Professional Documents
Culture Documents
CHAPTER – 1
INTRODUCTION
OBJECTIVES
NEED FOR THE STUDY
METHODOLOGY
SCOPE & LIMITATIONS
CHAPTER – II
INDUSTRY PROFILE
COMPANYPROFILE
CHAPTER – III
THEORITICAL FRAME WORK
CHAPTER – IV
ANALYSIS AND INTERPRETATION
CHAPTER – V
FINDINGS AND SUGGESTIONS
ANNEXURE
BIBLIOGRAPHY
QUESTIONNAIRE
CHAPTER- I
INTRODUCTION
OBJECTIVES OFSTUDY
NEED FOR THE STUDY
METHODOLOGY
LIMITATIONS OF THE STUDY
INTRODUCTION
The business operations of the TATA Group currently compass seven
Services, and Communications and information Systems. The scale of the Tata
Group’s operations is increasingly turning global. Tata Tea was first Indian MNC I
the global tea industry; Tata Steel is one of the world’s lowest cost producer of steel;
Tata Chemicals is one of Asia’s are manufacture of soda as; Titan is one of the
world’s top six manufacturer brands in the watch segment, and Tata Motors is
amongst the top six commercial vehicle manufactures in the world. The Tata Group
is increasingly focusing on new technology areas, and has the largest footprint in he
information technology and communication sector in India. Beside being the largest
software services provider in the country, it also one of the leading private sector
telecom service providers and is also India’s largest international long distance and
The Tata brand is recognized as the largest homegrown grand in India and the
most respected brand. The Tata Group’s stable of brands also includes many national
and some internationally renowned product and service brands, including Tata Indica,
Tata Indigo, Indigo Marina, Tata Safari, Tata Indicom Tata Safari, Tata Indicom, Taj
Group of Hotels, Luxury, Business and Leisure, Indione, Tata Tea Tetley, Tata Salt,
Tata Steelium, Tata Shaktee, Tata Tiscon, Tata Bearings, Titan, Tanishq, Voltas and
Westside.
THE AIG GROUP
and individual customers through the most extensive worldwide property causality
In the Unite States, AIG is the least underwriter o commercial and industrial
insurance and is on of the top tree life insurers. AIG`s global business also include
financial services, retirement savings and asset management. AIG`s financial services
business include aircraft leasing, financial products, trading and market making.
AIG`s growing global consumer finance business is led in the United States by
American General Finance. AIG also has on of the least U.S. retirement savings
businesses through AIG Sun America and AIG VALIC, an is a leader in asset
estate.
provide protection against the possible channels of generating losses. It eliminates worries
and miseries of losses at destruction of property and death. Further it provides capital to
the society as the accumulated funds are invested in the productive heads. The product of
insurance benefits the industry, the business, an individual and group of persons
OBJECTIVES
The study broadly pursues the following objectives
particulars.
4. To make an in depth study of the agents that are involved in the channels of
also felt necessary to make survive of the agents to assess their ideas in
Associated.
operations, which physically bring goods, produced by manufactured into the hands
of final consumer.
Channels of distribution forms an integral part of marketing it could provide
an important link between a producer and the ultimate consumer of goods. Channel of
undertaken this study to observe the efficiency in canalizing the services offered by of
Data collected method: the collection of data refers top planned gathering of
information relevant to the subject matter of the study from the units under
investigation. The method of collection of data depends mainly upon the nature,
objectives and scope of the inquiry on one hand and available of resources and time
on the other hand. Data may be classified into primary and secondary data, depending
Primary data: - Primary data is collected directly from the prospective customers,
those who are policyholders and agents of Tata AIG. Primary data is collected
Secondary Data: - Data collected or derived from the published reports treated as
secondary data. The secondary data is collected from the following sources
• Business magazines
• Periodicals
• Books
collecting the primary data. The questionnaire consists of a set of questions presented
information from customer. In designing the questionnaire for the data collection,
effort was made of avoid unnecessary questions and to include all the necessary
questions.
Most of the questions in the questionnaire are closed-end questions i.e., they
pre-specify all possible answers and respondents make a choice among them. There
are only few questions, which are opened questions, i.e., that allow the respondents to
answer in their own words. Care has been taken to make the wording of question as
simple, direct and unbiased as possible, so that, the customer can feel easy. The
collected data has been presented in the form of pie-diagrams and bar diagrams, with
study.
• This study is restricted only to a sample of 50 agents and 300
constraint.
• The study is based on the Three years only. The reason is Tata AIG
• This study covers mostly on agents in channels and not the corporate
INDUSTRY PROFILE
COMPANYPROFILE
INDUSTRY PROFILE
History of Insurance
The earliest traces insurance was in form of marine trade losses or carrier’s
contracts
In ‘Rigveda’ the references are made to the concept of ‘Yogakshema’, which is more
or less a kin to the well being, and security of people. This makes it clear that albeit in
the ancient world, the traces for sharing the future losses are available. However there
oldest form of insurance is the marine insurance. The piracy on the open seas and
highway robbery or fear of sinking the vessels in the deep water necessitated a device,
which spreads the financial losses. And the Marine insurance was found suitable for
that purpose.
Germany in the beginning of the 16th Century. The appearance of the life insurance
was first in England in 16th century. The policy of life of ‘William Gibbons’ on
june18 1653 is the first recorded evidence. The first registered life office was the
head-in hand society, which was established in 1696. In U.S.A, the life insurance
orderly growth of the insurance industry and for matters connected therewith or
incidental thereto.
In India, the first life insurance company was established in Bengal presidency
in1818 that was known as the oriental Life Insurance Company. The year 1870 is a
landmark, since then several companies were established and the insurance business
gained a rapid momentum. Experiencing so many ups and downs the life Insurance
1947 and to be more specific after nationalization in 1956. The Life Insurance
and foreign companies in India. The Life Insurance Corporation of India and General
accident. There is no certainty that an accident will hap. On the other hand there is a
certainty that death will happen, but its timing is uncertain. Life insurance protects
their lifestyle
• Pay off the mortgage if an income earner were to die so the house is
household.
security by entering general insurance. In General, different products are there like
These days’ Motor vehicles are increasing day by day. Along with them, road
accidents are increasing which leads to damage of the vehicles. We don’t know when
natural calamities and other unexpected things occur damaging our property like
buildings. In those cases, General Insurance provides them security and reduces risk.
Life Non Life Insurance Sectors in
India Growth Prospects: -
Presently life insurance based wealth known as life fund is some where around
Rs.1, 50,000 crores. This provides a possible trend of growth scenario of life funds.
Which about 25 percent of life fund collected as the current fund, inflow consists
roughly 16 percent premium income and 9 percent investment income of this funds
inflow, about 13 percent are transaction-based out, flow 4 percent life risk coverage
out flow and 16percent maturity repayment out flow. As a result, a life fund in India
shows an increasing trend of 17percent compound rate. Roughly life fund should
double every 4.5 years. This way India’s backlog of life insurance penetration as a
improves and the customers are offered better returns compared to substitute products.
their other financial sectors some of the insurance companies which are coming up
with a one or two year bond that pays nearly twice as much as a typical low risk
investment. Thus distinction between insurance and other financial activities gets
increasingly blurred. As the insurance companies will be able to reduce their risks by
spreading them over a large base. Therefore, instead of bearing the risks themselves,
insurers can concentrate on selecting risks and packaging them for sale to investors
who care more about yields than about risks involved. As this process become a
normal Activity insurers will increasingly be enjoying reasonably predictable income
The Indian Insurance Industry which until 1-4-2000 was a controlled sector,
with only two players for the last four and half decades (which are LIC and GIC), has
suddenly turned itself into a battle ground. Thought the sector remained in the strong
clutches of the Government enterprises, the growth has been slow. The industry is
Big Market:
Today global insurance companies see only two countries having a great
market potential. Incidentally the countries, China and India, have a high population
and relatively high savings rates. However around 25 percent savings in India, less
than 5 percent are being spent on insurance Inspire of the high savings rate, owing to
poor reach and consumer awareness, the insurance sector has not grown that fast as
anticipated, in spite of the fact that there are two government enterprises taking care
of life and general insurance (LIC, GIC), their contribution to the gross domestic
product is less than three percent. This indicates the extent of growth potential of this
sector in India. Despite the monopolistic control over the market life Insurance
(GIC) and its four subsidiaries (The Oriental Insurance Company Limited, The New
Survival Tactics:
With the entry of private player in the sector, the competition has increased
manifold. Giant’s Like State Bank of India, TATA AIG, HDFC, ICICI, BAJAJ and
reliance has all forayed into the market. Recently the Indian car giant, MARUTI
UDYOG also announced its plans to enter into Insurance. Through the companies
are competing with government monopolies, in one way or the other, they are also
competing with each other to create a niche for themselves. The private companies
However, the entry o big private players and multinational insurance companies have
created ripples in both LIC and GIC. Both of the government insurance sectors are
We cannot directly attribute the reasons for opening up the insurance sector to
any external influence. But it may be a mere coincidence that the US President Bill
Clinton’s a visit to India was announced soon after the Government passed the IRA
bill. A more possible reason could be that the Government is pressed for more long-
term funds for investment in infrastructure projects. Committees like the Rakish
indisputable fact that India is utterly under insured, not only when compared to other
countries, but also in relation to its own needs. While only 20 percent of the
population has nay-insurance coverage, such a cover meets only 25 percent of their
needed and affordable cover. The gap is even more glaring when we compare India
with other developed countries like the USA, Japan etc., the per capita life insurance
premium in India is a dismal$ 4 against that of $ 964 for the US 3817 for Japan.
Insurance premium as a percentage of GDP is only for India against those of 7.3 for
the U.S and 10.10 for Japan. It is hoped tat with privatization Indian’s total premium
and with that an improvement in the insurance products and services. With the
increase in number of players it may not be a difficult task to extend the insurance
coverage to larger section of the society. However will the expansion of this sector
lead to any improvement in the overall saving rate or will it be at the cost of other
sectors like bank and mutual funds. It depends on the kind of products that will be
offered and the kind of marketing strategy that will be adopted. In fact, the marketing
strategy will determine the speed at which the sector is going to develop. Product
designing is no doubt a major part of the marketing strategy, but even a good product
fails to take off if it is not marketed properly. The LIC does not lack in the variety and
number of products, but due to its neglect on the marketing side the market remains
Insurance Regulations:
The first step towards to opening up of insurance sector was taken in 1993,
when the government set up the Malhotra committee, headed by former insurance
secretary and RBI Governor R.N.Malhotra, to evaluate India insurance industry and
recommend its future directions. The committee submitted its report in 1994. It took
almost 6 years to take the next step of implementing its recommendations. The main
recommendations of the committee were concerning the structure and regulation of
industry the committee recommended that the government stake in the insurance
companies should be brought down to 50 percent and the private companies with a
minimum paid up capital of Rs.1 bn should be allowed to enter the industry. It ruled
that no company should deal in both life and General Insurance through a single
entity; further, it opined that foreign companies might be allowed to operate in the
rural market. It also felt that only one state level life insurance company should be
Regarding the regulatory aspects the committee felt that the insurance Act
should be changed and an Insurance Regulatory body should be set up with the
independent. Further on the issue of investment regulation the committee felt that
75 percent to 50 percent more over. It felt that the GIC and its subsidiaries should not
hold more that 5 percent in any company (their current holding to be bought down to
this level over a period of time). The committed had decided to restrict competition to
a few strong parties by stipulated the minimum capital requirement of Rs.1bn. For, it
felt the need to exercise caution because any failure on the part of new player could
ruin the need to exercise caution because any failure on the part of Rs.1bn. For it felt
the need to exercise caution because any failure on the part of new player could ruin
Insurers:
Insurance Industry, as on 1.4.2000, comprised mainly two players the state insurers.
Life Insurers:
GIC had four subsidiary companies, namely (with effect from Dec’2000. these
subsidiaries have been de-linked from the parent and made as independent insurance
companies.
Life Insurers: -
S.NO Reg Number Date of Reg. Name of the Company
1. 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2. 104 15.11.2000 Max New York Life Insurance Company Ltd.
3. 105 24.11.2000 ICICI prudential Life Insurance company Ltd.
4. 107 10.01.2001 Kotak Mahindra Old Mutual Life company Ltd.
5. 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
6. 110 12.02.2001 Tata AIG Life Insurance company Ltd
7. 111 30.03.2001 SBI Life Insurance company Ltd
8. 114 02.08.2001 ING Vysya Life Insurance company Ltd
9. 116 03.08.2001 Bajaj ALLianz Life Insurance company Ltd
10. 117 06.08.2006 Met Life India Insurance company Ltd.
General Insurers:
Company
Ltd
2 103 23.10.2000 Reliance General Insurance Company
Ltd.
3 106 04.12.2000 IFFCO TOKYO General Insurance Co.
Ltd
4 108 22.01.2001 Tata AIG General Insurance Co. Ltd
5 113 02.05.2001 Bajaj Alliaz General Insurance Co. Ltd
6. 115 03.08.2001 ICICI Lombard General Insurance Co.
Ltd
General Insurers
S.NO. Reg. Number Date of Reg. Name of the company
1 123 15.07.2002 Cholamandalam General Insurance Co.
Ltd
2 125 27.08.2002 HDFC-Chubb General Insurance Co. Ltd
COMPANY PROFILE
TATA AIG: -
TATA AIG life Insurance Company Ltd and Tata AIG General
Insurance Company Ltd, (collectively Tata AIG) are joint venture companies, formed
from the Tata group and American International Group, inc. (AIG). Tata AIG
companies the strength and integrity of the Tata Group with AIG’s international
expertise and financial strength. The Tata Group holds 74 percent stake in the two
individuals and corporate. Tata AIG Life insurance company was licensed to operate
in India on February 12, 2001 and started operations on April 1, 2001. Tate AIG Life
offers a broad array of life insurance coverage to both individuals and groups, with
various types of add-ons and options available on basic life products to give
which started its operations in India on January 22, 2001, offers the complete range of
insurance for automobile, home, personal accident, travel, energy, marine, property
History
The Tata Group, easily Indian’s most recognized business group, was
founded by Jaksetic Tata and began with a textile mill in central India in the 1870s.
and Communications & IT. The group established Tata LTD, London in 1907, and
then expanded into Airlines and Commercial Vehicles between 1930 and 1950, in
1948 launched car for the mass market and in 2000; it acquired the Tetley Group,
U.K.
GDP). Long loan for its adherence to business ethics, it is Indian’s most respected
private business group. With 219,000 employees across 94 major companies, it is also
Founded by Jamestji Tata in the 1860s, the Tata Group’s early years
were inspired by the spirit of nationalism. The Tata Group pioneered several firsts in
Indian Industry: Indian’s first private sectors steel mill, first private sector power
utility, first luxury hotel chain and first international airline, amongst others. In more
companies like Tata Consultancy Services (TCS), today Asia’s largest software and
services company, and Tata Engineering, the first car marker in a developing country
services, and Communications and Information Systems, The scale of the Tata
Group’s operations is increasingly turning global. Tata Tea is the first Indian MNC in
the global tea industry and India’s largest integrated tea company; Tata chemicals is
Asia’s largest manufacturer of soda ash; Titan is one of the world’s top six
manufacturer-bands in the watch segment and Tata engineering is a amongst the top
six commercial Vehicle manufacturers in the world. The Tata Group is increasingly
focusing on new technology areas. And has the largest footprint in Indian’s new
economy; besides being the largest software service provider in the country, it is one
of the leading private sector telecom service providers, and is also Indian’s largest
and the most respected brand across consumer segments. The Tata Group’s stable of
brands also include many national and some internationally renowned product and
service brands, including Tata Indica, Tata Indigo, Tata Safari, Taj (Hotels, Resorts
and palaces) Voltas, Tata Tea, Tetley, Tata salt Titan, Tanishq, Westside and the latest
The Tata Group has always believed in returning wealth to the society it
services. Thus, nearly two-thirds of the equity of Tata sons, the Tata Group’s
centers, hospitals and cultural establishments. The Trusts also give substantial annual
national interests and core business with emerging ones, the Tata Group aims to be
largest and most respected global brand from India whilst fulfilling its longstanding
industrial insurance and is one of the top three life insurers, AIG’s global business
also include financial services, retirement saving and assent management. AIG’s
financial services business includes aircraft leasing, financial products, trading and
market making.
finance business in the United States. AIG also has one of the largest U.S retirement
savings businesses through AIG Sun America and AIG VALIC, and is a leader in
asset management for the individual and institutional markets, with specialized
and real estate. AIG’s common stock is listed in the New York Stock Exchange, as
individual and corporate. Tata AIG Life Insurance Company was licensed to operate
in India on February 12, 2001 and started its operations April1, 2001. It offer a broad
array of life insurance coverage to both individuals and groups, with various type of
add-one and options available on basic life products to give the consumers flexibility
and choice. Tata AIG Life offers products in Ahemedabad, Bangolore, Chandigarh,
which started its operations in India on January 22, 2001, offers a complete range of
insurance for automobile, home, personal accident, travel, energy, marine, property
Management
• Dalip Verma: Managing Director, Tata AIG General Insurance Company Ltd.
• Ian J Watts: Masnging Dirctor, Tata AIG Life insurance Company Ltd. He has
been with American International Group for over two years now and is
I. For individuals
1. Life
2. Motor
3. Home
5. Travel
1. Life
3. Energy
4. 4.Property
5. Marine
6. Contingency
III. E-Application:
1. E Marin
Adult
Retirement
Children: -
Tata AIG watches over insurer Child every step of the way. From the first
days of college to the first days of happy, Matrimony, Tata AIG child policies really
understand what a child will inevitably ask for, and how parents need help to be able
to afford it.
b) Mahalife
d) Assure Educare
a) Tata AIG 21 Year Money Saver Plan given insures back 10% of the
sum assumed eery three years for the next 21 years ! And the balance
Insurer can spend the money the way he like it-on their children`s
In the event of insurers unfortunate death, the plan still protects their loved
ones for full sum assured, even after taking the money back periodically.
It is one-of-a kind endowment police (in other words, a policy that pays the
sum assured at maturity), especially designed to ensure their child’s education is well
• Educate 18 this plan mature at the age of 18. This policy is exclusively open
• Educate 21 this plan mature when insurer child is yrs. Here, the minimum
First –of – a kind guarantee where 10% of the sum assured will be paid at
maturity or on death, provided the police have been in force for 10 years.
Plus a guaranteed education benefit of 20% of the sum assured will be paid to
insurer at maturity.
It`s a money-back policy that helps insurer provide for your child`s carrier.
• 20% of the sum assured paid on insurer child`s 18th birthday. Just when he is
• 20% of the sum assured paid on insurer child`s 21st birthday. Right when he
• 40% at the policy maturity at insurer child`s 27th birthday. Finally at 27, he
All the periodical payments against this policy do not affect the full payment of sum
Adult:
Tata AIG designs insurance products around an adult`s distinct needs – both for
Different Products:
a) Investment assure
c) Life plus
premiums insurer pay is also invested, and based on fund performance insurer
receive a bonus from their insurance company every year. However they have
even if their premium could earn more dividends by, say, investing in equities,
b) Assure Lifeline:
The Lifeline Plans offer various policy terms to suit insurer`s needs. They can
choose from any of the following coverages to give the ultimate protection to
their loved ones: Assure One year Lifeline, Five year, Ten year, Fifteen year,
twenty year, Twenty five year Lifeline and Lifeline to Age 60.
c) Life plus:
This plan is Life cover for 20 years. With LifePlus Insurer pay premiums for
15 years and get protection for 20 years. That means the insurer is protected
Double the sum assured will be paid. Premiums paid are eligible for tax
This plan is more useful to the insurers ho are looking for an attractive savings
plan. This plan gives insurer the dual benefits i.e... Life cover plus the
assured every three years or the next 21 years, with the balance on maturity of
the policy. Alternatively, insurer can reinvest these returns with Tata AIG at a
This Plan offers both, security for insurer family and growth of their hard
earned savings. It offers three different terms 10/20/30 years. In any of these
intention.
f) Health First:
illness. The unique feature of this policy is that it comes in the form of a
benefit with a flexible coverage. This means that while other medical policies
reimburse for actual medical expenses, this policy provides a lump sum,
irrespective of what insurers bills are. So, now insurer can not only pay for
the hospital bills, but also have the freedom to pay for all allied expenditures.
• Surgical Benefit
• Post-Hospitalization Benefit
Retirement Plans:
They will be able to do every thing they wanted like visiting interesting places
This insurance plan matures at the age of 60. Insurer can pay the regular
life. It protects insurer`s family in the event of unfortunate death. This plan
also shares in the profits of the Company. So, the death benefits may be
b) Nirvana
insurers choose the amount of cover the want depending on their premium
paying capacity. It also allows choosing their retirement age and therefore the
Annual bonus will be declared by the company from the 5th policy
bonus. This bonus will also be payable in the unfortunate event of the insurer
SERVICES MARKETING
CHANNELS OF DISTRIBUTION
INSURANCE CHANNELS
SERVICES MARKETING
Services are marketed in the same way as tangible goods. And marketing in
nonprofit service organizations is fundamentally the same as in profit- seeking firms. The
idea we want to get across here is that whether it is a goods or service, profit or non-
profit, the organization should first select and analyze its target markets. Then the
company should design a marketing program around its marketing mix- the goods or
services, the price structure the distribution system, and the promotional activities.
Definition of Service: -
Services have been defined in a number of ways but no signal definition has
government to fight five giant evils, want disease, ignorance, squalor and
human effort which provides succor to the needy. It maybe food to a hungry
person, water to a thirsty person, medical services to an ailing person and
plain.
organizations(s) that maintains and improves the well being and functioning of
people”.
benefits or satisfactions which are offered for ales are provided in connection
services.
objects and can be created and transferred. But the services are intangible and
home, can be stored and in most of the cases we find their consumption at
home. But the services are not taken home. We only carry their effects. We
Existence: - On this basis, the goods can be stored and have some existence
over a long period. Generally, goods are of non-perishable nature but the
services don’t’ have any existence and are generally of perishable nature. As a
is difficult to judge the quality of service. But the goods can be standardized. It
Scope of Services
There are lot many services are available in our economy. The services
• Housing
• Private education
• Transportation
insurance
Characteristics of Services
Intangibility: - services are intangible. One can’t touch them. We can’t albeit smell
them before they are bright. It is not a physical object. It has mental connections.
benefits and satisfaction; a buyer can derive after buying that services.
Inseparability: -
Services are not separable generally the services are created and supplied
simultaneously, In other words, services and their providers are the same.
Ownership: -
An important feature of services is that of ownership. In the sale of goods,
after the completion of process, the goods are transferred in the name of buyer and he
becomes owner of the goods. In the case of services, we do not find the same thing.
The users have only an access to the services. They simply use the services.
Quality measurement: -
The quality of service requires another tools for measurement we can measure
it in terms of service level. It is very difficult to rate or qualify the total purchase.
Nature of demand: -
While identifying the silent features of services, we can’t undermine the factor
nature of demand. Generally the services are of fluctuating nature. Particular during
target markets. Then design and implement marketing and achieve the organization’s
marketing objectives. During each step use marketing research to help in decision-
making.
service. The services marketing needs to understand the component of population and
how they affect the market for a service. Marketers also must try to determine their
customer buying behavior buying motivation, perceptions attitudes rather than goods.
This is important when marketing services rather than goods. This is because we
cannot touch, smell or taste the service offered. Also, the social class structure and
Product Planning
decision regard.
• What features, such as branding and warranting the services will have
create an effective brand image. The strategy this goal is to develop a total theme that
includes more than just a good brand name. To important this strategy, the following
Include a tangible good as a part of the brand image- like the umbrella of
Travelers Insurance.
select the channels of distribution, and the other is to provide physical facilities for the
Under the product we include both goods and services tangible or of intangible
ingredients. Like goods, a service industry is also required to formulate its market-
oriented plans and programmers. The more scientific and condition – oriented is the
service mix the more refined is services. If our products are refined, the responses in
market are sure to be positive. This necessitates the formulation of marketing mix for
the services. The framing of marketing mix for services would make possible
have designed the conceptual framework of marketing mix but tee perception is more
or less the same. Kotter, Keelay and Lazar, Davar and many others have gone
through the term but all of them agree with the view that it is a fair combination of
product mix, price mix, place mix and promotion mix. The ultimate goal of different
significant role in the formation of product mix. The marketers are here required to
study the demand graphs of the different segments of society. The standard of living,
income index and incoming index developments in the field of culture mix also need a
• Brand
• Packing and services
suitable location. The providers of services have no option for opening or location
and organization wherever they like. Location advantages simplify the task of
applying the marketing strategies. The task before the marketing manager is to select
a suitable place where the actual sale is to make. User conveniences would be and
• Distribution channels
• Physical distribution
Price is the most crucial component of marketing mix. Both from economic
and social stand point, the management of pricing is important but at the same time
the pricing decisions are found to be critical, chaotic and challenging. Of course, no
enjoy considerable freedom in making pricing decisions. This freedom comes their
Pricing policies are used as general guidelines in making pricing decisions over long
fact promotion is the one part of the marketing mix that services marketers are most
• Personal selling
• advertising
• Publicity
service firms.
For years, advertising has been used extensively in may service fields-
DISTRIBUTION CHANNEL
arranging for its sale (and the transfer of title) from producer to final customer.
middleman either owns the product at some point or actively aids in the transfer of
ownership. Often, but not always, a middleman takes physical possession of the
product.
Importance of middlemen
Some critics say prices are high because they are many middlemen performing
manufactures also reached this conclusion and sought to cut costs by eliminating
middlemen. While middlemen can be eliminated from the channel, lower costs
may not always be achieved. The outcome is not predicable, because of a basic
axiom of marketing: you can eliminate but you cannot eliminate basic distribution
middlemen then the producer or other final customer. Middlemen may be able to
customers and as sales specialists for their suppliers. They provide financial
producer and the final customer for the product in its present from a well as any
The channel for a product extends only to the last person or organization that buys
without making any significant change in its form. Besides producer, middlemen
and final customer, other institutions aid the distribution process. Among these
companies. However because they do not take tittle to the products and are not
producer middlemen and final customer other than this bank assurance, insurance
the three largest sellers of auto insurance use different channels of distribution. If
a company wants a distribution channel that not only meets customer’s need but
also provides and edge on competition. Some firms gain a differential advantage
its agent with what it intends to the EST training in the insurance field.
marketing.
First the firm`s marketing objectives are reviewed. Next the roles assigned to
offensively. Under a defensive approach, a firm will strive for distribution that is a s
good as, but not necessarily better that, other firm`s distribution.
E.g.: Insurance companies they need agents to transfer their products from producer to
competitions.
E.g.: In car industry if one company introduces services another company also
introduces services.
most suitable type of channel for the company’s product must be determined. At
this point in the sequence, a firm needs to decide whether middlemen will be used
used at the wholesale and retail levels in a particular territory. The target market’s
buying behavior and the product’s nature has a direct bearing on this decision.
insurance also the producer must decide how many agents should we appoint and
from what bank we take bank assurance. What are the efficient corporate persons
Firms may rely on existing channels, or they may use new channels to better serve
current customer and reach prospective customers. In selecting their channels, a firm
the gent will work about the company. The agent sells the product to the final
Diverse distribution channels exist today. The most common channels for consumer
Producer → consumer
Producer → user
Distribution of services:
and/or sales activity often require personal contact between producer and
prepared by the producer reaches the ultimate consumer (or buyer). The distribution
channel bridges the distance between the producer (point of manufacture) and the
consumer (point of sale). In the case of goods, the product manufactured in the
factory passes through wholesalers, stockiest and retailers, before it reach the
consumer. In the case of life insurance, the agent is the primary component of the
training agents, makes the channel effective. New agents widen the channel
insurance consultants. Some life insures are trying to eliminate intermediaries to save
costs. Direct selling is one such attempt. This is increasing in foreign countries. In
India people by large know about life insurance, but still have a lot of wrong notions
about it. Personal contacts by agents may continue to be necessary for quite some
time.
Another method being attempted is the use of the extensive network of
branches of banks. The customers of both bands and life insures are practically from
the same segments of population. Through the same contact, the prospect can e
helped to arrange for both bank deposit and life insurance. There would e saving in
infrastructure to access vast areas. New insures find this an every way to access vast
areas. It may be possible to develop composite products having the elements of both
prospects, person who can be approached for insurance. There are names of people
at parties, meetings, seminars, etc. Their names have to be qualified which means that
some preliminary work should be done to collect detail may indicate whether it may
be worth approaching them for insurance. The work of “qualifying’ is done to ensure
that the prospect is not apparently until for insurance like being sick, or with great
moral hazard. advice, and personal service such as haircutting and weightless
transfer of ownership of owner ships (the sales task) or related tasks. Many
services notably travel, lodging advertising media entertainment, and
Producer
Customer
Many, perhaps most, producers are not contact with only a single distribution channel
instead, for reason such as achieving broad market coverage or avoiding total
agents, and bank assurance to transfer the products to consumers from producer.
can aggravate middlemen. Multiple channels are more advisable to the insurance
And also multiple channels are also used to reach different segment within a
single market
A distribution channel is the route by which the product (or offer prepared by the
producer reaches the ultimate consumer (or buyer). The distribution channel bridges
the distance between the producer (point of manufacturer) and the consumer (point of
sale). In the case of goods, the product manufactured in the factory passes through
wholesalers, stockiest and retailers, before before it reaches the consumer. In the case
of life insurance, the agent is the primary component of the distribution channel. He is
the equivalent of the retailer. The supervisor of agent, by whatever name called, is an
important part, because it is he who, by creating and training agents, makes the
insurance consultants. Some life insurers are trying to eliminate intermediate to save
costs. This is increasing in foreign countries. In India, people, by large know about
life insurance, but still have a lot of wrong notions about it, Personal contacts by
branches of banks. The customers of both banks and life insure are practically from
the same segments of population. Through the same contact, the prospect can be
helped to arrange for both bank deposit and life insurance. There would be saving in
infrastructure to access vast areas. New insurers find this an every way to access vast
areas. It may be possible to develop composite products having the elements of both
Location: -
The location and channels used to supply services to target customers are two
key areas. Location and channel divisions involve considering how to deliver the
service to the customer and where this should taken place. This has particular
relevance to services as very often they cannot be stored and will be produced and
consumed at the same point, ‘place’ also has importance as the environment I who the
service is delivered and how it is delivered, are part of the perceived value and
Location is concerned with the decision a firm makes about where its
operations and staff are situated. The importance of location for a service depends
upon the type and degree of interaction involved. Their exist three types of interaction
The choice of both distribution and channels for service largely depends on the
particular requirements of the market and the nature of the service itself.
often the service provides. The highlights the importance of the selection of the
place of significance.
Channel
Direct selling Agents, Direct marketing, Financial advisers/consultants,
corporate
Agents:-
The agents motivate or induce the potential policy holders or prospects and
turn them into actual policyholders. An agent is expected to establish contact with the
motivate them, prepare the proposal form, manage for their medical examination and
agent cannot be an employee of an insurance company and the insurance Act IRDA
Corporate Agents: -
The branch managers are found responsible for recruiting the agents. And also
the branch managers also sell the products. He also acts as a distributor of a product.
In insurance business the corporate agents working for the company. Through the job
working for the insurance company they can also sell the insurance policies. The
corporate agents performing both managerial functions and operative functions. The
remuneration to the corporate agents is salary plus commission over the business done
by them. Corporate agents are more responsible than the others. They are playing a
Employees are response for processing the policies claims etc… They are maintaining
records and providing information to the management and to the customers (or)
clients. They can also sell the policies. For that they are getting commission.
This helps checking the lapse of policies and paves ways for inducing the potential
policyholders, the agents can make available after sale service to the policyholders by
setting their chains, extending to them the credit facilities and helping them in
Banc assurance: -
themselves into ‘one stop financial supermarket’. This has promoted two big classes
Advantages of Bancassurance
• Wide network of branches allows tapping of both urban and rural areas
• Banks can market to and possibly even influence the insurance
sending habits, investment purchases etc., can help work out marketing
Brokers:
A large majority of the customers are unaware of the various risks that can be
that help customers in identifying the exact products they need. By spreading
awareness of their products among brokers, insurance companies can also reduce
India has an extremely well developed postal network, which is even in the
interior parts of the country. Insurance companies can tie up with the postal
department to sell a reattribute various insurance covers. This would certainly require
up front training costs. As the postal employees in turn need to educate an sell the
concept and benefits of insurance to the people in rural areas. Such a tie up would
open up India’s entire hinterland, which is largely untapped. This can be a sustainable
person who can be approached for insurance. There are names of people with in
meetings, seminars, etc. Their names have to be qualified which means that some
preliminary work should be done to collect details about them. Their details may
indicate whether it may indicate whether it may be worth approaching them for
insurance. The work of “qualifying “is done to ensure that the prospect is not
apparently until for insurance like being sick, or with great moral hazard.
TATA AIG DISTRIBUTION CHANNELS
I. Locations: -
• Mumbai
• Kolkatta
• Hyderabad
• Bangalore
• Delhi
• Chennai
And also the company the company offers in to six more branches in
• Insurance Agents: - At the end of 2002 Tata AIG had only 5000 agents. It
increases to 12000 at the end of 2003. Presently the agents are approximately
18000.
In the Tata AIG agents are playing a key role to distribute products to customers.
distribution channels agents playing key role in distribute the product. More than
50% of the product is selling by the agents only. For that only Tata AIG company
concentrating on the procuring the agents. The insurance products require
personnel selling and the insurance should have believed on the agents.
the corporate agent shall process a valid license to act as an insurance agent or
important role.
• Composite insurance agent: - Means an insurance agent who holds both life
III) Employees: - Employees are also act as channels of distribution. They also
sell the policies of the customers. The Tata AIG has 537 employees.
(%)
2002-2003 298 ------
2003-2004 537 80%
IV) Bancassurance
• HSBC
• IDBI
Tata AIG life has signed a pact with the United Bank of India to distribute
its Bancassurance products through the letters branch network in the country.
UBI as a corporate agents of the bank has chosen 100RS 1.25 crore premium.
AIG to industries.
The below figure says the producer push the products to corporate bodies
(manager) and banks (HDFC, OBI, IDBI). The corporate bodies push the product to
agents and employees some times directly to consumers. The agents and employees
push the products to the customer. Banks also push the products to the customers.
Producer
Employees
Customer
CHAPTER IV
ANALYSIS AND INTERPRETTION OF DATA
The researcher has conducted a survey over fifty agents to elicit information about
80
70
60
Percentage
50
40
30
20
10
0
Male Female
Gender
Regarding the gender Out of fifty agents, thirty-seven are male with the percentage of
LIFE
INSURANCE PRODUCTS
AGENTS (%)
a) Children 23 46%
b) Adult 16 32%
c) Retirement 11 22%
Total 50 100%
50
40
Percentage
30
20
10
0
Children adult Retirement
Product
Regarding the policy sold by the agents twenty-three said they were able to sell
Children products more when compare to the other life insurance products, their
dream is to see their children in high possession for that they spend more money for
education. So they save money for their children. Tata AIG providing this type of
policies to the children’s continuous education. Sixteen members were said they were
able to sell Adult policies when compare to the other life insurance products their
percentage is 32%. Eleven members said they were able to sell retirement products
when compare too the other products in lie insurance their percentage is 22%.
AGENTS
a) Urban 38 76%
b) Rural 12 24%
Total 50 100%
80
Percentage
60
40
20
0
Urban Rural
area
In the above analysis thirteen members said they are able to sell more products in
urban areas when compare to the rural areas, their percentage of 76%, and twelve
members said they are able to sell more products in rural areas when compare to the
AGENTS
a) Easy 2 4%
b) Difficult 13 26%
c) Very difficult 16 32%
d) More difficult 19 38%
Total 50 100%
40
Percentage
30
20
10
0
Easy difficult Vert More
duffiucult difficult
level
Two members said selling in rural areas is easy, their percentage 4%. Thirteen
members said difficult their percentage is 26% Sixteen members said very difficult
their percentage is 32% Nineteen members said more difficult their percentage is38%.
80
Percentage
60
40
20
0
able unable
ablity level
Thirty-four members said they are able to fulfill the targeted policies, their
percentage is68%. Sixteen agents said they unable to fulfill their target policies
6) COMMISSION TO AGENTS
70
60
Percentage
50
40
30
20
10
0
More satisfied satisfied less satisfied
ablity level
Twelve agents said they are more satisfied regarding commission received by
them their percentage is24%. Thirty-one agents said they are just satisfied their
percentage is 62%. Seven agents said they are less satisfied their percentage is
14%
7) AGENTS OCCUPATIONS
AGENTS (%)
a) Employees 17 34%
b) Business man 28 56%
c) Farmer 5 10%
Total 50 100%
60
50
Percentage
40
30
20
10
0
Employees Business man farmer
Occupation
Above analysis we can say agents are doing daytime job in other areas. In that
are businessman their percentage 56%. Five members are farmers their percentage is
10%.
The researcher has conducted a survey over one hundred policy holders to
elicit information about their demographic factors and their preferences, choices
60
50
Percentage
40
30
20
10
0
20-30 30-40 40-50 50-60
age
Out of the One hundred policy holders sixteen members age in the age group of
Twenty to thirty their percentage is16% fifty one policy holders are in the age
compare to the total. This is because most of the people will join in service at the
age of thirty to forty. So that they are purchasing policy after joining in service.
Twenty-three members are in the age group of Forty to Fifty with a percentage
of 23% to the total. Ten members are in the age group of Fifty to sixty with a
percentage of 10. With the above analysis we can say that the public awareness is
growing about the Tata AIG insurance company. People have a tendency of
2. OCCUPATION OF CUSTOMERS
CUSTOMERS (%)
a) Employee 38 38%
b) Businessman 59 59%
c) Farmer 3 3%
Total 100 100%
70
Percentage 60
50
40
30
20
10
0
Employee Businessman Farmer
Occupation
One hundred policy holders surveyed by researcher major are business people their
The number of farmer are very few i.e., Three with a percentage of 3% so the above
figures raveling that the awareness about the life insurance among the business about
the life insurance among the business about the life insurance among the business
people is growing.
3.) MARRIED AND UNMARRIED POLICY HOLDERS
80
70
60
Percentage
50
40
30
20
10
0
Married Unmarried
Marrital status
Among One hundred policy holders Sixty-nine numbers are married with a
percentage of 69% to the total. This is reveling that individuals will take more care
about life after marriage. This is because of they have to take care of about their life
not only for their future but also the future of dependents. So the insurance companies
can perceive the married people to get more business. Only thirty-one numbers are
CUSTOMERS
a) Agent 58 58%
b) Corporate gent 25 25%
c) Employee 17 17%
Total 100 100%
80
60
Percentage
40
20
0
agent Corporate agent Employee
Marrital status
Regarding the policyholders purchased by the policyholders Fifty-eight said that they
purchased policy through agent, twenty five people said that they purchased policy
through corporate agents and seventeen people said that they purchased policy
through employees of the insurance company. These figures reveling that the agents
are playing major role in life insurance business. This is because an agent who has
permanent employee in other organization can perceive his colleagues and motivate
them to purchase a policy. So that, the insurance companies can gets more business
70
60
Percentage
50
40
30
20
10
0
agent Corporate agent Employee
satisfaction evel
Regarding the customers satisfaction out of the One hundred policy holders Sixty four
policy holders said that the services providing by the company is highly satisfactory
with the percentage of 64%. Twenty-three customers are just satisfied with the
percentage of 23%. Only thirteen respondents expressed that the services are not up to
mark with the percentage of 13%. As the customer satisfaction is more important for
The researcher has conducted survey over 200 external customers to know their
(%)
1 HIGH 136 68%
2 MODERATE 44 22%
3 LOW 20 10%
Total 100 100%
80
68
70
60
Percentage
50 High
40 Moderate
30 22 Low
20 10
10
0
1 2 3 4
1tqur
From the above figure 68% people highly preferring Tata AIG insurance, 22% are
(%)
a) TATA AIG 84 42%
b) ROYAL 36 18%
c) HDFC 32 16%
d) ICICI 48 24%
Total 200 100%
50 42
40
Percentage
Tata AIG
30 24
18 16 Royal
20
Hdfc
10
0
1 2 3 4
1tqur
From the above data 42% preferred Tata AIG and 18% respondents preferred royal,
3. PRICE OF INSURANCE
80
70
60
50
40
30
20
10
0
reasonable High low
From the above data we came to conclusion that the price of the Insurance are
Of customers says sand 32% of the customers says that the price of the insurance are
high.
4) NEXT ALTERNATIVE
next alternative if you want to but another brand insurance and we have gives the
three choices i.e., HDFC, ROTAL, ICICI. 40 respondents said they want to buy
When we asked the owners of the HDFC insurance that what will be your next
alternative if we want to buy another brand insurance and we have given the three
choices i.e., TATA AIG, ROYAL, ICICI. 20 respondents said that they would by
TATA AIG, 12 respondents said that they buy ROYAL and 4 respondents said that
When we asked the owners of the ROYAL insurance holders that they would
FINDINGS
1. Through the age of Tata AIG is three years its market share is considerable in
Life insurance
2. The Tata AIG could be able to get considerable business because of its
3. The corporate agents and employees of the Tata AIG trying to get green
Pastures elsewhere. So that the labour turnover is very high among the
4. Due to high labour turnover among the agents and employees there is discontent
Between the company and the policy holders
5. As the insurance agency work is secondary to the agents they are not showing
much
6. As the LIC was a sole player and still major one most of the people trusting LIC.
Still people are not able to understand the changes taken place in insurance industry
.So that the most of the policyholders believing LIC is the only one is life insurance
industry they have no information about the new entrants of the industry and they do
7. The products offering by Tata AIG is not with in the reach of below middle class.
Company also not showing any interest in developing business in this segment.
8. Many people do not know even today that the Tat AIG is doing life insurance
business.
SUGGESTIONS
2. The company has to take necessary steps to make agents and employees committed
3. The company has to offer incentives to the agents and employees to make involve
5.The company has to educate the general public about the changes place in life
insurance industry there by the public can came to know LIC is not the only player
6. The Tata AIG has to offer life insurance products to all economic classes of the
society.
7. Tata group can make use its good will in the industry towards promoting the
business of Tata AIG. As almost all the companies have to make group insurance,
Tata AIG enters into this segment through its relations to with other companies.
8. Tata AIG has to take much care about the general insurance business. Due to the
position of the group Tata AIG as member of the group companies it can develop its
BIBLIOGRAPHY
QUESTIONNAIRE
BIBILOGRAPHY
1) FUNDAMENTALS
MARKETING -WILLIAM J.STANTION
2) SERVICES
MARKETING -S.M.JHA
3) JOURNALS -ANALYST
4) WEBSITES -WWW.TATAaig.com
-WWW. Insurance .com
QUESTIONNAIRE
A STUDY ON CHANNELS OF DISTRIBUTION
IN
INSURANCE SERVICES
Name:
Occupation:
Age:
Sex:
Address:
Yes No
A) Savings
B) Fixed Deposits
C) PPF
D) Stocks-Debentures
E) Others
(B) What would you do to protect your income after you retire?
b) Savings
c) Bank
d) Fixed Deposit
e) Post Office
4. How would you arrange for cash if you had Critica illness /Emergency/Accident
a) Medical Insurance
c) Don’t know
a) Very important
b) Important
c) Not important
a) Very important
b) Important
c) Not important
10. Would you like a representative call on you to discuss any of the ideas mentioned?
Above?
Yes No
A) Brand Name
B) Range of Price
C) Good Serivce