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Cultura Documentos
Brief Analysis of
EXPANSION OF DISTRIBUTION CHANNEL
at
AVIVA LIFE INSURANCE
NOIDA
Submitted To
KHANDELWAL COLLEGE
Of
Management Science and Technology Bareilly
In Partial Fulfillment Of
MASTER IN BUSINESS ADMINISTRATION
Session : 2006-2008
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EXPANSION OF DISTRIBUTION CHANNEL
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ACKNOWLEDGMENT
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ROHIT SHARMA
PREFACE
The opportunity to bring out project report has been well utilized in thoroughly
analyses and interprets beside retaining and strengthening the plus feature of this report
of Expansion of Distribution channel
I am confident that with all study and adaptation of the working capital is
expected to meet the combined requirement of working capital management of ACME
Tele Power. Constructive and helpful suggestions for improvement in the working capital
will be beneficial for the company.
ROHIT SHARMA
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CHAPTER 1
OBJECTIVE
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OBJECTIVE
company i.e. to increase the Advisor sales force for the company.
end result.
references.
interpersonal skills.
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Understanding the basic target segment for recruiting the
advisors.
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AN INTRODUCTION TO INSURANCE
producing events.
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From the standpoint of the insurer, an insurable risk must meet
destroyed.
occurred and how great that loss is. This is why insurance
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contracts specify very definitely what events must take
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Life insurance industry
income.
was in force. The assets of the more than 2,200 U.S. life
economy.
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Life insurance is relatively little used in poor countries, although
pays a portion of the premium and the employee pays the rest,
but sometimes the employer pays the entire cost of the plan.
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INDIAN INSURANCE INDUSTRY Insurers
Life Insurers:
December'2001)
namely:
Life Insurers:
n Reg.
Number
1 101 23.10.200 HDFC Standard Life Insurance
0 Company Ltd.
0
3 105 24.11.200 ICICI Prudential Life Insurance
0 Company Ltd.
4 107 10.01.200 OM Kotak Mahindra Life Insurance
1 Co. Ltd.
5 109 31.01.200 Birla Sun Life Insurance Company
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1 Ltd.
6 110 12.02.200 Tata AIG Life Insurance Company
1 Ltd.
7 111 30.03.200 SBI Life Insurance Company Limited .
1
8 114 02.08.200 ING Vysya Life Insurance Company
1 Private Limited
9 116 03.08.200 Allianz Bajaj Life Insurance Company
1 Ltd.
10 117 06.08.200 Metlife India Insurance Company Pvt.
1 Ltd.
namely
Life Insurers:
o. tion Reg.
Number
1 121 03.01.2002 AMP SANMAR Assurance Company
Ltd.
2 122 14.05.2002 Aviva Life Insurance Co. India Pvt.
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Ltd.
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Yr: 2003-2004 : ( From 1st Jan 2003 till Date)
namely
Life Insurers:
o. Number Reg.
1 127 06.02.200 Sahara India Insurance Company
4 Ltd.
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INSURANCE SECTOR IN INDIA
The insurance sector in India has come a full circle from being an
in India are:
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• 1938: Earlier legislation consolidated and amended to by
trace its roots to the Triton Insurance Company Ltd., the first
• 1907: The Indian Mercantile Insurance Ltd. set up, the first
business.
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• 1957: General Insurance Council, a wing of the Insurance
Many may not be aware that the life insurance industry of India
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which was started in India in 1818 at Kolkata1. A number of
players (over 250 in life and about 100 in non-life) mainly with
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regulations in line with global norms. So far in the private sector,
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CHAPTER 2
COMPANY PROFILE
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ABOUT THE COMPANY
& DABAR. AVIVA was amongst the first private sector insurance
AVIVA equity base stands at Rs. 9.25 billion with DABAR and
corporate agent tie-ups. For the past four years, AVIVA has
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AVIVA LIFE
30, 2004, the company had over US$300 billion in funds under
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HISTORY OF THE COMPANY
between AVIVA & DABAR . The company brings together the local
12.
From its early days, AVIVA seemed to have the wherewithal for a
When the company began its operations, the need was to build a
brand that was relatable to, symbolised trust and was easily
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masses. The success of the campaign, ‘the calling card of the
company’, saw the brand awareness scores almost at par with its
million, its ninth capital hike, bringing the total paid-up equity
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highest capital base amongst all life insurers in the country. The
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COMPANY’S VISION
“To make AVIVA the dominant Life and Pensions player built on
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The success of the company will be founded in its unflinching
describe what the company stands for, the qualities of its people
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ORGANIZATION STRUCTURE OF AVIVA LIFE
CEO
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COMPANY’S ACHIEVEMENTS
Beginning operations in December 2004, AVIVA’S success has
AVIVA closed the financial year ended March 31, 2004 with a
from last years total premium income of Rs. 4.20 billion. New
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for the second year running. The company is also proud to
have won Silver at EFFIES 2004 for its ‘Retire from work, not
customer a choice. This has been the driving force behind its
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MARKET
For over 50 years, life insurance in India was defined and driven
(IRDA) Bill 1999 paving the way for entry of private companies
into both life and general sectors there was bound to be new-
years since their entry, their cumulative share has crossed 13%
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towards the category and the perception that insurance was only
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BRAND VALUES
marketplace.
service to customers.
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CHAPTER 3
COMPETITION
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COMPETITION
future.
OM Kotak 1.3
Aviva 0.8
MetLife 0.2
LIC 162.8
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CHAPTER 4
JOB DESCRIPTION
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DETAILED JOB PROFILE
this proposal.
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Advantages of becoming a financial advisor with AVIVA life
insurance:
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AGENT/ADVISOR
new business.
commissions.
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ROLE OF ADVISOR
needs,
term commitment.
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ADVISOR BENEFITS
needs,
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Star India club. Each of these clubs have specific performance
locations each year. Advisors can also qualify for the renowned
Confidence
Self motivation
Persuasion
Relationship Skills
Recognition programs
Club Memberships
- President’s Club
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- Achiever’s Club
- MDRT Membership
FOUNDATION PROGRAM
INSTANT RECOGNITION
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awards. These are the trophies accompanied by the certificate
and point rewards given to the advisor for getting off to a flying
start.
assist them in planning for high net worth and building their
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the market. There is a further focus on soft skills such as
insurance.
by the organization.
feel of how their business will work from the very first day. All
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continuous support to the advisors in achieving independence
Company:
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Providing them complete information regarding the
FORMS INCLUDES
DOCUMENTS REQUIRED
forms are:
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Address proof
Seven photographs
SELECTION PROCEDURE
Advisor for that company and has to bring business for them.
criteria:
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Married
5 years.
A Graduate.
AREA ASSIGNED
like friends, relatives, and the reference collected from them. For
Doctors
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Housewives
Businessman
Brokers
Lawyers
Retired persons
Teachers
GIC Agents
Chattered Accountants
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However, a person who is the advisor of the company can bring
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TARGET ASSIGNED
and background.
the people were not even ready to listen, as they were not
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I even came across such people, who were interested towards
this business opportunity, but they were very busy with their
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CHAPTER 5
LIMITATIONS
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LIMITATIONS
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No identity card was issued at all, as a result there was no
Doctors.
the people were not ready to pay Rs. 1000 as the advisor’s
examination fee.
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CHAPTER 6
RECOMMENDATIONS
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RECOMMENDATIONS
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CHAPTER 7
CONCLUSION
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CONCLUSION
India is one of the best markets to be in. Over 75 per cent of its
growth opportunities.
The size of the market has grown and the size of the insurable
life insurance industry which moves with the times by offering its
future.
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According to me, this is an era of mergers and acquisitions. With
companies that are able to best utilize their data and provide
their customer with the most personalized options will have the
tremendous progress.
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ANALYSIS
Policy Holders
A sample size of 50 people has undertaken. The analysis of the questions has been done
with the help of pie charts. It helps is presenting a clear picture of the responses of the
people. The analysis has been done differently for each question. It is as follows:
38%
Yes
No
62%
Analysis:
Only 62 % people own a life insurance policy and rest of the people don’t
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2. Are you aware of various policies offered by AVIVA LIFE and LIC?
Yes No
ICICI Prudential
LIC
4%
Yes 46% Yes
No 54% No
96%
Analysis:
96% people are aware of LIC whereas only 54% of people are aware of
AVIVA LIFE. The reason behind is that LIC is the oldest insurance
player in the market since 1954 and had been enjoying monopoly for the
last 40 years. Where as AVIVA has come into the market only 3-4 years
back.
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3. Do you want any addition in your current policy? Yes No
If yes, specify
Analysis:
policy?
14
12
10
8
6
4
2
0
Risk coverage TaxSaving Saving/ All of the Above
Investment
Factors
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Analysis:
13 out of 31 people want life insurance as a tax saving option rather than a risk
option and only 5 people want all the features in their policies. Only 3 people are
considering risk factor as the major reason for taking a life insurance policy, which is not
an acceptable norm.
5. Do you want to comment on the products & services offered by AVIVA & LIC?
Analysis:
Most of the people whereof the view that both the companies should
come up with new products and improve their marketing strategy for
6. Do you think that services have improved after allowing private players in
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20%
Yes
No
80%
Analysis:
A large number of people are of the view that privatization is the appreciatable step of
sector in India.
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AVIVA & LIC
An interview with the officials of both the companies was conducted and the answers of
1. What do you think are the major problems of Insurance sector in India?
LIC AVIVA
Untapped rural sector Lack of awareness
Illiteracy of people
2. Can you mention some measures, which are required to remove the difficulties
LIC AVIVA
E-Panchayats Marketing strategy should be
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3. What are the market prospects for life insurance in India?
Excellent
LIC AVIVA
Good Excellent
4. Do you think that financial position of people in India becomes a problem in the
LIC AVIVA
No, because we are offering a range of No, because we offer policies with
policies with low premium which can be flexible and affordable premium as per
LIC AVIVA
No No
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LIC AVIVA
Because people are unaware of the People are more oriented towards
benefits what an insurance policy can investment and tax saving rather than
7. India has huge untapped market for insurance. What steps do you take to tap this
market?
LIC AVIVA
Advertising for the awareness Wide spread of our distribution
More advertisements
According to LIC this major step is helping the insurance sector to increase their
market
9. What type of products and services provided by your organization that is better
than LIC/AVIVA?
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LIC AVIVA
Premiums are lower Pension plans are better
of claims, flexibility
A sample size of 50 people has undertaken. The analysis of the questions has been
done and following advantages of AVIVA’S products came into picture under the
following categories:
• UNIT-LINKED PLANS
• PENSION PLANS
• CHILD PLANS
AVIVA
VS
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TATA AIG INVEST ASSURE, LIC BIMA PLUS,MAX NEW YORK LIFE
LifeTime does not have any entry age restrictions based on the term chosen.
LifeTime gives you the option to choose your own term based on your requirements.
LifeTime also gives you the flexibility to choose your premium paying term and still
continue the policy as long as you wish to. LifeTime gives you the flexibility to
completely withdraw the units from the 3rd year onwards, in case of any eventuality.
In case of any unforseen eventuality, LifeTime gives you the option to reduce the
premium amount without any change in the policy benefits. Plus, in case of an
increase in the premium paying capacity of the individual, Lifetime gives you the
case of LifeTime, by using the premium allocation benefit wherein the premium can
your need for protection will also increase. LifeTime gives you the added flexibility
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reward the customers for the persistency in premium payment, LifeTime offers
bonus units at regular intervals based on the premium amount paid. LifeTime does
not have any restriction on the number of top-ups in a particular year. Also the
minimum top-up allowed in LifeTime is much lower and so are the charges. LifeTime
offers partial withdrawals from the 1st year itself in case one needs to withdraw funds
due to any eventuality. LifeTime does not levy a charge on the premium holiday
facility. This is purely available as an additional benefit. LifeTime levies the charges
based on the premium invested and not on the term chosen or the age of the
individual.
PENSION PLANS
AVIVA
VS
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LIC JEEVAN NIDHI,BIRLA FLEXI SECURELIFE RETIREMENT,HDFC
LifeTime Pension II allows you to accmulate till you reach the ripe old age of 75
years giving you the option to maximise your retirement kitty even if you have begun
late. In addition to giving the option of choosing a Sum Assured, LifeTime Pension
also offers a Zero Life Cover option, thereby serving as a pure accumulation vehicle
for your retirement. Lifetime Pension II gives you the flexibility to increase the
contrary, it also allows you to decrease your contribution levels in case of any
your risk profile and investment priorities. It also allows you to switch between funds
at any time. This helps the client to maximise his returns as per his risk appetite.
Jeevan Nidhi does not give such choices. Lifetime Pension II maximises the value for
the client in case he wishes to use some other vehicle for accumulation of his
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retirement kitty. In Lifetime Pension II the client has the option to make an added
payment in the same retirement kitty if he has a windfall gain. To suit your ever-
changing lifestage requirements and risk appetite, LifeTime Pension II offers you a
choice of 4 free switches in a policy year. The customer knows at every point in time
how much he is actually accumulating, net of the charges in the case of Lifetime
Pension II whereas he does not know the same in case of other companies policies
and has to wait for the declaration of bonuses at the end of each year.
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CHILD PLANS
AVIVA
VS
SmartKid gives you the flexibility to choose any one of the structures based on
your needs, whether you require the money at periodic milestones or in the last few
years of the policy. All the future premiums are not waived in case of Jeevan Anurag.
In this case even in the case of the parent's death, the premiums will have to be paid
Income Benefit Rider - which will take care of your child's upbringing and all - round
development, if you are not around. Higher Surrender value offered in case of
SmartKid. Gives you the flexibility to choose any one of the structures based on your
needs, whether you require the money at periodic milestones or in the last few years
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SUMMARY
After analyzing the whole survey I come to know that market prospects of insurance is at
insurance sector in India. Most of the people are aware of the brand LIC as compare to
AVIVA, the reason being that LIC is enjoying monopoly for the last 40 years and ICICI
Prudential is the new player in the market and trying to give a stiff competition to LIC.
People expect some flexibility from LIC and lower premium from AVIVA. In India
policies are sold for tax saving purposes rather than risk coverage instrument.
As per experts views insurance sector is facing a number of problems like lack of brand
image, awareness of insurance needs, timid marketing, and illiteracy etc. Some measures
were suggested by the experts like improved marketing strategies, huge distribution
network, penetrating the rural sector etc. All the players for a better market prospect
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CONCLUSION
For the last few years I have seen the development in the
but still they are performing better with features like online
in the market.
However, still now there is a huge untapped market for insurance in India. In a survey it
was found that still there is 250million strong middle class population of India, which is
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still untapped. On the other hand rural areas and small towns offer a huge potential to the
Insurance companies. This potential was largely untapped due to inadequate distribution
It shows that there is a great scope of insurance business in India. In India health
insurance is also not so popular. The reason behind is that people are not aware of their
insurance needs. In India insurance is sold only as a tax saving and investment option
rather than a risk-cover instrument. In my survey I found a number of reasons for the
inadequate performance of insurance sector in India. Reasons like brand image, lack of
awareness for insurance needs, lack of educated & talented sales force with insurance
problems. Therefore, steps should be taken by AVIVA to overcome these hassles and
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RECOMMENDATIONS
SachinTendulkar .
The vast potential of the 250million strong middle class population of India, can
The key to tap the rural market can be through Co-operative societies, Village
Panchayats and Post Offices. Where the Co-operative societies and village
Panchayats can act as ‘Corporate Agents’ to create the brand image of AVIVA in
ANNEXURE
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Questionnaire 1
(AVIVA)
1 What do you think are the major problems of Insurance sector in India?
2 Can you mention some measures, which are required to remove the difficulties
4 Do you think that financial position of people in India becomes a problem in the
Yes _ No _
Yes _ No _
7 India has huge untapped market for insurance. What steps do you take to tap this
market?
8 What type of products and services provided by your organization that is better
than LIC?
Questionnaire 2
(LIC)
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1 What do you think are the major problems of Insurance sector in India?
2 Can you mention some measures, which are required to remove the
Yes _ No _
Excellent _
Yes _ No _
Yes _ No _
8 India has huge untapped market for insurance. What steps do you take to
Questionnaire 3
(Policy Holders)
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1 Do you own a life insurance policy?
` Yes _ No _
Yes _ No _
Yes _ No _
If yes, specify
5 Do you want to comment on the products & services offered by AVIVA & LIC?
6 Do you think that services have improved after allowing private players in
insurance sector?
Yes _ No _
Questionnaire 4
` Yes _ No _
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2 Are you aware of various policies offered by AVIVA and LIC?
Yes _ No _
Yes _ No _
If yes, specify
5. Which plan you are right now under and why did you bought that?
6. Please comment on the advantages you think AVIVA products have over the other
companies’ products?
Yes _ No _
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BIBLIOGRAPHY
International)
(Response books)
(HPH)
• AVIVA LIFE
Report/Acts
Newspapers / Magazines
• Insurance Post
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• The Insurance Times
THE PROBLEM
Primary objectives-
• An attempt will also be made to study the viewpoint of policyholders and further
Secondary objectives-
To find out the advantages of the policies offered by AVIVA over various
companies.
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An attempt will also be made to study the differentiating strategies adopted by
Research Methodology
Data is collected from both primary & secondary sources. As a primary source a
Articles, , newspapers, magazines, referral books and Internet services have been
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SWOT ANALYSIS OF AVIVA
STRENGTHS
delivery of first policy receipt, policy document, premium notice, final maturity
WEAKNESSES
More or less all players (including the market leader LIC) have
services.
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benefits of each often confuse them; thus it’s the job of
OPPORTUNITIES
companies like Reliance and Sahara will soon enter the fray. According
premia forms only 1.8 per cent of the GDP, indicating the extent of
underinsurance
AVIVA Life Insurance Company has entered into a strategic tie-up with
the Federal Bank for the distribution of life insurance products. AVIVA
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financial service consultants (FSC's) could now approach Federal Bank
customers.
AVIVA Life Insurance Company has recruited talent at a lateral level from various
industries, such as FMCG, banking, telecom, etc, for its middle and senior management
teams. Says Shubhro Mitra, Chief, Human Resources, AVIVA Life, "The candidates
must have the requisite qualifications in their functions and relevant experience, however
not necessarily in the field of insurance. In fact, only two people amongst the senior
management team has any experience in insurance — the head of sales and the chief
actuary. Most importantly, the individuals must have a winning attitude, energy,
willingness to learn and be able to bring fresh ideas and perspectives to the business."
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sector policy will cover larger groups amongst the
the end of the next fiscal and has already sold 1,500 policies
till date. It hopes to break even in four to six years and for
expansion.
A large part of the success of the new entrants ran be attributed to the government-
appointed Insurance Regulatory and Development Agency (IRDA), which developed the
regulatory framework. The regulations governingthe life and non-life insurers are
environment for thriving private sector participation and a level playing field.
Bancassurance and corporate agents are the two emerging channels that give companies
interested in insurance. Moreover, people inherently trust their local bank with which
they have transacted for many years, so an insurance product through that channel is also
regarded with less suspicion. These channels have only just emerged, but are already
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making their mark. With time and the appropriate regulations, the contribution of such
Multiple touchpoints have emerged -- contact centres, email, facsimile, websites, and of
course snail-mail - which enable the customer to get in touch with insurance companies
With the transformation in the industry comes a huge opportunity to tap hitherto largely
ignored segments. One of the most promising areas for life insurers is retirement
solutions. Consider this: Only 89% of the working population in our country has a form
of social security for old age. People in the unorganized sector, selfemployed persons and
this the fact that life expectancy is expected to rise from 77 years to 85 years in the next
decade. And that persons aged 60 and above are expected to form 8.6% of the total
population by the year 2016. It becomes obvious that the task of retirement planning and
Penetration of life insurance is beginning to cut across socio-economic classes and attract
people who have never purchased insurance before. With this heightened awareness and
consumer education comes a willingness to view life insurance as an integral part of the
financial portfolio, marking a significant change from the earlier attitude, where
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THREATS
The Problem:
• AVIVA wanted to service its employees across different functions in the same
• Data flow throughout the organization was via emails – thus all data was stored in
• Data was hence not centrally available to gather information and convert the same
• Employees often spent considerable time in finding out from whom to seek
• With multiple branches all across the country, the need existed to be able to
centrally provide a pool of experts as it was not possible to have experts for every
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• This in turn would mean that a user would have to know the expert, location of
the expert and his availability and correspond with him over email or long
distance phone calls. This was not feasible, as it was not possible to educate all
the users of the different experts and with possible transfer of experts the problem
The Challenge:
• Ensuring the solution becomes the only conduit for employee service.
- 95 -
Major players
Major players in the market include ING Vysya, ICICI PruLife, SBI Life, HDFC, AMP
Sanmar, Birla Sunlife, Max New York Life, Met Life, Tata AIG, Oriental Insurance,
Objective
Some insurers, such as AVIVA, have fulfilled their mission to be a scale player in the
mass market by intro-ducing a range of 13 products to meet the needs of each customer.
Others have taken a more focused approach, introducing select products that they believe
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