Girish Projet on .Tata Aig Project for Mba

PROJECT REPORT

ON

TATA AIG LIFE INSURANCE COMPANY

LTD.

SUBMITTED BY

GIRISH DESAI

SEAT NO-34

SEM V, T.Y.B.B.I

BACHELOR OF COMMERCE (BANKING &

INSURANCE)

PATUCK GALA COLEGE OF COMMERCE &

MANAGEMENT

SANTACRUZ (E), MUMBAI-400055

2013-2014

CERTIFICATE

This is to certify that the project entitled “TATA AIG LIFE INSURANCE

COMPANY LTD” is a true and satisfactory work done by Mr. GIRISH

DESAI, T.Y.B.B.I, and Roll No 34. The project report is submitted to

University of Mumbai in partial fulfillment for the requirements of the award

of the degree of “Bachelor of Commerce (Banking & Insurance)” for the

academic year 2012-2013.

-------------------------------------- ------------------------------------

Signature of the Coordinator Signature of Principal

------------------------------------- -------------------------------------

Signature of Project Guide Signature of External Examiner

COLLEGE SEAL

DECLARATION

I, GIRISH DESAI, student of Patuck-Gala College of Commerce &

Management, T.Y.B.B.I (SemVI) hereby declare that I have completed the

Project on TATA AIG LIFE INSURANCE COMPANY LTD in the

academic year 2012-2013.

The subject matter contained in this project is a research work and most of

the work carried out is original and was done under the guidance of my

project guide Prof..PALLAV DAS.

The information submitted is true and original to the best of my

knowledge.

------------------------------

GIRISH DESAI

Roll no. 34

ACKNOWLEDGEMENT

It is my nearest and sincere desire and ambition to acquire profound knowledge in the study of banking and insurance. I have had considerable help to advice at very outset of his project. It is my pleasure to acknowledge the help and guidance from those personnel and to thank them individually.

First of all, I express my sincere thank to Dr. (Mrs.) Meeta Pathade, I/C principal of our college for having given me chance to undergo the project.

Secondly, I convey my sincere thanks to the Course Coordinator Mrs. Byshi Panikar for her valuable suggestion and co-operation which help to me complete the project successfully.

The compilation of project is a milestone in the life of the banking & insurance and its execution is inevitable without the co-operation of the project guide. I am deeply grateful to my project guide Mr.PALLAV DAS for her valuable ideas, required suggestions and encouragement for refining this project study.

Finally, I think all the staff of our college and my friend for their valuable support and contribution to my project.

CONTENTS

Sr.No Title

01. Executive Summary

02. Introduction to topic

03. Scope and limitations

04. industry profile

05. Company Profile

06. Research Methodology

07. Data Analysis And Interpretation

08. Findings And Suggestions

09. Annexure

10. Conclusion

11. Bibliography

CONTENTS

CHAPTER: 1

EXECUTIVE SUMMARY

SCOPE OF THE STUDY

OBJECTIVE OF THE STUDY

LIMITATION OF THE STUDY

RESEARCH METHODOLOGY

CHAPTER: 2

COMPANY INTRODUCTION

COMPANY PROFILE

HISTORY OF THE AIG GROUP

ABOUT TATA AIG LIFE INSURENCES

CHAPTER: 3

A STUDY OF MARKETING

THE REFERENCE MARKETING APPROACH

CHAPTER: 4

INSURENCES INDUSTRY

INSURENCES MARKET IN INDIA

KNOWLEDGE OF LIFE INSURENCES

ADVERTISING INSURENCES INDUSTRY PRODUCTS

CHAPTER: 5

ANALYSIS AND INTERPRETATION

FINDINGS

SUGGESTIONS

CONCLUSIONS

APPENDIX

QUESTIONNAIRE

BIBLIOGRAPHY

7

ABSTRACT

The changes after liberalization and globalization process initiated since

1991 has significant impact on the financial sector. In India, personal loan Finance segment has

increased in recent years. Personal loan sector is of immense importance. The success of the

personal loan companies in the Market rest on the availability of customized product and also the

services Quality offered to customers. The future growth of the companies depends upon its

qualitative service to the customers. At this juncture, the banks should evaluate their services and

identify their distinction from others. Personal loans like housing, it has maximum propensity to

generate income and demand for materials, equipments and services. Also the housing sector

creates a substantial employment opportunity. Low growth rates in developing markets,

changing customer needs, and the uncertain economic conditions in the Developing world are

exerting pressure on personal loan companies while testing their ability to survive. The only way

to succeed in the market is the Formulation of differentiated service to different customer

segments. Hence, It is essential to identify the discriminate service quality among the public And

private players in personal loan market. The present study has made an Attempt on the credit

appraisal process on personal loans at TATA AIG. The basic premise of globalization is opening

of new service markets to provide the developing countries with new opportunities for the

expansion of trade and economic growth. Personal loan sector has often been regarded as the

engine of economic growth on account of its beneficial forward and backward linkages with the

other sectors of the economy. The exposure of the banking sector of personal loan has gone up.

8

EXECUTIVE SUMMARY

As the title of the project suggests the main aim of the project lies in studying the

marketing process of insurance products and during this process to understand the customer

behavior and various reactions of the customers as prospects.

Insurance business has traditionally been at the mercy of tax savers and business booms

in the financial yearend. However the influx of private players in the foray has changed the

business outlook of this industry.

The project gives an introduction to the concept of insurance followed by its origin and

history in the world and in India and then discusses the current market scenario. Further the

project gives introductions of TATA-AIG life insurance company ltd. And the various products

it has for offering to the public.

The project then briefly discusses about the sales interviewing script, methodology of

research, consumer opinion analysis direct selling, and market segmentations etc.).

A sample size of 50 corporate agents was taken and their responses are briefly

analyzed, tabulated, to know the reactions of corporate agents regarding insurance

products of TATA-AIGLIFE.

9

SCOPE OF THE STUDY

By knowing who the customers are for TATA-AIG LIFE products, the target can be

made to other customers.

By studying the factors influencing purchase, better strategic decisions can be made to

increase the demand.

By knowing the ways of convincing the customers for opting the policy, proper steps

should be adopted.

By evaluating the problems faced by the corporate agents, further steps should be taken

for solving the problems.

OBJECTIVES OF THE STUDY

To study the marketing practices of corporate agents.

To study the problem faced by the corporate agents in marketing of TATA-AIG LIFE

To know about the factors influencing customer attitudes towards TATA-AIG products.

To understand the selling mechanism and various techniques involved in the marketing of

life insurance products

To understand customers perceptions regarding for opting of life insurance.

10

LIMITATIONS OF THE STUDY

The Limitations encountered during the process of the study are;

The study of the project is limited only to the insurance products of TATA-AIG LIFE

Insurance.

The time within which the study is being conducted is too short to carry out a detailed

analysis.

Only 50 respondents were covered.

The response given by the people was spontaneous and therefore the reflections are the

mental predisposition at the time of the Interview.

The time available for this total project is only one month.

11

RESEARCH METHODOLOGY

Methodology selected in order to realize the research objective of the present study of survey

by interview

RESEARCH DESIGN:

The study conducted is exploratory in nature. It involves a survey of

Corporate agents for understanding their marketing practices and the factors influencing

consumers attitude towards TATA-AIG products with reference ton TATA-AIG PRU LIFE

INSURANCE CO.

DATA SOURCE:

Data and information for the study were collected from both.

1. PRIMART DATA

2. SECONDARY DATA

1. PRIMARY DATA:

The data is collected freshly for a specific purpose for a specific project i.e. called

Primary Data. Here, the primary data was collected through questionnaires was designed in such

way that it covers all aspects.

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2. SECONDARY DATA:

Secondary data that were collected from the past records Already collected

information is known as secondary data

1. Journals

2. Company Records

3. Internet

4. Newspapers

5. Catalogues, etc.

RESEARCH INSTRUMENT:

The research instrument used was a structured closed–end questionnaire backed by personal

interview for data collection.

SAMPLESIZE:

The study is conducted using basing on the samples taken as 50 corporate agents working

in TATA-AIG PRU LIFE, Secunderbad.

13

Company Introduction

About Tata AIG Life Insurance Company Ltd.

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company,

formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life

combines the Tata Group’s pre-eminent leadership position in India and AIG’s global presence

as the world’s leading international insurance and financial services organization. The Tata

Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per cent.

Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life

Insurance Company was licensed to operate in India on February 12, 2001 and started operations

on April 1, 2001.

American International Group, Inc. (AIG)

American International Group, Inc. (AIG), world leaders in insurance and financial

services, is the leading international insurance organization with operations in more than 130

countries and jurisdictions. AIG companies serve commercial, institutional and individual

customers through the most extensive worldwide property-casualty and life insurance networks

of any insurer. In addition, AIG companies are leading providers of retirement services, financial

services and asset management around the world.

14

Understanding the American International Group (A.I.G.)

American International Group, Inc. (AIG) (NYSE: AIG) is a major American insurance

corporation based at the American International Building in New York City. The British

headquarters are located on Fenchurch Street in London, continental Europe operations are based

in La Defense, Paris, and its Asian HQ is in Hong Kong. According to the 2008 Forbes Global

2000 list, AIG was the 18th-largest public company in the world. It was on the Dow Jones

Industrial Average from April 8, 2004 to September 22, 2008.

It suffered from a liquidity crisis after its credit ratings were downgraded below “AA”

levels, and the Federal Reserve Bank on September 16, 2008, created an $85 billion credit

facility to enable the company to meet collateral and other cash obligations, at the cost to AIG of

the issuance of a stock warrant to the Federal Reserve Bank for 79.9% of the equity of AIG. In

November 2008 the U.S. government revised its loan package to the company, increasing the

total amount to $152 billion. AIG is attempting to sell assets to repay the loans. So far the U.S.

government has given the company over $170 billion.

15

History of the AIG group

AIG’s history dates back to 1919, when Cornelius Vander Starr established an insurance

agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance to the

Chinese. Right after the Chinese Civil War which put Mao Zedong and the Chinese Communist

Party in power, AIG moved out of China and into New York City. After his business became

successful in Asia, he expanded to other markets, including Latin America, Europe, and the

Middle East. In 1962, Starr gave management of the company’s less than successful U.S.

holdings to Maurice R. “Hank” Greenberg, who shifted the company’s U.S. focus from personal

insurance to high-margin corporate coverage. Greenberg focused on selling insurance through

independent brokers rather than agents to avoid selling insurance at prices which occasionally

became too low (to cover the future payouts) given marketplace competition. A company with

agents must pay their salaries even while selling little to no insurance. Instead, with brokers, AIG

could price insurance properly even if it suffered decreased sales of certain products for great

lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The

company went public in 1969.

In the mid-2000s AIG became embroiled in a series of fraud investigations conducted by

the Securities and Exchange Commission, U.S. Justice Department, and New York State

Attorney General’s Office. Greenberg was ousted amid an accounting scandal in February 2005.

The New York Attorney General’s investigation led to a $1.6 billion fine for AIG and criminal

charges for some of its executives. Greenberg was succeeded as CEO by Martin J. Sullivan, who

had begun his career at AIG as a clerk in its London office in 1970.

On June 15, 2008, under intense pressure due to financial losses and a falling stock price,

Sullivan resigned from the CEO position. He was replaced by Robert B. Willemstad, who had

served as Chairman of the Board of Directors of the Company since 2006. Willemstad was

forced to step down and was replaced by Edward M. Liddy on September 17, 2008.

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History

1919 1921 19391926

C.V. Starr founds

American Asiatic

Underwriters

Asia Life Insurance

Company is formed

AAU opens American

International Underwriters

Headquarters moved to New York

17

1950’s 19691967

AIU’s presence

includes over75 officesworldwide

Acquisitions.Basic structure

in place for DBG

AIG goes public

AIG established as a holding company

M.R. Greenberg becomes President

and CEO

1960’s

AIU entersJapan and

Germany after WWII

Foreign Life Expansion

1940’s

History

18

1984 1990’s 19921990

Expansion in China, Latin

America, Israel, Russia, Uzbekistan, and Eastern

Europe

American International Assurance Company, Ltd. becomes the first foreign

insurance company to receive an operating

license from the Chinese government

AIG lists its shares on the

New York Stock

Exchange

Financial Services begins

expansion

History

19

1998 20011999

Reopening of The Bund Building

Acquisition ofSunAmerica Inc.

Acquisition of

American General

Corporation

2005

Martin J. Sullivanbecomes President and CEO

History

20

AIG in India

LifeInsurance

TataAIGLife

Tata AIG

General

AIG System

Solutions

General Insurance

IT Solutions-Main/Dev

Pvt EquityReal EstateAsset Mgt

AIG Global Inv

Group

AIG Consumer Finance Group

Consumer Finance

• Lives covered : 2.33 Million (including Group life)

• Total premium income was USD 246 Million (Dec’05 –Nov’ 06)

• 28 life insurance product offerings, with over 250 product combinations

• Channel Partners : HSBC, Citigroup, DBS, UBI, PNB Principal, and many more

• Operations in 94 locations (in 60 cities) across India

• Sales force of approx 34,000 advisors (Nov’06)

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Premium Income (till Nov 2006) was USD 171 Million (approx 80 cr) (same period in

2005 was USD 128 Million approx 58cr).

Network of 40 sales offices in 32 cities across India

First company to have a Claims registration service through SMSes

Channel partners – HSBC, Citigroup, Kotak Mahindra, Bajaj caps, Shriram etc

First company to have Mobile Claims van service.

Sales force of over 4000 agents.

• AIG Systems Solutions (AIGSS) is the member company of AIG providing IT/ Software

solutions and services to AIG Companies worldwide

• Captive Offshore Development Center (ODC) for AIG having 600+ professionals

• Business Domains: Insurance (Life & General), Financial Services and Retirement

Solutions

• Technology: E-Business, ERP, BPM, HRIS, Mainframe & Client Server technologies

• Revenues of USD 20 million for the year 2006 (approx 90 cr)

• Corporate office: Chennai;

• Development Centre/Branches: Chennai, Kolkata & USA

Sources, executes and monitors direct investment for AIG in the following regions –

China, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and

Thailand

Cumulative investments more than US$ 500 mn (approx Rs. 225 cr) in India in over 20

companies

Ranked among the top 10 largest fund manager globally by the worldwide institutional

assets under management

30 dedicated direct investment professional across the regions

22

• AIG Global Real Estate is a full service real estate organization

• Focus on all property types through a strategic network

• Financial Strength - Current portfolio includes real estate assets with an estimated

valuation of US $40.0 billion.

• India Strategy - Team of Professionals in place

• Focus areas include – Hotel , Retail, Township, SEZ, Office space .

Asset Management business in India is 100% owned by AIG

Capital Investment of USD 50 Mn

Business in the process of being launched. Sr. Mgt team on board

About Tata AIG Life Insurance

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company,

formed by the Tata Group and American International Group, Inc. (AIG). Tata AIG Life

combines the Tata Group’s pre-eminent leadership position in India and AIG’s global presence

as one of the world’s leading international insurance and financial services organization. The

Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per

cent. Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life

Insurance Company was licensed to operate in India on February 12, 2001 and started operations

on April 1, 2001.

THE TATA GROUP

23

Tata is a rapidly growing business group based in India with significant international

operations. Revenues in 2007-08 are USD 62.5 billion (around Rs. 251,543 crores), of which

61% was from business outside India. The Group’s Net Profit for 2007-08 is USD 5.4 billion

(around Rs. 21,578 crores). The Group employs around 350,000 people worldwide. The Tata

name has been respected in India for 140 years for its adherence to strong values and business

ethics. The business operations of the Tata Group currently encompass seven business sectors -

Communications and Information Technology, Engineering, Materials, Services, Energy,

Consumer Products and Chemicals. The Group's 28 publicly listed enterprises have a combined

market capitalization of around $60 billion, among the highest among Indian business houses,

and a shareholder base of 2.9 million. The major companies in the Group include Tata Steel,

Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian

Hotels, Tata Teleservices and Tata Communications.

24

Jamsetji Tata•Founder of India's largest and internationally best known group of companies, •Began with a textile mill in central India in the 1870s.

Sir Dorabji TataSir Dorabji Tata Trust (1932)

Sir Ratan Tata

Jehangir Ratanji Dadabhoy Tata(1904 - 1993)•Pioneered civil aviation in the subcontinent in 1932 •Funding Dr Homi Bhabha

Ratan N. TataGroup Chairman

Tata Group – The Family Tree

25

A STUDYOF MARKETING

What is marketing?

The word market is often misused and therefore misunderstood. It is used instead of the

word selling is done in a more grand or better way. A market is a place where are bought and

sold, arena for exchange. In its broadest sense, marketing should mean the study of market.

Marketing is a compressive team it includes a group of business activities in to create and

promote consumer demand and to direct the flow of goods services from the original producer to

the final consumer in the process of distribution.

American business activity that direct the flow of goods and services from the original

producer to the final consumer in the process of distribution”.

Philip Kotler defines marketing as the “Human activity directed at satisfying needs and

wants through exchange process”.

From the above definitions, it is obvious that traditional description of

marketing was mainly concerned with the physical movement of goods, while the modern

concept of marketing is consumer oriented. It makes customer the focus of all business activities.

Thus one can say that marketing both begins and ends with the customer.

The Marketing Channels of the company however consists of all those measures

undertaken by the company to create a demand for its products and do not directly contribute to

sales but are meant to assist the Sales channels.

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The Marketing Channels of the company consists of:

Advertising

The Company to boost sales and its image in the eyes of its customers sends out

communication signals to the public at large through various media like the newspapers,

television and so on.

Sales Promotions

The company in addition to its advertising campaigns conducts some special events or

activities to simulate demands such as setting up kiosks and conducting road shows etc.

The Sales Process

The two widely followed methods of selling Insurance are

The cold call approach

In the cold call approach the Insurance Care Consultant does not know the prospect

personally but has a database or leads of the various prospects and thus his main aim is to

seek an appointment over the phone and then to do a fact finding on the field as well as make

the sales presentation and follow up as the case may demand. The drawbacks however are

fear: getting past assistants, secretaries. And other gatekeepers: finding the right contact: and

finding a way to make a pitch quickly that will move the sales process forward.

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The Reference marketing approach1. In the case of reference marketing the Insurance Care Consultant approaches his existing

contacts of friends and acquaintances and does not follow any specific methodology.

2. Here the air lies in developing a vast network of friends and acquaintances by various

means in order to prospect a larger size of the popular to which he knows personally and

is no longer a stranger to.

3. The main drawback of this process however is that the marketer may soon run out of

references as he would have finished approaching all his close circles of influence.

Closing the Sale

Although one should never be shy about “asking for the business”. Prospects will

probably give you some signals when they are ready to become customers! Familiarize

yourself with the following readiness signals:

1. Asking about availability such as, “How soon can someone be here?”

2. Asking specific questions about rates, prices or statements about affordability

3. Asking about features, options, quality, guarantees or warranties.

4. Asking positive questions about your business.

5. Asking for something to be repeated.

6. Making statements about problems with previous vendors: they might be seeking

reassurance from you that won’t pose the same problems.

7. Asking about follow-up service or other products you carry.

8. Requesting a sample or asking you to repeat a demonstration for them or for others in

their company or family.

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9. Asking about other satisfied customers. You should have a list of satisfied customers

ready to give to prospects who ask. (Make sure you’ve already contacted your customers

and gained their approval for providing their names!)

Follow-Up and Service after the Sale

After the sale follow-up after the sake is just as important as making the sale. That’s when your

relationship with a customer really takes hold. It helps to build long term relationships with the

customer and helps in retaining him and referring the products to his peers.

Market segmentation

Market segmentation can be defined as the process of dividing the markets into distinct

subsets of customers with common needs or characteristic and selecting each target segment with

a distinct marketing mix.

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INSURANCE INDUSTRY

The Insurance Industry

Many may not be aware that the life insurance industry of India is as old as it is in any

other part of the world. The first Indian life insurance company was the Oriental Life Insurance

Company, which was started in India in 1818 at Kolkata1. A number of players (over 250 in life

and about 100 in non-life) mainly with regional focus flourished all across the country. However,

the Government of India, concerned by the unethical standards adopted by some players against

the consumers, nationalized the industry in two phases in 1956 (life) and in 1972 (non-life). The

insurance business of the country was then brought under two public sector companies, Life

Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

In line with the economic reforms that were ushered in India in early nineties, the

Government set up a Committee on Reforms (popularly called the Malhotra Committee) in April

1993 to suggest reforms in the insurance sector. The Committee recommended throwing open

the sector to private players to usher in competition and bring more choice to the consumer. The

objective was to improve the penetration of insurance as a percentage of GDP, which remains

low in India even compared to some developing countries in Asia.

Reforms were initiated with the passage of Insurance Regulatory and Development

Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority, which

has put in place regulations in line with global norms. So far in the private sector, 12 life

insurance companies and 9 general insurance companies have Been Registered.

30

INSURANCE MARKET IN INDIA

By any yardstick, India, with about 200 million middle class households, presents a huge

untapped potential for players in the insurance industry. Saturation of markets in many

developed economies has made the Indian market even more attractive for global insurance

majors. Table 1 reflects the low percentage and per capita penetration of insurance in India

compared to other developed and developing countries. With the per capita income in India

expected to grow at over 6% for the next 10 years and with improvement in awareness levels, the

demand for insurance is expected to grow at an attractive rate in India. An independent

consulting company, The Monitor Group has estimated that the life insurance market will grow

from Rs.218 billion in 1998 to Rs.1003 billion by 2008 (a compounded annual growth of

16.5%).

WINDS OF CHANGE

Reforms have marked the entry of many of the global insurance majors into the Indian

market in the form of joint ventures with Indian companies. Some of the key names are AIG,

New York Life, Allianz, Prudential, Standard Life, Sun Life Canada and Old Mutual. The entry

of new players has rejuvenated the erstwhile monopoly player LIC, which has responded to the

competition in an admirable fashion by launching new products and improving service standards.

The following are the key winds of change brought about by privatization.

31

Market Expansion:

There has been an overall expansion in the market. This has been possible due to

improved awareness levels thanks to the large number of advertising campaigns launched by all

the players. The scope for expansion is still unlimited as virtually all the players are

concentrating on large cities and towns - except by LIC to an extent there was no significant

attempt to tap the rural markets.

New Product Offerings:

There has been a plethora of new and innovative products offered by the new players,

mainly from the stable of their international partners. Customers have tremendous choice from a

large variety of products from pure term (risk) insurance to unit-linked investment products.

Customers are offered unbundled products with a variety of benefits as riders from which they

can choose. More customers are buying products and services based on their true needs and not

just traditional money-back policies, which is not considered very appropriate for long-term

protection and savings. However, there are still some key new products yet to be introduced -

e.g. health products.

Customer Service:

Not unexpectedly, this was one area that witnessed the most significant change with the entry of

new players. There is an attempt to bring in international best practices in service and operational

efficiency through use of latest technologies. Advice and need based selling is emerging through

much better trained sales force and advisors. There is improvement in response and turnaround

times in specific areas such as delivery of first policy receipt, policy document, premium notice,

final maturity payment, settlement of claims etc.However, there is a long way to go and various

customer surveys indicate that the standards are still below customer expectation levels.

32

Channels of Distribution:

Till two years back, the only mode of distribution of life insurance products was through

Agents. While agents continue to be the predominant distribution channel, today a number of

innovative alternative channels are being offered to consumers. Some of them are banc

assurance, brokers, the internet and direct marketing. Though it is too early to predict, the wide

spread of bank branch network in India could lead to banc assurance emerging as a significant

distribution mechanism. Table 2 below gives a snapshot of the performance for 2003-04 (up to

October) of the 13 life insurance payers in India based on the first year premium

Knowledge of Life Insurance products

What is life insurance?

A Life insurance policy is a contract between you (the policy owner-insured) and an

insurance company (the insurer). Under the terms of a life insurance contract, the insurer

promises to pay a certain amount of money (death benefit) to someone you choose (a

beneficiary) when you die, in exchange for your premium payments.

Do you need life insurance?

The need for life insurance is simple; you should consider life insurance if anyone

depends on your income. Essentially, you transfer the risk (loss of your income) to the insurer by

paying a fee, or “premium,” to the insurer. The insurer, with a large capital base and expertise in

risk selection and management, is better able to accept this risk than any single individual would

be.

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This risk transfer may be helpful in both personal and business situations.

Personal needs:

Dependent's Support:

The major reason people buy life insurance is to replace income that would be lost

because of the death of an income earner. If you support or help support a family, the loss of

income that would result from your death could mean that your surviving dependents may

face financial difficulties. Household expenses continue, utility bills and school fees must be

paid, and food and clothing must be purchased. Life insurance provides you with a sense of

security in the knowledge that the life insurance money will be available to help support

family members in case of your death.

Education Costs:

One of your primary objectives may be to send your children to a university or college.

Due to an untimely death, the tuition may become beyond your family's reach. Life insurance

may be used to provide for the tuition expense.

Burial expenses and estate planning:

Life insurance may be used to pay funeral or burial expenses. In addition, it may be used

to pay inheritance taxes.

Investment Income:

Life insurance policies that accumulate savings can also be used as vehicles for personal

savings and investment. Over a period of time, the accumulated savings in a permanent life

insurance policy can grow to a substantial sum and, while growing, will still provide the

insured with life insurance coverage.

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Charity:

You can purchase life insurance in order to donate the proceeds to a charitable

organization, such as a church or an educational institution.

Business needs:

A business continuation insurance plan:

When the owner or a key person (any person whose death would cause the business a

significant financial loss) dies, a business continuation life insurance plan may be used to

provide the necessary fund for the business' continued operation.

Buy-Sell Agreement:

If your business partner dies and you don't have enough money to buy your partner's

financial interest in the company, life insurance may be arranged to cover this cost.

Life insurance as Employee Benefits:

Businesses often use life insurance to provide benefits for their employees. Employers pay

for all or part of these employee benefits as part of the total package under which they

compensate their employees.

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Which insurance do you need?

Although you may hear about many names for different types of life insurance policies, the

majority of policies contain benefits derived from one or more of three basic types. These types

are briefly outlined in very general terms below.

Term Life Insurance:

Term insurance is issued for a specific period, or “term.” This term usually ranges from 1

to 30 years. You may choose the length of the term that best suits you. Term insurance is

considered an “affordable” insurance choice. If you are young with a family and need a large

amount of protection without paying high premiums, this type of life insurance may be of

interest to you.

Under a Term policy, in case of death during the term of the policy, your beneficiary

receives the cash payment equal to the insurance amount, or “death benefit.” The death benefit

amount is chosen when you buy the policy. Term insurance protection ends when the period or

“term” is over, and only pays out in case of death. For this reason this product type offers higher

protection at a lower cost. It is a pure “risk transfer” product.

Term insurance can be divided into three main types: level term, increasing term, and

decreasing term. Level term means that the death benefit remains the same throughout the term

of the policy. Increasing term means the death benefit gets larger throughout the term of the

policy. Decreasing term means the death benefit gets smaller.

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Endowment Life Insurance:

Endowment life insurance generally guarantees that a sum of money will be available to

you or your beneficiaries, whether you live until the policy ends (or “matures,”) or in case of an

untimely death. Endowment insurance usually provides a guaranteed death benefit and has a

savings component called the “cash value.”

Generally, if you buy an endowment policy and keep it until maturity, it will provide a

lump-sum cash payout equal to the insurance amount, or “death benefit.” In case of death before

maturity, the death benefit would be paid to your beneficiary.

Endowment insurance can be useful for people who know that they will have to incur a

specific expense in the future — like a wedding or college tuition. They know that regardless of

what the future may hold, the expense will have to be paid. Endowment insurance allows them to

be certain that the money will be there.

Money Back Policy:

Unlike ordinary endowment insurance plans, where the survival benefits are payable only

at the end of the endowment period, money-back policies provide for periodic payments of

partial survival benefits during the term of the policy, as long as the policyholder is alive.

An important feature of this type of policies is that in the event of death at any time

within the policy term, the death claim comprises the full sum assured, without deduction of any

of the survival benefit amounts, which may have already been paid as money-back components.

Similarly, the bonus is also calculated on the full sum assured.

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Children's Insurance Policies:

Children's insurance policies include those through which parents or legal guardians can

provide for life insurance for their child from birth. The risk cover commences from the child

attaining the age of 12 / 17 / 18 / 21 (known as the Date of Risk), and will vest itself on the child

upon his or her attaining majority on completion of age 21, if the case demands.

Until the child attains majority, the parents are the owners of the policy and have to pay

the premium periodically. It is important that these policies are considered only after the

insurance portfolios of the parents have been completed. The family's insurance budget should

primarily buy as much life insurance as possible on the lives of the breadwinner and should not

be frittered away on the children's lives as their insurance is useless in the event of any premature

death of the breadwinner. In fact, those lives should be insured that have maximum economic

benefits. Quite often, policies lapse if and when the premium-paying breadwinner of the family

dies before the vesting age. After all, the child may not be in a position to continue paying the

premiums.

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Pension Plans or Annuities:

An annuity is an investment that you make, either in a single lump sum or through

installments paid over a certain number of years, in return for which you receive a specific sum

every year, every half-year or every month, either for life or for a fixed number of years.

After the death of the annuitant or after the fixed annuity period expires for annuity

payments, the invested annuity fund is refunded, perhaps along with a small addition, calculated

at that time. Annuities differ from all the other forms of life insurance discussed so far in one

fundamental way - an annuity does not provide any life insurance cover but, instead, offers a

guaranteed income either for life or a certain period.

Typically, annuities are bought to generate income during one's retired life, which is why

they are also called pension plans. Annuity premiums and payments are fixed with reference to

the duration of human life. Annuities are an investment, which can offer an income you cannot

outlive and provide a solution to one of the biggest financial insecurities of old age; namely, of

outliving one's income.

Special plans:

Special plans are insurance policy plans available from the national insurance providers

to serve the needs of citizens who cannot be commonly classified or segregated. These special

plans are designed to satisfy needs ranging from debt-clearance in the event of the death of the

insured to financial aid in the event of a medical mishap. Special plans also provide financial

assistance for handicapped dependants as well as emergency surgery required if and when a

medical condition arises.

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Whole Life Insurance:

Whole life insurance has many of the same features as Endowment insurance, but it is

designed to remain in force during the insured's entire lifetime. Like Endowment insurance, it

provides a guaranteed death benefit, and has a savings component called the “cash value.” As

you pay your premiums, a portion of each payment is set aside to create the cash value. The

insurance company typically invests the cash value, which continues to grow as long as the

policy is in force.

Some of the advantages of a policy's cash value are that:

You can cancel or surrender the policy in total or in part and receive the cash value;

however, since this is a long-term policy, in the early years the cash value may be small

or even equal to zero.

If you find that you need to skip a premium payment, you can use the cash value to

continue your current insurance protection for some time.

In most cases, you may borrow from the insurance company, using the cash value in your

life insurance as collateral.

Other types of whole life insurance:

Universal Life Insurance:

Universal life insurance has all the features of Whole life insurance. In addition to those

features, it offers flexibility in premium payment and face amount, and it provides current

interest rates. Unlike whole life and term, Universal life allows you, after payment of your initial

premium, to pay premiums at any time, in virtually any amount, subject to certain minimums and

maximums. You also can reduce or increase the death benefit more easily than under traditional

whole life policy.

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Variable Universal Life Insurance:

Variable universal life insurance has all the features of Universal life insurance coverage,

but, instead of earning an interest rate, its cash value is linked to non-guaranteed equity

investment funds, bond investment funds, or similar investments. Your premiums will be

invested in the various investment options that you have chosen, and you assume the investment

risks. The amount of the policy benefit is dependent on the performance of your investments.

A number of supplementary benefits can also be added to the various forms of life

insurance policies. These additional benefits are usually provided by adding riders to the life

insurance policy. The most common supplementary benefits include:

Waiver of Premium for Disability Benefits:

The insurer waives its right to collect premiums that become due while the insured is totally

disabled.

Disability Income Benefits:

The insurer provides a monthly income benefit to the policy owner insured if he becomes

totally disabled.

Critical Illness Benefits:

The insurer agrees to pay a portion of the policy's face amount to a policy owner insured who

suffers from one of a number of specific, critical illnesses.

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Advertising industry is a rapidly growing industry and determines to a considerable

extent the GDP or the gross domestic product of any country. The advertising industry besides

functioning as an intermediate between the manufacturers and the customers plays an important

role in the economy of the country. This industry necessitates investment for funding different

resources. One cannot measure the degree of development by interpretation of inputs in the

economy which yields some production. In the event when consumption levels far exceed than

what is reckoned, this is not a means of triggering or bringing about transformation in the

culture, society or development in human resources or economy. What the time demands is

optimum and efficient execution of advertising projects by involving appropriate technology

along scientific lines.

As per report by ZenithOptiMedia, “..expect advertising expenditure in India to increase

from 0.50% of the gross domestic product (GDP) to 0.53% over the next three years,”

Worldwide, the ad industry is expected to grow 6.7% to reach $61 bn and Internet

advertising is expected to surpass magazine advertising; and the upswing will be triggered by

quadrennial events like Olympics, US elections and Euro 2008.

As far as Indian market is concerned:

Internet advertising contributes only 1.8 % of the country’s total advertising spend.

Internet medium is set to witness 150 per cent growth in 2008.

For every hundred rupees spent by advertisers, Rs 91 is spent on television and the print

media while the outdoor media accounts for Rs 5. The rest is divided between cinema, radio and

the Internet. (the Indian entertainment industry, too is expected to grow by CAGR of 18% to

reach Rs. 1 trillion numbers by 2011).

Though these numbers may sound great (and most of the times theoretical), what is really

important and worth noticing is the rise of ad networks by newspapers/magazines worldwide

(after all they are the ones who have a strong relationship with local advertisers as well as

readers) which are essentially competing with ad networks from Google/Yahoo/MSN and online

companies.

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http://www.pluggd.in/2007/07/indian-entertainment-industry-all-sethtml

http://www.pluggd.in/2007/12/indian-internet-advertising-to-beat-magazine-advertising

http://www.pluggd.in/2007/12/indian-internet-advertising-to-beat-magazine-advertising

TABLE SHOWING THE LITERACY LEVEL OF THE RESPONDENTS

RATING OF PARAMETERS NUMBER OF RESPONDENTS %

Under Graduation 13 26

Graduation 29 58

Post Graduation 8 16

INTERPRETATION:-

From the above table it is clear that out 50 respondents 26% are under graduates, 58% are

graduates and 16% are postgraduates.

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TABLE SHOWING THE RESPONDENTS QUANTUM OF MONTHLY INCOME


5000 – 10000 11 22

10000 – 15000 24 48

> 15000 15 30

INTERPRETATION:-

From the above table it is understood that out of 50 respondents 22% of them earn between

5000 – 10000 income monthly, 48% of them earn 10000 – 15000 income monthly, and 30% of

them earn more than 15000.

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TABLE SHOWING THE RESPONDENTS AWARENESS METHOD TOWARDS THE BUSINESS


News Papers 23 46

Internet 16 32

Corporate advisors 11 22

INTERPRETATION:-

It is evident from above table out of 50 respondents 46% are came to know about the

business through news papers, 32% of them came to know through Internet, and 22% of them

through corporate advisors

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TABLE SHOWING THE REASONS BY WHICH RESPONDENTS ENTERED IN

TO THIS FIELD :


Self Employment 34 68

Additional Income 16 32

INTERPRETATION:-

From the above table it is inferred that out of 50 Respondents 68% respondents have entered

into this field for self employment, and 32% are entered for additional income.

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TABLE SHOWING THE SOURCES OF RESPONDENTS FOR REACHING CUSTOMERS


Friends 16 32

Cold Calling 24 48

Others 10 20

INTERPRETATION:-

From the above table it is clear that out of 50 respondents 32% respondents reached the

customers through their friends, 48% of them reached through cold calling, and 20% of them

reached through others.

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TABLE SHOWING THE TARGETED CUSTOMERS OF RESPONDENTS


High class 9 18

Upper Middle 29 58

Middle 12 24

INTERPRETATION:-

From the above table it is inferred that out of 50 respondents the targeted customers of 18%

respondents are High class, targeted customers of 58% respondents are Upper middle class and

24% are middleclass.

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TABLE SHOWING WHETHER THE SALES OF ICICI PRODUCTS ARE AFFECTED BY PRICE


Yes 32 64

No 18 36

INTERPRETATION:

From the above table it is clear that 64% of TATA-AIG products sales are affected by its

price.

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TABLE SHOWING THE FACTORS INFLUENCING THE CUSTOMERS TO TAKE POLICY


Risk Coverage 12 24

Tax Benefit 24 48

Big Returns 14 28

INTERPRETATION

From the above table it is found that out of 50 respondents 24% say that customers

take policy for Risk Coverage, 48% of them for Tax Benefit, and 28% of them take for Big

returns

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TABLE SHOWING THE WAYS OF CONVINCING THE CUSTOMERS TO TAKE POLICY


Demonstration 13 26

Comparison 24 48

Benefits 13 26

INTERPRETATION:

From the above table it is clear that out of 50 respondents 26% of respondents are convinced

with effective demonstration, and 48% of respondents are convinced with comparison, and 26%

of respondents are convinced with the explanation about the benefits our products offers

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FINDINGS

The company is mostly emphasizing on upper middle customers (58%).

Most of the customers are takes the policy for tax benefits (48%) and risk coverage

(24%).

Corporate agents reached 48% of customers through cold calling.

Corporate agents convince most of the customers by comparison of our products with

others (48%).

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SUGGESTIONS

The company has to give priority for service, which is most important element in service

industry.

Along with the product, service has to give sample opportunity to differentiate along the

competitors as styling and services.

In order to overcome the competitive market and to attract customers the company can

adopt suitable sales promotional techniques.

A continuous research study should be carried out to have a perfect knowledge of its

customer’s needs, wants and demands, which are constantly changing.

Enhancing the value added features in the products.

The premiums of policies are very high so that middle level people should not payable.

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CONCLUSION

Most of the people interested to take the policy for tax benefit and risk coverage.

84% market share has been covered by LIC.

Most of the peoples are joined insurance sector by corporate agents Most of the

customers are convinced by comparison of our products with others (48%).

58% of people are insured in unit linked insurance plans.

Both commitments and lack of trust are leading to face a huge problem for corporate

agents to market the TATA-AIG products.

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QUESTIONNAIRE

ON

A STUDY ON MARKETING OF LIFE INSURANCE PRODUCTS OF TATA AIG

TATA AIG LIFE INSURANCES COMPANY LTD.

HYDERABAD

General information

I) Name :

II) Age :

III) Educational Qualifications :

IV) Designation :

V) Experience :

1. What is your Educational Qualifications?

a) Under Graduation

b) Graduation

c) Post Graduation

2. What is yours monthly income?

a) 5000-10000

b) 10000-15000

c) >15000

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3. How do you come to know about TATA AIG?

a) News papers

b) Internet

c) Corporate advisors

4. Why do you choose insurance field?

a) Self employment

b) Additional income

5. What are the sources for reaching customers?

a) friends

b) cold calling

c) others

6. Who are your target customers?

a) High class

b) Upper middle

c) Middle

7. Whether the sales of TATA AIG sale products are affected by price?

a) Yes

b) No

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8. What are the factors influences to take policy?

a) Risk coverage

b) Tax benefit

c) Big returns

9. How do you get convinces to take policy?

a) Demonstration

b) Comparison

c) Benefits

10.) From how many years you are been insured?

(a) 0-1 years

(b) 2-5 years

(c) 5-10 years

(d) 10 years and above

11) Would you like to have insurance updates on phone or over mail?

(a) Yes

(b) No

(c) If yes specify: ____________

12) Do you agree that services offered online are trust worthy & are secure?

(a) Strongly agree

(b) Agree

(c) Undecided

(d) Disagree

(e) Strongly disagree

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13) The Company serving their customers needing many services through Media?

(a) Strongly agree

(b) Agree

(c) Undecided

(d) Disagree

(e) Strongly disagree

14) What made you to take a decision on taking policy from TATA AIG?

(a) Full information over the mail

(b) Media like TV, News Papers etc.,

(c) Others Specify: _________

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BIBILOGRAPHY

1) www.tata-aig life.com

2) www.irdaindia .com

3). Insurance Journals –INSURANCE PLUS

4) Marketing Management - Philip Kotler

5) Marketing Research – Beri G.C

6) Services Marketing – Zeithmal Valorie

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Girish Projet on .Tata Aig Project for Mba

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