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IN

BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD.

AREA OFFICE 2, VARANASI (U.P.)

SUMMER TRAINING INTERNSHIP

TITLE : INSURANCE SCHEMES FORRURAL PEOPLE IN INDIA

AMAR DEEP

MBA (Agri-Business) IIIrd, Sem.

Enrollment No. 290515

FACULTY OF MANAGEMENT STUDIES

BHU,VARANASI-221005.

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Outline of Project :

Introduction.

Objective.

Research Design.

Findings.

Recommendation.

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Introduction

Insurance industries in india: Insurance Act passed in, 1938.

private participation in the year 1999.

India has become the 19th largest insurance market ofthe world (2006).

Life insurers underwrote a premium of Rs. 29664.64 croreduring the six months in the current financial year.

LIC accounted for Rs. 23435.08 crore.

The Private insurers for Rs. 6229.56 crore.

average annual growth of ~37 per cent in the first yearpremium in the life segment

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About Bajaj Allianz Life InsuranceCompany

BAJAJ :

Bajaj is the largest manufacturer of two-wheelers

and three-wheelers in India from 55 years.

4th largest automotive company of the world.

Bajaj Auto Limited, the flagship company of Bajajgroup with the net business of Rs. 8000 crore.

Bajaj is a household name in India, with thequality and customer satisfaction. With more than15,000 employees.

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More than 21 million vehicles on the road across

the globe.

Bajaj Auto Finance is one of the largest autofinance companies in India.

Total turnover of Rs. 5,766 crores with the netprofits of Rs. 986 Crores (2005-06).

Contd.Contd.

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Founded in 1890 in burlin. At the top of theinternational group is the holding company, AllianzAG , with its head office in Munich (Germany).

Allianz Group is one of the worlds leading insurers

and financial service provider.

Second largest in the World with a gross writtenpremium of Rs. 8,68,746 crores.

ALLIANZ :

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12th largest corporation in the world.

Holds 52.8 % of global business of life insurance.

110 years of insurance expertise.

Third largest Assets Under Management (AUM)and largest amongst insurance companies AUMof Rs. 51,96,959 crores

Contd.Contd.

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Bajaj allianz life insurance company ltd.

Established on August 03, 2001, with the name ofAllianz Bajaj Life Insurance Company Limited.

Later, on July 12, 2004 the company change itsname as Bajaj Allianz Life Insurance CompanyLimited. situated in Pune (Maharashtra).

Based in 534 towns with 1286 branches all overindia.

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Contd.

The end of 2007, the company plans to increase its

branches to 2423.

Presently the company has a strong network ofmore than 108155 agents.

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Understand rural customers current knowledge,attitudes and practices regarding savings and

insurance.

Identify existing factors, if any, prohibiting thepurchase of insurance policies.

Profile potential rural customer segments in termsof attitudes, behavior and demographics.

Objective

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Develop a broad, cost effective distributionstrategy.

Explore new definitions of rural with respecy toinsurance sector.

Develop a comprehensive description of available

channels and their delivery capabilities in thecontext of rural insurance potentials

Contd.Contd.

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Identify and understand the concerns of insurersand their strategies for facing the challenges that

rural market presents.

Develop an Evaluation Framework as a basis forselection, design and operationalisation ofdistribution channels.

Primary research in the Varanasi District of UP forthe feasibility of each available channel applyingevaluation criteria.

Contd.Contd.

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Research Design

Data Collection

Primary : Primary data collected from head ofthe family and earning member.

Secondary : From internet and companyrecords.

Survey : Personal Interview.

Instrument

Questionnaire

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Sampling Techniques

Sampling : (Universe - Rural people belonging

to District : Varanasi, Villages - Pahari,Kandawa, Marhauli,Kadipur & Nakaai.)

Sampling procedure :Individuals residingin selected area.

Sample size : Target respondent : 340.

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S.No. Villages Interviews Education Interviews

1. Pahari 95

Segment - A Xth + 682. Kandawa 56

3. Marhauli 74 Segment - BVth to

IXth34

4. Kadipur 54

Segment - CUpto

Vth 2185. Nakaai 61

TOTAL 340 TOTAL 340

Sampling procedure

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Data Analysis technique

Frequency.

Percentage.

Pie diagram.

Bar diagram.

Column diagram.

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28100 7000

18900

22200 5600

12200

18500 3700

9677

0 20000 40000 60000

Segment A

Segment B

SegmentC

Household

expenses

Other

expenses

Savings

ANNUAL HOUSEHOLD MONEY FLOWS

Estimated Avg. income (Rs.) 60000 40000 20000

Range ofincome(Individual)/Year

20k 200k 15k-150k 5k - 80k

Savings ratio 35% 30% 30%

As would be expected, educational levels are correlated to income &also to higher spending and saving.

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PENETRATION OF INSURANCE PRODUCTS

Over one-third have insurance, with life insurance having themaximum penetration.

Non Insured : 64%Non Insured : 64%

Insured : 36%Insured : 36%

11510

1629

38

64

NO INSURANCE

ANY INSURANCE

LIFE INSURANCE

GENERAL INSURANCE

MOTORTRACTOR

CATTLE

ACCIDENT

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Non- Policy

Holders,62%

Policy

Holders,

38%

Intention to purchase Insurance

Mostrespondentsdointendtopurchaseaninsurancepolicyinthe

future,especiallythosewithnopolicycurrently.Themoreaffluentaremost

keentopurchasesome formofinsurance.

TotalPopulation :340TotalPopulation :340

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LIFE INSURANCE

RURALURBAN

18%

3.86%

Per Annum growth of Life insurance PoliciesPer Annum growth of Life insurance Policies

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SUM ASSURED

RURALURBAN

28.4%

10.75%

Growth in Sum Assured/ AnnumGrowth in Sum Assured/ Annum

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Target Market for Life Insurance

Rural Population (%) Segment

11% Segment A (Class X +) most affluent

Target market for Individual policies

27% Segment B (Class V - IX) affluent

Target market for Individual policies

62% Segment C (less than Class V) least

affluent

Target market for Group policies

*TotalPopulation -340

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K

ey findings of the research

Rural sector offers a huge business opportunity forinsurance companies.

Savings ratio is across all socio economicsegments.

Awareness about Life Insurance is near universal.

51% of all respondents have expressed intentionto purchase a life policy.

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An extensive rural agent network for sale of Lifeinsurance products exists.

The agent plays a major role in creating

awareness, motivating purchase and renderingother insurance services.

Delivery infrastructure in the form of DistrictCooperative Banks, Cooperative Societies, NGOsand Self Help Groups already exists in mostvillages.

78% of respondents prefer various combinationsof life insurance like life + accident, life + loan,life + health + accident.

Contd.Contd.

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Flexibility in Premium payments is important.

TV viewership 59% ; newspaper readership 58% ;radio 50%.

Security of income and bulk returns, especially fordaughters marriage and childrens education are

major persuasions for taking life policy.

Contd.Contd.

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Recommendation

Life policies products in combination withAccident, Health and Loan facility.

Communication :

Need for establishing credibility of privateplayer.

Create awareness and interest throughregional mass media.

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Delivery systems

Agent Network :

Insurance customers rely on personalinteractions and a high level of service.

Commercial, Co-operative Grameen,RRBs :

Banks are viewed as safe institutions to investin and any tie up would enhance the credibilityof insurers and their agents.

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Post Office :

This institution is very highly trusted by therural population with access to the smallestvillages.

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Self Help Groups,Youth Clubs,

Co-operative Societies :

These are various rural forums that meetregularly at the village, block and district levelsand can be used for promoting group insurance.

Once the group leadership approves the

insurance company, members will be moreinclined to accept its insurance products.

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