Final Sip 2008

A REPORT ON
Analysis of Life Insurance Sector in India with a Focus on Distribution Channel

By Priyanka IV Semester MBA
Reg. No. 07MB3061
Guide Prof. Monika Attri
Project Report Submitted to the University of Mysore in partial fulfillment of the requirements of IV Semester MBA degree examinations - 2008
K. R. Mangalam Global Institute of Management
University of Mysore, Manasagangothri, Mysore 570 006
A REPORT ON
Analysis of Life Insurance Sector in India with a Focus on Distribution Channel
By Priyanka IV Semester MBA

Reg. No. 07MB3061
Guide Prof. Monika Attri
Project Report Submitted to the University of Mysore in partial fulfillment of the requirements of IV Semester MBA degree examinations - 2008
KGIM, Manasagangotri, University of Mysore, Mysore
K. R. Mangalam Global Institute of Management

University of Mysore, Manasagangothri, Mysore 570 006
CERTIFICATE
This is to certify that ___________________________________ (Roll Number: _________________) worked and completed this project titled _______________________________________under my guidance and supervision. He/She was sincerely involved in the working of this project till its completion. This project work is required in the partial fulfillment of two years M.B.A. programme from University of Mysore. __________________ (Sign. of Guide)
ACKNOWLEDGEMENTS
I wish to thank my project guide Prof. Monika Attri whose accomplished guidance channeled my conscientious endeavors towards the rightful realization of my goals. The progress of the project was smooth and steady due to her regular guidelines. I also wish to thank my company guide Mr. Deepak Bhardwaj who with his constant appreciation and affectionate encouragement has been a source of inspiration throughout the project. The consistent and substantial contribution from my faculty guide augmented my initiative and guided my efforts in the appropriate direction. Finally, I am thankful to my director and the faculty members for their encouragement and help.
Priyanka
LIST OF ABBREVIATIONS
IRDA Insurance Regulatory and Development Authority AIG - American International Group LIC Life Insurance Corporation FSAP - Financial Sector Assessment Program GDI - Gross Domestic Investment GIC General Insurance Corporation GDP - Gross Domestic Product IAIS - International Association of Insurance Supervisors IDMA - Insurance Data Management Association ISO - Insurance Services Office MFI - Microfinance Institution GDA Global Development Alliance PL - Property-Liability Insurance
TABLE OF CONTENTS
1. Introduction 1
..........
1.1 Problem Definition ........ 1.1.1 Company Profile 2 1.2 5 1.3 Research Methodology .......... 1.3.1 Research Brief 1.3.2 Research Design . 1.3.3 Data Collection Method . 1.3.4 Steps in the Market Research Research Objectives
..
...........
5 5 5 6 6
1.4 Limitations of the Project Study ........ 7
2. What is Insurance 8
............... 11
2.1 Insurers Business Model ........ 3. Types of Insurance 13 4. Insurance Industry in India 17 4.1 Brief History of Insurance Sector in India ...... 5. Distribution Channel 20 5.1 Channels ... 5.2 Channel members ..... 5.3 The internal market ...... 5.4 Channel management ....... .....
........
18
..,......
20 21 22 22
5.5 Channel membership ..... 23 5.6 Channel motivation ... 23 6. Channeling the Future .. 26 26
6.1 The emergence of new distribution channels ..
6.2 The consumer is evolving and so are his needs 26
6.3 The burden of legacy 28 6.4 Ease of doing business .. 29 6.5 Innovative commission and incentive packaging . 31 6.6 Managing licensing of doing business .. 32 6.7 Evaluating performance .... 33 6.8 Point of Sale .. 34 6.9 Portals ... 6.10 Channel Management .. 7. Data Analysis & Interpretation .. 35 36 38
8. Findings
.......
50 50 51
8.1. Distribution - the key differentiator .......... 8.2. Challenging Scenario transformation of intermediaries ........
8.3. Distribution Scenario in the Indian market ....... 52 8.4. What should the companies look at ...... 53 8.5. Focus on multiple distribution channels ...... 55
9. Conclusions & Suggestions 62 10. Bibliography 64 11. Appendix 65
.........
.......
.........
1. Introduction
1.1 Problem Definition
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 while health insurance and non-life insurance continues 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. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. The current state of insurance distribution in India is still in flux. On one hand, insurers are awaiting regulations to be approved for brokerages and bancassurance to be truly launched. On the other hand they are trying the corporate model of intermediaries in addition to the traditional models in the market. It is clear that the only way in which insurance companies can address the challenges and capitalize on the opportunities is by investing in systems that are customizable, open, flexible and can be easily integrated with legacy and other back-office platforms. Such a system will help them make their distribution chain more effective and efficient, push new products through the distribution pipeline at a faster pace, reduce operational costs and inefficiency and position themselves as a preferred partner with channels.
1.1.1 Company Profile
Unicon Investment Solutions

Unicon has been founded with the aim of providing world class investing experience to hitherto underserved investor community. The technology today has made it possible to reach out to the last person in the financial market and give him the same level of service which was available to only the selected few. Unicon provides personalized premium service with reasonable commissions on the NSE, BSE & Derivative market through our Equity broking arm Unicon Securities Pvt Ltd. and Commodities on NCDEX and MCX through our Commodity broking arm Unicon Commodities Pvt. Ltd. With our sophisticated technology you can trade through your computer and if you want human touch you can also deal through our Relationship Managers out of our more than 100 branches spread across the nation.
Unicon also give personalized services on Insurance (Life & General) & Investments (Mutual Funds & IPO's) needs, through our Insurance & Investment distribution arm Unicon Insurance Advisors Pvt. Ltd. Our tailor-made customized solutions are perfect match to different financial objectives. Our distribution network is backed by in-house back office support to serve our customers promptly. Mission : To create long term value by empowering individual investors through superior financial services supported by culture based on highest level of teamwork, efficiency and integrity. Vision :
To provide the most useful and ethical Investment Solutions - guided by values driven
approach
to
growth,
client
service
and
employee
development.
Management Team
Gajendra Nagpal (Founder & CEO)
Mr. Nagpal with his dynamic leadership brings vision to the company. A management graduate by qualification, Mr. Nagpal brings with him over 14 years of experience in the stock market. Before joining Unicon he has served at senior positions for 5 years with Kotak securities at a regional level and Indiabulls securities for 4 years at national level assignments. Mr. Nagpal brings with him the rich experience of building a retail broking network. He is a familiar face on the electronic media and is well respected in the broking industry for his stock market expertise.
Mr. Ram M Gupta (Co-Founder & President)
Mr. Gupta through his aggression and dynamism brings energy to the team. He has 8 years of stock market experience behind him and is responsible for driving the sales team. Mr. Gupta has held senior level postions in Karvy stock broking and Indiabulls Securities. Mr. Gupta is supported by a team of over 850 relationship mangers spread over 89 locations across the country.
Mr. Vikas Mallan (Chief Financial Officer)
Mr. Mallan , A Chartered Accountant , Company Secretary and Cost Accountant by profession. Mr. Mallan has over 14 years of experience in the area of finance. Before joining Unicon he has served at senior level positions with Rediff.com, Reliance Telecom and Koshika Telecom. His experience includes a Nasdaq listing of an Indian internet company and Head of Finance of a leading Law firm. Mr. Mallan is heading Distribution / Mutual Fund initiative and is supported by around 1100 dedicated employees nationwide.
Products & Services

Unicon is a customer focused financial services organization providing a range of investment solutions to our customers. We work with clients to meet their overall investment objectives and achieve their financial goals. Our clients have the opportunity to get personalized services depending on their investment profiles. Our personalized approach enables clients to achieve their Total Investment Objectives. Our key product offerings are as follows: Equity Commodity Depository PCG Distribution Properties NRI Services Back Office
1.2 Research Objectives

Analysis of Life Insurance Sector in India with a Focus on Distribution Channel.
Specific Objectives:
To provide the company with information of customer's Insurance
policy if they have any and reasons for opting for that particular policies. To determine customers perception towards private insurance
companies and their expectation form private insurance companies. To study the different distribution channels To study the distribution model and distribution framework used by
corporate agents agents. To study the types of benefits provided by insurance services and To determine the feedback on the services provided by the corporate
role of distribution network in it
1.3 Research Methodology

1.3.1 Research Brief
The first stage involved initial discussion between the various team members and the company guide in order to identify the research objectives (Rationale of the research), which is the most difficult step in the research process.
1.3.2 Research Design

The research is primarily both exploratory as well as descriptive in nature. The sources of information are both primary & secondary. A well-structured
questionnaire was prepared and personal interviews were conducted to collect the customers perception and buying behavior through this questionnaire.
1.3.3 Data Collection Method

a. Preparation of Questionnaire: Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done. b. Sampling Method: Sampling method followed was judgmental sampling. The customer was selected on a random basis from different parts of Delhi. c. Sample Size: The sample size was restricted to only 200, which comprised of mainly peoples from different regions of Delhi due to time constraints.
1.3.4 Steps in the Market Research

Identification of the Objective (problem) Initial collection of the data from secondary sources. Identification of sample size and sampling area. Formulation of the questionnaire. Collection of the primary data through fieldwork. Analysis and interpretation of the collected data.
Preparation of the research report along with observations &
recommendations.
1.4 Limitations of the project study

In all kinds of Marketing Research studies errors are bound to creep in. These errors, mainly, are the outcome of the various limitations. Some of the limitations of this project are listed below:

Lack of experience to conduct a professional Marketing Research study. Errors in the results due to small sample size.
The definition of the population may be restricted. Thus, the
results can only be generalized with confidence to the group from whom the sample was taken.
Potential biases such as unauthentic, refusals and respondents
non-cooperation.
The research suffers from response bias when people answer a
question falsely, either through deliberate misrepresentation or unconscious falsification.
Questionnaire is long which makes it difficult to get all the
responses from interviewee in limited period of time.
The scope of the project is limited to Delhi city only.
2. What is Insurance
Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. With the help of Insurance, large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good.
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable
transfer of the risk of a loss, from one entity to another, in exchange for a premium. An insurer is a company selling the insurance. The insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice. Principles of insuranceCommercially insurable risks typically share seven common characteristics. 1. A large number of homogeneous exposure units. The vast majority of insurance policies are provided for individual members of very large classes. Automobile insurance, for example, covered about 175 million automobiles in the United States in 2004. The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called law of large numbers, which in effect states that as the number of exposure units increases, the actual results are increasingly likely to become close to expected results. There are exceptions to this criterion. Lloyd's of London is famous for insuring the life or health of actors, actresses and sports figures. Satellite Launch insurance covers events that are infrequent. Large commercial property policies may insure exceptional properties for which there are no homogeneous exposure units. Despite failing on this criterion, many exposures like these are generally considered to be insurable. 2. Definite Loss. The event that gives rise to the loss that is subject to insurance should, at least in principle, take place at a known time, in a known place, and from a known cause. The classic example is death of an insured on a life insurance policy. Fire, automobile accidents, and worker injuries may all easily meet this criterion. Other types of losses may only be definite in theory. Occupational disease, for instance, may involve prolonged exposure to injurious conditions where no specific time, place or cause is identifiable. Ideally, the time, place and cause of a loss should be clear enough that a
reasonable person, with sufficient information, could objectively verify all three elements. 3. Accidental Loss. The event that constitutes the trigger of a claim should be fortuitous, or at least outside the control of the beneficiary of the insurance. The loss should be pure, in the sense that it results from an event for which there is only the opportunity for cost. Events that contain speculative elements, such as ordinary business risks, are generally not considered insurable. 4. Large Loss. The size of the loss must be meaningful from the perspective of the insured. Insurance premiums need to cover both the expected cost of losses, plus the cost of issuing and administering the policy, adjusting losses, and supplying the capital needed to reasonably assure that the insurer will be able to pay claims. For small losses these latter costs may be several times the size of the expected cost of losses. There is little point in paying such costs unless the protection offered has real value to a buyer. 5. Affordable Premium. If the likelihood of an insured event is so high, or the cost of the event so large, that the resulting premium is large relative to the amount of protection offered, it is not likely that anyone will buy insurance, even if on offer. Further, as the accounting profession formally recognizes in financial accounting standards, the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. If there is no such chance of loss, the transaction may have the form of insurance, but not the substance. 6. Calculable Loss. There are two elements that must be at least estimable, if not formally calculable: the probability of loss, and the attendant cost. Probability of loss is generally an empirical exercise, while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim.
7. Limited risk of catastrophically large losses. The essential risk is often aggregation. If the same event can cause losses to numerous policyholders of the same insurer, the ability of that insurer to issue policies becomes constrained, not by factors surrounding the individual characteristics of a given policyholder, but by the factors surrounding the sum of all policyholders so exposed. Typically, insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base, on the order of 5 percent. Where the loss can be aggregated, or an individual policy could produce exceptionally large claims, the capital constraint will restrict an insurers appetite for additional policyholders. The classic example is earthquake insurance, where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones, particularly along coast lines, is another example of this phenomenon. In extreme cases, the aggregation can affect the entire industry, since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurers capital constraint. Such properties are generally shared among several insurers, or are insured by a single insurer who syndicates the risk into the reinsurance market.
2.1 Insurers Business Model

Profit = earned premium + investment income - incurred loss - underwriting expenses. Insurers make money in two ways: (1) through underwriting, the process by which insurers select the risks to insure and decide how much in premiums to charge for accepting those risks and (2) by investing the premiums they collect from insured. The most difficult aspect of the insurance business is the underwriting of policies. Using a wide assortment of data, insurers predict the likelihood that a claim will be
made against their policies and price products accordingly. To this end, insurers use actuarial science to quantify the risks they are willing to assume and the premium they will charge to assume them. Data is analyzed to fairly accurately project the rate of future claims based on a given risk. Actuarial science uses statistics and probability to analyze the risks associated with the range of perils covered, and these scientific principles are used to determine an insurer's overall exposure. Upon termination of a given policy, the amount of premium collected and the investment gains thereon minus the amount paid out in claims is the insurer's underwriting profit on that policy. Of course, from the insurer's perspective, some policies are winners (i.e., the insurer pays out less in claims and expenses than it receives in premiums and investment income) and some are losers (i.e., the insurer pays out more in claims and expenses than it receives in premiums and investment income). An insurer's underwriting performance is measured in its combined ratio. The loss ratio (incurred losses and loss-adjustment expenses divided by net earned premium) is added to the expense ratio (underwriting expenses divided by net premium written) to determine the company's combined ratio. The combined ratio is a reflection of the company's overall underwriting profitability. A combined ratio of less than 100 percent indicates underwriting profitability, while anything over 100 indicates an underwriting loss. Insurance companies also earn investment profits on float. Float or available reserve is the amount of money, at hand at any given moment, that an insurer has collected in insurance premiums but has not been paid out in claims. Insurers start investing insurance premiums as soon as they are collected and continue to earn interest on them until claims are paid out. Finally, claims and loss handling is the materialized utility of insurance. In managing the claims-handling function, insurers seek to balance the elements of customer satisfaction, administrative handling expenses, and claims overpayment leakages. As part of this balancing act, fraudulent insurance practices are a major business risk that must be managed and overcome.
3. Types of Insurance
Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which are not. Below are (nonexhaustive) lists of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set forth below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of health insurance for medical expenses of guests who are injured on the owner's property.
Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owners policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs. Health Almost all developed countries have government-supplied insurance for health Health insurance policies will often cover the cost of private medical treatments if the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs do not pay for them. It will often result in quicker health care where better facilities are available. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the U.S., dental insurance is often part of an employer's benefits package, along with health insurance. Most countries rely on public funding to ensure that all citizens have universal access to health care. Disability
Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.
Total permanent disability insurance insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance.
Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work.
Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred because of a job-related injury.
Casualty Casualty insurance insures against accidents, not necessarily tied to any specific property.
Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.
Life insurance Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance.
Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed. In many countries, such as the U.S. and the UK, the tax law provides that the interest on this cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. In U.S., the tax on interest income on life insurance policies and annuities is generally deferred. However, in some cases the benefit derived from tax deferral may be offset by a low return. This depends upon the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover, other income tax saving vehicles (e.g., IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value accumulation. A combination of low-cost term life insurance and a higher-return taxefficient retirement account may achieve better investment return. Property This tornado damage to an Illinois home would be considered an "Act of God" for insurance purposes Property insurance provides protection against risks to property, such as fire, theft or weather damage. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, inland marine insurance or boiler insurance.
Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout the United States auto insurance policy is required to legally
operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars.
o
Driving School Insurance provides cover for any authorized driver whilst under going tuition, cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are both equally liable in the event of a claim.
Aviation insurance insures against hull, spares, deductible, hull wear and liability risks.
4. Insurance Industry in India
Abstract
The Indian Insurance Industry Report provides insightful analysis, market overview, industry structure and outlook of life and non-life insurance industries in the country. Richly laden with quantitative analysis, the report provides the reader with a rudimentary preface to Indian insurance industry. The closely summarized Indian market report is designed to offer a macro level picture of the trends, challenges, market structure/basics, and recent mergers & acquisitions, and strategic corporate developments witnessed by the industry. Also provided is a compilation of recent past/ historical perspective of the countrys insurance market and corporate developments within the industry. The report examines the leading companies footing in insurance markets at regional level, along with their annual written premiums and/ or market shares. Regional key and niche players briefly discussed and abstracted in the report include Bajaj Allianz, General Insurance Co., ICICI Prudential Life Insurance Co. Ltd., and Life Insurance Corp. of India.
Overview
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 while health insurance and non-life insurance continues 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. Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.
4.1 Brief History of Insurance Sector In India

The insurance sector in India has come a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.
1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business.
1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 1977 insurers amalgamated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.
5. Distribution Channel
Distribution (or placement) is one of the four aspects of marketing. A distributor is the middleman between the manufacturer and retailer. After a product is manufactured, it may be warehoused or shipped to the next echelon in the supply chain, typically either a distributor, retailer or consumer. The other three parts of the marketing mix are product management, pricing, and promotion. Frequently there may be 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.
5.1 Channels
A number of alternate 'channels' of distribution may be available:

Selling direct, such as via mail order, Internet and telephone sales Agent, who typically sells direct on behalf of the producer Distributor (also called wholesaler), who sells to retailers Retailer (also called dealer or reseller), who sells to end customers 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. There have also been some innovations in the distribution of services. For 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.
5.2 Channel members

Distribution channels can thus have a number of levels. Kotler defined the simplest level, that of direct contact with no intermediaries involved, as the 'zero-level' channel. The next level, the 'one-level' channel, features just one intermediary; in consumer goods a retailer, for industrial goods a distributor. In small markets (such as small countries) it is practical to reach the whole market using just one- and zero-level channels. In large markets (such as larger countries) a second level, a wholesaler for example, is now mainly used to extend distribution to the large number of small, neighborhood retailers. In Japan the chain of distribution is often complex and further levels are used, even for the simplest of consumer goods.
In Bangladesh Telecom Operators are using different Chains of Distribution, especially 'second level'. In IT and Telecom industry levels are named "tiers". A one tier channel means that vendors IT product manufacturers (or software publishers) work directly with the dealers. A one tier / two tier channel means that vendors work directly with dealers and with distributors who sell to dealers. But the most important is the distributor or wholesaler.
5.3 The internal market

Many of the marketing principles and techniques which are applied to the external customers of an organization can be just as effectively applied to each subsidiary's, or each department's, 'internal' customers. In some parts of certain organizations this may in fact be formalized, as goods are transferred between separate parts of the organization at a `transfer price'. To all intents and purposes, with the possible exception of the pricing mechanism itself, this process can and should be viewed as a normal buyer-seller relationship. The fact that this is a captive market, resulting in a `monopoly price', should not discourage the participants from employing marketing techniques. Less obvious, but just as practical, is the use of `marketing' by service and administrative departments; to optimize their contribution to their `customers' (the rest of the organization in general, and those parts of it which deal directly with them in particular).
5.4 Channel management

The channel 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. In practice, if the producer is large enough, the use of intermediaries (particularly at the agent and wholesaler level) can sometimes cost more than going direct. Many of the theoretical arguments about channels therefore revolve around cost. On the other hand, most of the practical decisions are concerned with control of the consumer. The small company has no alternative but to use intermediaries, often several layers of them, but large companies 'do' have the choice. However, 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 is merely assuming a part of the supplier's responsibility; and, if he has any aspirations to be market-oriented, his job should really be extended to managing, albeit very indirectly, 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:

Channel membership Channel motivation Monitoring and managing channels
5.5 Channel membership

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'.
5.6 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 competition is offered to the distributors' sales personnel, so that they are tempted to push the product. At the other end of the spectrum is the almost symbiotic relationship that the all too rare supplier in the computer field develops with its agents; where the agent's personnel, support as well as sales, are trained to almost the same standard as the supplier's own staff Monitoring and managing channels 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.
Vertical marketing
This relatively recent development integrates the channel with the original supplier producer, wholesalers and retailers working in one unified system. This may arise because one member of the chain owns the other elements (often called `corporate systems integration'); a supplier owning its own retail outlets, this being 'forward' integration. It is perhaps more likely that a retailer will own its own suppliers, this being 'backward' integration. (For example, MFI, the furniture retailer, owns Hygena which makes its kitchen and bedroom units.) The integration can also be by franchise (such as that offered by McDonald's hamburgers and Benetton clothes) or simple cooperation (in the way that Marks & Spencer co-operates with its suppliers).
Alternative approaches are 'contractual systems', often led by a wholesale or retail cooperative, and `administered marketing systems' where one (dominant) member of the distribution chain uses its position to co-ordinate the other members' activities. This has traditionally been the form led by manufacturers. The intention of vertical marketing is to give all those involved (and particularly the supplier at one end, and the retailer at the other) 'control' over the distribution chain. This removes one set of variables from the marketing equations. Other research indicates that vertical integration is a strategy which is best pursued at the mature stage of the market (or product). At earlier stages it can actually reduce profits. It is arguable that it also diverts attention from the real business of the organization. Suppliers rarely excel in retail operations and, in theory, retailers should focus on their sales outlets rather than on manufacturing facilities ( Marks & Spencer, for example, very deliberately provides considerable amounts of technical assistance to its suppliers, but does not own them).
Horizontal marketing
A rather less frequent example of new approaches to channels is where two or more non-competing organizations agree on a joint venture - a joint marketing operation because it is beyond the capacity of each individual organization alone. In general, this is less likely to revolve around marketing synergy.
6. Channeling the Future

The insurance distribution landscape is strewn with opportunities and challenges. Obviously, to make the most of the opportunities, insurance companies will first have to overcome the challenges. Lets take a quick look at the opportunities.
6.1 The emergence of new distribution channels

There was a time when captive agents wrote the bulk of an insurance companys business.But increasingly people are buying insurance products from independent producers and institutional channels such as banks, broker-dealers, IFAs and wire houses. In a way, this is good news for insurance companies. Managing a captive agency force is an expensive business. Studies estimate that insurance companies invest anywhere between $65,000 and $200,000 in training each
agent. This investment often does not deliver the desired return because there is a great deal of attrition among agents. Besides training, there are huge operational overheads attached to maintaining a captive force. Independent producers and institutional channels are likely to bring new efficiencies into the distribution framework and corner a larger percentage of the policies written. For instance, banks and large broker-dealers already have huge networks in place, existing relationships with customers and brand equity. If insurance companies are able to position themselves as preferred partners with these channels, they could quickly increase their market share and at the same time bring down their cost per business acquisition.
6.2 The consumer is evolving and so are his needs:

The way consumers look at insurance products today is completely different from how they looked at them a few years ago. Insurance products are no longer about just covering risks and lives. Since the 1980s insurance in many markets has increasingly become a wealth-management product. Consumers are seeking variety and customizability in their investment portfolios. The demographics are also in favor of insurance companies. The average lifespan is increasing and so are standards of living. This is creating demand for products that not only offer protection but also double up as investments. Insurance companies have an opportunity to bring innovation into their product mix. They can gain a competitive advantage by quickly launching innovative products that are aligned with evolving consumer needs. To do this, insurance companies must be able to understand consumer needs better and have agile systems that let them launch products quickly. To capitalize on these opportunities, however, insurance companies must get closer to the customer by expanding their distribution network. They have to
incorporate new and alternative channels, arm the sales forces with effective sales tools and position themselves as preferred partners with their channels. In most markets, except Asia, insurance carriers generate more than 80% of their business through alternative distribution channels such as bancassurance, brokerdealers, wire houses and IFAs. The key challenge for insurers is to attract and retain these distribution channels by: Making it easy for channels to do business with them Providing good and quick underwriting support Delivering differentiated service to top performers Providing proactive service Launching incentive plans and contests Managing commissions in a more efficient manner In a marketplace where products are increasingly becoming commoditized, the big differentiator that insurers can offer their channels is ease of doing business. Insurance companies can position themselves as preferred providers by delivering on key areas such as: New business and underwriting support Marketing and sales support Underwriting speed Client services Commission rate In this white paper, we will look at how insurance companies can streamline their distribution networks, address the business and technological challenges and capitalize on the opportunities.
6.3 The burden of legacy
One of the biggest stumbling blocks for insurance companies in mature markets is their legacy systems. The IT systems of many insurance companies have evolved in an ad-hoc manner over the last 30 years. These legacy systems were built around product silos. Each product came with its own policy admin platforms. Today, insurance companies are saddled with a disparate set of platforms that are extremely complex to integrate. Maintaining so many platforms is expensive and operationally inefficient. For instance, if there is any change in calculations, it will have to be replicated across multiple platforms. But the biggest impact is on the distribution landscape. The existing systems were adequate when insurance products were simple, consumers were less demanding and they were sold through a large network of captive agents. Today, insurance products have become a lot more complex, customers are demanding better service and customized products, and non-traditional channels such as banks, brokerdealers, IFAs and retail outlets are seeking better support through out the sales cycle. In a recent survey, agents were asked to rank the various factors that made it attractive for them to do business with an insurer. If you thought that the answer would be the percentage of commission, you couldnt be more wrong. The most attractive thing about an insurer, they felt, was the ease with which they could do business with the company. As independent channels, which sell competing products, become the norm in the distribution landscape, carriers clearly have their work cut out. They must make it simpler and more attractive for the channels to sell their products over those of their competitors.
6.4 Ease of doing business

There is very little differentiation among the products of insurance companies. So, a producer will typically recommend those products that are easier to sell to maximize their commissions. Take for example the case of brokers A and B. Lets assume that both are paid the same commission rate. If broker A can convert a prospect to a policy in two days, and broker B can do it in ten days, it doesnt take a math wizard to figure out who will make more commission. So, how can insurance companies encourage producers to sell more of their products? Carriers must provide channels with tools and services that can help the latter improve sales efficiency. Lets take a look at some of them Quick closure of sales: To begin with, agents need tools and calculators to produce accurate quotations on the fly. They also need tools that can help them perform a financial need analysis of the customer and suggest suitable products based on the customers profile. To further speed up the process, it would help if agents can perform basic suitability tests and underwriting at source. Reduction in proposal turnaround time: Insurers must aim to reduce the time it takes to turnaround proposals. They must give agents the ability to submit applications online through a portal, which is seamlessly integrated with the back office. An underwriting engine, which is based on pre-defined rules, can automatically handle many of the proposals, flagging only those proposals that do not meet the basic criteria for manual underwriting. In such a system, insurers can also use straight through processing (STP) to greatly reduce the turnaround times. Proactive service: A good system will allow insurers to be proactive in the kind of service they deliver to their distribution partners. For instance, they can provide alerts to agents on policies that are likely to lapse or about defaults on premiums through producer-defined or system alerts. When it comes to wealth management
products, an insurer must be able to provide its channels with portfolio management tools such as tools to generate simulated what if scenarios or perform financial need analysis. These tools can help agents maximize the asset value of their customers and, since commissions are based on asset value, their income as well. Enhanced service: Once agents submit a proposal, they are keen to know the status of the proposal. Insurers can enable their agents to directly communicate with underwriters through chat sessions. Insurers can also provide agents with access to a transaction portal, where they can perform basic changes to policies and submit and manage claims. Value-added services: An important service that insurers can render channels is lead generation. If insurers can get a single view or a household-centric of the customer, they can alert agents about cross-selling and up-selling opportunities. Insurers can help agents identify profitable customers and segment their customer base, thus giving them the ability to provide differentiated service. For many transactions such as withdrawals, surrender etc, insurance companies can enable straight through processing (STP), thereby increasing transaction throughput and operational efficiency.
6.5 Innovative commission and incentive packaging

Agents sell insurance products so that they can maximize their commissions. To become a preferred partner with profitable producers, insurers must be able to pay differentiated commission rates based on performance and disburse these commissions at different frequencies. For instance, a platinum producer could be given commissions fortnightly, whereas a gold producer could get it once a month.
Insurers also need the ability to define a team beyond conventional hierarchies. Unlike in the past where one agent belonged to just one hierarchy, today a single agent could belong to multiple hierarchies. So insurers need the flexibility to assign compensation to and manage agents across multiple hierarchies. Many insurers also find it difficult to manage the different types of exceptional commissions like clawback/ chargeback, annualization, commission sacrifice, split commission, adjustments against loans and advances, etc on their legacy systems. This could lead to inaccurate calculations and a lot of reconciliation efforts, resulting in agent dissatisfaction. A good system can help insurers simplify the calculation and management of these commissions, reduce reconciliation and increase accuracy of payouts. Besides commissions, insurance companies frequently launch incentive plans (around once or twice a year) and contests (as often as once a month) to motivate agents. These incentive plans and contests can come in a variety of configurations and flavors. For instance, an insurer may want to launch a contest to reward top performers in a particular location during a given period. Or they may want to have a contest for a particular channel across all products. So insurers need a great deal of flexibility in the way they configure their incentive plans and contests. Once a contest is launched, insurers must be able to track performance of producers during the contest period so that they can disburse rewards to the performers in a timely manner. As with commissions, insurers need to provide different incentive rates to different channels and even pay these incentives at different frequencies based on profitability and performance. Insurers therefore need the ability to map incentives and benefit schemes across products to individual producers, with eligibility alerts so rewards can be handed out quickly
But as most insurers have multiple policy admin systems, their flexibility to configure incentive plans and contests and ability to launch them quickly are severely hampered. Besides, to determine eligibility for incentives and contest rewards, insurers will need to get a consolidated view of transactions across channels, locations and products. But, as this data scattered in multiple silos, calculating eligibility can be a difficult task. This is a critical challenge, because if they are unable to process incentives quickly or accurately, it could breed dissatisfaction among producers and lead to a lot of time being spent on reconciliation
6.6 Managing licensing of doing business

Every representative who sells insurance products needs to have a license. In some countries, licensing regulation can be quite complex. For example, a broker or representative who wants to sell insurance products in the USA will need separate licenses for each state and for different products. If a representative wants to sell a variable annuity product in New York or any other state, he has to get two licenses one from the Securities Commission and another from the insurance authority. While channels have to ensure that their representatives have the required licenses, the liability for misrepresentation is with the insurance company. So it becomes the insurance companys responsibility to see that representatives have unexpired licenses. A typical insurance company would have hundreds of thousands of agents across a host of channels selling its products. It has not only to ensure that its agents have the proper license, but it must also be able to alert them when it is about to expire so that they can renew them.
This can be a big challenge even when an insurance company launches a new product, because it is the carriers responsibility to ensure that all those who sell the products are authorized to do so. Ideally, carriers need a system that can keep track of all agents and their licensing requirements and alert them when the licenses are due to expire. The problem is that legacy systems dont have such functionality built into them. In fact, many cases of misrepresentations are regularly reported. Also, agents are often expected to undergo continuing training and take examinations or get certifications before their licenses are renewed. Insurance companies can take the lead in helping these agents get the required certifications through online continuing education programs.
6.7 Evaluating performance

A critical aspect of managing the insurance distribution network is evaluating performance. Because performance data is what will help insurers offer differentiated service to their channels and design better products. For instance, a channel may be writing a large number of policies, but its lapse rate may be high. Or an agent may be very successful in booking business, but the claims rate on his/her policies may be higher than average. What senior managers need is a dashboard that gives them personalized and customized snapshots of performance across the distribution chain. They should have the ability to drill down from the summary views and make deeper analyses of all The frameworkSo what would it take for insurance companies to build all this functionality into their systems? What would the framework look like? performance data.
Fig 6.1 Distribution Network
Distribution Framework
An ideal channel-facing and customer-centric IT system would have three critical components, all of which must be seamlessly integrated with the back-office platforms. The components are 1) Point of Sale, 2) Channel Portal and 3) Channel Management
6.8 Point of Sale

When a prospect approaches an agent for an insurance product, what are the things an agent needs to make a quick sale? To recommend a product that is best suited to a customers needs, the agent should have financial tools to perform need and costbenefit analyses. The agent should be able to simulate and demo a variety of investment scenarios and share with the customer information about the product such as past performance, bonus record etc.
If a prospect shows interest in a product, the agent must get an accurate quote in real-time and be able to generate a proposal on the fly. After the customer has accepted the proposal, he has to fill the proposal form. If a paper form is used, there will be a delay in the proposal being converted into a policy. Agents would generally prefer to recommend products of those companies that have quicker proposal to policy conversion. So, carriers must provide agents with the ability to submit the forms online. Of course, agents are not always online when they are with their customers. So, the point of sale system must provide the agent with the flexibility to fill up the form offline and later synchronize it when he is online. Once a proposal is submitted, channel partners should be able to track the status of the proposal through an online portal. This will help reduce call-center costs because agents do not need to keep calling up to check on the proposal status. To enable channels to deliver better service to customers, insurers must provide them with access to relevant customer information such as life events, household information, past transactions, policy and premium status, etc. This information can help agents recommend the right products, cross-sell and up-sell products, inform customers about premiums due, etc.
6.9 Portals
A major servicing cost for insurance companies is call centers to support agents. Heres where a portal can be particularly handy. Lets take an example. Today, a large insurance company may get as many as 20,000-30,000 calls a month from agents. On average, each call costs $10 and thats just the manpower costs; add communication charges and it is much higher. In a year an insurance company would get around 400,000 such calls, which would, at $10 a call, would cost the insurance company $4 million. A portal that provides information at the click of a
mouse to those who want it will lead to a drastic reduction in such calls. Even if it reduces the number of calls by 10%, it means a substantial cost saving for the company. A portal will also reduce the cost an insurance company spends in producing marketing collateral. Companies keep sending collateral to channels. Each agent may get as many as 100 brochures a month, whether he wants it or not. Insurers can provide these collaterals as downloads or even have a system in place that enables such brochures to be sent on request. The result: big savings in printing and postage costs. In addition to providing information and service, portals are increasingly being used for straight through transactions. There are many transactions that do not need manual intervention and can be made completely online. Transaction-based portals can increase turnaround times of transactions and reduce operational and backoffice costs substantially.
6.10 Channel Management

An ideal channel management system will provide insurers with the ability to quickly configure new channels whether it is bancassurance, IFAs or brokerdealers, and add new partners. The system must be flexible enough to accommodate a particular channels hierarchical needs and manage each channel through a set of comprehensive business rules. The system should help insurance companies and its channels evaluate producer performance across products, channels and locations. For instance, the system could help them perform KPI evaluation on multiple parameters or persistency measurements on premium and number of policies. Channels must be able to get internal hierarchy-wise performance evaluation.
The channel management component should allow insurers and channels to perform a variety of analyses such as target vs variance, KPI evaluation, performance evaluation of producers for promotion, demotion or transfer and channel performance evaluation. Insurers should be able to manage different types of commissions across products, channels, producers and regions. They should also be able to launch incentive schemes in a jiffy and then be able to calculate and distribute the benefits to individual producers. To do this, the system should be able to do formula-driven benefit calculations. A good system will also allow insurers to help channels manage their own producers, provide automated commission and benefits calculations, and maintain test and exam records. To provide this kind of functionality, the channel management system needs to be seamlessly integrated with the multiple back-office platforms.
Conclusion: It is clear that the only way in which insurance companies can address the challenges and capitalize on the opportunities is by investing in systems that are customizable, open, flexible and can be easily integrated with legacy and other back-office platforms. Such a system will help them make their distribution chain more effective and efficient, push new products through the distribution pipeline at a faster pace, reduce operational costs and inefficiency and position themselves as a preferred partner with channels.
7. Data Analysis & Interpretation

1. Do you have any insurance policy?
Response Yes No
No. of Respondents 45 155
Percentage % 22.5% 77.5%
22.50%
77.50%
Yes No
Interpretation
Out of 200 respondents, 22.5% said they dont have an insurance policy and a large portion of 77.5% said they dont have an insurance policy. This indicates that there is a huge opportunity for the insurance companies to tap these people.
2.
Which insurance policy do you have?
Response Life Non Life Both
No. of Respondents 45 12 20
Percentage % 52.5% 17.5% 30%
Both, 30%
Life, 52.50% Non Life, 17.50%
Life
Non Life
Both
Interpretation
52.5% of people said they have Life insurance policy, 17.5% said they have Non life policy and 30% of them said they have both.
3.
Which companys insurance policy you prefer the most?

Response LIC ICICI Prudential SBI Life Insurance Ing Life Reliance Life Insurance Tata Aig Life Any Other No. of Respondents 140 20 14 2 9 4 11 Percentage % 70% 10% 7% 1% 4.5% 2% 5.5%
2% 4.50% 1% 7% 5.50% LIC ICICI Prudential SBI Life Insurance Ing Life 10% 70% Reliance Life Insurance Tata Aig Life Any Other
Interpretation
Majority of the people have faith in LIC, 70% of the people have taken LIC Among the private life insurers, ICICI prudential comes second, 10% of the
policy people have taken ICICI prudential plans.
4.
How is your awareness about insurance distribution companies/corporate agents?

Response Good Average Poor No. of Respondents 100 40 60 Percentage % 50% 20% 30%
50% 50% 40% 30% 20% 10% 0% Good Average Poor 20% 30%
Good
Average
Poor
Interpretation
50% of the respondents said they have good knowledge about distribution companies, 20% said they have average knowledge about the corporate agents 30% of the respondents said they have poor or no knowledge about the insurance companies The data shows that the distribution companies have to focus on their brand awareness 5. What do you think are the benefits of insurance?
Response Family Protection Tax Deductions Investment Any Other
No. of Respondents 40 60 90 10
Percentage % 20% 30% 45% 5%
45% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
30% 20%
5%
Family Protection Family Protection
Tax Deductions
Investment
Any Other Any Other
Tax Deductions
Investment
Interpretation
The reason to take an insurance policy for majority of people is investment. Around 45% of the people said investment is the sole reason 30% of the people wants to take the plan for tax deduction, and 20% of people said they want it for family protection The interpretation says that still majority of people see insurance as an investment tool
6.
Which feature of your policy attracted you to buy it?

Response Low Premium Larger Risk Cover Money Back Guarantee Reputation of Company Easy Access to Agents Guaranteed Returns No. of Respondents 30 30 20 40 10 50 Percentage % 15% 15% 10% 20% 5% 25%
Any Other
20
10%
15% 25% Low Premium Larger Risk Cover 15% 5% 10% 20% Money Back Guarantee Reputation of Company Easy Access to Agents Guaranteed Returns
Interpretation
Most of the people look for guaranteed returns in the plan, around 25% of the people said that. 20% of the people look for the reputation of the company 15% of the people said larger risk cover and 15% of the people said lower premium This indicates that the customers want some minimum guarantee in the plan and also safety of their money.
7.
How have/would you bought/buy insurance?

Response Customer approach insurance company Insurance company approach customer
Percentage % 10% 45%
Customer approach corporate agent Corporate agent approach customer
10 80
5% 40%
45% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Cust app com Cust app com Com app cust Com app cust Cust app corp Cust app corp Corp app cust Corp app cust 10% 5% 40%
Interpretation
45% of the respondent said that insurance companies approached them to sell the plan 40% of the respondent said that corporate agent approached the customer to sell plan This shows that 85% of the people were approached by insurance companies. It also shows that there is lack of awareness about insurance.
8.
Are you satisfied with the services of corporate agent?
Response
No. of Respondents
Percentage %
Satisfied Somewhat Satisfied Not Satisfied
30 20 50
30% 20% 50%
50% 50% 40% 30% 30% 20% 20% 10% 0% Satisfied Satisfied Somewhat Somewhat Not Satisfied Not Satisfied
Interpretation
Only 30% of the people seems to be satisfied with the services of the corporate agents Almost 70% of the people are either not satisfied or somewhat satisfied with the services of corporate agents. So the finding shows that corporate agents should not only focus on sales, but they should also focus on the services which they provide to the customers.
9.
Which is the best form of investments?

Response Fixed Assets No. of Respondents 20 Percentage % 10%
Bank Deposits Jewellery Securities Shares Insurance
90 10 25 25 30
45% 5% 12.5% 12.5% 15%
50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Fixed Assets Fixed Assets 10%
45%
12.50% 5%
12.50%
15%
Bank Deposits Bank Deposits
Jew ellery
Securities
Shares
Insurance
Jew ellery
Securities
Shares
Insurance
Interpretation
Majority of the respondents prefer Bank deposit as the mode of investment. 45% of the people said they prefer bank deposit Only 15% of the people preferred insurance as their choice for investment So the data suggests there is a huge opportunity for the insurance companies to attract client to invest in insurance plan i.e. ULIPs
10.
How would you rate Indian insurance companies?
Response Rigid Plans Non User Friendly Unsatisfactory Services Satisfactory Good Very Good
No. of Respondents 40 25 30 30 50 25
Percentage % 20% 12.5% 15% 15% 25% 12.5%
30% 25% 20% 15% 10% 5% 0%
25% 20% 12.50% 15% 15% 12.50%
Rigid Plans
Unsatisfactory Services
Non User Friendly
Satisfactory
Good
Rigid Plans Satisfactory
Non User Friendly Good
Unsatisfactory Services Very Good
Interpretation
25% of the respondents said that they feel insurance companies are good 20% of them feel the insurance plans in India are very rigid
11.
What would you look for in an insurance company?
Very Good
Response A Trusted Name Friendly Service Good Plans Accessibility
No. of Respondents 80 35 45 40
Percentage % 40% 17.5% 22.5% 20%
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
40%
22.50% 17.50%
20%
A Trusted Name
Friendly Service Friendly Service
Good Plans Good Plans
Accessibility Accessibility
A Trusted Name
Interpretation
40% of the respondent said they look for the company name and its trust 22.5% said they look for the plan features 20% of the people look for easy accessibility and 17.5% said they look for friendly service
12.
Do you know the Unicon company and its services?
Response Yes No
Percentage % 30% 70%
30%
70%
Yes
No
Interpretation
Only 30% of the respondents said that they know Unicon and its services. 70% of the respondent have no knowledge about Unicon company The result shows that the Unicon should focus on Brand awareness and it should give some advertisements on T.V. and Print media
8. Findings
1. Distribution - the key differentiator 2. Challenging Scenario demanding role transformation of intermediaries 3. Distribution Scenario in the Indian Market 4. What should the companies look at? 5. Focus on multiple distribution channels
8.1. Distribution - the key differentiator

It has been two years since the Indian insurance market has opened up, and the new entrants into the market have set up shop in every major city. The public sector companies have already established themselves in the market. But there are multiple challenges faced by these insurance companies, of which two are critical: Designing of products suiting the market Using the right distribution channel to reach the customer While the companies have been quite successful in dealing with the first of these challenges using the existing product features and leveraging the technical know-how of their partners, most are still grappling with the right channel mix for reaching potential customers. This paper discusses the distribution channels from the perspective of the socio-cultural ethos of the market and how these channels fit into it, along with where the various companies face challenges and bottlenecks. Whenever any debate arises about the intermediaries and distribution channels, the discussion veers to technology and its impact on distribution. However, the authors believe that the basic existential problems being faced by the channels in this market needs to be looked into first, and then the question of enablers - technology, tools, training, learning etc. -- is to be taken up.
Fig. 8.1 Tele Marketing Model
8.2. Challenging Scenario demanding role transformation of intermediaries

Insurance has to be sold the world over, and the Asian Market is no exception. The touch point with the ultimate customer is the distributor or the producer (as they are known in certain markets), and the role played by them in insurance markets is critical. It is the distributor who ismakes the difference in terms of the quality of advice for choice of product, servicing of policy post sale and settlement of claims. In the Asian markets, with their distinct cultural and social ethos, these conditions will play a major role in shaping the distribution channels and their effectiveness. In today's scenario, insurance companies must move from selling insurance to marketing an essential financial product. The distributors have to become trusted financial advisors for the clients and trusted business associates for the insurance
companies. This calls for leveraging multiple distribution channels in a cost effective and customer friendly manner. For example, in the developed markets producers (brokers and agents) form the major channels of distribution, while the web as a complementary channel is catching up slowly. According to a Forrester survey, 88% of the Life insurance executives responding identified agents as the primary channel of distribution.1 The distinction of channels in the developed markets is: personal distribution systems and direct response systems. Personal distribution systems include all channels like agencies of different models and brokerages, bancassurance, and work site marketing. Direct response distribution systems are the method whereby the client purchases the insurance directly. This segment, which utilizes various media such as the Internet, telemarketing, direct mail, call centers, etc., is just beginning to grow.
8.3. Distribution Scenario in the Indian market

In today's Indian insurance market, the challenge to insurers and intermediaries is two-pronged: Building faith about the company in the mind of the client Intermediaries being able to build personal credibility with the clients Traditionally tied agents have been the primary channels for insurance distribution in the Indian market; the public sector insurance companies have their branches in almost all parts of the country and have attracted local people to become their agents. The agents are from various segments in society and collectively cover the entire spectrum of society. A person who has lived in the locality for many years sells the products of the insurance company with a local branch nearby. This ensures the last mile touch point being closer to the customer. Of course, the profile of the people who acted as agents suggests they may not have been sufficiently knowledgeable about the different products offered, and may not have sold the best possible product to the client. Nonetheless, the customer trusted the agent and company. This arrangement worked adequately in the absence of competition. In today's scenario agents continue
as the prime channel for insurance distribution in India, as is the case in most markets, supported by call centers to a small extent. Almost all the new players follow this model primarily because the regulations for other channels are yet to be put in place. However there is great excitement in the industry over the impending broker regulations, and companies are planning possible channels in their enthusiasm to increase volumes. The belief that all these channels will grow and seamlessly integrate to bring in business seems a fallacy. What has emerged is a much more difficult and evolving market scene with existing players, more new players coming in, and global marketing practices and ideas being tested. But none of this has changed the fundamental character of the market, which we believe will take more time than expected.
8.4. What should the companies look at?

Basically companies have to take a look at the intermediaries they are using, whether it is optimal to use them, and what are the alternatives? The new companies have attempted appealing only to the middle, upper middle and elite classes in the major cities. Contrasted with Public sector insurance companies, with their offices across the country, the new companies have miles to go before they reach anywhere. They must overcome the mindset of the customer that life insurance is Life Insurance Corporation of India (LIC) and general insurance is General Insurance Corporation of India (GIC) if they hope to grow in the market. Meanwhile, the public sector companies are going to great lengths to revamp their image to look and feel more contemporary. Both the public and new private sector companies are fighting their own battles from the perspective of customer perception management:
Table 8.1 Comparison between public and private insurance company
In this process all are targeting the same market --the existing pie is being cut up further, but no attempt is being made to increase the size of the pie. For example, while attempts are made to complete the quota of rural insurance in percentage terms, the rural market potential is yet to be tapped, as the new insurers are not able to attract the right kind of talent into their distribution force to address this. Intelligent segmentation of distribution channels to match the market segmentation is what will help the companies to move in this direction.
8. 5. Focus on multiple distribution channels

Though a multi-channel strategy is better suited for the Indian market as well, it is important to keep in mind that this market is really a conglomeration of multiple markets. Each of the markets within this conglomeration requires a different approach. Apart from geographical spread the socio-cultural and economic segmentation of the market is very wide, exhibiting different traits and needs. Let us look at the various insurance distribution channels and the challenges faced by them from these perspectives.
Agents
Today's insurance agent has to know which product will appeal to the customer, and also know his competitor's products in the same space to be an effective salesman who can sell his company, the product, and himself to the customer. To the average customer, every new company is the same. Perceptions about the public sector companies are also cemented in his mind. The new companies are looking for educated, aware individuals with marketing flair, an elite group who can be attracted only with high remuneration and the lure of a fashionable job, all of which may not be possible in this business with its price pressures and the complexity of selling insurance. Unable to attract this segment, they have started easing recruitment conditions as against the stringent norms they had earlier, thereby diluting the process. While the public sector companies are able to attract agents, they continue to suffer from high attrition rates due to indiscriminate agent appointment. The most successful of these companies' tied agents are hardly of the elite variety of salesman. They are still the neighborhood do gooders -- the postman, the schoolteacher, and the shopkeeper -- who know the people and are themselves known in the community. The challenge here is the lack of knowledge of the competitive market and the inability to do intelligent comparisons with the competitor's products. Educating and training these agents is a serious challenge for the insurance company. The relevance of this kind of agent continues even today as agents are sought or contacted by families by
word of mouth. Insurance companies are advised not to follow the path of FMCG's/credit card companies, believing that a suited and booted customer care consultant or financial consultant will necessarily appeal to the average Indian customer. Another social feature in the market is the considerable respect for age in Indian society and a belief that an older person knows better. A very young up-market agent who is a typical salesman may not appeal to a large segment of the middle class, which is looking for a solid trustworthy person from whom they can buy insurance. In this context it might be a rewarding exercise to recruit some older people (who have taken VRS2 from banks and other financial institutions) to sell some lines of products like pension plans, annuities etc. Gender of agents is another relevant feature in the rural context that makes a difference, especially for the female population. Women to whom the customers can relate --e.g., nurses, gram sevikas3 -- can target the female segment of the population more effectively. What is applicable for the rural women and children health programs and population control programs is equally applicable for insurance selling also. Max New York Life has adopted a version of this strategy by appointing gram sahayaks4 to sell and service the rural customers. With this kind of segmentation of intermediaries the challenge for the insurance company lies in training and educating these people to become effective sales persons. But this in no way diminishes the benefits of intermediary segmentation.
Banks
Banks in India are all pervasive, especially the public sector banks. Can they also become the foremost channel for distribution of insurance? Perhaps in the future. The public sector banks, with their vast branch networks, are also plagued by a rigid unionized workforce and archaic systems, and lack vision of a broader service spectrum encompassing non-banking products. The newer banks are constrained by their lack of reach and meager branch strength. For banks to become a predominant channel for selling insurance will require a paradigm shift. But the encouraging fact for insurance companies waiting for bancassurance to take off is that bank branches are here to stay, and customers do want them. A customer survey by Deloitte
Consulting5 in the western developed markets found that for banking activities, customers place high importance on having convenient branches in their banking relationships. This is good news for the Indian banks with their many branches, and also makes a strong case for taking up bancassurance. The major lines of business that can be sold through bancassurance successfully are term insurance, creditor insurance, and non-life products like Property, Motor and Personal accident, Homeowners comprehensive insurance etc. An example is SBI Life,6 which is waiting for the broker regulation to be put in place in order to move ahead aggressively with the bancassurance model. One of their major product lines is creditor insurance, and they have launched their first creditor insurance product, which covers the liabilities of the creditor in case of death of debtor. SBI Life is planning a similar product for home loan borrowers of State Bank of India. This model has high relevance in the Indian context with far-flung villages where the insurance potential is in volume and not in high per capita premiums. Some advantages and disadvantages are:
Table 8.2 Advantages and Disadvantages of Bancassurance
The strategy should be to use multiple banks according to their presence in different regions. Success would come by using bancassurance where it will be most effective i.e., selling simple, cheap products to the masses at a low cost. This awareness is growing and is evident from the fact that nearly every insurance company has partnered with one or many banks to implement bancassurance.
Brokers
With the broker regulation under review and expected any time, this could be the next hope, especially for the urban market. This will be a new experience for the insurance customer, accustomed to brokers in financial services, real estate, and travel and tourism. For historical reasons the image that 'broker' carries in the minds of the customer is not very favorable. Thus the new breed of insurance brokers face the challenge of establishing credibility. The positives are that brokers in the urban arena
can attract the elite and the upper middle class customer. Brokers represent the customer and will sell the products of more than one company. They seek to determine the best fit for the client and can effectively address the mind block faced by the public about the various companies. This is applicable in the case of life insurance for the high-end and corporate/group segment. In the non-life segment, broking is not entirely new, as reinsurance brokers were arranging exotic covers. For individual customers also, with a wide range of competitive products, the broker can get a good deal. The corporate broking companies will have to play a prominent role. If NGOs based in rural areas can be attracted into the rural sector cooperatives arena, they stand a good chance of succeeding and can help the new players get a foothold in the rural market. These are the players with the potential to make the difference, as they have the trust of the people. We envisage scenarios like that in Bangladesh's micro lending growth and the milk co-operatives7 in Gujarat selling insurance in addition to milk production and distribution. It would be a new dawn in Indian insurance distribution! With the right impetus the Indian rural insurance scenario could be one with high business volume and tremendous growth potential. ICICI Prudential Insurance and HDFC Standard Life Insurance have already partnered with NGOs8 to sell some low cost insurance in rural areas. However, the challenge lies in establishing regulations that protect the customer and attract the right players into the brokerage market rather than creating another middlemen segment eroding the premium.
Work site marketing

This area needs to be tapped, as in any country one of the biggest markets is through the worksite. With changes in human resources management polices and compensation packages, group products or work site products do have a definite market that cannot be ignored. Here the advantages would be: Captive customer base Potential to sell individual insurance and group insurance
High trust factor High hit ratio for the intermediaries
The challenges would be the cost effectiveness, product customization and efficient post sales servicing, which would determine continued business. Technology has a key role to play in worksite marketing to ensure cost benefits. Banks and financial institutions have been successfully marketing credit cards and other financial products using this channel. If not an identical model a similar approach can be used for selling insurance.
Internet
Though India is joining the fast growing breed of net users, using net for transactions has not yet caught up. Though a few banks provide online banking, the usage is still a small fragment. The insecurity associated with transactions over the net is still an inhibiting factor. At present most of the insurance companies have product information and/or illustrative tools on the web. We do not see the web evolving into a means for direct selling of insurance in the current scenario. In the Indian market, where insurance is sold after considerable persuasion even after face-to-face selling, the selling over the net, which must be initiated by the client, would take some more time. While the technology capability is there, improvements in bandwidth and infrastructure are needed. Also needed are simpler products where auto-underwriting is feasible. Automobile insurance, one of the segments of insurance purchased "off the shelf" in India, would be the ideal segment to start with. On the life side, term assurance for standard lives with simplified underwriting is a possibility. These channels by themselves will not be able to overcome the mindset of the people, but rather can only be enablers for the human channels.
Invisible Insurer
In this model, the insurance company or its representative is not the entity marketing the products. The insurance cover is sold by an automobile /credit card company as an add-on product leveraging the brand of the retailer. The risk is carried by the insurance company, which underwrites it. . Products like creditor insurance, automobile insurance, and credit card related insurance could be distributed using this channel. This model can be adopted in all market segments for the lines of business mentioned. It is already prevalent in some areas like credit card insurance and crop insurance for agricultural loans. The new players are also attempting this model. The venture of Maruti 9 into insurance by setting up two subsidiaries MIDS10 and MIBL11 to sell automobile insurance is a case in point. These firms will largely arrange insurance cover for Maruti's captive customer base. MIDS has been registered as a corporate agent with an exclusive arrangement with Bajaj Allianz General Insurance, while MIBL has linked up with state-owned National Insurance Company Limited. What makes these arrangements attractive is the low distribution cost and captive customer base. However, repeat business or renewal of business cannot be assured. In the life segment, group creditor insurance may be the most suitable product for this channel.
Conclusion
The current state of insurance distribution in India is still in flux. On one hand, insurers are awaiting regulations to be approved for brokerages and bancassurance to be truly launched. On the other hand they are trying the corporate model of intermediaries in addition to the traditional models in the market. There is no right and wrong in all this. The success of marketing insurance depends on understanding the social and cultural needs of the target population, and matching the market segment with the suitable intermediary segment. In addition a major segment of the Indian population has low disposable income meaning that every penny won will be obtained after a lot of persuasion and the expected value for money is high. All intermediaries can't sell all lines of business profitably in all markets. There should be clear demarcation in the marketing strategies of the company from this perspective.
Clients should also receive price differentials for using different channels. This is not a new concept, as the Public sector Property&Casualty companies are giving discounts in lieu of agency commission. The channel composition should not be homogeneous but should reflect the larger society. For example: Agents from different economic, social strata and different age and gender. Bancassurers ranging from multinational banks to micro credit lending agencies. Brokers stretching from corporates to NGOs to milk co-operatives These intermediaries need to be empowered with the right learning, training and sales tools and technology enablers. Coupled with the right product mix, this will help the insurers to survive and flourish in this competitive market. Let us conclude with a story of a retired postal clerk who became a success story for selling postal savings and insurance in his village in Punjab in Northern India. The person is the father of our colleague, who is a retired postal employee and took up agency for postal savings and insurance to supplement his meager retirement earnings. Today -- 10 years later -- he is one of the top agents selling postal savings and insurance in his village, assisted by his illiterate wife and grandson (a seven year old computer literate) doing all the administrative work from home on a small Personal computer using a package (developed by our friend who is a programmer) to handle his client portfolio! The entire village population trusts him with the investment advices that he doles out and has no qualms in handing over small amounts of cash to him for depositing in the post office. He is their trusted customer care or financial consultant. This we feel is the essence of distribution of financial products in India.
9. Conclusions & Suggestions

Role of Distribution Channels in Value Creation in insurance companies Distribution accounts for the largest element in insurers costs and impact the profitability. Distribution capabilities strongly influence product design in insurance. Distribution channels have a direct impact on the insurers market image. Integrity of distribution channel is the key concern of the regulatory mechanism. Opening up Indias insurance sector: Key influences on Distribution channels Emergence of alternative channels such as Bancassurance and Corporate Agents is reshaping the insurance industry. Insurance penetration levels will rise sharply with multi distribution channel. Widespread recognition of the need for qualified, trained sales force to serve the increasingly discerning insurance buyers.
Emergence of online and offline insurance education and training initiatives is changing the range insurance services. Opening up Indias insurance sector: Key influences on Distribution channels Emergence of new channels will have positive impact on rebating and such undesirable practices in the industry. Widening choice of distribution channels will eventually drive down the premium level. Evolution of alternate Distribution channels in India: Areas of supportive official measures Need to encourage and nurture new channels such as Bancassurance to utilise the existing infrastructure to optimum extent. Policy measures should encourage insurers to take full responsibility for training and skill building. Encouraging self-regulation. Strengthening the consumer grievance redressal mechanism. Importance of Distribution Channels In Sum: We need more alternative channels in India to sharply increase penetration levels. Emergence of new channels is in the interest of consumers.
and quality of
Widening and strengthening the channels will help the insurance industry to become more competitive and healthy.
10. Bibliography
Consumer Outlook Magazine, May (2008) Global Insurance Industry Study, PricewaterhouseCoopers, 2007/2008 Kotler Philip (2008), Marketing Management, Pearson Education Asia, New Delhi Company Profile, http://www.uniconindia.in, April 14, 2008 Insurance Industry, http://www.business.mapsofindia.com, April 20, 2008 Insurance Industry in India, http://www.researchandmarkets.com, April 30, 2008 Insurance Regulatory and Development Authority, http://www.irdaindia.org, May 10, 2008
Effect of Insurance on Indian Economy, http://www.economywatch.com, May 16, 2008 Distribution Channel, http://www.wikipedia.org, May 20, 2008 Distribution Channel in Insurance, http://www.irdaindia.org, May 30, 2008 Emergence of New Distribution Channels in Insurance, http://www.ficci.com, June 02, 2008 Insurance a New Perspective, http://www.managementparadise.com, June 05, 2008
11. Appendix
QUESTIONNAIRE Are you employed? Yes No If Yes, only then proceed 1. Yes 2. Do you have any insurance policy? No Which insurance policy do you have? Life Non-Life Both
3.
Which companys (Rank Them) a) LIC b) ICICI Prudential c) SBI Life Insurance d) Ing Life
insurance
policy
you
prefer
the
most?
e) Reliance Life Insurance f) Tata Aig Life g) Any Other 4. agents. a) Have good knowledge about them b) Average Knowledge about them c) Poor knowledge about them _____________ ( Specify)
How is your awareness about insurance distribution companies/corporate
5.
What do you think are the benefits of insurance? (Rank Them) a) Family Protection b) Tax Deductions c) Investment d) Any Other ___________
6.
Which feature of your policy attracted you to buy it? (Rank Them) a) Low Premium b) Larger Risk Cover
c) Money Back Guarantee d) Reputation of Company e) Easy Access to Agents f) Guaranteed Returns g) Any Other 7. ____________
How have/would you bought/buy an insurance? a) Customer approach Insurance company b) Insurance company approach Customer c) Customer approach Corporate Agent d) Corporate Agent approach customer
8.
Are you satisfied with the service of corporate agent? a) Satisfied b) Somewhat Satisfied c) Not Satisfied
9.
Which is the best form of investments? (Rank Them) a) Fixed Assets b) Bank Deposits c) Jewellery d) Securities i.e. Bonds etc. e) Shares f) Insurance
10.
How would you rate Indian insurance companies?
a) Rigid Plans b) Non User Friendly c) Unsatisfactory Services d) Satisfactory e) Good f) Very Good 11. What would you look for in an insurance company? (Rank Them) a) A Trusted Name b) Friendly Service & Responsiveness c) Good Plans d) Accessibility 12. Do you know the Unicon company and its services? a) Yes b) No

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A REPORT ON

Analysis of Life Insurance Sector in India with a Focus on Distribution Channel

Guide Prof. Monika Attri

K. R. Mangalam Global Institute of Management

University of Mysore, Manasagangothri, Mysore 570 006

By Priyanka IV Semester MBA

Guide Prof. Monika Attri

KGIM, Manasagangotri, University of Mysore, Mysore

K. R. Mangalam Global Institute of Management

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

1.4 Limitations of the Project Study ........ 7

KGIM, Manasagangotri, University of Mysore, Mysore

6.1 The emergence of new distribution channels ..

6.2 The consumer is evolving and so are his needs 26

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

9. Conclusions & Suggestions 62 10. Bibliography 64 11. Appendix 65

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

1.1.1 Company Profile

Unicon Investment Solutions

Gajendra Nagpal (Founder & CEO)

Mr. Ram M Gupta (Co-Founder & President)

KGIM, Manasagangotri, University of Mysore, Mysore

Mr. Vikas Mallan (Chief Financial Officer)

Products & Services

1.2 Research Objectives

Analysis of Life Insurance Sector in India with a Focus on Distribution Channel.

role of distribution network in it

1.3 Research Methodology

1.3.2 Research Design

KGIM, Manasagangotri, University of Mysore, Mysore

1.3.3 Data Collection Method

1.3.4 Steps in the Market Research

KGIM, Manasagangotri, University of Mysore, Mysore

Preparation of the research report along with observations &

1.4 Limitations of the project study

The definition of the population may be restricted. Thus, the

Potential biases such as unauthentic, refusals and respondents

The research suffers from response bias when people answer a

question falsely, either through deliberate misrepresentation or unconscious falsification.

Questionnaire is long which makes it difficult to get all the

responses from interviewee in limited period of time.

The scope of the project is limited to Delhi city only.

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

2.1 Insurers Business Model

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

KGIM, Manasagangotri, University of Mysore, Mysore

4. Insurance Industry in India

KGIM, Manasagangotri, University of Mysore, Mysore

4.1 Brief History of Insurance Sector In India

KGIM, Manasagangotri, University of Mysore, Mysore