding company of the four pulic sector general

insurance companies has since een de linked from the later and has een

approved as the >Indian 'e#insurer> since 6rd%ovemer $888. &he share

capital of ;I* and that of the four companies are held y the

;overnment of India. All the five entities are ;overnment companies

registered under the *ompanies Act. &he general insurance usiness has

grown in spread and volume after nationali!ation. &he four companies

have $:11 ranch offices, 6:8 divisional offices and 1$ regional offices

spread all over the country. ;I* and its susidiaries have representation

either directly through ranches or agencies in : countries and through

associate or locally incorporated susidiary companies in 7 other

countries. A wholly# owned susidiary company of ;I*, i.e. Indian

International Pvt. /td. is operating in "ingapore and there is a joint

venture company, vi!. enindia Assurance /td. in enya. A new wholly

owned susidiary called %ew India International /td., ) has also een

registered.

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OBJECTI3ES O? +IC

"pread /ife Insurance widely and in particular to the rural areas and to

the socially and economically ackward classes with a view to reaching

all insurale persons in the country and providing them ade=uate

financial cover against death at a reasonale cost.

Maximi!e moili!ation of people


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that the moneys elong to the policyholders.

Act as trustees of the insured pulic in their individual and collective

capacities.

Meet the various life insurance needs of the community that would

arise in the changing social and economic environment.

Involve all people working in the corporation to the< est of their

capaility in furthering the interests of the insured pulic y

providing efficient service with courtesy.

Promote amongst all agents and employees of the *orporation a

sense of participation, pride and jo satisfaction through discharge of

their duties with dedication towards achievement of *orporate

Ojective.

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+8


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COMPANY PRO?I+E

ICICI PRUDENTIA+ +I?E INSURANCE

ICICI Pr%ential +ife In$rane C"!pan. is a joint venture etween

ICICI Ban/ and Pr%ential pl) &he stake of the companies in the joint

venture is -:J and $7J respectively, which was incorporated on uly $8,

$888.It was one of the first players to commence operations when the

insurance industry was opened to the private sector in $888. "ince

inception the company has written over $ million policies. &he company

has over network of -8,888 advisors, 1 anc assurance as well as over

18 corporate agent and roker tie# ups. It is also the only life insurer in

India to get I3" AAA CindD rating, y 3itch 'atings. I*I*I offers a wide

+


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range of flexile products that meet the needs of Indian customers at

every step in life.

&he authori!ed capital of the company is 's.$688 Million and the paid up

capital is 's. +88 Million. &he *ompany was granted *ertificate of

'egistration for carrying out /ife Insurance usiness, y the Insurance

'egulatory and (evelopment Authority on %ovemer $7, $888. It

commenced commercial operations on (ecemer 1, $888, ecoming

one of the first few private sector players to enter the lierali!ed area.

3or the financial year $88+#$88: which ended on March 6,

$88:, the company registered 's. $7.$ illion of weighted new

usiness premium and wrote 06-,1:6 policies. &he sum assured in

force stands at 's 7+0.00 illion.

I*I*I and Prudential to formed Prudential I*I*I Asset

Management *ompany in 166, which has today emerged as one of

the leading mutual funds in India. After the success of this joint

venture, the two companies joined hands once again in $888 to

form I*I*I Prudential /ife Insurance *ompany, with a commitment

to provide leading edge life insurance solutions.

+$


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ICICI BAN,

I*I*I 5ank is India


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strengths to offer products internationally. I*I*I 5ank currently

has susidiaries in the )nited ingdom, 'ussia and *anada,

ranches in "ingapore, 5ahrain, ong ong, "ri /anka and (uai

International 3inance *entre and representative offices in the

)nited "tates, )nited Ara 4mirates, *hina, "outh Africa and

5angladesh. Its ) susidiary has estalished a ranch in 5elgium.

ank in India in terms of market.

I*I*I 5ank


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pulic offering of shares in India in fiscal 110, an e=uity offering

in the form of A('s listed on the %2"4 in fiscal $888, I*I*I

5ank


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merger of I*I*I with I*I*I 5ank would e the optimal strategic

alternative for oth entities, and would create the optimal legal

structure for the I*I*I group


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5ank of India in April $88$. *onse=uent to the merger, the I*I*I

group


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Prudential has significant operations in the ), the )" and Asia,

contriuting to a diversity of earnings. Borldwide it employs more than

$8,888 people and our shareholders numer :8,17$ Cat 6 (ecemer

$88+D. It is listed on the /ondon and %ew 2ork stock exchanges.

In Asia, Prudential *orporation Asia has $6 operations in $ countries.

&hese include strategic partnerships with some of the regionGs leading

players, including *I&I* ;roup Cfor life usiness in *hinaD, I*I*I 5ank

Cfor life and mutual fund usiness in IndiaD and 5ank of *hina

International Cfor Mandatory Provident 3und usiness in ong ongD.

Prudential *orporation Asia offers a wide range of savings, protection

and investment products tailored to the needs of our customers in each of

the $ markets in which it operates. In addition to its life insurance

operations Prudential has asset management usinesses in India, ong

ong, apan, &aiwan, Malaysia, "ingapore, orea, 9ietnam and *hina

managing over $: illion Cas of 68 une $88+D.

+0


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+1


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MAR,ET S*ARE ANA+YSIS

PARTICULARS 2004-05 2005-06 2006-07

LIC 87.7 71.04 71.44

PRIVATE PLAYERS 12.3 28.96 28.56

:8


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:


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INNO3ATI3ENESS

COMPANY

LIC BAJAJ ALLIANZ ICICIPRUDENTIAL

SCORE 128 106.9 122.1

:$


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RAN 1 3 2

UA+ITY DEPT* O? MANAGEMENT

:6


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:7

COMPANY


SCORE 163.9 96 95.1

RAN 1 2 3


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?INANCIA+ PER?ORMANCE

COMPANY LIC BAJAJ ALLIANZ ICICIPRUDENTIAL

SCORE 158 115.8 78.6

RAN 1 2 3

:+


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ET*ICS TRANSPARENCY

COMPANY

LIC BAJAJ

ALLIANZICICI

PRUDENTIAL

SCORE 158 115.8 78.6

RAN 1 2 3

::


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UA+ITY O? PRODUCTS SER3ICES

COMPANY


SCORE 163.1 111 114.1

RAN 1 3 2

:-


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PEOP+E PRACTICESTA+ENT MANAGEMENT

COMPANY

LIC BAJAJ

ALLIANZICICI

PRUDENTIAL

SCORE 139 102 114.1

RAN 1 3 2

:0


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G+OBA+ COMPETITI3ENESS

COMPANY LIC BAJAJ ALLIANZ ICICIPRUDENTIAL

SCORE 124 94.1 71

RAN 1 2 3

:1


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TOP : INSURANCE COMPANIES

POINTS SURVEY-2006

! Birla Sun Life

2 ICICI Lom General

" ICICI Pru Life

4 Bajaj Allian General

5 LIC

-8


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&OP + I%")'A%*4 *OMPA%I4"# $88:

-

POINTS SURVEY-2005

! SBI Life

2 Birla Sun Life

" ICICI Pru Life

4 !"#C S$an%ar% Life

5 LIC


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&OP + I%")'A%*4 *OMPA%I4"# $88+

-$


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RESEARC* OBJECTI3E

&he report identifies the position of 5ajaj Allian! in the current insurance

market as a fast emerging insurance company. It gives the detailed

ackground of the company and its whereaouts efore the two insurance

tycoons namely# /I* and I*I*I Prudential. It also highlights the

-6


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potential of the company to penetrate and sustain in the insurance sector

leaving many ig players far ehind.

RESEARC* DESIGN

&he research design for the comparative study is of eFpl"rat"r. type and

the focus is given to discover the possile measures, y detailed analysis,

for the company which would e helpful up to some extent to retain a

good position in the competitive market. &he research design is not

formal and rigid one as the focus depends upon the availaility of new

ideas and relationship among variales.

DATA CO++ECTION MET*OD

3or the purpose of study oth primary as well as secondary data have

een used. &he secondary data have een collected from various

maga!ines, newspapers, company annual reports, and wesites. 3or the

collection of primary data structured and undisguised =uestionnaire has

een used.

-7


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3or the purpose of knowing whereaouts of the company in the present

insurance market secondary data has disclosed many important

information as# market share of the company and its potential efore the

insurance market leaders on the asis of various attriutes

Primary data have een helpful to explore the opinion of general pulic

and their future insurance plans with the company. On the asis of

information extracted from the primary data various measures are found

which would e helpful to it in making new strategies in near future.

SAMP+ING

As per the sampling procedure is concerned, the finite universe is taken

into consideration. &he sampling units include# usinessmen, government

employees, and private employees ounded to )ttar PradeshC/ucknowD

only.

-+


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&he sampling is ased upon proaility sampling methods. &he reason is#

it is the only sampling method that provides essentially uniased

estimates having measurale precision. &he sample si!e was :8.

ANA+YSIS

Bhich company has played a major role in the field of insuranceQ

COMPANY PRIVATE

EMPLOYEES#OVERNMENTEMPLOYEES

BUSINESSMEN

-:


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LIC 10 13 10

BAJAJALLIANZ

5 3 5

ICICIPRUDENTIAL

3 3 4

OTHERS 2 1 1

Bhich insurance company has een successful in making strong

pulic ase y advertisementQ

COMPANY PRIVATE


BUSINESSMEN

--


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LIC 12 14 12

BAJAJALLIANZ

2 2 3

ICICIPRUDENTIA

L

5 3 4

OTHERS 1 1 1

(o you think the insurance policy is totally in the direction of

pulic welfareQ

OPTION

PRIVATEEMPLOYEES

#OVERNMENTEMPLOYEES

BUSINESSMEN

YES 10 13 12

-0


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NO 7 4 6

C$%'S$(

3 3 2

&he life insurance policy opted y you is from which companyQ

COMPANY PRIVATE


BUSINESSMEN

-1


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LIC 10 16 12

BAJAJALLIANZ

2 2 3

ICICIPRUDENTIAL

3 1 2

OTHERS 5 1 3

(o you think /I* would continue to loose its grip over the

insurance market in coming daysQ

OPTION

PRIVATEEMPLOYEES

#OVERNMENTEMPLOYEES

BUSINESSMEN

08


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YES 3 1 15

NO 14 18 3

C$%')$(

3 1 2

If any life insurance need arises in your family, then which

company would you prefer to get insured with after analy!ing all

insurance playersQ

0


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COMPANY PRIVATE


BUSINESSMEN

LIC 7 15 5

BAJAJALLIANZ

5 1 2

ICICIPRUDENTIAL

5 3 2

OTHERS 3 1 11

Bhich private company do you think would e ale to make its

grip stronger over insurance market in coming daysQ

0$


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COMPANY PRIVATE


BUSINESSMEN

BAJAJALLIANZ

8 7 6

ICICIPRUDENTIA

L

7 7 7

OTHERS 5 6 7

?INDINGS

3rom the analysis of the aove study it can e revealed that#

06


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/I* has played a major role in the field of insurance, while 5ajaj

Allian! and I*I*I Prudential stay ehind it.

In making strong pulic ase y advertisement /I* is not ehind

anyone in the race despite private players are generally supposed to

deliver comparatively more advertisements.

A majority of private employees, government employees, and

usinessmen are insured with /I* which is a tough challenge for

private players especially 5ajaj Allian! and I*I*I Prudential.

Majority of people still trust a lot in /I* despite its gradually

loosening grip over the insurance market. &hey hope it will

recapture the market share lost y it.

Majority of people would like to get insured with /I* despite of

the fact that private players like 5ajaj Allian! and I*I*I Prudential

are e=uipped with a lot of eneficial products, not less than /I*. Its

really a matter of consideration.

07


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&alking aout private players, majority of people hope and are

confident for the comparatively righter future of 5ajaj Allian!

than any other private player, which is a good indication and

response for the company.

CONC+USION

0+


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&he story of insurance sector, however, is the meteoric rise of 5ajaj

Allian! ;eneral, the second largest private general insurer after I*I*I

/omard ;eneral. 5ajaj Allian! has een winning image points y

mixing transparency with innovativeness. &he company, last year,

oosted its pulic profile y insuring production of the movieBunty Aur

Bubly and the &9 showNach Baliye. 5ajaj Allian! is also driving deeper

into the hinterland for growth.

&he entry of private insurance companies has expanded the product

segment to meet different levels of customer re=uirements. &he most

powerful competitor is /I* which has vast market and very firm grip on

its traditional customers. In life insurance segment I*I*I Prudential is the

main challenge for 5ajaj Allian!. owever, there seems no immediate

cause for alarm for /I*, which continues to top customer rankings for the

sector. &hough the private pack niled off aout -J more of its market

share in $88+#$88: reducing it to -J, the company managed to grow its

premium income y 71J for individual policies and 6$J for usiness

policies in$88+#$88:.

RECOMMENDATIONS

0:


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&oday the Indian consumers are increasingly ecoming more aware and

are actively managing their financial affairs. &oday, while oundaries

etween various financial products are lurring, people are increasingly

looking not just at products, ut at integrated financial solutions that can

offer staility of returns along with total protection. &o satisfy these

myriad needs of customers, insurance products will need to e

customi!ed. Insurance today has emerged as an attractive and stale

investment alternatively that offers total protection # /ife, ealth and

Bealth. In terms of returns, insurance products today offer competitive

returns ranging from -J to 1J. 5esides returns, what really increases the

appeal of insurance is the enefit of life protection from insurance

products along with health cover enefits.

&herefore, to eat the competition, more and more transparency should

e ascertained etween the company and policy holders. Particularly, in

the emerging oom in insurance sector, 5ajaj Allian! should e more

customers centered, and well versed in the handling prolem and

grievances of the policy holders. Also it should more concentrate on good

advertising media to make the customers well aware of its products.

0-


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(ata show that more rural people are uninsured till the time which is a

good indication for companyGs prospects in rural areas. Accordingly,

company should prepare its products for rural people and make them

aware of these products. 5ut, meanwhile, the company should not forget

that marketing of financial instruments in a rural area is not an easy jo

and for that company would have to convince the rural customers in a

rural way.

00


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BIB+IOGRAP*Y

BOO,S

"tatistics 3or Management# 'ichard I. /evin, (avid ". 'uin

3undamentals of "tatistics# (.%. 4lhance

'esearch Methodology# *.'. othari

MAGAINES NE-SPAPERS

&he 4conomic &imes

&he &imes of India

01


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5usiness Borld

5usiness &oday

-EBSITES

www.ajajallian!.co.in

www.licofindia.com

www.indiainfoline.com

www.iciciprulife.com

www.financialexpress.com

www.theeconomictimes.com

www.licindia.co

18


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AC*IE3EMENTS

1


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Bajaj Allianz Life Insurance Company Limited is a Union between AllianzSE, one of te world!s lar"est Life Insurance companies and Bajaj Auto,one of te bi""est #$ %$ & weeler manufacturers in te world.

Allianz SE is a leadin" insurance con"lomerate "lobally and one of te

lar"est asset mana"ers in te world, mana"in" assets wort o'er a (rillionEuros )*'er +. ,--,--- crores. Allianz SE as o'er // years offinancial e0perience in o'er 1- countries.

Bajaj Auto is one of te most trusted name is Indian auto for o'er years.At Bajaj Allianz Life Insurance customer deli"t is our "uidin" principle.Ensurin" world$class solutions by offerin" customized products wit

transparent benefits, supported by best tecnolo"y is our businesspilosopy.

Key Achievements in FY 2006-07 :

2 3a'e sold o'er 4-,--,--- policies to satisfied customers

2 Is bac5ed by a networ5 of 617 offices spannin" te country

2 Accelerated 8rowt

2 Sareolder capital base of +s 1-- cr.

1$


93/93

DEC+ARATION

I Puneet ;upta declare that the "ummer &raining Project 'eport entitled&OPI*@ eing sumitted to the T)J"hn B$ine$$ Sh""l for the partialfulfillment of the re=uirement for the degree of Master of 5usinessAdministration is my own endeavors and it has not een sumitted earlierto any InstitutionR)niversity for any degree.

PlaceH P)%44&;)P&A (ateH

CMM586-8$D

55738860 bajaj allianz insurance

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