CONTENTS

CHAPTER – 1
INTRODUCTION
OBJECTIVES
NEED FOR THE STUDY
METHODOLOGY
SCOPE & LIMITATIONS

CHAPTER – II
INDUSTRY PROFILE
COMPANYPROFILE

CHAPTER – III
THEORITICAL FRAME WORK

CHAPTER – IV
ANALYSIS AND INTERPRETATION

CHAPTER – V
FINDINGS AND SUGGESTIONS

ANNEXURE

BIBLIOGRAPHY
QUESTIONNAIRE
 CHAPTER- I

INTRODUCTION
OBJECTIVES OFSTUDY
NEED FOR THE STUDY
METHODOLOGY
LIMITATIONS OF THE STUDY
 INTRODUCTION
The business operations of the TATA Group currently compass seven

business sectors Engineering, Materials, Energy, Chemicals, Consumer Products,

Services, and Communications and information Systems. The scale of the Tata

Group’s operations is increasingly turning global. Tata Tea was first Indian MNC I

the global tea industry; Tata Steel is one of the world’s lowest cost producer of steel;

Tata Chemicals is one of Asia’s are manufacture of soda as; Titan is one of the

world’s top six manufacturer brands in the watch segment, and Tata Motors is

amongst the top six commercial vehicle manufactures in the world. The Tata Group

is increasingly focusing on new technology areas, and has the largest footprint in he

information technology and communication sector in India. Beside being the largest

software services provider in the country, it also one of the leading private sector

telecom service providers and is also India’s largest international long distance and

internet services provider.

The Tata brand is recognized as the largest homegrown grand in India and the

most respected brand. The Tata Group’s stable of brands also includes many national

and some internationally renowned product and service brands, including Tata Indica,

Tata Indigo, Indigo Marina, Tata Safari, Tata Indicom Tata Safari, Tata Indicom, Taj

Group of Hotels, Luxury, Business and Leisure, Indione, Tata Tea Tetley, Tata Salt,

Tata Steelium, Tata Shaktee, Tata Tiscon, Tata Bearings, Titan, Tanishq, Voltas and

Westside.
 THE AIG GROUP

American international Group Inc. (AIG) is he world`s leading international

insurance and financial services organization, with operations in approximately 130

countries and jurisdictions. AIG member companies serve commercial, Institutional

and individual customers through the most extensive worldwide property causality

and life insurance networks of any insurer.

In the Unite States, AIG is the least underwriter o commercial and industrial

insurance and is on of the top tree life insurers. AIG`s global business also include

financial services, retirement savings and asset management. AIG`s financial services

business include aircraft leasing, financial products, trading and market making.

AIG`s growing global consumer finance business is led in the United States by

American General Finance. AIG also has on of the least U.S. retirement savings

businesses through AIG Sun America and AIG VALIC, an is a leader in asset

management or the individual and institutional markets, with specialized investment

management capabilities in equities fixed income, alternative investments and real

estate.

Whenever there is uncertainty, there is risk. The risk cannot be averted.

We don’t have any command on uncertainties. The main function of Insurance is to

provide protection against the possible channels of generating losses. It eliminates worries

and miseries of losses at destruction of property and death. Further it provides capital to
the society as the accumulated funds are invested in the productive heads. The product of

insurance benefits the industry, the business, an individual and group of persons

OBJECTIVES
The study broadly pursues the following objectives

1. To gather information about insurance industry

2. To collect information about Tata AIG insurance company and information

about channels of distribution in that company.

3. To provide information about the channel of distribution in general and in

particulars.

4. To make an in depth study of the agents that are involved in the channels of

distribution relatively associated to TATA AIG and in this connection. It is

also felt necessary to make survive of the agents to assess their ideas in

relation to the channels of distribution associated with Tata AIG.

5. The study is to makes an attempt to offer suggestions in light of with problems

Associated.

6. To elicit customer’s perception regarding the agents services.

NEED FOR THE STUDY

Channels of distribution may be defined as the process of service of

operations, which physically bring goods, produced by manufactured into the hands

of final consumer.
 Channels of distribution forms an integral part of marketing it could provide

an important link between a producer and the ultimate consumer of goods. Channel of

distribution make available the products at manufacturer of reasonable prices. It also

helps in meeting the demand at consumer in time.

Channel of distribution form an important aspect of marketing. I have

undertaken this study to observe the efficiency in canalizing the services offered by of

Tata AIG insurance company.

METHODOLOGY OF THE STUDY

Data collected method: the collection of data refers top planned gathering of

information relevant to the subject matter of the study from the units under

investigation. The method of collection of data depends mainly upon the nature,

objectives and scope of the inquiry on one hand and available of resources and time

on the other hand. Data may be classified into primary and secondary data, depending

upon the nature and mode of collection.

Primary data: - Primary data is collected directly from the prospective customers,

those who are policyholders and agents of Tata AIG. Primary data is collected

through interaction with various respondents.

Secondary Data: - Data collected or derived from the published reports treated as

secondary data. The secondary data is collected from the following sources

• Company internal records and published information

• Business magazines

• Periodicals
 • Books

Research Instrument: - Questionnaire has been used in this research to collect

the necessary information. Questionnaire is the most common instrument, in

collecting the primary data. The questionnaire consists of a set of questions presented

to the respondents for their valuable answers.

The questionnaire consists of questions. Were used to obtain necessary

information from customer. In designing the questionnaire for the data collection,

effort was made of avoid unnecessary questions and to include all the necessary

questions.

Most of the questions in the questionnaire are closed-end questions i.e., they

pre-specify all possible answers and respondents make a choice among them. There

are only few questions, which are opened questions, i.e., that allow the respondents to

answer in their own words. Care has been taken to make the wording of question as

simple, direct and unbiased as possible, so that, the customer can feel easy. The

collected data has been presented in the form of pie-diagrams and bar diagrams, with

the help of which, the study can be understood in a better way.

LIMITATIONS OF THE STUDY

• This study is under taken as a part of M.B.A course curriculum during

the summer vocation. Short span of time 8 weeks is a limitation of the

study.
• This study is restricted only to a sample of 50 agents and 300

customers in Hyderabad and Vijayawada. Due to time and money

constraint.

• The study is based on the Three years only. The reason is Tata AIG

Company established on April 2001.

• This study covers mostly on agents in channels and not the corporate

agents, employees in Tata AIG, because of time constraint.

CHAPTER – II

INDUSTRY PROFILE

COMPANYPROFILE
 INDUSTRY PROFILE

History of Insurance

The earliest traces insurance was in form of marine trade losses or carrier’s

contracts

In ‘Rigveda’ the references are made to the concept of ‘Yogakshema’, which is more

or less a kin to the well being, and security of people. This makes it clear that albeit in

the ancient world, the traces for sharing the future losses are available. However there

is no evidence of a particular from or shape, especially prior to the 12 th Century. The

oldest form of insurance is the marine insurance. The piracy on the open seas and

highway robbery or fear of sinking the vessels in the deep water necessitated a device,

which spreads the financial losses. And the Marine insurance was found suitable for

that purpose.

After marine insurance, we find development of Fire Insurance. It started from

Germany in the beginning of the 16th Century. The appearance of the life insurance

was first in England in 16th century. The policy of life of ‘William Gibbons’ on

june18 1653 is the first recorded evidence. The first registered life office was the

head-in hand society, which was established in 1696. In U.S.A, the life insurance

could not flourish due to mainly abnormal function in death rate.

Insurance industry in India

Mission: To protect the interests of the policyholders, to regulate, promote and ensure

orderly growth of the insurance industry and for matters connected therewith or

incidental thereto.

In India, the first life insurance company was established in Bengal presidency

in1818 that was known as the oriental Life Insurance Company. The year 1870 is a

landmark, since then several companies were established and the insurance business

gained a rapid momentum. Experiencing so many ups and downs the life Insurance

business was found a changed shape, particular the attainment of independence in

1947 and to be more specific after nationalization in 1956. The Life Insurance

Corporation was established on01-07-1956 by amalgamation of 245 existing Indian

and foreign companies in India. The Life Insurance Corporation of India and General

Insurance Corporation are managed and controlled by Union Government.

Important of Life Insurance: -

Human life is an income-generating asset. This asset can be lost through

unexpected death or made non-functional through sickness or disability caused by an

accident. There is no certainty that an accident will hap. On the other hand there is a

certainty that death will happen, but its timing is uncertain. Life insurance protects

against loss of income of an individual.

Life Insurance Basics: -

Life Insurance can help to:

• Provide income to surviving family members so they can maintain

their lifestyle

• Pay off the mortgage if an income earner were to die so the house is

free and clear of debt.

• Provide for a college education if there are dependent children in the

household.

• Pay for final expenses of a funeral or estate settlement costs.

• Provide an emergency fund to handle unexpected financial costs.

• Provide for settlement of personal debts.

Importance of General Insurance: -

Non-life products come under General Insurance. These products can get

security by entering general insurance. In General, different products are there like

Motor vehicles and property.

These days’ Motor vehicles are increasing day by day. Along with them, road

accidents are increasing which leads to damage of the vehicles. We don’t know when

natural calamities and other unexpected things occur damaging our property like

buildings. In those cases, General Insurance provides them security and reduces risk.
 Life Non Life Insurance Sectors in
India Growth Prospects: -
Presently life insurance based wealth known as life fund is some where around

Rs.1, 50,000 crores. This provides a possible trend of growth scenario of life funds.

Which about 25 percent of life fund collected as the current fund, inflow consists

roughly 16 percent premium income and 9 percent investment income of this funds

inflow, about 13 percent are transaction-based out, flow 4 percent life risk coverage

out flow and 16percent maturity repayment out flow. As a result, a life fund in India

shows an increasing trend of 17percent compound rate. Roughly life fund should

double every 4.5 years. This way India’s backlog of life insurance penetration as a

ratio of GDP is likely to be neutralized by 2010 as compared to developed countries

improves and the customers are offered better returns compared to substitute products.

The Trends in Industry:

The insurance industry in the developed world is as evolved and mature as

their other financial sectors some of the insurance companies which are coming up

with a one or two year bond that pays nearly twice as much as a typical low risk

investment. Thus distinction between insurance and other financial activities gets

increasingly blurred. As the insurance companies will be able to reduce their risks by

spreading them over a large base. Therefore, instead of bearing the risks themselves,

insurers can concentrate on selecting risks and packaging them for sale to investors

who care more about yields than about risks involved. As this process become a
normal Activity insurers will increasingly be enjoying reasonably predictable income

streams and principle repayments.

Indian Insurance Sector with Private Parties:

The Indian Insurance Industry which until 1-4-2000 was a controlled sector,

with only two players for the last four and half decades (which are LIC and GIC), has

suddenly turned itself into a battle ground. Thought the sector remained in the strong

clutches of the Government enterprises, the growth has been slow. The industry is

characterized by a number of players, both domestic and international competing for

the huge untapped market. Indian Insurance is ranked 51 in the world.

Big Market:

Today global insurance companies see only two countries having a great

market potential. Incidentally the countries, China and India, have a high population

and relatively high savings rates. However around 25 percent savings in India, less

than 5 percent are being spent on insurance Inspire of the high savings rate, owing to

poor reach and consumer awareness, the insurance sector has not grown that fast as

anticipated, in spite of the fact that there are two government enterprises taking care

of life and general insurance (LIC, GIC), their contribution to the gross domestic

product is less than three percent. This indicates the extent of growth potential of this

sector in India. Despite the monopolistic control over the market life Insurance

Corporation (LIC) and General Insurance Corporation

(GIC) and its four subsidiaries (The Oriental Insurance Company Limited, The New

India Insurance Company Limited, National Insurance company limited, United

Insurance Company Limited), market penetration has remained low especially in non-

life insurance business.

Survival Tactics:

With the entry of private player in the sector, the competition has increased

manifold. Giant’s Like State Bank of India, TATA AIG, HDFC, ICICI, BAJAJ and

reliance has all forayed into the market. Recently the Indian car giant, MARUTI

UDYOG also announced its plans to enter into Insurance. Through the companies

are competing with government monopolies, in one way or the other, they are also

competing with each other to create a niche for themselves. The private companies

established agent network for their insurance companies to complete environment.

However, the entry o big private players and multinational insurance companies have

created ripples in both LIC and GIC. Both of the government insurance sectors are

reacting to sustain their market initially and then to expand to survive.

Need For Privatization:

We cannot directly attribute the reasons for opening up the insurance sector to

any external influence. But it may be a mere coincidence that the US President Bill

Clinton’s a visit to India was announced soon after the Government passed the IRA

bill. A more possible reason could be that the Government is pressed for more long-

term funds for investment in infrastructure projects. Committees like the Rakish

Mohan Committee on infrastructure Finance have also recommended the opening up

of the insurance sector for tapping it as a source of long-term funds. It is an

indisputable fact that India is utterly under insured, not only when compared to other

countries, but also in relation to its own needs. While only 20 percent of the

population has nay-insurance coverage, such a cover meets only 25 percent of their

needed and affordable cover. The gap is even more glaring when we compare India
with other developed countries like the USA, Japan etc., the per capita life insurance

premium in India is a dismal$ 4 against that of $ 964 for the US 3817 for Japan.

Insurance premium as a percentage of GDP is only for India against those of 7.3 for

the U.S and 10.10 for Japan. It is hoped tat with privatization Indian’s total premium

could go up to $200 to 300 min.

Privatization of the insurance sector is expected to bring in some competition

and with that an improvement in the insurance products and services. With the

increase in number of players it may not be a difficult task to extend the insurance

coverage to larger section of the society. However will the expansion of this sector

lead to any improvement in the overall saving rate or will it be at the cost of other

sectors like bank and mutual funds. It depends on the kind of products that will be

offered and the kind of marketing strategy that will be adopted. In fact, the marketing

strategy will determine the speed at which the sector is going to develop. Product

designing is no doubt a major part of the marketing strategy, but even a good product

fails to take off if it is not marketed properly. The LIC does not lack in the variety and

number of products, but due to its neglect on the marketing side the market remains

grossly under tapped.

Insurance Regulations:

The first step towards to opening up of insurance sector was taken in 1993,

when the government set up the Malhotra committee, headed by former insurance

secretary and RBI Governor R.N.Malhotra, to evaluate India insurance industry and

recommend its future directions. The committee submitted its report in 1994. It took

almost 6 years to take the next step of implementing its recommendations. The main
recommendations of the committee were concerning the structure and regulation of

the insurance industry under a newly liberalized environment. On the structure of

industry the committee recommended that the government stake in the insurance

companies should be brought down to 50 percent and the private companies with a

minimum paid up capital of Rs.1 bn should be allowed to enter the industry. It ruled

that no company should deal in both life and General Insurance through a single

entity; further, it opined that foreign companies might be allowed to operate in the

rural market. It also felt that only one state level life insurance company should be

allowed to operate in each state.

Regarding the regulatory aspects the committee felt that the insurance Act

should be changed and an Insurance Regulatory body should be set up with the

controller of Insurance (Currently a part from the Finance Ministry) made

independent. Further on the issue of investment regulation the committee felt that

mandatory investments of LIC fund in government securities need to be reduced from

75 percent to 50 percent more over. It felt that the GIC and its subsidiaries should not

hold more that 5 percent in any company (their current holding to be bought down to

this level over a period of time). The committed had decided to restrict competition to

a few strong parties by stipulated the minimum capital requirement of Rs.1bn. For, it

felt the need to exercise caution because any failure on the part of new player could

ruin the need to exercise caution because any failure on the part of Rs.1bn. For it felt

the need to exercise caution because any failure on the part of new player could ruin

the public confidence in the industry.

Players in Indian Insurance Industry:

Insurers:
Insurance Industry, as on 1.4.2000, comprised mainly two players the state insurers.

Life Insurers:

• Life Insurance Corporation of India (LIC)

General Insurers: - General Insurance Corporation of India (GIC)(with effect from

Dec’2000, a National Reinsure)

GIC had four subsidiary companies, namely (with effect from Dec’2000. these

subsidiaries have been de-linked from the parent and made as independent insurance

companies.

1. The Oriental Insurance Company Limited

2. The New India Assurance Company Limited

3. National Insurance Company Limited

4. United India Insurance Company Limited

Yr: 2000-2001: (From 2nd April’2000 to 31st December’2001)

Insurance Industry in the year 2000-2001 had 16 new entrants, namely

Life Insurers: -
S.NO Reg Number Date of Reg. Name of the Company
1. 101 23.10.2000 HDFC Standard Life Insurance Company Ltd.
2. 104 15.11.2000 Max New York Life Insurance Company Ltd.
3. 105 24.11.2000 ICICI prudential Life Insurance company Ltd.
4. 107 10.01.2001 Kotak Mahindra Old Mutual Life company Ltd.
 5. 109 31.01.2001 Birla Sun Life Insurance Company Ltd.
6. 110 12.02.2001 Tata AIG Life Insurance company Ltd
7. 111 30.03.2001 SBI Life Insurance company Ltd
8. 114 02.08.2001 ING Vysya Life Insurance company Ltd
9. 116 03.08.2001 Bajaj ALLianz Life Insurance company Ltd
10. 117 06.08.2006 Met Life India Insurance company Ltd.

General Insurers:

S.NO. Reg. Number Date of Reg. Name of the company

1 102 23.10.2000 Royal Sandarac Alliance insurance

Company

Ltd
2 103 23.10.2000 Reliance General Insurance Company

Ltd.
3 106 04.12.2000 IFFCO TOKYO General Insurance Co.

Ltd
4 108 22.01.2001 Tata AIG General Insurance Co. Ltd
5 113 02.05.2001 Bajaj Alliaz General Insurance Co. Ltd
6. 115 03.08.2001 ICICI Lombard General Insurance Co.

Ltd

Yr: 2001-2002: (From 1st Jan2001 to Dec 2002)

Insurance Industry in this year, so far has 5 new entrants; namely

S.NO. Reg. Number Date of Reg. Name of the company

1 121 03.01.2002 AMP SANMAR Assurance Company ltd
2 122 14.05.2002 Aviva Life Insurance Co. India Pvt. Ltd

General Insurers
S.NO. Reg. Number Date of Reg. Name of the company
1 123 15.07.2002 Cholamandalam General Insurance Co.
 Ltd
2 125 27.08.2002 HDFC-Chubb General Insurance Co. Ltd

COMPANY PROFILE

TATA AIG: -

TATA AIG life Insurance Company Ltd and Tata AIG General

Insurance Company Ltd, (collectively Tata AIG) are joint venture companies, formed

from the Tata group and American International Group, inc. (AIG). Tata AIG

companies the strength and integrity of the Tata Group with AIG’s international

expertise and financial strength. The Tata Group holds 74 percent stake in the two

insurance ventures while AIG holds the balance 26 percent stake.

 Tata AIG life insurance Company ltd. provides insurance solutions to

individuals and corporate. Tata AIG Life insurance company was licensed to operate

in India on February 12, 2001 and started operations on April 1, 2001. Tate AIG Life

offers a broad array of life insurance coverage to both individuals and groups, with

various types of add-ons and options available on basic life products to give

consumers flexibility and choice.

The non-life insurance arm, Tata AIG General Insurance Company,

which started its operations in India on January 22, 2001, offers the complete range of

insurance for automobile, home, personal accident, travel, energy, marine, property

and casualty, as well as several specialized financial lines.

History
The Tata Group, easily Indian’s most recognized business group, was

founded by Jaksetic Tata and began with a textile mill in central India in the 1870s.

From there, it has evolved into a truly diversified conglomerate

spanning, among other sectors, Engineering, Energy, Chemicals, Consumer Products,

and Communications & IT. The group established Tata LTD, London in 1907, and

then expanded into Airlines and Commercial Vehicles between 1930 and 1950, in
1948 launched car for the mass market and in 2000; it acquired the Tetley Group,

U.K.

The Tata Group:

The Tata group is Indian’s best-known industrial group in the private

sector with a turnover of around US $ 10.4 billion (equivalent to 2.4% of Indian’

GDP). Long loan for its adherence to business ethics, it is Indian’s most respected

private business group. With 219,000 employees across 94 major companies, it is also

Indian’s largest employer in the private sector.

Founded by Jamestji Tata in the 1860s, the Tata Group’s early years

were inspired by the spirit of nationalism. The Tata Group pioneered several firsts in

Indian Industry: Indian’s first private sectors steel mill, first private sector power

utility, first luxury hotel chain and first international airline, amongst others. In more

recent times, the Tata Group’s pioneering spirit continuous to be showcased by

companies like Tata Consultancy Services (TCS), today Asia’s largest software and

services company, and Tata Engineering, the first car marker in a developing country

to design and produce a car from the ground up.

The business operations of the Tata Group currently encompass seven

business sectors Engineering, Materials, Energy, Chemicals, Consumer Products,

services, and Communications and Information Systems, The scale of the Tata

Group’s operations is increasingly turning global. Tata Tea is the first Indian MNC in

the global tea industry and India’s largest integrated tea company; Tata chemicals is

Asia’s largest manufacturer of soda ash; Titan is one of the world’s top six
manufacturer-bands in the watch segment and Tata engineering is a amongst the top

six commercial Vehicle manufacturers in the world. The Tata Group is increasingly

focusing on new technology areas. And has the largest footprint in Indian’s new

economy; besides being the largest software service provider in the country, it is one

of the leading private sector telecom service providers, and is also Indian’s largest

international long distance and interest services provider.

The Tata brand is recognized as the largest homegrown brand in India

and the most respected brand across consumer segments. The Tata Group’s stable of

brands also include many national and some internationally renowned product and

service brands, including Tata Indica, Tata Indigo, Tata Safari, Taj (Hotels, Resorts

and palaces) Voltas, Tata Tea, Tetley, Tata salt Titan, Tanishq, Westside and the latest

addition, Tata Indicom.

The Tata Group has always believed in returning wealth to the society it

services. Thus, nearly two-thirds of the equity of Tata sons, the Tata Group’s

promoter company, is held by philanthropic trust which have created a host of

national institutions in community development, education and scientific and research

centers, hospitals and cultural establishments. The Trusts also give substantial annual

grants and endowments to deserving individuals and institutions in the areas of

education, healthcare and social upliftment.

By combining ethical values with business acumen, globalization with

national interests and core business with emerging ones, the Tata Group aims to be

largest and most respected global brand from India whilst fulfilling its longstanding

commitment to improving the quality of life of its stakeholders.

 The AIG Group
American International group, Inc. (AIG) is the world’s leading

international insurance and financial service organization, with operations in

approximately 130 countries and jurisdictions. AIG member companies serve

commercial, institutional and individual customers through the most extensive

worldwide property-casualty and life insurance networks of any insurer.

In the United States, AIG is the largest underwriter of commercial and

industrial insurance and is one of the top three life insurers, AIG’s global business

also include financial services, retirement saving and assent management. AIG’s

financial services business includes aircraft leasing, financial products, trading and

market making.

American General Finance leads AIG’s growing global consumer

finance business in the United States. AIG also has one of the largest U.S retirement

savings businesses through AIG Sun America and AIG VALIC, and is a leader in

asset management for the individual and institutional markets, with specialized

investment management capabilities in equities, fixed income alternative investments

and real estate. AIG’s common stock is listed in the New York Stock Exchange, as

well as the stock exchanges in London, Paris, Switzerland and Tokyo.

 Tata AIG Life
Tata AIG life insurance Company Ltd. Provides insurance solution to

individual and corporate. Tata AIG Life Insurance Company was licensed to operate

in India on February 12, 2001 and started its operations April1, 2001. It offer a broad

array of life insurance coverage to both individuals and groups, with various type of

add-one and options available on basic life products to give the consumers flexibility

and choice. Tata AIG Life offers products in Ahemedabad, Bangolore, Chandigarh,

Chennai, Gowhathi, Hyderabad, Jaipur, Jamshedpur, New Delhi, Pune, Rajkot,

Trichy, and Vijayawada.

Tata AIG General:

The non-life insurance arm, Tata AIG general insurance Company,

which started its operations in India on January 22, 2001, offers a complete range of

insurance for automobile, home, personal accident, travel, energy, marine, property

and casualty as well as several specialized financial lines. It offers products in

Mumbai, Chennai, Bangalore, Kolkata, Chandigarh, Hyderabad, Delhi, Pune,

Ahmedabad, Jamshedpur, and Guwahati.

Management
 • Dalip Verma: Managing Director, Tata AIG General Insurance Company Ltd.

He has 26 years of experience in the general Insurance business and is

designated Managing Director, Tata AIG General Insurance Company Ltd.

• Ian J Watts: Masnging Dirctor, Tata AIG Life insurance Company Ltd. He has

been with American International Group for over two years now and is

spresently assigned to Tata AIG Life Insurance Company in Mumbai. I an has

s123 years of international experience in the Life Insurance Industry based in

Hong Kong, Dubai and Bahrain.

Tata AIG Products

Tata AIG is providing different products to individuals and corporate.

I. For individuals

1. Life

2. Motor

3. Home

4. Accident & health

5. Travel

II. For Corporate:

1. Life

2. Accident & health

3. Energy

4. 4.Property

5. Marine
 6. Contingency

III. E-Application:

1. E Marin

2. Life Premium calculator

I. Life: - company provides three

types of policies in life
 Children

 Adult

 Retirement

Children: -

Tata AIG watches over insurer Child every step of the way. From the first

days of college to the first days of happy, Matrimony, Tata AIG child policies really

understand what a child will inevitably ask for, and how parents need help to be able

to afford it.

a) Assure 21 Money Saver Plan

b) Mahalife

c) Assure career building

d) Assure Educare
 a) Tata AIG 21 Year Money Saver Plan given insures back 10% of the

sum assumed eery three years for the next 21 years ! And the balance

when the police mature.

Insurer can spend the money the way he like it-on their children`s

education, on refurbishing or redecorating their home, or even on a

vacation! Or he could accumulate the money with that AIG at a

competitive interest rate.

Their Family gets full protection

In the event of insurers unfortunate death, the plan still protects their loved

ones for full sum assured, even after taking the money back periodically.

b) The Assure Educate Policy

It is one-of-a kind endowment police (in other words, a policy that pays the

sum assured at maturity), especially designed to ensure their child’s education is well

taken care of. Insurer can pick from 2 plans:

• Educate 18 this plan mature at the age of 18. This policy is exclusively open

for children between 30 days and 8 yes. of age.

• Educate 21 this plan mature when insurer child is yrs. Here, the minimum

entry age is 30 days and the maximum entry age is 11 yrs.

30% Guaranteed addition

First –of – a kind guarantee where 10% of the sum assured will be paid at

maturity or on death, provided the police have been in force for 10 years.
 Plus a guaranteed education benefit of 20% of the sum assured will be paid to

insurer at maturity.

c) Assure Carrier Builder

It`s a money-back policy that helps insurer provide for your child`s carrier.

It pays insurer a lump sum money at the various important stages of

insurer child`s life:

• 20% of the sum assured paid on insurer child`s 18th birthday. Just when he is

ready for college.

• 20% of the sum assured paid on insurer child`s 21st birthday. Right when he

wants to go for post-graduation.

• 2% of the sum assured paid on insurer child`s 24th birthday. By then he

should have decided what to specialize in.

• 40% at the policy maturity at insurer child`s 27th birthday. Finally at 27, he

would be at the there should of his career.

All the periodical payments against this policy do not affect the full payment of sum

assured in case o the insurer`s death.

 Adult:

Tata AIG designs insurance products around an adult`s distinct needs – both for

early adulthood as well as middle age.

Different Products:
 a) Investment assure

b) Assure life line

c) Life plus

d) Assure 21 year4s money saver

e) Assure security and growth

f) Tata AIG health first

g) Maha life gold

a) Tata AIG Invest Asssure :

When it comes to choosing insurance, the primary aim of most people is to

secure a financial cover in the event of misfortune. Now a part of the

premiums insurer pay is also invested, and based on fund performance insurer

receive a bonus from their insurance company every year. However they have

no control or choice in what kind of instruments the company invests in. So

even if their premium could earn more dividends by, say, investing in equities,

the company may not choose to invest in that category of funds.

b) Assure Lifeline:

The Lifeline Plans offer various policy terms to suit insurer`s needs. They can

choose from any of the following coverages to give the ultimate protection to

their loved ones: Assure One year Lifeline, Five year, Ten year, Fifteen year,

twenty year, Twenty five year Lifeline and Lifeline to Age 60.

c) Life plus:
 This plan is Life cover for 20 years. With LifePlus Insurer pay premiums for

15 years and get protection for 20 years. That means the insurer is protected

for a full 5 years absolutely free of charge. In case of an accidental death.

Double the sum assured will be paid. Premiums paid are eligible for tax

exemption benefits u/s 88 as per current Income Tax Act.

d) Assure 21 Years Money Saver:

This plan is more useful to the insurers ho are looking for an attractive savings

plan. This plan gives insurer the dual benefits i.e... Life cover plus the

flexibility of periodic withdrawals. Insurer gets back 10 percent of the sum

assured every three years or the next 21 years, with the balance on maturity of

the policy. Alternatively, insurer can reinvest these returns with Tata AIG at a

competitive interest rate.

e) assurance security and growth;

This Plan offers both, security for insurer family and growth of their hard

earned savings. It offers three different terms 10/20/30 years. In any of these

terms, insurers can pay annually or at other intervals depending on their

intention.
 f) Health First:

It is India`s first comprehensive hospital allowance policy that provides a

complete cover for prolonged hospitalization, a major surgery or a critical

illness. The unique feature of this policy is that it comes in the form of a

benefit with a flexible coverage. This means that while other medical policies

reimburse for actual medical expenses, this policy provides a lump sum,

irrespective of what insurers bills are. So, now insurer can not only pay for

the hospital bills, but also have the freedom to pay for all allied expenditures.

Benefits under this policy:

• Daily Hospital Benefit

• Surgical Benefit

• Critical illness Cover

• Post-Hospitalization Benefit

 Retirement Plans:

These Plans help insures to enjoy financial independence after retirement.

They will be able to do every thing they wanted like visiting interesting places

or pursuing their hobbies after retirement.

Different products are

a) Assure golden years (endowment policy)

b) Maha life gold (Whole life policy)

c) Nirvana (Pension policy)

d) Nirvana plus (pension policy)

a) Golden years plan:

This insurance plan matures at the age of 60. Insurer can pay the regular

premiums annually or at other intervals of your choice, during their working

life. It protects insurer`s family in the event of unfortunate death. This plan

also shares in the profits of the Company. So, the death benefits may be

further increased by way of Bonuses, which give extra protection to family

b) Nirvana

It is a Pension policy with a unique feature. There will be 10 percent

guaranteed addition on sum assured. It is an extremely flexible plan that lets

insurers choose the amount of cover the want depending on their premium

paying capacity. It also allows choosing their retirement age and therefore the

age from when they wish to get a pension.

Annual bonus will be declared by the company from the 5th policy

anniversary, which could be credited to the policy, which is paid on a

compounded basis. At the time of retirement, insurer will receive a terminal

bonus. This bonus will also be payable in the unfortunate event of the insurer

death, provided the policy has been in force for 10 years.

 CHAPTER III
THEORETICAL FRAME WORK

 SERVICES MARKETING

 CHANNELS OF DISTRIBUTION

 INSURANCE CHANNELS

 TATA AIG CHANNELS

SERVICES MARKETING
 Services are marketed in the same way as tangible goods. And marketing in

nonprofit service organizations is fundamentally the same as in profit- seeking firms. The

idea we want to get across here is that whether it is a goods or service, profit or non-

profit, the organization should first select and analyze its target markets. Then the

company should design a marketing program around its marketing mix- the goods or

services, the price structure the distribution system, and the promotional activities.

Definition of Service: -

Services have been defined in a number of ways but no signal definition has

been accepted universally.

According to US government’s standard industrial classification

“Establishments primarily engage to providing a wide variety of services for

individuals, business and government establishments and other organizations,

hotels and other lodging places establishments providing personal, business,

repair and amusement services, educational institutions, membership

organizations and other miscellaneous services are included”.

Another expert says, “Services refer to social efforts, which include

government to fight five giant evils, want disease, ignorance, squalor and

illness in the society”.

Further another expert opines, “Services can also be defined as a

human effort which provides succor to the needy. It maybe food to a hungry
person, water to a thirsty person, medical services to an ailing person and

education to a student, loan to a former, transport to a consumer,

communication aid to two persons who want to share a though, pleasure or

plain.

Another expert says, “Services can also be defined an actions (s0 of

organizations(s) that maintains and improves the well being and functioning of

people”.

The American marketing association defines services as activities,

benefits or satisfactions which are offered for ales are provided in connection

which the sale of goods.

Services require supporting goods, and goods require supporting

services.

Goods and Services

Tangibility: - On the basis of tangibility, goods are tangible having physical

objects and can be created and transferred. But the services are intangible and

have non-physical nature.

Transferability: - On the basis of transferability, the goods can be carried

home, can be stored and in most of the cases we find their consumption at
home. But the services are not taken home. We only carry their effects. We

consume services during the process of their creation.

Existence: - On this basis, the goods can be stored and have some existence

over a long period. Generally, goods are of non-perishable nature but the

services don’t’ have any existence and are generally of perishable nature. As a

marketable commodity, the services have a perish ability of high intensity. If a

service is not used today, it is lost forever.

Heterogeneity: - On the basis of heterogeneity, the services can’t be

standardized. As instance, a technician can’t offer equal quality of services. It

is difficult to judge the quality of service. But the goods can be standardized. It

is not difficult to judge the quality of goods.

Scope of Services

There are lot many services are available in our economy. The services

may be profit or non-profit organizations. The profit organizations are

• Housing

• House hold operations

• Private education

• Transportation

• Insurance, banking, and other financial services, personal and business

insurance
 Characteristics of Services
Intangibility: - services are intangible. One can’t touch them. We can’t albeit smell

them before they are bright. It is not a physical object. It has mental connections.

While selling or promoting the sale of a service, we have to concentrate on the

benefits and satisfaction; a buyer can derive after buying that services.

Inseparability: -
Services are not separable generally the services are created and supplied

simultaneously, In other words, services and their providers are the same.

Perish ability and Fluctuating

Demand: -
Services are highly perishable, and they cannot be stored.

Ownership: -
An important feature of services is that of ownership. In the sale of goods,

after the completion of process, the goods are transferred in the name of buyer and he

becomes owner of the goods. In the case of services, we do not find the same thing.

The users have only an access to the services. They simply use the services.

Quality measurement: -
The quality of service requires another tools for measurement we can measure

it in terms of service level. It is very difficult to rate or qualify the total purchase.
 Nature of demand: -

While identifying the silent features of services, we can’t undermine the factor

nature of demand. Generally the services are of fluctuating nature. Particular during

peak season, we find an abnormal increase in the demand.

Development of a Strategic Marketing Program: -

Basically a marketing program is developed in the same way in any

organization goods or services, for-profit or non-profit, first, identify and analyze

target markets. Then design and implement marketing and achieve the organization’s

marketing objectives. During each step use marketing research to help in decision-

making.

Selecting Target Market

Selecting market is essentially the same, whether a firm is marketing a good or

service. The services marketing needs to understand the component of population and

how they affect the market for a service. Marketers also must try to determine their

customer buying behavior buying motivation, perceptions attitudes rather than goods.

This is important when marketing services rather than goods. This is because we

cannot touch, smell or taste the service offered. Also, the social class structure and

reference groups are significant determinants of buying behavior in services markets.

Product Planning

The planning and development of goods has marketing of services- by either a

profit-seeking or nonprofit organization. The intangibility, high perishability and

inability to store services present significant product planning challenging in service

marketing. In terms of product plan a marketer of services must make strategic

decision regard.

• What services it will offer

• What services-mix strategies it will adopt

• What features, such as branding and warranting the services will have

• How it will manage services

Especially services marketing should have brand name.

Branding of services is a problem because maintaining consistent quality (a

responsibility of brand ownership) is difficult. Also, a brand cannot be physically

attached to a label or to the service itself. A service marketer’s goal should be to

create an effective brand image. The strategy this goal is to develop a total theme that

includes more than just a good brand name. To important this strategy, the following

tactics may be used.

Include a tangible good as a part of the brand image- like the umbrella of
Travelers Insurance.

Tie in a slogan with the brand

Use a distinctive color scheme.

Designing a distribution in a service organization involves two tasks. One is to

select the channels of distribution, and the other is to provide physical facilities for the

distribution, and the other is to provide physical of the services.

The marketing mix for services

Under the product we include both goods and services tangible or of intangible

nature having the same ultimate goal of satisfying the consumers.

In the formulation of marketing mix, goods or services take help of similar

ingredients. Like goods, a service industry is also required to formulate its market-

oriented plans and programmers. The more scientific and condition – oriented is the

service mix the more refined is services. If our products are refined, the responses in

market are sure to be positive. This necessitates the formulation of marketing mix for

the services. The framing of marketing mix for services would make possible

profitable and productive utilization of services. Different experts in different ways

have designed the conceptual framework of marketing mix but tee perception is more

or less the same. Kotter, Keelay and Lazar, Davar and many others have gone

through the term but all of them agree with the view that it is a fair combination of

product mix, price mix, place mix and promotion mix. The ultimate goal of different

sub-mixes is to deliver standard product, goods or services and to satisfy customers.

The product mix:

The product is of intangible nature. Hence, the qualities o services play a

significant role in the formation of product mix. The marketers are here required to

study the demand graphs of the different segments of society. The standard of living,

income index and incoming index developments in the field of culture mix also need a

close attention. The product mix includes

• Product line and quality

• Brand
 • Packing and services

The place mix:

Another important constituent of the marketing mix is an identification of a

suitable location. The providers of services have no option for opening or location

and organization wherever they like. Location advantages simplify the task of

applying the marketing strategies. The task before the marketing manager is to select

a suitable place where the actual sale is to make. User conveniences would be and

important consideration while making place decision. Place mix includes

• Distribution channels

• Physical distribution

The price mix:

Price is the most crucial component of marketing mix. Both from economic

and social stand point, the management of pricing is important but at the same time

the pricing decisions are found to be critical, chaotic and challenging. Of course, no

marketing tool is as critical as pricing. Modern marketers, except in rate instance,

enjoy considerable freedom in making pricing decisions. This freedom comes their

success in manipulating other controllable like products, distribution and promotion.

Price as a variable to be traded off against product quality and promotion.

Pricing policies are used as general guidelines in making pricing decisions over long

periods. Price- setting procedures vary with competitive conditions.

The promotion mix:

 Services types of promotions are used extensively in services marketing. In

fact promotion is the one part of the marketing mix that services marketers are most

familiar with and most adept at promotional selling.

• Personal selling

• advertising

• Publicity

• Sales promotion measures

Personal selling plays a dominant role in the promotional programs of most

service firms.

For years, advertising has been used extensively in may service fields-

housing, transportation recreation, and insurance.

All the sub-mixes help management in making right decision.

DISTRIBUTION CHANNEL

Distribution’s role with in a marketing mix is getting a product to market and

arranging for its sale (and the transfer of title) from producer to final customer.

Typically, however, firms called middlemen perform some of these activities on

behalf of the producer or the consumer.

 A middleman is a business firm that renders services related directly to the

sale and purchase of a product as it flows from producer to consumer. A

middleman either owns the product at some point or actively aids in the transfer of

ownership. Often, but not always, a middleman takes physical possession of the

product.

Importance of middlemen

Some critics say prices are high because they are many middlemen performing

unnecessary or redundant function. During the recent recession, some

manufactures also reached this conclusion and sought to cut costs by eliminating

middlemen. While middlemen can be eliminated from the channel, lower costs

may not always be achieved. The outcome is not predicable, because of a basic

axiom of marketing: you can eliminate but you cannot eliminate basic distribution

activities that they perform. Activities-such as crating assortments and storing

products can be shifting from one party to another in an effort to improve

efficiency. However, someone has to perform the various activities- if not

middlemen then the producer or other final customer. Middlemen may be able to

carry distribution activities better or more cheaply than either producers or

consumers. Moreover, it is usually not practical for a producer to deal directly

with ultimate consumers. Middlemen sere as purchasing agents for their

customers and as sales specialists for their suppliers. They provide financial

services for both suppliers and customers.

Meaning of distribution channels

 A distribution channel consists of the set of people and firms involved in the

transfer of title to product as the product moves from producer to ultimate

consumer or business use. A channel of distribution always includes both the

producer and the final customer for the product in its present from a well as any

middlemen such as retailers and wholesalers.

The channel for a product extends only to the last person or organization that buys

without making any significant change in its form. Besides producer, middlemen

and final customer, other institutions aid the distribution process. Among these

intermediaries are banks, insurance companies, storage forms, and transportation

companies. However because they do not take tittle to the products and are not

actively involved in purchase or sale activities, these intermediaries are not

formally included in the distribution channel (insurance products also have

producer middlemen and final customer other than this bank assurance, insurance

brokers, insurance consultant the home service representative the reinsurance

broker, insurance surveyor also act as a distribution channel).

Designing Distribution Channels

Similar firms often have dissimilar channels of distribution. For instance

the three largest sellers of auto insurance use different channels of distribution. If

a company wants a distribution channel that not only meets customer’s need but
 also provides and edge on competition. Some firms gain a differential advantage

with their channels. Northwestern mutual seeks competitive edges by supplying

its agent with what it intends to the EST training in the insurance field.

To design channels that satisfy customers and outdo competition, and

organized approach is required.

1. Specifying the role of distribution:

A channel strategy should be designed within the context of the entire

marketing.

First the firm`s marketing objectives are reviewed. Next the roles assigned to

product, price and promotion are specified.

A Company must decide whether distribution will be used defensively or

offensively. Under a defensive approach, a firm will strive for distribution that is a s

good as, but not necessarily better that, other firm`s distribution.

E.g.: Insurance companies they need agents to transfer their products from producer to

consumer so it is called defensive strategy.

With an offensive strategy, a firm uses distribution to gain an advantage over

competitions.

E.g.: In car industry if one company introduces services another company also

introduces services.

2. Selecting the type of channel:

 Once the distribution’s role in the overall marketing program has been agreed on,

most suitable type of channel for the company’s product must be determined. At

this point in the sequence, a firm needs to decide whether middlemen will be used

in its channel and, if so, which types of middlemen.

3. Determining intensity of distribution:

The next decision relates to intensity of distribution, or the number of middlemen

used at the wholesale and retail levels in a particular territory. The target market’s

buying behavior and the product’s nature has a direct bearing on this decision.

4. Choosing specific channel members:

The last decision is selecting specific firms to distribute the product. In

insurance also the producer must decide how many agents should we appoint and

from what bank we take bank assurance. What are the efficient corporate persons

to sell our polices to final consumers.

Selecting the type of Channel

Firms may rely on existing channels, or they may use new channels to better serve

current customer and reach prospective customers. In selecting their channels, a firm

should seek to gain a differential advantage.

Most distribution channels include middlemen, but some do not. A channel

consisting only of producer and final customer, with no middlemen providing

assistance is called direct distribution.

In contrast, a channel of producer final customer and at leas one level of

middlemen represents indirect distribution. Mostly insurance companies follow

indirect distribution. Mostly insurance companies follow indirect distribution. Here

the gent will work about the company. The agent sells the product to the final

consumers. In this indirect distribution a producer must determine the types of

middlemen that will best serve its needs.

Major channels of distribution:

Diverse distribution channels exist today. The most common channels for consumer

goods, business goods, and services are

Distribution of consumer goods

Producer → consumer

Producer → retailer →consumer

Producer → wholesaler→ retailer →consumer

Producer → agent → retailer →consumer

Producer → agent→ wholesaler→ retailer →consumer

Distribution of business goods

Producer → user

Producer → Industrial distributor →user

Producer → agent→ user

Producer → agent→ Industrial distributor →user

Distribution of services:

The intangible nature of services creates special distribution requirements.

There are only two common channels for services.

 • Producer →consumer: Because a service is intangible, te production process

and/or sales activity often require personal contact between producer and

consumer. Thus a direct channel is used. Direct distribution is typical for

many professional services, such as health care and legal

DISTRIBUTION CHANNELS IN TATA AIG

A distribution channel is the route by which the product (or after)

prepared by the producer reaches the ultimate consumer (or buyer). The distribution

channel bridges the distance between the producer (point of manufacture) and the

consumer (point of sale). In the case of goods, the product manufactured in the

factory passes through wholesalers, stockiest and retailers, before it reach the

consumer. In the case of life insurance, the agent is the primary component of the

distribution channel. He is the equivalent of the retailer. The supervisor of agent, by

whatever name called, is an important part, because it is he who, by creating and

training agents, makes the channel effective. New agents widen the channel

Equally important would be the other intermediates, like brokers and

insurance consultants. Some life insures are trying to eliminate intermediaries to save

costs. Direct selling is one such attempt. This is increasing in foreign countries. In

India people by large know about life insurance, but still have a lot of wrong notions

about it. Personal contacts by agents may continue to be necessary for quite some

time.
 Another method being attempted is the use of the extensive network of

branches of banks. The customers of both bands and life insures are practically from

the same segments of population. Through the same contact, the prospect can e

helped to arrange for both bank deposit and life insurance. There would e saving in

infrastructure to access vast areas. New insures find this an every way to access vast

areas. It may be possible to develop composite products having the elements of both

life insurance and banking their trends.

The selling insurance:

The first requirement is to have a continually expanding list of

prospects, person who can be approached for insurance. There are names of people

with in reach, obtained from acquaintances, newspaper reports, directorories, contacts

at parties, meetings, seminars, etc. Their names have to be qualified which means that

some preliminary work should be done to collect detail may indicate whether it may

be worth approaching them for insurance. The work of “qualifying’ is done to ensure

that the prospect is not apparently until for insurance like being sick, or with great

moral hazard. advice, and personal service such as haircutting and weightless

consulting. However other services, including travel, insurance, and entertainment,

may also rely on direct distribution.

• Producer → agent → consumers: - While direct distribution often is necessary

for a service to be performed, producer consumer contact may not be required

for distribution activities. Agent frequently assists services producer with

transfer of ownership of owner ships (the sales task) or related tasks. Many
 services notably travel, lodging advertising media entertainment, and

insurance, is sold through and insurance, is sold through agents

Producer

Agent Agent Agent

Customer

Multiple Distribution Channel

Many, perhaps most, producers are not contact with only a single distribution channel

instead, for reason such as achieving broad market coverage or avoiding total

dependence on a single arrangement, they employ multiple distribution.

Channels. (Similarly, many companies establish multiple supply channels to ensure

that they have products when needed)

E.g: Insurance companies are using different channels like individual agent, corporate

agents, and bank assurance to transfer the products to consumers from producer.

Although multiple distribution channels provide benefit to the producer, the

can aggravate middlemen. Multiple channels are more advisable to the insurance

companies when compare to the single channel.

And also multiple channels are also used to reach different segment within a

single market

THE DISTRIBUTION CHANNEL IN INSURANCE

A distribution channel is the route by which the product (or offer prepared by the

producer reaches the ultimate consumer (or buyer). The distribution channel bridges

the distance between the producer (point of manufacturer) and the consumer (point of

sale). In the case of goods, the product manufactured in the factory passes through

wholesalers, stockiest and retailers, before before it reaches the consumer. In the case

of life insurance, the agent is the primary component of the distribution channel. He is

the equivalent of the retailer. The supervisor of agent, by whatever name called, is an

important part, because it is he who, by creating and training agents, makes the

channel effective. New agents widen the channel.

Equality important would be the other intermediates, like brokers and

insurance consultants. Some life insurers are trying to eliminate intermediate to save
costs. This is increasing in foreign countries. In India, people, by large know about

life insurance, but still have a lot of wrong notions about it, Personal contacts by

agents may continue to be necessary for quite some time.

Another method being attempted is the use of the extensive network of

branches of banks. The customers of both banks and life insure are practically from

the same segments of population. Through the same contact, the prospect can be

helped to arrange for both bank deposit and life insurance. There would be saving in

infrastructure to access vast areas. New insurers find this an every way to access vast

areas. It may be possible to develop composite products having the elements of both

life insurance and banking their trends.

The Channels of insurance are

Location: -

The location and channels used to supply services to target customers are two

key areas. Location and channel divisions involve considering how to deliver the

service to the customer and where this should taken place. This has particular

relevance to services as very often they cannot be stored and will be produced and

consumed at the same point, ‘place’ also has importance as the environment I who the

service is delivered and how it is delivered, are part of the perceived value and

benefits of the services.

Location is concerned with the decision a firm makes about where its

operations and staff are situated. The importance of location for a service depends

upon the type and degree of interaction involved. Their exist three types of interaction

between the service provider and the customer.

 • The customer goes to the service provides

• The service provide goes to the customer

• The service provides and customer transacts business at arm’s length.

Location and Channel choice: -

The choice of both distribution and channels for service largely depends on the

particular requirements of the market and the nature of the service itself.

Technology has, in some instances changed the advantage to be gained by

proximately of a service to the customer market. Service delivery channels are

often the service provides. The highlights the importance of the selection of the

appropriate delivery channels.

Other main important channels:

In the formulation of marketing mix for the insurance business, the

management of insurers or say, the management of agents and staff occupies a

place of significance.

The conventional channels of in the insurance industry can broadly classify in

to three categories. Direct, indirect and partners.

Channel
Direct selling Agents, Direct marketing, Financial advisers/consultants,

Call Centers(sales calls)

Indirect selling Bundled products with commodity purchase, Bundled

products with other financial instruments

 Partner selling Bank assurance , postal Department, Selling through

corporate

Agents:-

The agents motivate or induce the potential policy holders or prospects and

turn them into actual policyholders. An agent is expected to establish contact with the

insurable person(s) making available to them detailed information regarding policies,

motivate them, prepare the proposal form, manage for their medical examination and

to submit the duly filled in proposal form in the branch office.

He receives payment by way of commission or other remuneration for

business relating to the continuance, renewal or revival of policies of insurance. The

agent cannot be an employee of an insurance company and the insurance Act IRDA

and Indian Contact Act govern his role as an agent.

Corporate Agents: -

The branch managers are found responsible for recruiting the agents. And also

the branch managers also sell the products. He also acts as a distributor of a product.

In insurance business the corporate agents working for the company. Through the job

of corporate agents is monitoring, regulating coordinating the functions of all people

working for the insurance company they can also sell the insurance policies. The

corporate agents performing both managerial functions and operative functions. The

remuneration to the corporate agents is salary plus commission over the business done

by them. Corporate agents are more responsible than the others. They are playing a

very key role to insurance business.

Employees: -

Employees are response for processing the policies claims etc… They are maintaining

records and providing information to the management and to the customers (or)

clients. They can also sell the policies. For that they are getting commission.

After sale service is an important component of motivating the policyholder.

This helps checking the lapse of policies and paves ways for inducing the potential

policyholders, the agents can make available after sale service to the policyholders by

setting their chains, extending to them the credit facilities and helping them in

depositing the amount of premium or installments

Of loans granted to them.

Banc assurance: -

With the evaluation of interconnected financial services, banks are converting

themselves into ‘one stop financial supermarket’. This has promoted two big classes

of financial institutions: Banks and insurance companies, to combine and deliver an

innovative product –Bancassurance. In Bancassurance, insurance products are sold

through the bank’s network of branches.

Advantages of Bancassurance

• Leverage bank’s existing brand name – inherent trust in the bank.

• Wide network of branches allows tapping of both urban and rural areas
 • Banks can market to and possibly even influence the insurance

purchase decisions of its clients.

• Access to customer database-raw information on the customers’

sending habits, investment purchases etc., can help work out marketing

strategies and arrive at targeting prospects.

• Cross selling – package different insurance products or insurance

products and other financial products.

• Fee based income through distribution of insurance products would

generate revenues for the bank.

• Cheaper than hiring new agents.

Brokers:

A large majority of the customers are unaware of the various risks that can be

covered by insurance policies. Therefore brokers can serve as effective intermediaries

that help customers in identifying the exact products they need. By spreading

awareness of their products among brokers, insurance companies can also reduce

transactional costs associated with selling through their own agents.

Selling through India’s postal network: -

India has an extremely well developed postal network, which is even in the

interior parts of the country. Insurance companies can tie up with the postal

department to sell a reattribute various insurance covers. This would certainly require

up front training costs. As the postal employees in turn need to educate an sell the

concept and benefits of insurance to the people in rural areas. Such a tie up would

open up India’s entire hinterland, which is largely untapped. This can be a sustainable

source of growing revenues.

The selling Insurance: -

Te first requirement is to have a continually expanding list of prospects,

person who can be approached for insurance. There are names of people with in

reach, obtained from acquaintances, newspaper reports, directories, contacts at parties,

meetings, seminars, etc. Their names have to be qualified which means that some

preliminary work should be done to collect details about them. Their details may

indicate whether it may indicate whether it may be worth approaching them for

insurance. The work of “qualifying “is done to ensure that the prospect is not

apparently until for insurance like being sick, or with great moral hazard.
TATA AIG DISTRIBUTION CHANNELS
I. Locations: -

Tata AIG offers products in

• Mumbai

• Kolkatta

• Hyderabad

• Bangalore

• Delhi

• Chennai

And also the company the company offers in to six more branches in

Chanmdigarh, Pune, Ahmedabad, Cochin and Guwahat

II. Different types of Agents

• Insurance Agents: - At the end of 2002 Tata AIG had only 5000 agents. It

increases to 12000 at the end of 2003. Presently the agents are approximately

18000.

In the Tata AIG agents are playing a key role to distribute products to customers.

YEARS AGENTS CHANGE (%)

2001-2002 5000 --------
2002-2003 12000 140%
2003-2004 18000 50%

Tata AIG channels of distribution compare to the distribution compare to the

distribution channels agents playing key role in distribute the product. More than

50% of the product is selling by the agents only. For that only Tata AIG company
concentrating on the procuring the agents. The insurance products require

personnel selling and the insurance should have believed on the agents.

• Corporate agents: - every director or person holding charge of the office of

the corporate agent shall process a valid license to act as an insurance agent or

a composite insurance agent. Tata AIG corporate agents also playing an

important role.

• Composite insurance agent: - Means an insurance agent who holds both life

insurance agency license and general insurance agency license.

III) Employees: - Employees are also act as channels of distribution. They also

sell the policies of the customers. The Tata AIG has 537 employees.

YEARS EMPLOYEES INCREASE

(%)
2002-2003 298 ------
2003-2004 537 80%

IV) Bancassurance

• United Bank of India

• HSBC

• IDBI

Tata AIG life has signed a pact with the United Bank of India to distribute

its Bancassurance products through the letters branch network in the country.

UBI as a corporate agents of the bank has chosen 100RS 1.25 crore premium.

HDFC (Housing Development Finance Corporation) bank to sell Tata AIG

insurance products through its branches.

 Industrial Development Bank of India also selling insurance of Tata

AIG to industries.

V) Through mail: - through mail also Tata AIG is selling policies

The below figure says the producer push the products to corporate bodies

(manager) and banks (HDFC, OBI, IDBI). The corporate bodies push the product to

agents and employees some times directly to consumers. The agents and employees

push the products to the customer. Banks also push the products to the customers.

TATA AIG Distribution channel

Producer

Corporate Agents H OB IDBI

Employees

Customer
 CHAPTER IV
ANALYSIS AND INTERPRETTION OF DATA

The researcher has conducted a survey over fifty agents to elicit information about

their demography factors and their preferences, choices perceptions of insurance

agents whio is selling TATA AIG insurances to customers

1) GENDER OF THE AGENT

S.NO GENDER AGENTS PERCENTAGE (%)
a) Male 37 74%
b) Female 13 26%
Total 50 100%

80
70
60
Percentage

50
40
30
20
10
0
Male Female
Gender

Regarding the gender Out of fifty agents, thirty-seven are male with the percentage of

74%. Thirteen agents are females with the percentage of 26%

 2) AGENTS ABILITY TO SELL PRODUCTS IN

LIFE

INSURANCE PRODUCTS

S.NO PRODUCT NUMBER OF PERCENTAGE

AGENTS (%)
a) Children 23 46%
b) Adult 16 32%
c) Retirement 11 22%
Total 50 100%
 50
40
Percentage

30
20
10
0
Children adult Retirement
Product

Regarding the policy sold by the agents twenty-three said they were able to sell

Children products more when compare to the other life insurance products, their

percentage is 46 %. The children product percentage is more because every parent

dream is to see their children in high possession for that they spend more money for

education. So they save money for their children. Tata AIG providing this type of

policies to the children’s continuous education. Sixteen members were said they were

able to sell Adult policies when compare to the other life insurance products their
percentage is 32%. Eleven members said they were able to sell retirement products

when compare too the other products in lie insurance their percentage is 22%.

3) AGENTS ABILITY TO SELL PRODUCTS RURAL AND URBAN AREAS

S.NO AREA NO.OF PERCENTAGE

AGENTS
a) Urban 38 76%
b) Rural 12 24%
Total 50 100%

80
Percentage

60
40
20
0
Urban Rural

area

In the above analysis thirteen members said they are able to sell more products in

urban areas when compare to the rural areas, their percentage of 76%, and twelve

members said they are able to sell more products in rural areas when compare to the

urban areas, their percentage of 24%.

4) AGENTS OPENION TO SELL IN RURAL AREAS.

S.NO LEVEL NO.OF PERCENTAGE

AGENTS
a) Easy 2 4%
b) Difficult 13 26%
c) Very difficult 16 32%
d) More difficult 19 38%
Total 50 100%
 40
Percentage

30
20
10
0
Easy difficult Vert More
duffiucult difficult
level

Two members said selling in rural areas is easy, their percentage 4%. Thirteen

members said difficult their percentage is 26% Sixteen members said very difficult

their percentage is 32% Nineteen members said more difficult their percentage is38%.

5) TARGET POLICIES OF AGENTS

S.NO ABILITY NO.OF PERCENTAGE

LEVEL AGENTS (%)

 a) Able 34 68%
b) Unable 16 32%
Total 50 100%

80
Percentage

60
40
20
0
able unable
ablity level

Thirty-four members said they are able to fulfill the targeted policies, their

percentage is68%. Sixteen agents said they unable to fulfill their target policies

their percentage is32%.

6) COMMISSION TO AGENTS

S.NO SATISFACTION NO.OF PERCENTAGE

LEVEL AGENTS (%)

a) More satisfied 12 24%
b) Satisfied 31 62%
c) Less Satisfied 7 14%
Total 50 100%

70
60
Percentage

50
40
30
20
10
0
More satisfied satisfied less satisfied
ablity level

Twelve agents said they are more satisfied regarding commission received by

them their percentage is24%. Thirty-one agents said they are just satisfied their

percentage is 62%. Seven agents said they are less satisfied their percentage is

14%
7) AGENTS OCCUPATIONS

S.NO OCCUPATION NO.OF PERCENTAGE

AGENTS (%)
a) Employees 17 34%
b) Business man 28 56%
c) Farmer 5 10%
Total 50 100%

60
50
Percentage

40
30
20
10
0
Employees Business man farmer
Occupation

Above analysis we can say agents are doing daytime job in other areas. In that

seventeen agents belong to employees their percentage is 34%. Twenty-eight agents

are businessman their percentage 56%. Five members are farmers their percentage is

10%.

The researcher has conducted a survey over one hundred policy holders to

elicit information about their demographic factors and their preferences, choices

perception of insurance policy taken by them.

1. AGE WISE RESPONDENTS

S.NO AGE NO.OF RESPONDENTS PERCENTAGE
a) 20-30 16 16%
b) 30-40 51 51%
c) 40-50 23 23%
d) 50-60 10 10%
Total 100 100%

60
50
Percentage

40
30
20
10
0
20-30 30-40 40-50 50-60
age

Out of the One hundred policy holders sixteen members age in the age group of

Twenty to thirty their percentage is16% fifty one policy holders are in the age

group of Thirty to forty their percentage is 51% which is considerable when

compare to the total. This is because most of the people will join in service at the

age of thirty to forty. So that they are purchasing policy after joining in service.

Twenty-three members are in the age group of Forty to Fifty with a percentage

of 23% to the total. Ten members are in the age group of Fifty to sixty with a

percentage of 10. With the above analysis we can say that the public awareness is

growing about the Tata AIG insurance company. People have a tendency of

insuring of insuring the risk of their life.

2. OCCUPATION OF CUSTOMERS

S.NO OCCUPATION NO.OF PERCENTAGE

CUSTOMERS (%)
a) Employee 38 38%
b) Businessman 59 59%
c) Farmer 3 3%
 Total 100 100%

70
Percentage 60
50
40
30
20
10
0
Employee Businessman Farmer
Occupation

Regarding the occupation of the policyholders the profession of Thirty-eight

policyholders is employment with a percentage of 38%. Among the total number of

One hundred policy holders surveyed by researcher major are business people their

number is Fifty-nine with 59% of the total

The number of farmer are very few i.e., Three with a percentage of 3% so the above

figures raveling that the awareness about the life insurance among the business about

the life insurance among the business about the life insurance among the business

people is growing.
3.) MARRIED AND UNMARRIED POLICY HOLDERS

S.NO MARRITAL NO.OF PERCENTAGE

STATUS CUSTOMERS (%)

a) Married 69 69%
b) Unmarried 31 31%

Total 100 100%

80
70
60
Percentage

50
40
30
20
10
0
Married Unmarried
Marrital status

Among One hundred policy holders Sixty-nine numbers are married with a

percentage of 69% to the total. This is reveling that individuals will take more care
about life after marriage. This is because of they have to take care of about their life

not only for their future but also the future of dependents. So the insurance companies

can perceive the married people to get more business. Only thirty-one numbers are

unmarried with the percentage of 31%.

4.) CUSTOMERS RECEVING POLICIES THROUGH VARIOUS AGENTS

S.NO CHANNEL NO.OF PERCENTAGE

CUSTOMERS
a) Agent 58 58%
b) Corporate gent 25 25%
c) Employee 17 17%
Total 100 100%

80
60
Percentage

40
20
0
agent Corporate agent Employee
Marrital status

Regarding the policyholders purchased by the policyholders Fifty-eight said that they

purchased policy through agent, twenty five people said that they purchased policy

through corporate agents and seventeen people said that they purchased policy

through employees of the insurance company. These figures reveling that the agents

are playing major role in life insurance business. This is because an agent who has

permanent employee in other organization can perceive his colleagues and motivate

them to purchase a policy. So that, the insurance companies can gets more business

through the agents at cheaper cost.

 5. SATISFACTION LEVELS OF THE CUSTOMERS

S.NO SATISFACTION NO.OF PERCENTAGE

LEVEL CUSTOMERS (%)

a) More Satisfied 64 64%
b) Satisfied 23 23%
c) Less Satisfied 13 13%
Total 100 100%

70
60
Percentage

50
40
30
20
10
0
agent Corporate agent Employee
satisfaction evel
Regarding the customers satisfaction out of the One hundred policy holders Sixty four

policy holders said that the services providing by the company is highly satisfactory

with the percentage of 64%. Twenty-three customers are just satisfied with the

percentage of 23%. Only thirteen respondents expressed that the services are not up to

mark with the percentage of 13%. As the customer satisfaction is more important for

any business. So in there is no dissatisfied customer.

The researcher has conducted survey over 200 external customers to know their

preferences regarding insurance companies.

1. PREFERENCE TOWARDS TATA AIG INSURANCE

S.NO PREFERENCE NO OF RESPONDENTE PERCENTAGE

(%)
1 HIGH 136 68%
2 MODERATE 44 22%
3 LOW 20 10%
Total 100 100%

80
68
70
60
Percentage

50 High
40 Moderate
30 22 Low
20 10
10
0
1 2 3 4
1tqur

From the above figure 68% people highly preferring Tata AIG insurance, 22% are

moderate and only 10% prefer very low.

 2. MARKET SHARE OF INSURANCE

S.NO BRAND NO.OF RESPONDENTS PERCENTAGE

(%)
a) TATA AIG 84 42%
b) ROYAL 36 18%
c) HDFC 32 16%
d) ICICI 48 24%
Total 200 100%

50 42
40
Percentage

Tata AIG
30 24
18 16 Royal
20
Hdfc
10
0
1 2 3 4
1tqur

From the above data 42% preferred Tata AIG and 18% respondents preferred royal,

16% respondents preferring more HDFC, 24% respondents preferring ICICI.

3. PRICE OF INSURANCE

S.NO PREFERENCES NO.OF RESPONDENTS PERCENTAGE

a) Reasonable 136 68%
b) High 64 32%
c) Low NILL NILL
 Total 200 100%

80
70
60
50
40
30
20
10
0
reasonable High low

From the above data we came to conclusion that the price of the Insurance are

reasonable i.e., 68%

Of customers says sand 32% of the customers says that the price of the insurance are

high.

4) NEXT ALTERNATIVE

TATA AIG HDFC ROYAL ICICI TOTAL

TATA AIG 00 40 24 20 84
HDFC 20 00 12 04 36
ROYAL 16 08 00 08 32
ICICI 30 12 06 00 48
Total 200
 When we asked the owner of the TATA AIG insurance that what will be your

next alternative if you want to but another brand insurance and we have gives the

three choices i.e., HDFC, ROTAL, ICICI. 40 respondents said they want to buy

HDFC, 24 respondents ROYAL and 20 respondents ICICI.

When we asked the owners of the HDFC insurance that what will be your next

alternative if we want to buy another brand insurance and we have given the three

choices i.e., TATA AIG, ROYAL, ICICI. 20 respondents said that they would by

TATA AIG, 12 respondents said that they buy ROYAL and 4 respondents said that

they will ICICI.

When we asked the owners of the ROYAL insurance holders that they would

be your nexrt alternative if we want to buy.

 CHAPTER-V

FINDINGS AND SUGGESTIONS

FINDINGS

1. Through the age of Tata AIG is three years its market share is considerable in

Life insurance

2. The Tata AIG could be able to get considerable business because of its

Goodwill and familiarity of the Tata group.

3. The corporate agents and employees of the Tata AIG trying to get green

Pastures elsewhere. So that the labour turnover is very high among the

Corporate agents and employees of the Tata AIG.

4. Due to high labour turnover among the agents and employees there is discontent
 Between the company and the policy holders

5. As the insurance agency work is secondary to the agents they are not showing

much

Interest about this insurance business.

6. As the LIC was a sole player and still major one most of the people trusting LIC.

Still people are not able to understand the changes taken place in insurance industry

.So that the most of the policyholders believing LIC is the only one is life insurance

industry they have no information about the new entrants of the industry and they do

not believe new entrants.

7. The products offering by Tata AIG is not with in the reach of below middle class.

Company also not showing any interest in developing business in this segment.

8. Many people do not know even today that the Tat AIG is doing life insurance

business.

SUGGESTIONS

1. The company has to under take rigorous advertising campaign

activities to promote the business of the agents and employees.

2. The company has to take necessary steps to make agents and employees committed

towards the Tata AIG.

3. The company has to offer incentives to the agents and employees to make involve

whole heartedly in the business.

4. The company has to motivate agents and to improve their business there by the

agents can show much interest about the work.

5.The company has to educate the general public about the changes place in life

insurance industry there by the public can came to know LIC is not the only player

other also major players of the insurance industry.

6. The Tata AIG has to offer life insurance products to all economic classes of the

society.

7. Tata group can make use its good will in the industry towards promoting the

business of Tata AIG. As almost all the companies have to make group insurance,

Tata AIG enters into this segment through its relations to with other companies.

8. Tata AIG has to take much care about the general insurance business. Due to the

position of the group Tata AIG as member of the group companies it can develop its

general insurance business.

ANNEXURE

BIBLIOGRAPHY

QUESTIONNAIRE
 BIBILOGRAPHY

1) FUNDAMENTALS
MARKETING -WILLIAM J.STANTION

2) SERVICES
MARKETING -S.M.JHA

3) JOURNALS -ANALYST

4) WEBSITES -WWW.TATAaig.com
-WWW. Insurance .com
QUESTIONNAIRE
 A STUDY ON CHANNELS OF DISTRIBUTION
IN
INSURANCE SERVICES

Name:

Occupation:

Age:

Sex:

Address:

1. Do you believe in money planning?

Yes No

2.How do you your money planning?

A) Savings

B) Fixed Deposits

C) PPF

D) Stocks-Debentures

E) Others

3. (A) Do you have a money plan for your retirement

Yes No

(B) What would you do to protect your income after you retire?

a) Monthly income scheme

b) Savings

c) Bank

d) Fixed Deposit

e) Post Office
4. How would you arrange for cash if you had Critica illness /Emergency/Accident

a) Medical Insurance

b) Relatives & Friends

c) Don’t know

6. How important is it to have on education fund for your children?

a) Very important

b) Important

c) Not important

6. How important is it to have a marriage fund for your children?

a) Very important

b) Important

c) Not important

7. Do you know what is Insurance?

Yes No

8. Do you think insurance is need for your family?

Yes No

9. Would a good insurance plan benefit your family?

Yes No

10. Would you like a representative call on you to discuss any of the ideas mentioned?
Above?
Yes No

11. Why do you prefer TATA –AIG?

A) Brand Name

B) Range of Price

C) Good Serivce