OVERVIEW OF INDUSTRY AS A WHOLE

With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. Its a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the countrys GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. Yet, nearly 80 per cent of Indian population is without life insurance cover, health insurance and non-life insurance continue to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself 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 ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country. With a large capital outlay and long gestation periods, infrastructure projects are fraught with a multitude of risks throughout the development, construction and operation stages. These include risks associated with project implementation, including geological risks, maintenance, commercial and political risks. Without covering these risks the financial institutions are not willing to commit funds to the
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sector, especially because the financing of most private projects is on a limited or non- recourse basis. Insurance companies not only provide risk cover to infrastructure projects, they also contribute long-term funds. In fact, insurance companies are an ideal source of long-term debt and equity for infrastructure projects. With long-term liability, they get a good asset- liability match by investing their funds in such projects. IRDA regulations require insurance companies to invest not less than 15 percent of their funds in infrastructure and social sectors. International Insurance companies also invest their funds in such projects. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. Life Insurance Market The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players have tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state owned LIC's new premium business has fallen. Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to
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sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. For instance, the avaerage size of a life insurance policy before privatisation was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh- way bigger than the industry average. Few of the Life insurance policies are: Whole life policies - Cover the insured for life. The insured does not receive money while he is alive; the nominee receives the sum assured plus bonus upon death of the insured. Endowment policies - Cover the insured for a specific period. The insured receives money on survival of the term and is not covered thereafter. Money back policies - The nominee receives money immediately on death of the insured. On survival the insured receives money at regular intervals during the term. These policies cost more than endowment with profit policies.
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Annuities / Children's policies - The nominee receives a guaranteed amount of money at a pre-determined time and not immediately on death of the insured. On survival the insured receives money at the same pre-determined time. These policies are best suited for planning children's future education and marriage costs. Pension schemes - are policies that provide benefits to the insured only upon retirement. If the insured dies during the term of the policy, his nominee would receive the benefits either as a lump sum or as a pension every month. Since a single policy cannot meet all the insurance objectives, one should have a portfolio of policies covering all the needs. In India, Life Insurance Business is defined under Section 2(11) of Insurance Act 1938, which reads as follows: life insurance business means the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life and any contract which is subject to payment of premium for a term dependent on human life and shall be deemed to include a) Disability and double or triple indemnity accident benefits, if so provided in the contract of insurance. b) Superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged or who have been engaged in any particular profession, trade or employment or of the dependents of such persons.

HISTORY OF INSURANCE

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu ( Manusmrithi ), Yagnavalkya ( Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. Insurance in India has evolved over time heavily drawing from other countries, England in particular. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. In 1914, the Government of India started publishing returns of Insurance Companies in India. The Indian Life Assurance Companies Act, 1912 was the first statutory measure to regulate life business. In 1928, the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and non-life business transacted in India by Indian and foreign insurers including provident insurance societies. In 1938, with a view to
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protecting the interest of the Insurance public, the earlier legislation was consolidated and amended by the Insurance Act, 1938 with comprehensive provisions for effective control over the activities of insurers. The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were a large number of insurance companies and the level of competition was high. There were also allegations of unfair trade practices. The Government of India, therefore, decided to nationalize insurance business. An Ordinance was issued on 19th January, 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies 245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector.

TH

MILESTONES OF INSURANCE REGULATIONS IN THE 20

CENTURY

Year 1912

Significant Regulatory Event The Indian Life Insurance Company Act

1928 1938

Indian Insurance Companies Act The Insurance Act: Comprehensive Act to regulate insurance business in India

1956

Nationalization of life insurance business in India with a monopoly awarded to the Life Insurance Corporation of India

1972

Nationalization of general insurance business in India with the formation of a holding company General Insurance Corporation

1993 1994

Setting up of Malhotra Committee Recommendations Committee published of Malhotra

1995 1996

Setting up of Mukherjee Committee Setting up of (interim) Insurance Regulatory Authority (IRA)

Recommendations of the IRA 1997 Mukherjee

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Committee

Report

submitted but not made public 1997 The Government to gives Life General greater

autonomy Corporation,

Insurance Insurance

Corporation and its subsidiaries with regard to the restructuring of boards and flexibility in investment norms aimed at channeling funds to the infrastructure sector 1998 The cabinet decides to allow 40% foreign equity in private insurance companies-26% to foreign

companies and 14% to Non-resident Indians and Foreign Institutional Investors 1999 The Standing Committee headed by MuraliDeora decides that foreign equity in private insurance should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and Development Authority Bill 1999 Cabinet clears Insurance Regulatory and Development Authority Bill 2000 President Insurance gives Assent to the and

Regulatory

Development Authority Bill

PROFILE OF THE ORGANISATION

Bharti AXA Life Insurancecompany ltd.is a joint venture between Bharti, one of Indias leading business groups with interests in telecom, agri business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, they have over 5200 employees across over 12 states in the country. Their business philosophy is built around the promise of making people "Life Confident". As they expand their presence across the country to cater to your insurance and wealth management needs with their product and service offerings, they continue to bring 'life confidence' to customers spread across India. Whatever your plans in
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life, you can be confident that Bharti AXA Life will offer the right financial solutions to help you achieve them. y Strong partner Bharti - provides access to customer base of more than 20 million y Multi channel execution capability y Current Asia product range which is a strong match to products sold to the mass and mass affluent y Global scale providing cost effective and speedy re-use of systems, products and business capability y Strong AXA and Bharti brands which can be leveraged to attract and retain a high quality management team y To achieve a top 5 market position in India through a multi-distribution, multi-product platform y To adapt AXA's best practice blueprints as a sound platform for profitable growth y To leverage Bharti's local knowledge, infrastructure and customer base y To deliver high levels of shareholder return y To build long term value with our business partners by enhancing the proposition to their customers y To be the employer of choice to attract and retain the best talent in India y To be recognised as being close and qualified by their customers

It is a joint venture between Bharti, one of Indias leading business groups with interests in telecom, agri business and retail, and AXA, world leader in financial protection and wealth management. The joint venture company has a 74% stake
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from Bharti and 26% stake of AXA. The company launched national operations in December 2006. Today, we have over 5200 employees across over 12 states in the country. Our business philosophy is built around the promise of making people "Life Confident". As we expand our presence across the country to cater to your insurance and wealth management needs with our product and service offerings, we continue to bring 'life confidence' to customers spread across India. Whatever your plans in life, you can be confident that Bharti AXA Life will offer the right financial solutions to help you achieve them. THEIR VISION To be a leader and the preferred company for financial protection and wealth management in India. THEIR VALUES y Professionalism y Innovation y Team Spirit y Pragmatism y Integrity STRATEGY y To achieve a top 5 market position in India through a multi-distribution, multi-product platform y To adapt AXA's best practice blueprints as a sound platform for
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profitable growth y To leverage Bharti's local knowledge, infrastructure and customer base y To deliver high levels of shareholder return y To build long term value with our business partners by enhancing the proposition to their customers y To be the employer of choice to attract and retain the best talent in India y To be recognised as being close and qualified by our customers STRATEGIC DIFFERENTIATORS y Strong partner Bharti - provides access to customer base of more than 20 million y Multi channel execution capability y Current Asia product range which is a strong match to products sold to the mass and mass affluent y Global scale providing cost effective and speedy re-use of systems, products and business capability y Strong AXA and Bharti brands which can be leveraged to attract and retain a high quality management team.

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MANAGEMENT PROFILE

Glenn Williams is the Chief Executive Officer and Managing Director for Bharti AXA Life Insurance Co. Ltd. Prior to this, he was the Regional General Manager, Corporate Development and Strategy for AXA Asia Life. In this position, Mr. Williams worked with AXA Asia Life's senior management to expand operations across the region in markets including Hong Kong, China, India, Indonesia, Malaysia, Singapore, Thailand and the Philippines. Mr. Williams has been with AXA since 2002 and has held key positions in Hong Kong and the Philippines. Mr. Williams has over 15 years of experience in the insurance industry, particularly in the areas of product & pricing actuary, operations and finance. In 2006, Mr. Williams led AXA Asia Life's successful integration of MLC and Winterthur. Prior to joining AXA, Mr. Williams was Marketing Actuary with Swiss Reinsurance Company in Hong Kong. Mr Williams graduated with a B.Sc (Honor) from Loughborough University, UK and has been a fellow of the Institute of Actuaries (UK) since 1998.

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Mark Meehan is currently the Chief Marketing and Operations Officer for Bharti AXA Life Insurance Company Ltd. Marks previous role in AXA was that of CEO of Tynan Mackenzie P/L, a professional investment services company. His role in Bharti AXA Life as CMOO includes Marketing,Product Development, Customer Service, Underwriting, Claims, Channel & Distribution Operations, Information Technology and Systems, Six Sigma, Business Continuity and Client Persistency Management. Marks career path spans a range of markets and geographies. He is a graduate from Royal Military College, Duntroon and has served as a commissioned Officer in the Australian Army. Mark has also enjoyed a successful international military career covering high technology and systems engineering. In 1994, he transferred his skills to the private telecommunication market, basing himself in the UK. On his return to Australia in 1997, Mark was a consultant to public and private sector clients in systems engineering and outsourcing, after which he moved to Equant in Singapore as their Asia Pacific Outsourcing Director. In 2000, Mark was appointed Equants General Manager for Australasia. Mark joined AXA Australia in 2002 and handled major roles in strategy execution, business turnaround, operations and general management. Mark held directorships
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of several AXA subsidiaries. In September 2006, Mark was appointed CEO and Director of Tynan Mackenzie P/L after leading the acquisition team to a successful transaction conclusion.

V Srinivasanis currently the Chief Financial Officer of Bharti AXA Life Insurance Company. He started his career as a Chartered Accountant in 1989 and over the past two decades has emerged as a stalwart in the financial sector. With over 8 years of rich experience in the Life Insurance industry, today, he stands as a storehouse of financial knowledge and expertise. His portfolio also boasts of extensive experience in diverse industrial segments like manufacturing and oil & gas. From April 1996 to February 2002, he has handled Corporate Finance and Tax at Cairn Energy India Pvt Ltd. He has held responsibilities in Accounting and Project Reporting at Kentz, Kuwait, Reliance and SRF Ltd. He has also functioned as the Senior Vice President - Corporate Affairs at ICICI Prudential Life Insurance Company and CFO of AMP Samar Life Insurance Company from February 2002 to December 2005. Please feel free to write in to V.Srinivasan@Bharti-axalife.com

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Sushanto Mukherjee is the Chief Distribution Officer for Bharti AXA Life Insurance Company Ltd. Prior to this, he was Director & Head Partnership Distribution & Group Business at Max New York Life Insurance Co. Ltd. He started his career with ITC-Welcomegroup hotels division in 1989. He has subsequently worked in various reputed organizations such as Xerox, Reliance Infocomm& Tata AIG in senior positions managing sales at Zonal & National Levels.Sushanto has over 21 years of experience across Insurance, Telecom, Hospitality and Office Automation. He has a strong background in developing & managing partnership channels in Life Insurance, managing large teams in Retail Distribution and effectively leading direct sales teams in the Corporate Segment. He is an MBA from Cardiff Business School United Kingdom.

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PriyaRanjan is Director - Human Resources at Bharti AXA Life Insurance Company. He brings to the business over 15 years of HR experience in diverse fields spanning financial services, information technology and manufacturing. He specialises in building large scale businesses right from their project days. Before joining Bharti AXA Life, Ranjan was with JPMorgan Chase Bank, Singapore as Vice President and Regional HR Manager - Technology & Operations (APAC) from May 2005, after serving the office of Vice President and Head - HR for the Global Service Centre of the Bank in India for about 3 years. Between June 1997 and May 2002, Ranjan was with GE Capital as Vice President and Head - HR for the Credit Card business, where he was a part of the Project Team responsible for creating the business in India. He also has an entrepreneurial venture to his credit with Bangalore-based Team Excel, which specialised in recruitment and HR consulting. His first assignment was with Tata Steel as Sr. Personnel Officer from 1991 to 1994, followed by Microland Ltd. as Manager - HR for two years. Ranjan is a BA (Hons) from St Xavier's College, Kolkata and holds a Post Graduate Diploma in Personnel Management from XLRI.

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PROMOTERS
BHARTIENTERPRISES Bharti Enterprises is one of Indias leading business groups with interests in telecom, agri business, insurance and retail. Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit. BhartiAirtel Limited, a group company, is one of Indias leading private sector providers of telecommunications services with an aggregate of 60 million customers, spanning mobile, fixed line, broadband and enterprise services. BhartiAirtel was ranked amongst the best performing companies in the world in the BusinessWeek IT 100 list 2007. Bharti Teletech is the countrys largest manufacturer and exporter of telephone terminals. Bharti has a joint venture with ELRo Holdings India Ltd. FieldFresh Foods Pvt. Ltd - for global distribution of fresh fruits and vegetables. Bharti also has a joint venture - Bharti AXA Life Insurance Company Ltd. - with AXA, world leader in financial protection and wealth management. Bharti has recently forayed into the retail business under a company called Bharti Retail Pvt. Ltd. It also has a joint venture Bharti WalMart Private Limited with Wal-Mart, for wholesale cash-and-carry and backend supply chain management operations. AXA AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe, North America and the Asia/Pacific area. AXA had Euro 1,315 billion in assets under management as of December 31, 2006. For full year 2006, IFRS revenues amounted to Euro 79 billion, IFRS underlying earnings amounted to Euro 4,010 million and IFRS
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adjusted earnings to Euro 5,140 million. The AXA ordinary share is listed and trades under the symbol AXA on the Paris Stock Exchange. The AXA American Depository Share is also listed on the NYSE under the ticker symbol AXA. AXA ASIA PACIFIC HOLDINGS AXA Asia Pacific Holdings Ltd (AXA APH) is listed on the Australian stock exchange and is 52.3% owned by AXA SA. AXA APH is responsible for AXA SAs life insurance and wealth management businesses in the Asia-Pacific region. It has operations in Australia, New Zealand, Hong Kong, Singapore, Indonesia, Philippines, Thailand, China, India and Malaysia. AXA APH had A$106.4 billion in total funds under management and administration at 30 June 2007 and reported a profit after tax before non-recurring items of A$374.0 million for the six months ended 30 June 2007. Group Sites y Airtel y Bharti AXA General Insurance y Bharti-Tele Tech Ltd y Bharti Investment Managers y Bharti Tele Soft y Bharti Resources y Bharti Foundation Dream Life Pension Dream Life Pension, Bharti AXA Life Insurances unique pension product ensures
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that your retirement life is your Dream Life. Live your Dreams! Be Life Confident.! Key Benefits: y Dream Life Pension enhances your retirement kitty by providing special addition, starting from the end of 10th policy year y Change your planned retirement age any time during the policy term The Bharti AXA "My Earnings shouldn't stop when I stop working" PLAN Aspire Life Aspire Life helps you create a pool of wealth to meet your long-term needs, while also providing you adequate protection in case the need arises. Key Benefits: y Up to 175% of the first year premium paid by you is returned as Guaranteed Special Addition, at maturity of the policy or on unfortunate event of death of the Life Insured. y 3 investment fund options as per your investment preferences. Invest Confident You have always strived hard to achieve the best for you and your loved ones, so when it comes to making an investment decision, we know that you would expect the best from it too. Presenting InvestConfident, a unique single premium, unit linked investment and protection product which not only strives to maximise your investment returns but
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also gives you an enhanced flexibility to suit it according to your protection needs, because we at Bharti AXA Life Insurance,believe that your hard earned money deserves nothing but the best. Key Benefits: y Convenient single premium product with policy benefit period till the age of 70. y Unique special additions starting from the end of 5th policy year and thereafter at the end of every 5 years till the maturity date.

Wealth Confident Your wealth, your status ensures that you get preferential status wherever you go. So why shouldn't your money get the same?

Wealth Confident, a unit-linked investment cum protection product, with its limited period premium payment facility of 5 years, premium payment flexibility, higher allocation of your premium for investment, unique special additions and life insurance benefit, not only makes your money grow but also provides your investment the special treatment that it deserves.

Key Benefits: y Pay premium for five years, while your policy continues for ten years. y Higher allocation of your premium up to 88% for investment.

Future Confident Imagine this, 12 years from now, your son will go for his MBA degree, or 15 years
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from now, you will have to find a suitable son-in-law, or 20 years from now, you will require money, to spend a happily retired life. "FutureConfident is a complete financial solution that serves you in building wealth for your long-term needs, but most importantly, provides comprehensive financial protection to your loved ones, against all odds." Key Benefits: y Life insurance benefit of up to 420 times the monthly premium. y Comprehensive overall protection through "Protection Enhancers" in the form of riders. Future Confident II When financial protection alongwith the wealth creation for long-term needs is your key financial objective, you need a solution that provides that extra protection for your loved ones, while creating wealth for your long-term goals. "FutureConfident II is a complete financial solution that serves you in building wealth for your long-term needs, but most importantly, provides comprehensive financial protection to your loved ones, against all odds." Key Benefits: y Build Wealth for your long term financial needs with enhanced financial protection. y Sum assured up to 420 times the monthly premium.

Save Confident Save Confident, a traditional money back insurance product, offers you a perfect
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combination of liquidity, long term savings and life insurance benefit. Save Confident with its unique liquidity feature of guaranteed payment for 10 continuous years, annually compounded bonus accumulation, and a guaranteed life insurance benefit offers a perfect three-in-one solution for your financial needs. Key Benefits: y Traditional money back product with payment term of 10 years. y Get guaranteed amount back on specified intervals, starting from 6th policy year till maturity. 2.2 PROBLEMS OF THE ORGANISATION In 1993, Malhotra Committee- headed by former Finance Secretary and RBI Governor R.N. Malhotra- was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognising that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994, the committee submitted the report and some of the key recommendations included: i) Structure: Government stake in the insurance Companies to be brought down to 50%. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. All the insurance companies should be given greater freedom to operate. ii) Competition: Private Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the sector. No Company should deal in both Life and General Insurance through a single entity. Foreign companies may be allowed to
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enter the industry in collaboration with the domestic companies. Postal Life Insurance should be allowed to operate in the rural market. Only one State Level Life Insurance Company should be allowed to operate in each state. iii) Regulatory Body: The Insurance Act should be changed. An Insurance Regulatory body should be set up. Controller of Insurance- a part of the Finance Ministry- should be made independent iv) Investments: Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. GIC and its subsidiaries are not to hold more than 5% in any company (there current holdings to be brought down to this level over a period of time)

PRESENT SCENARIO The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent.

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MARKET SHARE OF VARIOUS INSURANCE COMPANIES

Name of the Company LIC SBI Life Insurance ICICI Prudential Bajaj Allianz Reliance Life Insurance HDFC SLIC Birla Sun Life Max New York Life Bhartiaxa life insurance Aviva Life Insurance

Market Share (%) 64 8.93 8.46 6.98 2.96 2.88 2.11 1.75 1.19 0.83

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2.3 COMPETITORS INFORMATION

LIFE INSURERS

Life Insurance Corporation of India

Life Insurance Corporation of India (LIC) is an autonomous body authorized to run the life insurance business in India with its Head Office at Mumbai. It had been established by an act of the Parliament and started functioning from 1/9/1956. LIC is the biggest insurance player in the country. Out of the total premium of Rs 3766 crore generated by the insurance industry through group business in the year 2005-06, LIC alone accounted for Rs 3051 crore. In the financial year 2005-06, LIC has grown at 30.68%. In respect of the number of lives insured, LIC has shown a growth of over 152%. In respect of number of schemes, LIC has a growth of 2%. LIC's market share in the number of individuals covered and the number of policies stands at, 77% and 81%, respectively.

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 Bajaj Allianz Life Insurance Company Limited

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authoritys (IRDA) Certificate of Registration (R3) on May 2nd, 2001 to conduct general insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Auto holds 74% and the remaining 26% is held by Allianz, AG, Germany.

In its first year of operations, the company has acquired the No. 1 status among the private non-life insurers. As on 31st March 2003, Bajaj Allianz General Insurance maintained its leadership position by garnering a premium income of Rs.300 Crores. Bajaj Allianz also became one of the few companies to make a profit in its first full year of operations. Bajaj Allianz made a profit after a tax of Rs.9.6 crores.

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 Birla Sun Life Insurance Co. Ltd

Birla Sun Life Insurance Company Limited is a joint venture between Aditya Birla Group and Sun Life Financial of Canada. Aditya Birla Group is an Indian multinational conglomerate with presence in India, Thailand, Indonesia, Malaysia, Philippines, Egypt, Canada, Australia and China. Sun Life Assurance, Sun Life Financial's primary insurance business, is one of the leading insurance companies of the world and ranks amongst the largest international financial services organizations in the world. The Group has presence in several countries such as Canada, United States, Philippines, Japan, Indonesia, India and Bermuda.

 HDFC Standard Life Insurance Co. Ltd

HDFC Standard Life Insurance Company Ltd. is one of Indias leading private life insurance companies, which offers a range of individual and group insurance solutions. It is a joint venture between Housing Development Finance Corporation Limited (HDFC Ltd.), Indias leading housing finance institution and The Standard
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Life Assurance Company, a leading provider of financial services from the United Kingdom. Both the promoters are well known for their ethical dealings and financial strengths and are thus committed to being a long-term player in the life insurance industry-all important factors to consider when choosing your insurer. Standard Life, UK was founded in 1825 and has an experience of over 180 years. The company is rated as "very strong" by Standard & Poor's (AA) and "excellent" by Moody's (Aa2). HDFC Standard Life's cumulative premium income, including the first year premiums and renewal premiums is Rs. 672.3 Crores for the financial year, AprNov 2005. So far the company has covered over 11,00,000 individuals and has declared the 5th consecutive bonus in as many years for its 'with profit' policyholders.

 ICICI Prudential Life Insurance Co. Ltd

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank, a premier financial powerhouse and Prudentialplc, a leading international financial services group headquartered in the United Kingdom. ICICI was established in 1955 to lend money for industrial development. Today, it has diversified into retail banking and is the largest private bank in the country. Prudential plc was established in 1848 and is presently the largest life insurance company in the UK.
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ICICI Prudential is currently the #1 private life insurer in the country. For the financial year ended March 31, 2005, the company garnered Rs 1584 crore worth of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies.

 ING Vysya Life Insurance Company Ltd.

ING Vysya Life Insurance Company Private Limited (the Company) entered the private life insurance industry in India in September 2001, and in a short span of 4 years has established itself as a distinctive life insurance brand with an innovative, attractive and customer friendly product portfolio and a professional advisor sales force. It has a dedicated and committed advisor sales force of over 11,000 people, working from 80 branches located in 70 major cities across the country and over 2,600 employees. It also distributes products in close cooperation with the ING Vysya Bank network. The Company has a customer base of over 3,00,000& is headquartered at Bangalore. In 2005, ING Vysya Life earned a total income in the excess of Rs. 400 crore and also has a share capital of Rs. 440 crore.

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 Metlife life Insurance co. ltd

With over 137 years of experience, the MetLife companies serve Million of customers in the Americas and Asia with one goal in mind to build financial freedom for everyone. The MetLife companies are a leader in-group benefits that serves 88 of the top one hundred FORTUNE 500* companies, and provides benefits to 37 Million employees and family members through its plans and sponsors in the U.S. The MetLife companies are also ranked #1 in-group life and #1 in commercial dental in the U.S. The MetLife companies are the # 1 life insurer in the U.S. with approximately US $2.8 trillion of life insurance in force. In India, MetLife was incorporated in 2001, and aims to differentiate itself through customized need based selling, simple and innovative products, and technologybacked service experience, to tread its path to build financial freedom for everyone.

 Kotak Mahindra Old Mutual Life Insurance Limited

Kotak Mahindra Old Mutual Life Insurance Ltd. is a joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra is one of India's leading financial institutions and offers a range of financial services such as
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commercial banking, stock broking, mutual funds, life insurance, and investment banking Old Mutual was established more than 150 years ago and offers a diverse range of financial services in South Africa, the United States and the United Kingdom. The company is listed on the London Stock Exchange with a market capitalization and has its headquarters in London.

 SBI Life Insurance Co. Ltd

SBI Life Insurance is a joint venture between the State Bank of India and Cardif SA of France. SBI Life Insurance is registered with an authorised capital of Rs 500 crore and a paid up capital of Rs 350 crores. SBI owns 74% of the total capital and Cardif the remaining 26%. SBI Life Insurance is uniquely placed as a pioneer to usher bancassurance into India. The company hopes to extensively utilize the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans, personal loans and credit cards. SBIs access to over 100 Million accounts provides a vibrant base to build selling insurance across every region and economic strata in the country.

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 Tata AIG Life Insurance Company Limited

Tata AIG Life Insurance Company Limited is a joint venture between the Tata Group and American International Group, Inc. (AIG). Tata Group is one of the oldest and leading business groups of India. Tata Group has had a long association with India's insurance sector having been the largest insurance company in India prior to the nationalization of insurance. The Late Sir DorabTata, was the founder Chairman of New India Assurance Co. Ltd., a group company incorporated way back in 1919. American International Group, Inc is the leading U.S. based international insurance and financial services organization and the largest underwriter of commercial and industrial insurances in the United States. AIG has one of the most extensive life insurance networks in the world. It offers a broad array of life insurance products to individuals; associations and businesses of all sizes, with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs

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 Reliance Life Insurance Company Limited.

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil DhirubhaiAmbani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services. Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporates.

 Aviva Life Insurance Co. India Pvt. Ltd.

Aviva Life Insurance Company India Pvt. Ltd. is a joint venture between Aviva of UK and Dabur, one of India's leading producers of traditional healthcare products.
34

Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share.

Aviva is UK's largest and the world's sixth largest insurance Group. It is one of the leading providers of life and pensions products to Europe and has substantial businesses elsewhere around the world. Aviva pioneered the concept of Bancassurance in India. Currently, Aviva has Bancassurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank, Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind Bank, 11 Co-operative Banks in Gujarat, Rajasthan, Jammu & Kashmir and Maharashtra and one regional Bank in Sikkim. Aviva has 40 Branches in India (including rural branches) supporting its distribution network. Through its Bancassurance partner locations, Aviva products are available in 378 towns and cities across India.

 Sahara India Life Insurance Co. Ltd.

The Sahara Pariwars latest foray is in the field of Life Insurance. The Pariwars life insurance company Sahara India Life Insurance

Company Ltd. has been granted license by the insurance regulator the IRDA on 6th February 2004. With this approval Sahara India Life Insurance Company Ltd. becomes the first wholly and purely Indian company, without any foreign collaboration to enter the Indian life insurance market. The launch is with an initial
35

paid up capital of 157 crores. The Chairman of the company is ShriSubrata Roy Sahara who is also the Chairman of Sahara Pariwar.

 Shriram Life Insurance Co. Ltd.

Shriram Life Insurance Company Ltd is a joint venture between the Chennai-based Shriram Group and the South African insurance Shriram Life has set a target of achieving a premium income of Rs 110 crore during the first year of operations. While focussing largely on the strong network of over 65,000 agents and distribution network of more than 550 branches, Shriram Life is also contemplating bank assurance alliances with couple of banks.

36

S.W.O.T ANALYSIS OF THE ORGANISATION

Strengths

Weaknesses

1.Premium rates are increasing and so 1.Insurance companies are often slow to are commissions. respond to changing needs.

2.The variety of products is increasing. 2.There financial

is an increasing trend of weakness among the

3.Prospects expect more services from companies. their brokers. 3.There are more competitors for

agencies to compete with banks and Internet players.

Opportunities

Threats

1.The ability to cross sell financial 1.The increasing cost and need for services is barely being tapped. insurance might hit a point where a backlash will occur.
37

2.Technology is improving to the point that paperless transactions are 2.Government regulations on issues like health care, mold and terrorism can quickly 3.The client's increasing need for an insurance. "insurance consultant" can open new ways to service the client and generate 3.Increasing expenses and lower profit income. margins will hit hard on the smaller agencies and insurance company. change the direction of

available.

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REVIEW OF LITERATURE THE DISTRIBUTION CHANNEL It is defined as a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the elements in these chains will have their own specific needs, which the producer must take into account, along with those of the all-important end-User

CHANNELS A number of alternate 'channels' of distribution may be available: y Distributor, who sells to retailers, y Retailer (also called dealer or reseller), who sells to end customers y Advertisement typically used for consumption goods Distribution channels may not be restricted to physical products alone. They may be just as important for moving a service from producer to consumer in certain sectors, since both direct and indirect channels may be used. Hotels, for example, may sell their services (typically rooms) directly or through travel agents, tour operators, airlines, tourist boards, centralized reservation systems, etc. If we mention in a single sentence the distribution channel is nothing but it is a process of transfer the products or services from Producer to Customer or end user. There have also been some innovations in the distribution of services. For
39

example, there has been an increase in franchising and in rental services - the latter offering anything from televisions through tools. There has also been some evidence of service integration, with services linking together, particularly in the travel and tourism sectors. For example, links now exist between airlines, hotels and car rental services. In addition, there has been a significant increase in retail outlets for the service sector. Outlets such as estate agencies and building society offices are crowding out traditional grocers from major shopping areas.

CHANNEL DECISIONS y Channel strategy y Gravity & Gravity y Push and Pull strategy y Product (or service) y Cost y Consumer location MANAGERIAL CONCERNS The channel'Bold text' decision is very important. In theory at least, there is a form of trade-off: the cost of using intermediaries to achieve wider distribution is supposedly lower. Indeed, most consumer goods manufacturers could never justify the cost of selling direct to their consumers, except by mail order. Many suppliers seem to assume that once their product has been sold into the channel, into the beginning of the distribution chain, their job is finished. Yet that distribution chain
40

is merely assuming a part of the supplier's responsibility; and, if they have any aspirations to be market-oriented, their job should really be extended to managing all the processes involved in that chain, until the product or service arrives with the end-user. This may involve a number of decisions on the part of the supplier: y Channel membership y Channel motivation y Monitoring and managing channels

MULTIPLE CHANNELS OF DISTRIBUTION For many products and services, their manufacturers or providers use multiple channels of distribution. A personal computer, for example, might be bought directly from the manufacturer, either over the telephone, direct mail, or the Internet, or through several kinds of retailers, including independent computer stores, franchised computer stores, and department stores. In addition, large and small businesses may make their purchases through other outlets. Channel structures range from two to five levels. The simplest is a two-level structure in which structures occur in some industries where consumers are able to order products directly from the manufacturer and the manufacturer fulfills those orders through its own physical distribution system. In a three-level channel structure retailers serve as intermediaries between consumers and manufacturers. Retailers order products directly from the manufacturer, then sell those products directly to the consumer. A fourth level is added when manufacturers sell to wholesalers rather than to retailers. In a four-level structure, retailers order goods from wholesalers rather than manufacturers. Finally, a manufacturer's agent can
41

serve as an intermediary between the manufacturer and its wholesalers, creating a five-level channel structure consisting of the manufacturer, agent, wholesale, retail, and consumer levels. A five-level channel structure might also consist of the manufacturer, wholesale, jobber, retail, and consumer levels, whereby jobbers service smaller retailers not covered by the large wholesalers in the industry.

BENEFITS OF INTERMEDIARIES

If selling directly from the manufacturer to the consumer were always the most efficient methodology for doing business, the need for channels of distribution would be obviated. Intermediaries, however, provide several benefits to both manufacturers and consumers: improved efficiency, a better assortment of products, routinization of transactions, and easier searching for goods as well as customers. The improved efficiency that results from adding intermediaries in the channels of distribution can easily be grasped with the help of a few examples. Take five manufacturers and 20 retailers, for instance. If each manufacturer sells directly to each retailer, there are 100 contact linesone line from each manufacturer to each retailer. The complexity of this distribution arrangement can be reduced by adding wholesalers as intermediaries between manufacturers and retailers. If a single wholesaler serves as the intermediary, the number of contacts is reduced from 100 to 25: five contact lines between the manufacturers and the wholesaler, and 20 contact lines between the wholesaler and the retailers. Reducing the number of necessary contacts brings more efficiency into the distribution system by eliminating duplicate efforts in ordering, processing, shipping, etc.

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In terms of efficiency there is an effect of diminishing returns as more intermediaries are added to the channels of distribution. If, in the example above, there were three wholesalers instead of only one, the number of essential contacts increases to 75: 15 contacts between five manufacturers and three wholesalers, plus 60 contacts between three wholesalers and 20 retailers. Of course this example assumes that each retailer would order from each wholesaler and that each manufacturer would supply each wholesaler. In fact geographic and other constraints typically eliminate some lines of contact, making the channels of distribution more efficient. Intermediaries provide a second benefit by bridging the gap between the assortment of goods and services generated by producers and those in demand from consumers. Manufacturers typically produce large quantities of a few similar products, while consumers want small quantities of many different products. In order to smooth the flow of goods and services, intermediaries perform such functions as sorting, accumulation, allocation, and creating assortments. In sorting, intermediaries take a supply of different items and sort them into similar groupings, as exemplified by graded agricultural products. Accumulation means that intermediaries bring together items from a number of different sources to create a larger supply for their customers. Intermediaries allocate products by breaking down a homogeneous supply into smaller units for resale. Finally, they build up an assortment of products to give their customers a wider selection. A third benefit provided by intermediaries is that they help reduce the cost of distribution by making transactions routine. Exchange relationships can be standardized in terms of lot size, frequency of delivery and payment, and communications. Seller and buyer no longer have to bargain over every

43

transaction. As transactions become more routine, the costs associated with those transactions are reduced. The use of intermediaries also aids the search processes of both buyers and sellers. Producers are searching to determine their customers' needs, while customers are searching for certain products and services. A degree of uncertainty in both search processes can be reduced by using channels of distribution. For example, consumers are more likely to find what they are looking for when they shop at wholesale or retail institutions organized by separate lines of trade, such as grocery, hardware, and clothing stores. In addition, producers can make some of their commonly used products more widely available by placing them in many different retail outlets, so that consumers are more likely to find them at the right time.

WHAT FLOWS THROUGH THE CHANNELS Members of channels of distribution typically buy, sell, and transfer title to goods. There are, however, many other flows between channel members in addition to physical possession and ownership of goods. These include promotion flows, negotiation flows, financing, assuming risk, ordering, and payment. In some cases the flow is in one direction, from the manufacturer to the consumer. Physical possession, ownership, and promotion flow in one direction through the channels of distribution from the manufacturer to the consumer. In other cases there is a two-way flow. Negotiation, financing, and the assumption of risk flow in both directions between the manufacturer and the consumer. Ordering and payment are channel flows that go in one direction from the consumer to the manufacturer.

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There are also a number of support functions that help channel members perform their distribution tasks. Transportation, storage, insurance, financing, and advertising are tasks that can be performed by facilitating agencies that may or may not be considered part of the marketing channel. From a channel management point of view, it may be more effective to consider only those institutions and agencies that are involved in the transfer of title as channel members. The other agencies involved in supporting tasks can then be described as an ancillary or support structure. The rationale for separating these two types of organizations is that they each require different types of management decisions and have different levels of involvement in channel membership. Effective management of the channels of distribution involves forging better relationships among channel members. With respect to the task of distribution, all of the channel members are interdependent. Relationships between channel members can be influenced by how the channels are structured. Improved performance of the overall distribution system is achieved through managing such variables as channel structure and channel flows goods and services move directly from the manufacturer or provider to the consumer. Two-level

SELECTING CHANNELS FOR SMALL BUSINESSES Given the importance of distribution channelsalong with the limited resources generally available to small businessesit is particularly important for entrepreneurs to make a careful assessment of their channel alternatives. In evaluating possible channels, it may be helpful first to analyze the distribution channels used by competitors. This analysis may reveal that using the same channels would provide the best option, or it may show that choosing an
45

alternative channel structure would give the small business a competitive advantage. Other factors to consider include the company's pricing strategy and internal resources. As a general rule, as the number of intermediaries included in a channel increase, producers lose a greater percentage of their control over the product and pay more to compensate each participating channel level. At the same time, however, more intermediaries can also provide greater market coverage. Among the many channels a small business owner can choose from are: direct sales (which provides the advantage of direct contact with the consumer); original equipment manufacturer (OEM) sales (in which a small business's product is sold to another company that incorporates it into a finished product); manufacturer's representatives (salespeople operating out of agencies that handle an assortment of complimentary products); wholesalers (which generally buy goods in large quantities, warehouse them, then break them down into smaller shipments for their customersusually retailers); brokers (who act as intermediaries between producers and wholesalers or retailers); retailers (which include independent stores as well as regional and national chains); and direct mail. Ideally, the distribution channels selected by a small business owner should be close to the desired market, able to provide necessary services to buyers, able to handle local advertising and promotion, experienced in selling compatible product lines, solid financially, cooperative, and reputable. Since many small businesses lack the resources to hire, train, and supervise their own sales forces, sales agents and brokers are a common distribution channel. Many small businesses consign their output to an agent, who might sell it to various wholesalers, one large distributor, or a number of retail outlets. In this way, an agent might provide the small business with access to channels it would not otherwise have had. Moreover, since most agents work on a commission basis, the
46

cost of sales drops when the level of sales drops, which provides small businesses with some measure of protection against economic downturns. When selecting an agent, an entrepreneur should look for one who has experience with desired channels as well as with closely relatedbut not competitiveproducts. Other channel alternatives can also offer benefits to small businesses. For example, by warehousing goods, wholesalers can reduce the amount of storage space needed by small manufacturers. They can also provide national distribution that might otherwise be out of reach for an entrepreneur. Selling directly to retailers can be a challenge for small business owners. Independent retailers tend to be the easiest market for entrepreneurs to penetrate. The merchandise buyers for independent retailers are most likely to get their supplies from local distributors, can order new items on the spot, and can make adjustments to inventory themselves. Likewise, buyers for small groups of retail stores also tend to hold decision-making power, and they are able to try out new items by writing small orders. However, these buyers are more likely to seek discounts, advertising allowances, and return guarantees. Medium-sized retail chains often do their buying through a central office. In order to convince the chain to carry a new product, an entrepreneur must usually make a formal sales presentation with brochures and samples. Once an item makes it onto the shelf, it is required to produce a certain amount of revenue to justify the space it occupies, or else it will be dropped in favor of a more profitable item. National retail chains, too, handle their merchandise buying out of centralized offices and are unlikely to see entrepreneurs making cold sales calls. Instead, they usually request a complete marketing program, with anticipated returns, before they will consider carrying a new product. Once an item becomes successful, however, these

47

larger chains often establish direct computer links with producers for replenishment.

TYPE OF MARKETING CHANNEL 1. Intensive distribution - Where the majority of resellers stock the 'product' (with convenience products, for example, and particularly the brand leaders in consumer goods markets) price competition may be evident. 2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where 'suitable' resellers stock the product. 3. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the 'product'. CHANNEL MOTIVATION It is difficult enough to motivate direct employees to provide the necessary sales and service support. Motivating the owners and employees of the independent organizations in a distribution chain requires even greater effort. There are many devices for achieving such motivation. Perhaps the most usual is `incentive': the supplier offers a better margin, to tempt the owners in the channel to push the product rather than its competitors; or a compensation is offered to the distributors' sales personnel, so that they are tempted to push the product. Dent defines this incentive as a Channel Value Proposition or business case, with which the supplier sells the channel member on the commercial merits of doing business together. He describes this as selling business models not products.
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In much the same way that the organization's own sales and distribution activities need to be monitored and managed, so will those of the distribution chain.

In practice, many organizations use a mix of different channels; in particular, they may complement a direct salesforce, calling on the larger accounts, with agents, covering the smaller customers and prospects. these channels show marketing strategies of an organisation. Effective management of distribution channel requires making and implementing decision in these areas.

CHANNEL DEVELOPMENT STRATEGIES AT BHARTI AXA LIFE INSURANCE y TIED AGENCY MODEL y y Bank assurance and alliance Corporate Agency (exclusive for BhartiAxa) and Brokers(can sell any

product) Tied Agency (Agent Advisors) Tied Agency is the largest distribution channel of BhartiAxa Life Insurance, comprising a large advisor force that targets various customer segments. The strength of tied agency lies in an aggressive strategy of expanding and procuring quality business. With focus on sales & people development, tied agency has emerged as a robust, predictable and sustainable business model.

49

Bank assurance and Alliances At its most simple level banc assurance is the business of banks selling insurance. In concrete terms banc assurance, which is also known as Allfinaz constitutes a package of financial services that can fulfill both banking and insurance needs at the same time. Simplest form where bank provides database to the insurance companies and insurance companies pays certain base charges for each customer and commissions are paid on the basis of conversions. Strategic alliance 1 Sharing of customer data 2 Branding of insurers products to leverage the banks own brand 3 Developing specific products exclusive to banks own customer 4 Deployment of insurers staff within the bank 5 Joint marketing strategy with complete risk management and financial services offers. 6 Sharing of technical infrastructure. Bank assurance is the term used to describe the sale of investment products in a bank. The word is a combination of "bank" and "assurance" signifying that both banking and insurance is provided by the same corporate entity. Bank assurance - selling life insurance through bank branches - has also driven life insurance business over the two years. Heres why. First, banks deposits as a percentage of total financial assets of the household sector have gone down from about 46% in 1980 to about 30% now. This means that banks have to seek other avenues, beyond just interest income, to remain profitable. Banks have found that
50

selling life insurance policies is a great way to make profits. Company adopted the concept of banc assurance merely few years back and got a good amount of success through that. Within a short span of time, company has large number of partners like Yes Bank, India bulls and Amway. B & A has emerged as a vital component of the companys sales and distribution strategy, contributing to approximately one third of companys total business. The business philosophy at B&A is to leverage distribution synergies with our partners and add value to its customers as well as the partners. Flexibility, adaptation and experimenting with new ideas are the hallmarks of this channel. Corporate Agency (exclusive for BhatiAxa) and Brokers(can sell any product) Corporate agency are those which sells exclusive Services of BhartiAxa Life Insurance and Where are a Brokers is a one who can sell and service of and company depending on the rate of commission.

51

OBJECTIVE OF STUDY

1. To understand the attitudes and perception of respondents towards Bhartia axa life insurance.

2. To understand the growth of insurance sector in today s scenario.

3. To study the respondents awareness towards bhartia axa life insurance.

4. To know people perception towards distribution channel available in the market. 5. To understand people s consumer behavior with reference to insurance.

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RESEARCH METHODOLOGY
The Research Methodology adopted for the present study has been systematic and was done in accordance to the objectives set which has been detailed as below. Research Definition Research is a process in which the researcher wishers to find out the end result for a given problem and thus the solution helps in future course of action. According to Redman &Mory research is defined as a Systemized effort to gain new knowledge. So, This project here finds out the training procedure and its effectiveness and the benefits of the training process for the employees who undergo training here. RESEARCH OBJECTIVE PRIMARY OBJECTIVE: y To find out Distribution Channel ofBhartiAxaLifeInsurance company ltd. SECONDARY OBJECTIVE Objectives of my research are : 1) To find out various channel of BhartiAxa Life Insurance. 2) To find out contribution in distribution of Agents and Other channel. 3) To find out contribution of new distribution channel as: y Bank assurance
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Research Design: According to Claire Seltiz, a research design is the arrangement of condition and analysis of data in manner that aims to combine relevance to the research purpose with economy in procedure. Nature of Research: Research is basically of three types. 1. Descriptive research 2. Exploratory research 3. Causal research 1. Descriptive Research: TheDescriptive research includes Surveys and factfinding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs, as it exists as the present. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening.these studies are concerned with describing the characteristic of a particular individual or a group. Determining sources of Data: There are two main sources of data 1. Primary data 2. Secondary data

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Data resource 1)Data Collection It consists of primary data and secondary data. Primary data was collected by holding semi- structured and focused individual interviews of sales Agent, executive, Consultant and Personnel associated with Corporate Direct sales associate. For the primary data Interviewed 35 insurance personnel, out these 15 were Executives including Consultants, Executive (Managerial), and associated Executive from other tied organization. Where as secondary data was obtained by different records, magazines, newspapers, internet and various pamphlets of BhartiAxa Life Insurance. Primary data: A well-structured questionnaire was developed for the research that was to be filled by the Financial Consultants. The questions were deliberately made easy and simple which covered all the relevant information. Secondary Data: It consists of information that already exists somewhere and has been collected for some specific purpose in the study. The secondary data for this study is collected from various Management books and Internet.

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Exploratory Research

Designed to generate basic knowledge, clarify relevant issues uncover variables associated with a problem, uncover information needs, and/or define alternatives for addressing research objectives.A very flexible, open-ended process. Causal Research Design to provide information on potential cause-and-effect relationships.Most practical in marketing to talk about associations or impact of one variable on another. Type of Research The type of research used for our study was an exploratory research, as the objective of the research was to have in depth understanding of the sales agents. Since the research was qualitative, the need for formal and rigid questionnaire was not felt. However I covered a specific list of topics and sub areas. This was done in the form of Open-ended question, where the timing, exact wordings and time allocated to each question area was left at the interviewers discretion open structure ensured that inspected facts or attitudes could perused easily.

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QUESTIONNAIRE DESIGN / FORMULATION Questionnaires: - A questionnaire consists of a set of questions presented to respondent for their answers. It can be Closed Ended of Open Ended

Open Ended: - Allows respondents to answer in their own words & are difficult to Interpret and Tabulate. Close Ended: - Pre-specify all the possible answers & are easy to Interpret and Tabulate.

TYPES OF QUESTIONS USED IN THIS PROJECT Close ended Questions To know the choice of the people regarding various matters.

Dichotomous Questions Which has only two answers Yes or No.

Multiple Choice Questions Where respondent is offered more than two choices. This is done to know the choice of the customers regarding different matters.

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Sample design: Sample unit: The population considered for the purpose of the survey was succied the term and plans of bhartiaxa life insurance company. Sample Extent East Delhi Time Frame 5 weeks Sampling Technique Used Since the information required was of a very technical nature and also looking at the scope of the project and the extent of the target segment, the sampling technique employed was Judgmental Sampling. I administered the questionnaires. Sample Size I have restricted the sample size to 100 respondents. This was done keeping in mind the time constraints and the fact that I felt that this number would be enough to serve the information needs required to show the trends.

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LIMITATIONS OF THE RESEARCH

1 Due to lack of time I was not able to cover many customers. 2 As I reside in Delhi, so customers of Delhi were taken into account. 3 Answers given by the customers may be biased one. 4 Training work was confined to definite area in Delhi 5 The main source of data is primary data, though secondary data has not been ignored 6 Time limit was another limitation and there may be possibility of committing a general

59

DATA ANALYSIS & INTERPRETATION

Q1) Do you have any policy?

A)Yes

B)No

0 0 25%

YES 75% NO

Interpretation:

This pie chart clearly shows that 75% of people have policy and rest 25% does not have any policy.

60

Q2) How many policies do you have ?

A) ONLY 1

B) 2-3

C)3-above

60%

50%

40% no policy 30% 50% 20% 40% 3 to above 2 to 3 only1

10% 10% 0% only 1 2to3 3 to above no policy

Interpretations:

This graph clearly shows that 40% people have only1 policy 10%people have 2 to 3 policies 50% people have 3 to above and neither of them dont have any policy.

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Q3) What is the amount of life insurance cover you have taken?

A) <10 Lacs c) > 20 lacs

B) 10-20 lacs D) none

amount of life insurance covered

15% 45% 25% <10 lacs 10-20 lacs >20 lacs 15% none

Interpretation:

According to this pie chart most of the people have taken less than 10 lakh life insurance cover while least of them have taken 10 to 20 lakhs life insurance cover.

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Q4) Are you aware of bhartiaxa life insurance and its products?

A) Yes B) Not about its products C) No

0 10% 25% 65% yes not about its product no

Interpretation:

This pie chart clearly shows that there is lack of awareness among people regarding bhartiaxa life insurance products, though they have a hint about the company so,a lot of promotion needs to be done and to expand the distribution channel and more financial agents are to be appointed.

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Q5) Do you like advertising process of bhartiaxa life insurance company ltd.?

A) Yes B) No

0 25%

yes 75% no

Interpretation:

This pie chart clearly shows that most of people like the advertising process of the company.

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Q6) Do you like services of agents of bhartiaxa life insurance company?

A) Yes

B) No

30%

yes 70% no

Interpretations:

This pie chart shows that most of the people like the services of agentsof bhartiaxa life insurance.

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Q7) Do you think bhartiaxa life insurance have appropriate marketing

A) Yes

B)No

0 10%

yes no 90%

Interpretation: As per the survey conducted maximum of the respondents believe that bhartiaxa life has a good distribution network. While a minority of them said that the distribution network is not very appropriate.

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Q8) Do you think bhartiaxa life insurance company is maintain good relations with its customers?

A) Yes

B) No

0 10%

yes no 90%

Interpretation: When I asked about the public relation than I concluded that 90% people are in in favour and rest of the them dont agree with the statement.

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Q9) Which company do you think is the strongest competitor of bhartiaxa life insurance company?

A) LIC POLICY B) MAX NEW YORK POLICY C) ICICI POLICY D) MET LIFE POLICY

10% 8% 7% LIC POLICY MAX NEW YORK POLICY ICICI POLICY 75% MET LIFE POLICY

Interpretation:

Majority of people have LIC POLICY while only 25% of people have all the other policies.

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Q10) Are you satisfied with the company services regarding the services of bhartiaxa life insurance company?

A) Yes

B)No

0 20%

yes no 80%

Interpretation:

Most of the people are satisfied regarding the services provided by bhartiaxa life insurance and rest of them do not agree.

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Q11) What features / services of the company do you like for your convenience? (a) Trust in the company (b) Quick settlement of claims (c) Customize product (d) Customer friendly

35 35 30 30 25 20 20 15 15 10 5 0
customize product quick settlement of claims trust in the company

customer friendly

Interpretation:

Maximum people around 35 % says customer friendly and minimum people says around 15% says customize product.

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Q12) What do you rate the selling process of bhartiaxa life insurance?

A) Average B) Good C) Very good

60% 50% 50% 40% 40% average good 20% 10% 10% very good

30%

0% average good very good

Interpretation: Half of the people feel that the selling of the company is good while the others feel it is average but few people think that it is very good.

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Q13) Does Company provide knowledge of entire product range in its portfolio? (a) yes (b) no

70 60 50 40

67.5

yes

32.5 30 20 10 0

Interpretation Only 32.5% says no and rest 67.5% says yes for knowledge of entire product range in its portfolio.

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FINDINGS

1. People are less aware about the organisation. 2. People like the advertisement of the company. 3. Most of the people like the services of the agents of the company. 4. Distribution network of the company is good. 5. Bhartia axa has maintained good relations with the customers. 6. LIC is still the leader in insurance industry. 7. People are satisfied with the services of bharti axa life insurance. 8. Customers have good trust in the company and think the organisation is

customer friendly. 9. Selling process of the company is good. 10. Company does not provide knowledge of entire product range.

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Recommendations

1 People should be made aware about the entire range of products, though they have a hint about the company so a lot of promotion needs to be done and to expand the distribution channel more financial agents are to be appointed. 2. The company needs to work harder as the share of the company in the market is too low, while the companies like LIC has maximum share of about 75%. 3. The company should improve the process of settlement of claims and should customize their products. 4. The company should provide knowledge to its entire product range briefly in its portfolio. 5. The channel will be most effective for Bhatia axa life insurance company would be bank assurance and direct marketing.

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BIBLIOGRAPHY
BOOKS: 1 Kotler, Philip Marketing Management Pearson Education 2nd edition. Ed.-2008 2 Consumer Behavior by G. Schiffman, Leon, Prentice-Hall publication 18th edition. Ed.-2008. . WEBSITES http://www.bhartiaxa.co.in/website/aboutus.asp http://www.bhartiaxa.co co.in/website/products/reliance_automatic_investment_plan.asp http://www. bhartiaxa.co.in/website/products/reliance_money_guarantee_plan.asp

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ANNEXURES
QUESTIONNAIRE NAME . QUALIFICATION.. AGE..

Q1) Do you have any policy?

A)Yes B)No

Q2) How many policies do you have ?

A) ONLY 1

B) 2-3

C)3-above

Q3) What is the amount of life insurance cover you have taken?

A) <10 Lacs C) > 20 lacs

B) 10-20 lacs D) none

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Q4) Are you aware of bhartiaxa life insurance and its products?

A) Yes B) Not about its products C) No

Q5) Do you like advertising process of bhartiaxa life insurance company ltd.?

A) Yes B) No

Q6) Do you like services of agents of bhartiaxa life insurancecompany?

A) Yes

B) No

Q7) Do you think bhartiaxa life insurance have appropriate marketing

A)Yes

B)No

Q8) Do you think bhartiaxa life insurance Company is maintaining good relations with its customers?

A) Yes

B) No

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Q9) Which company do you think is the strongest competitor of bhartiaxa life insurance Company?

A. LIC POLICY B. MAX NEW YORK POLICY C. ICICI POLICY D. MET LIFE POLICY

Q10) Are you satisfied with the company services regarding the services of bhartiaxa life insurance company?

A) Yes

B)No

(11) What features / services of the company do you like for your convenience?

B) (a) Trust in the company C) (b) Quick settlement of claims D) (c) Customize product E) (d) Customer friendly

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Q12) What do you rate the selling process of bhartiaxa life insurance?

A) Average B) Good C) Very good

Q13) Does Company provide knowledge of entire product range in its portfolio?

(a) yes

(b) no

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