Professional Documents
Culture Documents
Concept of Insurance
1
be mitigated through insurance. Insurance is a commodity which
offers protection against various contingencies.
Insurance products available for life and non-life
are many. In non-life, apart from personal covers such as accident
covers and health insurance, there are products covering liabilities
under a particular law and or common law. The various products are
designed to cater to different needs of an individual or industry such
as fire insurance policy on multi-storied building, householder’s
policy.
An insurance contract promises to make good to
the insured a certain sum in consideration for a payment in the form
of premium from the insured.
Human life cannot be valued. Hence, the sum
assured is by way of a ‘benefit’ in the case of life insurance. Life
insurance products provide a definite amount of money to the
dependants of the insured in case the life insured dies during his
active income earning period or becomes disabled on account of an
accident causing reduction/complete loss in his income earnings. An
individual can also protect his old age when he ceases to earn and
has no other means of income by purchasing an annuity product.
2
In the case of Health Insurance, the policy seeks
to cover expenses towards treatment of diseases and /or injury up to
the sum opted by the insured.
In respect of insurance relating to property,
there are many products available. Property may be covered against
fire and perils of nature including flood, earthquake etc. Machinery
may be insured for breakdown. Goods in transit can be insured under
a marine cargo insurance cover. Insurance covers are also available
for ships and other vessels. A motor insurance policy covers third
party damage as well as damage to the vehicle.
Insurance of property is based on the principle
of indemnity. The idea is to bring the insured to the same financial
position as he/she was before the loss occurred. It safeguards the
investment in the property. Where there is no insurance, losses can
mar a project or an industry. General Insurance offers stability to the
economy and to the society.
Insurance offers security and so peace of mind to the individual. The
concept of insurance is that the losses of a few are made food by the
contribution from many. It is based on the law of large numbers. It
stemmed from the need of man to find a solution for mitigation of
losses. It also reflects the nature of man to find a solution collectively.
It is important for all to understand the
various products that life and general insurance companies offer
before they make a choice as to the product they want to buy.
As per regulations, insurers have to give the
various features of the products at the point of sale. The insured
3
should also go through the various terms and conditions of the
products and understand what they bought and met their insurance
needs.
4
Necessity of Insurance:-
• Regular Savings:-
Providing for ones family and oneself as a
medium to long term exercise has become a more relevant
exercise in recent times as people seek financial independence
from their family.
• Investments:-
5
The building up of savings while
safeguarding it from the ravages of inflations also a part of
insurance. As while regular product investment products are
traditionally lump sum investments were the individual makes
one-time payment.
• Retirement:-
Provision for ones later years becomes
increasingly necessary especially in the changing cultural and
social environments. One can buy a suitable insurance policy,
which will provide periodical payments in ones old age.
6
INSURANCE IN INDIA
7
Some of the important milestones in the lifer insurance
8
Reforms of Insurance Sector:
9
INSURANCE REGULATORY AND DEVELOPMENT
AUTHORITY:
IMPACT OF LIBERALIZATION:
10
rural areas. While there are as many as 27 direct insurance players,
more await their foray into the county.
India is turning out to be a crucial market, with premium
from India accounting for almost 25% of Asia and Middle East’s gross
written premium for royal & sun alliance. The group expects the
Indian market to double again in the next five years substantially
increasing the region’s share in world insurance.
Allianz, New York, Prudential, standard life, AIG, Aviva,
Axa, Metlife and ING are all multinational insurance companies that
have joint ventures in the country. Yet another foreign insurance
player entered the country when Religare, a Ranbaxy group company
providing financial services, joining hands with the Dutch insurer
action
11
was also felt that the rapid economic growth witnessed in the 90s
cannot be sustained without a thriving insurance sector.
It was also recognized that India has a vast potential that
is waiting to be tapped and this could be achieved when sufficient
competition is generated and it is exposed to the developments in
the rest of the world. The insurance sector was, therefore, opened
up for private sector participation with provision for limited foreign
equity exposure. We have now four years experience of the public
and private sector together operation in the market.
Indian insurance business, which remained under
developed with low levels of insurance penetration and insurance
density has shown signs of improvement. The insurance
penetration i.e. premia as percentage of GDP has increased from
2.32%in 2000 to 2.88% in 2003. The insurance density i.e. premia
per capita has increased from USD 9.90 in 2003. The overall world
rankings in terms of total premium volumes have improved from
23rd in 2000 to 19th in 2003. The world ranking in terms of premium
volumes has also improved from 20th in 2000 to 18th in 2003. The
share in world in world market has increased from 0.50% to 0.81%.
The total premium collected by the insurers both life and non-life in
the years – 1997-98, 2000-01 and 2003-04 in crores.
12
70000
60000
50000
40000 LIFE INSURANCE
30000 NON-LIFE
20000 INSURANCE
10000
0
1997-98 2000-01 2003-04
The diagrams represents that there is 83% increase in the last three
years over the base year 2000-01. There was also an increase of 66%
market share of the private players has also to be seen in the context
13
of this enlarged market. This is also an evidence to show that the rate
14
were purchasing products as they alone are available in the market.
This choice has empowered the customers and this is a positive
signal.
In the case of General Insurance also, the public
sector has responded to the challenge by entering into the corporate
agency relationships with providers of goods and services. The scope
for innovation being limited in the tariff market, the private general
insurance companies seem to be concentrating on provision of total
risk management services to their corporate clients. This has enabled
them to make in roads into the profitable corporate accounts of state
insurers. In addition the private sector has concentrated on providing
a host of service to their clients like point of sale issuance of policies,
cashless settlement in the case of motor repairs, and SMS alerts on
motor claims status. The accent is on providing high-class service to
the customers and earning goodwill which would in due course help
access large corporate accounts. The general insurers have to come
out with innovative products in the personal lines if they are to
expand business. I have no doubt that this would happen and the
IRDA would be happy to facilitate it by removing any regulatory or
tariff related obstacles.
In addition to the growth of insurance market the
other area where there is significant beneficial change with the entry
of the private insurance companies is in the area of insurance
intermediation. Till two years
ago, the only mode of distribution or life insurance products was
through agents. We have today alternate channels like banc
assurance, brokers,
15
Corporate agents and direct marketing through internet. Though it is
too early to predict, banc assurance has the potential to emerge as a
significant distribution mechanism. Banks have not only data from
which they can identify potential clients, but have also extensive
reach and provide a point of contact for the insured. The bank branch
unlike an agent cannot be elusive after the sale of the product and
has to respond to the needs of the insured. If there is proper
disclosure at the time of sale of policy and efficient post sale service,
there will be significant increase in the use of this model by the
insurers to enlarge their business.
The insurance broker offers the most efficient
distribution system through which clients purchase commercial
insurance. As the non-life insurance market opens gradually, the
value of the insurance broker’s role will be better understood. There
will be increasing opportunities to serve the needs of midsize
companies and small enterprises by delivering the specific services
these clients need and in the way they want them delivered.
This implies that there is enough business for a large
number of brokers for the present and an early start would give them
adequate time and opportunity to equip themselves with necessary
skills to provide professional services when the market is finally
detariffed. Corporate Agency is another area, which has been
expanding rapidly. This is a new institution and we have no
experience of the functioning of this new class of intermediary, as
such an institution is not preventing in insurance markets in the
world. While this model has the potential to reach a large section of
the population in a short time, there are concerns about the mode of
16
sale of the policies. Insurance products are becoming complicated
and unless the agent is conversant with benefits and conditions
attached to the policy, there is a distinct possibility if the sale being
affected without full disclosure. While this may not be international
repercussions could have far-reaching consequences. The insurers
will have to be extremely careful in dealing with corporate agents and
keep a vigilant eye on the way the sales are affected. The IRDA would
be issuing some guidelines in the manner of selection of corporate
agents, the manner in which their activities should be monitored and
the precautions to be taken to ensure that there is complete
disclosure to the clients of policy implications In spite of the
proliferation of the intermediary channels, the traditional agent
continues to play a dominant role in the sale of insurance policies.
The regulations provide for minimum qualifications, specified training
programme followed by a pass in the test conducted by the insurance
institute of India for becoming an agent. The insurers have been
aggressively recruiting candidates as agents and after getting them
trained sending them for the examination. In view of the large
numbers the Institute is finding it difficult to exercise the required
controls for conducting the examination. We have come across some
irregularities in the conduct of both training and the examination. I
have no doubt that the insurers are interested in recruiting for their
agency force a person with good academic qualification and with
impeccable credentials and conduct. While from the Regulatory side
we shall take action necessary to ensure the fair and proper conduct
of training and examination, I would appeal to the CEO’s through this
17
forum to send the message down to their HR managers that they
should exercise due diligence in the recruitment of agents.
A significant feature in the post reforms era is the
ability of the agency force to assess the requirements of risk cover for
their prospect and suggest the policies that suit their individual
requirements it may be recalled that one of the criticisms against the
public sector insurers is that they concentrated on side of policies
without looking into the needs of the customers. As a result many of
the individuals remained underinsured. The average size of the life
insurance policy before the opening up of the sector was around Rs.
50,000/-. This has now risen to about Rs. 80,000/-. The policies sold
by the private insurers are in the range of Rs. 1.1 lakh to Rs. 1.2 lakh,
way above the industry average.
The limited coverage in the rural areas and the
available sections of the society continues to be a source of concern
for the regulatory body. While the private insurers are adhering to the
targets stipulated in the Regulations, there is need for a greater
involvement of the management at various levels so that the product
that is finally delivered serves the needs of those targeted group. We
have streamlined the definition of “RURAL AREAS” to bring it on par
with the classification followed by the Census Department to avoid
confusion on what constitutes a “rural area”. In the case of coverage
of the socially disadvantaged sections, the IRDA has come out with a
draft micro insurance regulation to facilitate easy coverage and
provide quality service to the insured.
As we look at these four years, one can reasonably
be proud of the strides made by the industry. We are witnessing a
18
demographic change in the country and the younger generation
which is exposed to the outside world demands products and services
which are at par with what is available in the
SIZE:
Insurance is a $10 billion (premiums) industry in India: Grew by
25% in 2004-05 over the previous year.
In life insurance, the total premium collected in FY 2004-05 was
$5.8 billion for 26.2 million policies: Growth of 36% over 2003-
04.
Non-life insurance – Motor, marine, fire and health insurance are
STRUCTURE:
INDIAN Insurance market was opened to private & foreign
investment in 1999-2000.
19
Major international players like AIG, Aviva, Metlife, New York,
Prudential, Allianz, Sun Life, Standard Life and Lombard are
already
20
SHARE OF THE INSURANCE COMPANY IN MARKET
21
However, consumer awareness level is still off the
mark. According to the recently conducted FICCI survey on
the Present State of Indian Insurance Industry, the
awareness levels regarding insurance are still in the realm of
medium to low. This clearly indicates the onerous task that
companies have in creating awareness about “need to
insure” and also tremendous potential they have in
expanding the markets by getting more customers in their
fold by increasing awareness levels.
Despite several positive developments and entry of
several large private players in the market, there are certain
areas, which need to be delivered in order to reap full
potential of privatization. In fact, the companies should start
looking at the B&C population segments, as the metro and
large urban market will saturate in 3-5 years time. The
success of the companies will be determined by the insurer’s
ability to innovate and distribute simple products for B&C
population segments.
The 26% Foreign Equity in insurance Joint
Ventures continues to be an issue of concern and needs
to be reviewed. I am sure government in due course
will certainly look at it. Also, in light of recent talk on
benchmarking FDI limits for all sectors at 74%, would
this have any implication on insurance sector as well?
The issue of rebating has been bothering the regulator
as well as the players. This needs be looked at seriously
22
to ensure regulated and sustained growth of the
Insurance market. Taxation issue on the life side
continues to bother the private insurance companies.
Desertification is another critical element of insurance
reforms. This sooner or later will become a reality, as
tariff and liberalization do not go hand in hand.
Worldwide, markets have gradually moved to
Desertification. It is, therefore, important to chalk out a
roadmap, prepare all the stakeholders of its likely
impact, and make the process less painful.
Health Insurance has a great potential in the
country but remains highly underdeveloped in India.
According to some estimates, only 3% of India’s population
is covered under some form of voluntary health insurance
schemes.
POLICY:
23
OUTLOOK:
POTENTIAL:
24
• Investment opportunities exit in both life and
non-life segments.
• Total estimated investment opportunities of
$4-5 billion.
25
History of company
Bajaj Allianz Life Insurance Company Limited is a joint venture
between Allianz SE, one of the world’s largest insurance
companies and Bajaj Auto, one of the biggest 2 & 3- wheeler
manufacturers in the world. Allianz SE is a leading insurance
conglomerate globally and one of the largest asset managers in
the world, managing assets worth over a trillion Euros. Allianz
SE has over 115 years of financial experience and a strong
presence in over 70 countries.
Bajaj Allianz life insurance company was incorporated on 12th
March 2001, when it got certification of Registration from the
Insurance and Regulatory Development Authority. Bajaj Auto
has a share of 74%, whereas Allianz has the remaining 26%. In
the very first year, the company made a strong position for
itself in the industry and was reckoned amongst the top private
insurers. The premium income of the company as on 31st
March 2006 was Rs. 1285 crores, whereas the profit after tax
made was Rs. 52 crores. Bajaj Allianz has a Pan India network
covering over 100 towns from Jammu to Thiruvananthapuram
and aims to spread its operations in many other cities.
BAJAJ AUTO:
27
IV. Bajaj Auto finance one of the largest auto finance COS in
India.
VISION:-
SHARED MISSION:-
28
Highest customer retention in industry (target 90% first
year)
ACCELERATED GROWTH
2002-2003 115965 69
29
ACHIEVEMENTS
It has achieved iAAA rating, by ICRA Limited and has the highest
claims- paying ability and a stable position in the market. In a
2006 survey, Business World has rated it among the Most
Respected Companies, putting it at No.2 position in Insurance
sector Bajaj Allianz Life Insurance is the leading private sector
life insurer and has offices in over 900 towns across the country.
In FY 2006-07 Bajaj Allianz Life Insurance issued over 2 million
policies (highest in Private Sector) and collected over Rs 5300
crores in premiums
since th Bajaj Allianz made a Rs. 167 crore profit before taxes.
After generating an amount of Rs. 105 crores, it became the
first of its kind to cross the mark of Rs.100 crores in profit after
tax.
30
On 31st March 2008, Bajaj Allianz General Insurance collected
a premium income worth Rs. 2578 crore. This marked a growth
by 43 % for the company e last year.
ORGANISATIONAL STRUCTURE
Kamlesh Goyal
CEO
1. Rahul Bajaj
2. Niraj Bajaj
3. Sanjiv Bajaj
4. Ranjit Gupta
5. Dr. Werner Zedelius
6. Heinz Doll berg
7. Don Nguyen
8. Alan Wilson
9. Sanjay Asher
10. Suraj L Mehta
11. Dipak Kumar Prodder
MANAGEMENT TEAM
32
Channel Partners
1) Standard chartered.
2) Syndicate Bank.
5) GE Money.
Regular Premium
YoungCare PlusNew
FamilyGain-R
YoungCare
Single Premium
PENSION PLANS
34
Bajaj Allianz Life Insurance offer Retirement Plans which will
make sure that we are there to support you in every stage of
your life and your savings today become your wealth and
support for your future years to come.
Annuity
Pension Guarantee
Retirement
Swarna vishranti
TRADITIONAL PLANS
Saving Plans, which offer bonuses, are excellent long term
saving instruments with complete safety. Our products offer
additional benefits which include 4 times life cover at little
extra costs, limited premium payment terms and compounded
reversionary bonuses making it a very good long term
investment.
35
Endowment
InvestGain
SaveCare Economy SP
Super Saver
Money Back
CashGain
TERM PLANS
The sole objective of Term plans is to serve the protection
needs of the customers and by doing so, safeguard one’s
family from the financial implications of unfortunate
circumstances that one cannot foresee.
These plans are pure risk cover plans with or without maturity
benefit. These pure risk plans cover your life at a nominal cost
and you may want to take this plan to cover your outstanding
debts like a mortgage, a home loan etc
Protector
Term care
36
WOMEN INSURANCE PLANS
Today’s lady is an inspiration to her family.
She takes important decisions in every household and at work.
To cater to women's special needs we offer innovative women
specific plans which provide investment benefits, savings,
retirement solutions and medical insurance. Our special plans
help mothers plan for their children's education, save for the
future and take care of all medical emergencies in the family.
House Wives
Working Women
37
HEALTH PLANS
Care first
Health care
Family care
CHILDREN PLANS
Ever wondered why you need an insurance policy for your
child?
As a parent, you always dream the best for your child including
marriage, higher education, or that hand holding for a start in
life. Whether you are there to see your child grow up and
settled or not, your child feels your love in the financial support
38
arranged by you through our wide range of Children's
insurance policies taking him from one milestone to another.
Saving early and saving regularly for your child helps combat
inflation and ensures higher yields. If you take an insurance
policy for your child you can take advantage of lower premium
rates and ensure that your children remain covered throughout
adult hood, at a much lower rate. This also instills a saving-
habit in your children at a young age developing them as and
when the policy vests in them
Post Graduation
Marriage
Start a business
39
We at Bajaj Allianz Life Insurance continuously try to improve
our products and services so that our customers get the best
buy. Our recently launched products are:
Family fortune
Fortune plus
Capital Shield
Century Plus
GROUP PLANS
One of the best ways for employers to retain their employees is
to show them that their organization cares not only for them
but also their families. At Bajaj Allianz Life Insurance we offer
customized insurance plans, which safeguard your employees’
interests and show your commitment to your employees.
Credit Shield
Group Suraksha
40
Group Loan Protector
Group Annuity
41
During my specified training at Bajaj Allianz Life Insurance, my
job profile was “Effectiveness of Training given to
Advisors”. Training refers to the process if learning a
sequence of programmed behaviour. It is a short-term process
utilizing a systematic and organized procedure by which non-
managerial personnel learn technical knowledge and skills for a
definite purpose.
During the training period, we are the trainees in the
pass the exam, he/she becomes the Advisor for that company
and has to bring business for them. These Advisors are also
IFA, the advisors have to undergo training for 4-5 days through
42
company and this training is provided to them by the company
MEANING OF AGENTS/ADVISORS:-
ROLE OF ADVISOR:-
43
regular reviews to keep customers on track, achieve targets
and also providing them better services which is most
important in life insurance because unlike other savings which
is most important in life insurance because unlike other savings
or investment plans, life insurance is a long term commitment.
ADVISOR POSSESS:-
• Confidence
• Self Motivation
• Persuasion
• Relationship skills
• Recognition programs
• Club membership
Training:
45
sequence. These steps show what to do, how to do, why to do
etc. It is four step process starting with
a. Preparation of trainees for instruction.
b. Presentation of the instructions, giving
essential information in a clear manner.
c. Encouraging the questions and allowing the
up regularly.
PARTS OF TRAINING:
46
Training before attainment of license:-
market.
calculations.
47
Training after the attainment of license:-
agents.
48
To enable them to stand in front of the customer with
competitors.
49
The manager thinks that the training will help the
50
The next step is the preparation of the learner (the person
who has to receive the training). It involves steps like:
51
customers). The trainer teaches them to be patient, generous,
polite, well-dressed, courteous etc. with the customers.
5. Performance tryout:-
The trial of the performance of the advisor is the
next step. In this step, the advisors are asked to go through
presentations which he/she has to present to the customers.
The presentations are being done so that the trainer comes to
know how much he/she is successful in imparting the skills to
the advisors. This step helps in the correction of the mistakes
of the advisors and it builds confidence in the advisors that
they can give presentation in a better way than the other
trainees.
6. Follow up:
The last step is the testing of the effectiveness of
training efforts. This consists of:
I. Putting the advisors “in his/her own”.
Tapering off extra supervision and close follow-up until
he is qualified to work with normal supervision.
II. Checking frequently to be sure that the advisor had
followed instructions
Training period:
Training period after the attainment of license is of 4-5 days,
but it sometimes extends to a week depending upon the ability
and knowledge of the advisor. Before the attainment of license,
50 hours training is given to the advisor.
52
Supporting material for training:-
a) Lectures (followed by reading assignments), conferences,
seminars, staff-meetings.
b) Role playing
c) Problem solving sessions.
d) Use of hand books, manuals etc.
e) Books, slides, movie projectors, filmstrips, tape recorders
53
his/her performance and there by boost his/her
rewards.
Proper feedback to the trainees as people work even
faster when they are told about their achievements.
Simplification of complex problem and discovery of
new alternative solutions to create an atmosphere of
relaxation.
TRAINING EVALUATION:
Training Evaluation refers to the analysis of training
programme to see that whether the advisors have gained
something from the training. The main objective of training
evaluation is to determine the ability of the advisors in the
training programme to perform jobs, for which they are trained,
the specific nature of training deficiencies, whether the
54
trainees required any additional on the job training and the
extent of training not needed for the participants to meet job
requirements. The company followed the following principles
for the evaluation of training programme:-
Code of conduct:-
company:-
FOUNDATON PROGRAMME:-
56
57
• What has been the training technique for the year
2007-08?
although advisors are being imparted with skills yet all the
• What will be
The next plan for training regarding same i.e. on the job
advisors.
59
If we have to adopt a new method that method will be the
training?
advisors?
these skills?
60
• How is BAJAJ ALLIANZ better than other companies
like LIC?
LIC.
need training?
over?
managers.
61
POST TRAINING EVALUATION BY TRAINEE/ADVISORS:
Period of course
assigned
a) fully related
62
POST TRAINING EVALUATION BY CONTROLLING
OFFICER:
a) acquisition of knowledge
b) acquisition of skills
existing employees?
training course?
63
7. Will something additional be done apart from the existing
insurance business.
64
5. Although the company has a big structure yet it is able to
problems of customers..
help advisors.
company.
WEAKNESSES:
1. High targets are being set for advisors and sale managers.
65
4. Target high income group only.
the organization.
Threats
1. Weak perception of private players in the minds of the Indian
people due to frequent financial scams.
Opportunities
1. Huge market is literally untapped. Out of estimated 320
millions insurable markets only 20% of the population is
insured.
66
Suggestions
67
3. Customer queries regarding ULIPs should be handled
in working.
investment plans.
shows.
customers.
68
9. To appoint advisors and get them trained for attracting
zeal.
Difficulties faced:
company are not very flexible. Not only this, the sales
69
by the company and not to the outsiders. Sometimes, the
query.
queries. They don’t want reveal all the facts except those
faced:-
BAJAJALLIANZ.COM
BAJAJALLIANZLIFE.CO.IN
GOOGLE.COM
ECONOMIC TIMES.COM
71
IRDAonline.org & other related sites
by the company.
72
73