Marketing of life insurance products in IndiaFirst year premium of life insurance sector in India increased 3.5% as the tax season is approaching and people are increasingly seeking for insurance products.The Insurance Regulatory Development Authority (IRDA) revealed in its report for January 2009 that the Indian life insurance sector witnessed 3.5% growth in its first year premium during April 2008-January 2009, as reported by Total Premium income stood at Rs 13,043 Crore ($2.6 Billion) in January 2009 whereas it was recorded at Rs 65,337 Crore ($13.1 Billion) during April 2008-January 2009. Private insurance companies witnessed a decline of 24% in FPI in January 2009 while Life Insurance Corporation of India (LIC) posted 72.53% FPI growth during the same month. Life Insurance sector is projected to grow 20% in the current year, driven by soaring demand for both single premium and unit-linked policies.The prime factor for the exponential increase in Indias FPI is that the period spanning from January to March is regarded as the period of heavy sales for the life insurance sector. Insurance companies that trial behind during the initial period of any fiscal have been relying upon this crucial period of the year to meet their targets for that particular fiscal year. Since every individual focuses on his/her tax planning during this time period, sales of insurance products increase considerably.Moreover, all the insurance companies are making efforts to end this fiscal year on a high note. Consequently, they have intensified their field activities to get the optimum productivity from the distribution channels, leading to the increase in FPI during the review period.Furthermore, the introduction of new products, such as Jeevan Aastha launched by LIC, received wide customer acceptance and thus, helped LIC to register huge premium income in a short term.According to a Research Analyst RNCOS, Indian insurance sector remains hugely untapped as its life insurance sector is still young and under-penetrated. Besides, more than 50% of the Indian population lies within the age group of 20-60 years. Indians take insurance products as investment tools and buy these policies from the perspective of long-term investmentsLife Insurance industry to grow 15 per cent this fiscalMUMBAI: The life insurance industry in India is expected to grow by 15 per cent this fiscal and may cross the Rs. 2.5lakh crore mark in total premium income by March-end, industry body Life Insurance Council said.This growth in premium income includes new business as well as renewals, driven by increasing awareness on the value of getting insured.Despite a slowdown in the economy, the life insurance industry has continued to grow as policy-holders are realizing the value of insurance, Life Insurance Council Secretary General, S B Mathur, said in a press release. We continue to be optimistic about the future of the insurance business in India and expect the industry to grow by about 15 per cent. We stand committed to achieve a target of Rs. 2,55,000crore in total premium for FY10, he said.Total premium income for the industry stood at Rs. 2,21,688crore for fiscal 2009, data from the council said.The Life Insurance Council, the industry body for all the life insurance companies in India, releases quarterly data for 22 life insurance firms including public sector giant Life Insurance Corporation (LIC).Indian life insurers have recorded a robust growth of over 18 per cent for the first six months of FY10 with total premium collections of Rs. 1,01,976 crore against Rs. 86,571 crore collected in the same period last year.

Life insurance sector to grow 15% this fiscalHYDERABAD: The life insurance industry which saw its assets grow seven-fold to over Rs. 14 lakh crore in the last decade, expects growth to temper to 10-15% during the current fiscal as it balances the challenges of growth and profitability.At a CEO roundtable organized by the Life Insurance Council in Hyderabad, industry honchos were of the view that growth would be in the 10-15% range as the product mix sees a shift towards traditional policies. The Life Council is now working on a vision document where it will highlight how the industry will evolve in the next decade.According to M N Rao, MD, SBI Life, by a rough estimate, the new business premium of the life insurance industry should grow by 10-15% during the current fiscal. But the big challenge for insurers would be to ensure that all their earlier policies are renewed. It is an acknowledged fact that renewal premium will be the main driver of profit he said.Largely on the back of sales of high value unit-linked insurance plans. However, a cap on charges and an insistence on a minimum level of protection under every policy by the regulator had resulted in a partial shift back to life Rs. 14.8 lakh crore. The life industry which recently completed 10 years of operations, had an investment portfolio of insurance policies.Even if number of agents and productivity are at the same level, the new business premium will be lower because the average ticket size of traditional plan is much lower than unit linked insurance plan said T R Ramchandran, MD, Aviva India Life Insurance.Last fiscal (10-11) the life industry grew its premium from new policies to Rs. 1.25 lakh crore from Rs. 1.09 lakh crore largely on the back of sales from LIC. Private life companies as a group recorded negative growth.Part of the reason for negative growth in the private sector was decision by companies to cut costs and focus on profits. Also the new regulations, because of the cap on charges, have forced companies to cut costs. Cost rationalization is a continuous journey. The regulations have only accentuated the change process said Sandeep Bakhshi, MD, ICICI Prudential Life Insurance.He added that there has already been a rationalization of products and there has also been a shift towards traditional insurance plans.

CHAPTER: 5MARKETING MIXMarketing mix is the most common and popular term related to marketing. The term marketing mix gained popularity after it was used by Neil H. Borden in his speech at the American Marketing Association. E. Jerome McCarthy put forward Four P criteria in 1960, which has been in use since then.These five marketing elements crucial in marketing a product or service. A right mix of these elements ensures that the product reaches the target customer.The marketing manager can follow a predetermined mix or device a new mix for himself depending on the requirements.1.PRODUCT MIX:Product is anything that can be offered to a market to satisfy a want or need. A product mix is a set of all product an item that particular seller offer for sale. In case of insurance sector, the product mix comprises of life and non life insurance policies that are offered to the customer by the company. A company products mix has certain Width, length and depth The Width of a product mix:It refers to how many different product line are available. In case of insurance sector, there are generally three different product line i.e. life insurance, marine insurance, fire insurance. Life insurance is a financial resource for your family and loved one in case of death. It is a contract between you and insurance company in which the company provides your beneficiary with a certain amount of money upon your death, in return you pay premium in an amount that depends on medical history. The length of the product: It refers to the total no. of item in the mix, in case of insurance sector. The depth of the product mix:The various products and various type of product with distinct feature, in the insurance sector are policy can be made available in different variation. Some of the examples are as follows:1. Whole life insurance.2. Whole life with profit policy.3. Limited payment whole life policy.4. Single premium whole life policy.2. PRICE MIX:Price is one element in the marketing mix that produce, revenue, all the other element produce costs. Prices are the easiest marketing mix element to adjust product, feature, channel and even promotion taken more time. Price also community to the market the company intended value positioning of its product or brand.In the insurance business the pricing decision are concerned with the premium and credit facility, commit ion charge, for underwriting and consultancy services.PREMIUM: Premium are the periodic payment usually monthly or quarterly. The policy holders pays to the insurance company to purchase and keep a policy on force.For example in case of life insurance according to the policy it may be the amount payable during the endowment term of the policy or until the death of the life assumed whichever is earlier. The common query raised by client with their insurance agent is why does his insurance company charge more premium for the same cover and tenure, we have tried to address this query below.Insurance is essentially a matter of sharing risk. A thousand people contribute a certain fixed amt and in future if something were to go wrong with any of the large contributor the lump some collected is used to compensate for the loss.The basic on which the insurance company decides the amt of premium to be paid by each person is determine mainly by these three factors. Mortality table: All insurance company refers to different mortality table. This table differs from country to country. The mortality table indicates the probability of a person dying in a particular age group. For example, in age group of 25-30 yrs, the probability might be just two but this probability would increase for a higher age group 45-50. Life insurance company with its long standing pursuance has mortality table which is grocery outdated. Some other insurance companies have got their own table but they are more or less in line that of LIC. Expected surplus: The premium collected by the insurance are invested in capital market. There is a fixed investment pattern for the investment.Expected surplus: The premium collected by the insurer is invested in the capital market. There is a fixed investment patter for the insurer. Out of the surplus on the premium invested 95% is distributed to the policy holder and the insurance company retain the balance 5% if an insurer expect to earn more return on his investment then he would charge more premium to his investor. It also depend on the nature of return, the insurer is planning to give his policy holder. A compounded return mean higher premium for the life to be assured.Expenses: An insurance company has to incur expense in the form of commission to the agent, office expense, advertisement expense, salary to employees. These expenses are to be managed by the company in the 5% surplus earning which they earned as mention below.In order to meet the above expense the insurer has to collect more premium so that there is more surplus from which expense can be meeting. Therefore even if the insurer premiums are a bit higher compared to other it is justified for the security of is policy holder and basically for its survival in age long run. Now the critics on which the premium amount is fixed are different from different type of insurance.Life insurance pricing: The pricing in case of life insurance is done in the basis of:Life Expectancy: In case of life insurance the premium amount tends to be different for different customer. This differentiation on the basis of Age, Medical history of a person.Age: Example, low premium is charge for children and youngster as it is assumed that they are at lesser risk of death as compared to the aged people.3. PLACE MIX:LIC place mix: LIC has one corporate office at yogekshma which is in Mumbai. They have 18 main branches, which make up one division, there are total 18 such division which make up a zone. There is total 7 zone office.

A single branch or lic consist of four different department mainly Sale New Business Account Policy ServicingThese branch work as per co-ordinated effort of these department for the employee of lic (development officer/ agent), there is no such fixed formula of insurance. Now within a branch, following is the decentralised organization structure in LIC. Manager/administrative Development office Agent/high grade Peons etc.From the above decentralized org structure, we find that there is a main manager/ administrative officer, is responsible to control the employee under him. Then we have the development officer, who according to lic is their pr officer. This development officer carries out the duty of a pr officer. This development officer carries out the duty of a pr officer under the development officer, there are the agent who are mainly responsible for carrying out the task of selling the policy to the respective clients.Place mix can be differ physical distribution i.e. the delivery of goods/service at the right time at the right place to the customer. Place decision involve building relationship with the wholeseller, retailer and through intermediaries building relationship with the customer. Product and service must be at the right place, at the right time in order to be consumed. Probably the best way to perceive place is to think of flow of product from manufacturer through intermediaries to the customer user. These flow can be through as a channel used to move goods and service. The channel of distribution in component of the place mix.4.PEOPLE MIX:Employee: Employee are very crucial because they are the servicethey are the breadthey are the marketerthey are the organisation in the eyes of the customerThe various employee involved in providing service to the customer in insurance sector. Customer service representative: they process insurance policy application charge, and cancellation. They review application for completeness, complies data on policy change, and verify the accuracy of insurance company record. They may also process and claim and sell new policy to existing clients. A growing no of customer service representative work in call center that are open 24hrs a day, 7 day a week, where they answer client question, updated policy information and providing client with information regarding the type of policy the company issues more than a 28% of insurance worker are in mgmt or business and financial operation occupation. Marketing and sales manager: These constitute the majority of manager in carrier local sales office and in the insurance sales agent segment. These employee sell insurance product, work with client and surprise staff. Other manager who work in their company home office are in change of function such as actuarial calculation, policy insurance, accounting and investments.Claims Adjusters, appraises, examiner and investigator: These decide whether claim are covered by the customer policy confirm payment, and when necessary investigate circumstance ground by a claims. Claims adjuster work for property and liability insurance carrier or for independent adjusting firm.They inspect property damage estimate how much it will cost to repair and determine extent of their insurance companies liabilities in some case. They may help the claimant receiver assistance quickly inorder to prevent further damage and begin repair adjuster plan schedule the work require to process claims, which may include, interviewing the claimant and witness and consulting policy and hospital record. In some property casually claims adjuster are called claim examiner, but in other companies a claims examiner primary job is to review claims to ensure that proper guidelines have been followed, only occasionally especially when disaster suddenly incure the volume of claims, do these examiner aid adjuster with complicated claims. Insurance investigation handle claims in which companies respect for fradulentor difficult to explain accident and dubious medical treatment. Investigator usually perform database research in respect to determine whether they have a history of attempted or successful insurance fraud, then the investigator often consult with legal consumer and are some times called to testify as expert witness in court cases.5. PROMOTION MIX:Promotion is a descriptive term for the mix of communication activities which is a service organization carries out in order to influence the target customer on whom their sales depend. It is an element in an organizations marketing mix that serves to informed, persuade, or/and remind people about an organization or individual goods, service, image, ideas, communities. Involve or impact on the society it is used in hopes of influencing the receipt feeling, belief or behavior through any form of communication.1. Identification of target market:The target market is focus of deciding the promotion mix. The total no of groups is analyzed and decision is to take regarding which segment is to be target. Ex. LIC has introduced a new life insurance policy especially for children (jeevanAnurag)2. Determination and setting objective:Service marketer employee a range of promotion method, so it is essential to what the promotion has to achieve, it is necessary to defined marketing objective clearly so that most effective type of promotion is design and utilized.In case of insurance sector, the main objective of a promotion campaign will be To make all or maximum population assure of the various insurance policies of the company. To promote the advantages of all the insurance policies. To make the people aware of the risk involved and the importance of taking insurance.Ex. LIC conduct seminar and mass marketing campaign in order to make the customer aware of insurance and why it is needed.3. Message development for right communication effect:The message is an instrument for converting a suspect into prospect. To obtain an effective response from the target market, there is always need to plan an effective message such that promotion effort cause. Building of brand image Service awarenessThe promotional message should aim. To provide knowledge for service. To ensure that customer will have a positive perception for service promoted. To build up preference for service offered.In the insurance sector, LIC and Met Life insurance are example of companies who have promotion mix to promote insurance ex. LIC promotes its life insurance using the slogan Zindagi ke saath bhi, Zindagi ke baad bhiProduct, price various scheme and lots of other information people also purchase the product through this websites.1. Television: Companies like LIC, MET life India, advertise on television to make people aware of their product & services.

2. Radio: ICICI prudential advertise on 92.5 red FM.

3. Hoarding: LIC put its hoarding where there is a mars. Slow of people especially outsiders the railways station or at the backside of the bus when met life was in introduces it has put his hoarding on the side of the trains of target huge nos of people.

4. Browser: Companies provide to the customer so that they can have a look on various schemes and their prices e.g. lic have browser of various scheme that are available different language. They provide the browser of the scheme the customer has chosen. In the language which they understand browser will provide the customer the influence like features.

5. Advertising: It is a paid form of non-personal in communication.

6. Newspapers & magazines: LIC gives ads in the newspaper and magazines round the years to continue its brand image and also when new products are introduce normally its ads are publish in times of India.

7. Electronic media: Insurance companies also advertise its services in electronic media.

8. Internet (websites): Companies like LIC all have web sites from which people can get the information below there:1. Overall marketing objective2. Activities of the competitors3. Characteristicof target customer4. Cost effective etc.The types of promotion methods used in insurance sector are as follow1. Advertising2. Public Relation3. Sales promotion4. Personal selling5. Words of mouth2. Personal Selling:1. Agents: It is the most widely used method of promotion by all insurance companies they recruit trains, and motivates the insurance agents to confidence the customer to claim of the customer.Roles and selection of agent in lic1. Press release: This helps the company to convey its message to its customer and other people.2. Seminars: These are held to provide information about the new products launched position of the company in the market.Sales promotion:1. Gifts: LIC provides diaries, pens, booklets etc to its customer.2. Sponsoring events: Eg. Max New York Life Insurance company has sponsored the event India.1. Staff: Staff should be adequately trained so that they help in increase in sales. LIC policies are sold and not purchased and this sailing is done by agents constitute around more than 75% of the lic sales so agents are very important. For lic select the agents on the following basis. Minimum education up to HSC How to under grow 100hrs training Pass the test with more than 50% conducted immediately after training Then he gets the license for 3yrs and after 3yrs he has to renew the license He has to sell 12 policies worth minimum 1 lacs in yrs He receives communication per policy normally it ranges up to 15%-25% the premiumpaid.

2. Words of mouth: Words of mouth promotion plays the role of hidden sales source the word of mouth promotion is normally carried out by customer, agents and employees. It can be positive or negative depending upon the services or experience they receives.

3. Customer: It is important for the organization to provide customer with quality services so that he is satisfied and spread the goods word of mouth. On the contrary if the customer is not satisfied with the services or experience he spread bad word of mouth.E.g. LIC settles the claims of the customer within 1-2 days which is latest in the world and thereby providing them with quality services so that customer is satisfied and spread good word of mouth. It also maintains good relationship with their customer.

4. Agent: LIC maintains good relationship with their agents if they continue target assigned to them LIC gifts them extra % on premium. Thereby keeping them happy so that they spread good word of mouth to their agents. Promotions done by LIC in rural are lic market may be reducing in urban areas but it is still 100% in rural area. This is because of the premium strategy adopted by LIC. What lic does in rural areas? Lic does the promotion when the panchayat meetings are held, as all the people meet in the panchayat meeting LIC can communicate to a huge mass of the people to promote in policies. People in the village are hungry influenced by the word of mouths promotion so what LIC does is, it give some money to the sarpanch.

CHAPTER: 6MARKETING STRATEGYA marketing strategy is a process that can allow an organization to concentrate its limited sources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. It defines objectives and describes the way youre going to satisfy customers in your chosen markets. It does not have to be written down but it is easier to communicate to outsiders, like your bank manager or other investors.Types of strategies Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented be below: Strategies based on market dominance- In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: Leader Challenger Follower NicherLIFE INSURANCE CORPORATION OF INDIA (LIC)Life Insurance Corporation of India (LIC) was formed in September, 1956 by an Act of Parliament, viz., Life Insurance Corporation Act, 1956, with Capital contribution from the Government of India. The Finance Minister, Shri C.D. Deshmukh, while piloting the bill outlined the objectives of LIC. Thus, to conduct the business with the utmost economy, in a spirit of trusteeship; to charge premium no higher than warranted by strict actuarial considerations; to invest the funds for obtaining maximum yield for the policy holders consistent with safety of the capital; to render prompt and efficient service to policy holders, thereby making insurance widely popular.Since nationalization, LIC has built up a vast network of 2,048 branches, 100 divisions and 7 zonal offices spread over the country. The life Insurance Corporation of India also transacts business abroad and has offices in Fiji, Mauritius and United Kingdom. LIC is associated with joint ventures abroad in the field of insurance, namely, Ken-India Assurance Company Limited, Nairobi; United Oriental Assurance Company Limited, Kuala Lumpur and Life Insurance Corporation (International) E.C. Bahrain. The corporation has registered a joint venture company on 26th December, 2000 in Kathmandu, Nepal by the name of Life Insurance Corporation (Nepal) Limited in collaboration with Vishal Group Limited, a local industrial group. An off-shore company L.I.C. (Mauritius) Off-shore Limited has also been set up in 2001 to tap the African insurance market. There are total 13 life insurance companies operating in India, of which one is Public Sector Undertaking and the balance 12 are Private Sector Enterprises.List of Companies are indicated below:NAME OF THE LIFE INSURANCE COMPANY AND THE SHARE HOLDING PATTERNNAME OF THE INSURANCE COMPANYNATURE OF HOLDING

Allianz Bajaj Life Insurance COPrivate

Aviva Life InsurancePrivate

Birla Sun Life Insurance COPrivate

HDFC Standard Life Insurance COPrivate

ICICI Prudential Life Insurance COPrivate

Life Insurance Corporation of IndiaPublic

LIC V/S ICICI PRUDENTIAL IN TERMS OF PRODUCT VARIATIONLife Insurance ProductLICICICI

Term Insurance policyYesYes

Whole life policyYesYes

Money back policyYesYes

Annuities and pensionYesYes

Critical illness policyNoYes

Education insurance policiesYesYes

United linked insurance productYesYes

Senior citizen policiesYesNo

Wealth creation policiesNoYes

NAME OF THE PLAYER MARKET SHARE (%)Life insurance corporation of India82.3

Icici Prudential5.63

Birla Sun Life2.56

Bajaj Allianz2.03

SBI Life Insurance1.80

HDFC Standard1.36

TATA AIG1.29

MAX NEW YORK0.90

What are the Elements of A Marketing Plan?A marketing plan is generally created for two main purposes and its purpose determines what it contents should be.1. The first purpose for a marketing plan is to communicate to someone that youve given thought to the marketing strategies youre going to be employing and understand the market youre going to be participating it. Lets call this the Business School Marketing Plan.2. The second purpose of a marketing plan is to guide executive to your marketing activities. It includes both elements of strategy as well as tactics. Lets call this the Marketing Action Plan.Some might make a distinction between the two purposes above and call one a strategic marketing plan and the second a tactical marketing plan. This is true but only on the surface level. Youll understand why by exploring what the elements of each plan are so lets explore.

CHAPTER: 7MARKET SEGMENTATION OF LIFE INSURANCEThe term market refers to the collective of existing and proportion customer or the product. In life insurance, the task of formulating the overall marketing strategy cannot perform satisfactorily till market segmentation. This is because is vast, the potential policy holder are in a large number and their need and requirement are diverse. There are no of similarities in the market segmentation of banking and insurance services. Insurance market segmentation is done on the basis of region. The entire nation is divided into four zone viz. Central, Eastern, Western, Northern zones. If the market segmentation is done in the right way the marketer find it convenient to identify the market. The main purpose of segmentation is to know the policy holder. It is natural that the need and requirement of the potential policyholders belonging to different zones or region cannot be uniform. Particularly, in the Indian environment. We find a large number of rural prospects. In order to transfer them into actual policyholder.The segmentation can be made on the basis of characteristic of customer. The segment may be as follows: Individual Small trader Transport operator Industrial unit

1. Market planning: For proper segmentation and choice of target segment, which is the basic of further market planning, it is necessary to identify the various characteristic of the market. Geography and Demographic characteristic may appear to easy to know, but they are relevant for segmentation, only if they are relevant to the tendencies of the customer preference choice. Knowledge about relevant parameters and characteristic is the field of market research.2. Market planning: Market planning refers to the planning of all marketing activities. These includes:

Setting marketing objective based on scanning of the environment for opportunities and internal assessment of strength Formulating marketing strategies and tactics Monitoring of evaluation of events, internal and externalThe purpose of planning are to:i. Focus on costs, revenue, marginii. Focus on objectives and action planiii. Set and communicate specific business targetiv. Schedule and co-ordinate promotion and other marketing actionv. Monitor and evaluate results, in relation to planed targetPromotion of the insurance productInsurance marketing depend on effective promotional measure. The magnitude and dependence in case of insurance service is high. Creations of awareness is found very much instrumental in the generation of impulse buying in a country like India, the rate of literacy is very high and rural economy has dominance in the national economy. It is personal to have both personal and impersonal promotional strategies. The relation of agent and imparting them proper training facility to create impulse buying important advertising and publicity measure, organization of conference and seminar incentive it policy holder, are impersonal communication arranging Kistan, exhibition participation in fair and festival.A) Insurance Distribution channels1. Direct selling2. Corporate Agent3. Partner of company4. Group selling5. Worksite marketing6. Broker and corporative societiesB) Alternative Distribution channel1. Bancassurance2. Selling through or authorized of corporate3. Call centre4. Co-operative society or brokerMarket segmentation for Market trend analysis Market segmentation creates segments with the same or similar attributes. It normally uses the following attributes to generate market segments. One or more of the attributes may be used to define market segments. Geographical regions: regions, countries, states, zip-codes, etc. Demographics: gender, age, income, education, etc. Psychographics: life style classification Sales channels, branches, and departments Product and service types (or product categories) Products. Offer types.Segmentation provides opportunities for trend analysis. Trends and patterns embedded in changes of sales revenues can be useful indicators for market shifts. Trend analysis may answer the following types of segment trend information; What are projected sales revenues for the next three months (or quarters)? Which segments are having highest growth in dollar terms? Which segments are having highest revenue decline in dollar terms? Which segments are having highest growth rates in percentage terms? Which segments are having highest revenue decline rates in percentage terms? How solid the growth or decline trend is? Which segments are showing exponential growth?

CHAPTER: 8DISTRIBUTION CHANNELS IN INSURANCEAn insurance cover is an intangible product evidenced by a written contract known as the policy. Insurers market various insurance covers either directly or through various distribution channels- individual agents, corporate agents (including Bancassurance) and Brokers. The marketer in the distribution network is in direct interface with the prospect and the customer.Life insurance products are sold through individual agents and many of them have this as their only career occupation. General insurance products are sold through individual agents and brokers.Distribution channels such as agents are licensed by the IRDA. To get an agency license, one has to have certain minimum qualifications; practical training in insurance subjects and pass an examination conducted by the Insurance Institute of India.IRDA regulations on licensing of agents/brokers lay down the code of conduct for individual agents, corporate agents and brokers. A separate note on the code of conduct is appended to this note.Thus it is seen that the dos and donts for these intermediaries are given clearly at the point of sale as well as in the event of a claim. Service does not end with the customer receiving his document; it in fact only begins here. After sales service is an important or even more important- like when a refund has to be made or when a claim has to be made.One of the issues that is of great concern affecting professionalism in insurance activities is resorting rebating by intermediaries. Rebating is prohibited as per Section 41 of the Insurance Act, 1938 and the public are advised not to deal with intermediaries offering rebate of any kind.Relating means a share of commission receivable by the agent/broker is given to the prospect/client. This is done to attract the client in the purchase of insurance contract by offering cash. Competition among agents/brokers is so cut-throat, some agents indulge in such unethical practices. Public are advised not to ask for any prohibited rebates in premium since commission payment to an agent is the only income for some to take care of their families. Similarly, agents are also advised not to indulge in such practices which could cause then loss of agency income.INSURANCE AGENTEvery insurance agent shall identify himself and the insurance company of whom he is an insurance agent; disclose his license to the prospect on demand. disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan; disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect; indicate the premium to be charged by the insurer for the insurance product offered for sale; explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance contract; bring the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called Insurance Agents Confidential Report) along with every proposal submitted to the insurer, and any material fact that may adversely affect the underwriting decision of the insurer as regards acceptance of the proposal, by making all reasonable enquiries about the prospect; inform promptly the prospect about the acceptance or rejection of the proposal by the insurer; obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for by the insurer for completion of the proposal; render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlements of claims by the insurer; advise every individual policyholder to effect nomination or assignment or change of address or exercise of options, as the case may be, and offer necessary assistance in this behalf, wherever necessary;No insurance agent shall---- solicit or procure insurance business without holding a valid license; induce the prospect to omit any material information in the proposal form; induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal; behave in a discourteous manner with the prospect; interfere with any proposal introduced by any other insurance agent; offer different rates, advantages, terms and conditions other than those offered by his insurer; demand or receive a share of proceeds from the beneficiary under an insurance contract; force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination; have in case of a corporate agent, a portfolio of insurance business under which the premium is in excess of fifty percent of total premium procured, in any year, from one person (who is not an individual) or one organization or one group of organizations; apply for fresh license to act as an insurance agent, if his license was earlier cancelled by the designated person, and a period of five years has not elapsed from the date of such cancellation; Every insurance agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by tge policyholders within the stipulated time, by giving notice to the policyholder orally and in writing;CORPORATE AGENTEvery Licensed Corporate Agent shall abide by the code of conduct specified below:Every corporate agent shall: be responsible for all acts of omission and commission of its corporate insurance executive and every specified person; ensure that the corporate insurance executive and all specified persons are properly trained, skilled and knowledgeable in the insurance products they market; ensure that the corporate insurance executive and all specified persons do not make to the prospect any misrepresentation on policy benefits and returns available under the policy; ensure that no prospect is forced to buy an insurance product; give adequate pre-sales and post-sales advice to the insured in respect of the insurance product; extend all possible help and cooperation to an insured in completion of all formalities and documentation in the event of a claim; give due publicity to the fact that the corporate agent does not underwrite the risk or act as an insurer; enter into service level agreements with the insurer in which the duties and responsibilities of both are defined.Every corporate agent or a corporate insurance executive or a specified person shall also follow the code of conduct specified below: Every corporate agent/corporate insurance executive/specified person shall identify himself and the insurance company of whom he is a representative; disclose his license/certificate to the prospect on demand; disseminate the requisite information in respect of insurance products offered for sale by his insurer and take into account the needs of the prospect while recommending a specific insurance plan; disclose the scales of commission in respect of the insurance product offered for sale, if asked by the prospect; indicate the premium to be charged by the insurer for the insurance product offered for sale; explain to the prospect the nature of information required in the proposal form by the insurer, and also the importance of disclosure of material information in the purchase of an insurance sector; bring to the notice of the insurer any adverse habits or income inconsistency of the prospect, in the form of a report (called Insurance Agents Confidential Report) along with every proposal submitted to the insurer, and any material fact that may adversely affect the under writing decision of the insurer as regards acceptance of the proposal by making all reasonable enquiries about the prospect; inform promptly the prospect about the acceptance or rejection of the proposal by the insurer; obtain the requisite documents at the time of filing the proposal form with the insurer; and other documents subsequently asked for the insurer for completion of the proposal; render necessary assistance to the policyholders or claimants or beneficiaries in complying with the requirements for settlement of claims by the insurer; advise every individual policyholder to effect nomination or assignment or change of address or exercise of options. as the case may be, and offer necessary assistance in this behalf, wherever necessary;No corporate agent/corporate insurance executive/specified person shall --- solicit or procure insurance business without holding a valid license; induce the prospect to omit any material information in the proposal form; induce the prospect to submit wrong information in the proposal form or documents submitted to the insurer for acceptance of the proposal; behave in a discourteous manner with the prospect; interfere with any proposal introduced by any other insurance agent; offer different rates, advantages, terms and conditions other than those offered by his insurer; demand or receive a share of proceeds from the beneficiary under an insurance contract; force a policyholder to terminate the existing policy and to effect a new proposal from him within three years from the date of such termination; No corporate agent shall have a portfolio of insurance business from one person or one organization or one group of organizations under which the premium is in excess of fifty percent of total premium procured in any year; apply for fresh license to act as an insurance agent, if his license was earlier cancelled by the designated person, and a period of five years has nit elapsed from the date of such cancellation; become or remain a director of any insurance company;Every corporate agent shall, with a view to conserve the insurance business already procured through him, make every attempt to ensure remittance of the premiums by the policyholders within the stipulates time, by giving notice to the policyholder orally and in writing.No director of a company or a partner of a firm or the chief executive or a corporate insurance executive or a specified person shall hold similar position with another corporate agent of any other insurance company.INSURANCE BROKER Every Insurance Broker shall follow recognized standards of professional conduct and discharge his functions in the interest of the policy holders. Conduct in matters relating to clients relationship Every insurance broker shall: conduct its dealings with clients with utmost good faith and integrity at all times; act with care and diligence; ensure that the client understands his relationship with the broker and on whose behalf the broker is acting; treat all information supplied by the prospective clients as completely confidential to themselves and to the insurer(s) to which the business is being offered; take appropriate steps to maintain the security of confidential documents in their possession; hold specific authority of client to develop terms; understand the type of client it is dealing with and the extent of the clients awareness of risk and insurance; obtain written mandate from client to represent the client to the insurer and communicate the grant of a cover to the client after effecting insurance;

CHAPTER: 9COMPARISON BETWEEN PUBLIC ANS PRIVATE IN TERM OF PRODUCT POLICYCOMPARING Endowment PoliciesCOMPANYPOLICYFEATURE

LICJeevan Anand:Endowment scheme, Rs. 4047 yearly premium for a 30 year old person for an assured sum of Rs. 1 lakh for 16-year period.Loan facility accident benefit cover sum assured + bonus

ICICI prudential LifeICICI pru save n protect:For a 20- year policy of Rs. 2 lakh sum assured. A 30-year old will pay an annual premium of Rs. 8868 to get about Rs. 4.80 lakh on maturity.Rider option for accident, disability and critical illness available

Comparing Money Back PoliciesCOMPANYPOLICYFEATURES

LICMoney back: Rs. 6564 annual premium for the 3-5 year old for an assured sum of Rs. 1 lakh over 20-year period.Jeevan Chaya:Rs. 5686 annual premium for the 3-5 year old for an assured sum of Rs. 1lakh over a 20-year period.

Jeevan Surabhi:Rs. 9581 annual premium for the 35-old for an assured sum of Rs. 1 lakh over 20-year period.Bima Gold:This insurance policy can be taken by the person who has age between 1463 years and for the period of 75 years, till the afe 12, 16 and 20 yrs Min Rs. 40,000. MAX no specific limit. SA in multiple of Rs. 5,000 only.

Cash back:Interim benefit every 5 year, accidental benefit rider, and declared bonus of Rs. 65 per Rs. 1000000 in the last year.

Interim benefit of Rs. 25,000 in 4th , 8th, 12th, 15th years, accidental benefit rider cover increase by 50% every 5 year beginning from the 6th year and premium paying term is less than the term of the policy.

Comes with accidental benefit rider.

Payable at the end of the specified duration provided the policy is in full force as given below:FOR policy term 12 year: 15% of the sum assured under Basic plan at the end of each 4th and 8th year policy For term 16 year: 155 of the sum assured under basic plan at the end of each 4th. 8th and 12th policy year For policy term 20 years: 10% of the sum assured basic plan at the end of each 4th, 8th, 12th and 16th policy year.Interim benefit of Rs. 10,000 in the 4th year.

ICICI PRURs. 6618 annual premium for the 35 year old on assured sum of Rs. 1 lakh over 20year period.

15000 in the 8th year,20,000 in 16th year, accident benefit rider, guaranteed return @3.5% per annum for the first 7 year, 120%% of the sum assured is returned during the tern of the policy.

Comparing Term PlanINSURERPOLICYFEATURE

LIC Anmol JeevanAnnual premium of Rs. 2,813. The plan offer less than 2 year temporary insurance provision and it can be converted to whole life or an endowment insurance plan after 5 or 7 years.

ICICI PRUDENTIALLife Guard level Team AssuranceAnnual premium of Rs. 2,680. Accident and disability benefit rider is available.

CASE STUDYLife Insurance Marketing in India the changing product and pricingThe Changing Product ProfileIn July 2002, Indias state-owned insurer Life Insurance Corporation of India (LIC) launched a new insurance policy, Anmol Jeevan (Priceless Life). This was seen by industry observers as something LIC had to do in the wake of the increasing competition in the insurance sector. Before the launch of Anmol Jeevan, two of LICs major competitors, ICICI Prudential Life and HDFC Standard Life had launched similar, competitively priced insurance products. In the newly opened Indian insurance sector, private insurers were coming up with many innovative products, offering riders on the policies in order to woo the consumers. LIC, which has been exercising monopoly in the Indian insurance sector, had been offering only plain policies without any riders to its policyholders. Analysts pointed out that LIC never seemed to have any proper strategy for bringing out innovative products and customer-friendly pricing of its products. Though LIC offered around 60products, only seven to eight were popular with policyholders.With almost all private players premium rates being more or less similar to LICs premium rates, the only areas where they could distinguish themselves was in the marketing, distribution and product innovation. The private insurers decided to develop products that would not compete with LICs money back and endowment policies at the initial stage (Refer to Exhibit I for a note on various kinds of insurance products). Thus, the new players launched a host of group insurance and term-life schemes, as LIC had not focused intensively on these aspects of insurance.However, the private players soon began to launch products that competed with LICs core products. With innovative product designing and intelligent pricing methods being adopted by these players, industry observers commented, LIC seemed to have realized that it would have to rapidly adapt itself to the changing market dynamics. The decision to launch Anmol Jeevan was, thus, not entirely unexpected.Background noteThe life insurance industry in India dates back to 1818, when a British firm Oriental Life Insurance Company opened its office in Kolkata, followed by the Bombay Life Assurance Company in 1923. During the British rule in India, the Indian Life Assurance Companies Act was passed in 1912, which was followed by the Indian Insurance Companies Act, 1928, enabling the government to collect the data regarding life and non-life business conducted by both Indian and foreign insurance companies. The 1928 Act was amended and a new act, Insurance Act was formed in 1938. By the mid-1950s, 154 Indian insurers, 16 foreign insurers and 75 provident societies were operating in the country.The life insurance business was concentrated in urban areas and was confined only to the higher strata of the society. In 1956, the government of India took over the management of these companies. The LIC was formed in September 1956 through the LIC Act, 1956, with a capital of Rs. 50 million. One of the main objectives of setting up LIC was to extend the reach of insurance cover and make it available to the lower segments of the society. In 1972, the government of India took over the management of 106 private general insurance companies and set up the General Insurance Corporation (GIC).Over the next few years, LIC expanded its network to all parts of the country and emerged as one of the largest corporations in India. The growth of the Indian insurance industry was minimal in the 1960s and 1970s due to factors like low savings, low investment, inadequate infrastructure and low literacy level. However, changes in the countrys economy in 1980s such as growth of industrialization, infrastructure, the capital markets, savings rate and capital formation resulted in tremendous growth in the life insurance industry, which meant the growth of LIC. Eventually, LIC launched several schemes aimed at reaching out to the rural areas. The company launched many group insurance and social security schemes. LIC had seven zonal offices, 100 divisional offices, 2,048 branch offices and about 6,28,031 agents. In the early 1990s, it was felt that the insurance industry needs to be reformed in order to provide better coverage to the customers and to increase the inflow of long-term financial resources to finance the enhancement of infrastructure. In 1993, the Indian government set up the Malhotra Committee to suggest reforms in the industry.The Committee submitted its report in 1994, with suggestions like opening the insurance sector to private players, improving service standards and extending insurance coverage to larger sections of the population. The Committees suggestions were strongly opposed by various labour unions and political parties in the country.They opened that the entry of private players would lead to job cuts by the nationalized players in order to compete with them. There were a host of other arguments against the Malhotra Committees suggestions. The government tried to deal them by restricting foreign stake in insurance companies to only 26%, which was well below the 51% that was needed for managing the company in the Insurance Bill.Though one of LICs basic objectives was to provide insurance cover to all Indians, insurance penetration in India was considered to be very low. According to reports, only 65 million people were covered by insurance. In 1999, R N Jha, LICs former Executive Director, commented in his book, Insurance in India, Insurance average has been extended only yo about 25% of the insurable population in 40 years, indication the huge uncovered market potential in the country. It was reported that the per capita insurance premium in developed countries was much higher than that in India.In 1999, the per capita insurance premium in India was only $8, while it was $4,800 in Japan, $1000 in the Republic of Korea, $887 in Singapore, $823 in Hong Kong and $144 in Malaysia. Also, in terms of gross insurance premium, Indias share in the global market was only 0.3%, though it ranked second in the world in terms of population. The corresponding figure in 1999 was 31% for Japan, 25% for the European Union, 2.3% for South Africa and 1.7% for Canada. Further, in 2001, while the ratio of insurance premium and the Gross Domestic Product (GDP) was 9% for UK and Japan, and 5% for the US, it was only 1.9% for India.Attracted by the potential of the insurance market in India, many private players entered it after the Insurance Bill was passed in late 2000. A majority of these were collaborations between Indian companies and leading multinational insurance/financial services company (Refer to Table 1).The life insurance market in India was divided into two customer segments: individual and corporate. The segment comprised of individual customers was further divided into four sub-segments protection, investment, savings and pension.Protection products offer only protection to the customer from risk. They do not provide any savings facility to the policyholder.Investment products offer long-term investment growth and insurance cover. Savings products like endowment and money back policies provide protection and investment benefits in combination. Pension policies are products offered to customers as income during their years of retirement. The corporate segment was divided into three sub-segments- protection, statutory savings and pension. Group term insurance products provided low cost life insurance as part of employee benefit packages as a motivation to employees or to cover housing/vehicle loan of the employee. The statutory savings segment comprised gratuity products for companies. The pension policies included products such as group superannuation, enabling a company to benefit from investment and the operational expertise of a specialist company to manage its funds. It was reported that in the individual insurance segment, investment products segment was growing rapidly as they provided long-term investment growth and insurance cover (refer to Table II for the cutomer segments and products offered under them). Over the years, LIC catered to both individual and corporate segments.Its individual insurance policies included Endowment Policies, Money Back Policies, Term Assurance Plans, Money Back Plans and Joint Life Plans. The corporate policies included group insurance schemes such as group gratuity schemes, group term insurance schemes, group savings linked insurance scheme and group leave encashment schemes (Refer to Exhibit II for the products offered by LIC and other major private insurers).LIC provided a return of 7% on average on all its policies. Around 80% of LICs premium income came from endowment and money back policies. However, according to some analysts, one of the major problems faced by the Indian insurance industry was high premium rate charged by LIC over the decades.They argued that, when life expectancy had increased substantially, LIC did not revise its mortality table and reduce the premium accordingly. Analysts also said that, due to poor customer service, more than 10% of LIC policies reportedly lapsed or were surrendered every year. LIC never paid attention to market research in order to understand customer preferences, while developing new products. It was pointed out that with no proper social security schemes implemented by the government of India, there was huge untapped potential in the pensions and annuities in India.LIC offered only one pension policy, Jeevan Suraksha (Life Protection), the returns from which contributed significantly to its revenues. However, with the liberalization of the industry, not only were premiums expected to go down, but increased products, improvements in customer service and deeper insurance penetration were also expected. The endowment policy for children at age 18 covered children aged between 91 days and 13 years, and policy would mature when the child is aged 18. The policy for childrens endowment at the age of 24, covered children aged between 91 days and 15 years, and policy maturing at age 24. The policy endowment at the age of 60 covered individuals aged between 91 days and 50 years and the policy would mature at the age of 60. Maturity benefits under this policy included sum assured and terminal bonus. Having realized the untapped potential of the rural markets for insurance products, AMP Sanmar decided to target semi-urban and small towns by having product features simple and straightforward.It also attached riders to various policies, which did not feature in LICs products. AMP Sanmar decided to keep its product strategy as offering simple life insurance solutions to individuals primarily aiming at wealth creation and risk protection.Birla Sun Life also launched products meant for the rural population in order to capture a larger market share. It launched the Birla Sun Life Bima Kavach Yojana, a three-year single premium insurance cover available in denominations of Rs. 50, 100 and 200, which offered 100 times the amount of premium paid in the event of death of the insurer. HDFC Standard Life stated that it would target the mass market comprised of retail customers in the low and medium income group for its insurance products.The company also announced that it would concentrate on secondary and tertiary towns to reach out to a larger percentage of the population. The companys MD, Deepak Satwalekar, said, Our studies have shown that there is a high level of economic activity in these towns and the potential for encouraging savings exists.According to companys sources, in the first year of its operations, company set up branches in 12 cities in the country, which included metros and mini-metros. HDFC Standard Life also announced that it could design special products for targeting the rural markets and the socially underprivileged sections. HDFC Standard Life also strengthened its relation with over 90 non-government-organizations (NGOs) in order to determine what kinds of products would best suit the rural population. It had already decided, in association with various NGOs to provide insurance cover to over 1,000 families in the economically weaker section of the population of Karnataka, with low interest housing loans provided as riders to the policies.According to company sources, it planned to offer high quality service to customers. This way, it could distinguish itself from others on the service plank along with the product aspects. The company also offered it customers a choice between the base products (the company offered two products- the endowment policy and the money back policy) each of which would be accompanied by four riders (critical illness, accidental death benefit, waiver of premium and double sum assured), according to the requirements of the customer. HDFC Standard Life offered 14 pre-packaged products from which customer could choose the one that best suited their needs. Also, the customers were allowed mix and match the benefits in order to create a most suitable product according to their needs. The company also planned to introduce unit-linked products and individual pension products after the required amendments were made to the Insurance Bill.According to company sources, it planned to offer high quality service to customers. This way, it could distinguish itself from others on the service plank along with the product aspects. The company also offered its customers a choice between the base products (the company offered two products- the endowment policy and the money back policy) each of which would be accompanied by four riders (critical illness, accidental death benefit, waiver of premium and double sum assured), according to the requirements of the customer. HDFC Standard Life offered 14 pre-packaged products from which customer could choose the one that best suited their needs. Also, the customers were allowed mix and match the benefits in order to create a most suitable product according to their needs. The company also planned to introduce unit-linked products and individual pension products after the required amendments were made to the Insurance Bill. According to company sources, it planned to offer high quality service to customers. This way, it could distinguish itself from others on the service plank along with the product aspects. The company also offered its customers a choice between the base products (the company offered two products- the endowment policy and the money back policy) each of which would be accompanied by four riders (critical illness, accidental death benefit, waiver of premium and double sum assured), according to the requirements of the customer. HDFC Standard Life offered 14 pre-packaged products from which customer could choose the one that best suited their needs. Also, the customers were allowed mix and match the benefits in order to create a most suitable product according to their needs. The company also planned to introduce unit-linked products and individual pension products after the required amendments were made to the Insurance Bill.A part of the investment returns were held back by the insurance company to offset market fluctuations during the term of the policy, and the surplus was distributed as terminal benefits.Three optional riders, for critical illness and permanent total disability, accidental death and dismemberment and hospital cash benefits accompanied both Life Long and Life Saver.The company also announced its plans to launch a term-plan, which would return the premium back to the policy holder at the end of the policy period, an individual pension product and group protection product for corporates.According to company sources, unutilized products were more flexible, as the customer would be able to increase or reduce the level of protection or savings benefits.LIC Rejigs its PortfolioWith the above developments in the market, LIC too had to gear up for competition. In the year 2002, LIC introduced a new facility the term assurance rider that would accompany select life insurance policies. This facility provided an extra risk cover, which was double the existing risk cover under the plan, subject to an overall limit of Rs. 25 lakh. In addition to Anmol Jeevan, it introduced a few other new policies in early 2002- Jeevan Anand (a combination of an endowment and a whole life plan), Jeevan Rekha (a combination of money back and whole life plan), Jeevan Surabhi (a money back policy) and (an endowment policy.) The Jeevan Surabhi policy offered early payment of survival benefits and money back facility. LIC also launched a new Bima Kiran policy, which had an accident benefit and extended term cover beyond maturity period in addition to risk cover during the term of the policy. In addition to the new launches, LIC also made changes to its product portfolio by withdrawing certain schemes and bringing down returns on some others. In March 2002, the company withdrew Jeevan Sanchay, its childrens growth scheme and the childrens money back policy due to the falling yield on investments. It also brought down the assured returns on its newly launched schemes following 1 0.5% rate cut by the Reserve Bank of India and the depressed sentiments in the market. Initially, Bima Nivesh offered about 10.5% assured return and it was reported that newer schemes would assure returns lower than 9.3% (Refer Exhibits III, IV & V for a comparison between the policies of LIC and other players).In late 2001, LIC launched a special campaign to revive peoples interest in its policies, which now carried customer-friendly incentives. A 30% waiver on late fees was offered (subject to a ceiling of Rs. 250) during the period of this campaign. Additional incentives were allowed relaxation in the procedures for mandatory self-declaration of good health and offered spot revival facilities.Future ImplicationsThe issue of bonus rates on policies emerged as an important factor that could determine the future prospects of various players in the insurance industry. LIC was criticized for offering low bonus rates traditionally. However, many private players were apprehensive that, by increasing the bonus rates on its policies in the future, LIC could strangle them. Co-incidentally, LIC announced a guarantee of minimum bonus and additional loyalty bonus on some of its policies. The company also offered attractive bonuses on its endowment policies.Analysts pointed out that the new insurers were indeed at a disadvantage as they would not be able to offer high bonuses. They opined that, during the initial years, it would be very difficult for these companies to offer bonus on account of lower bonus valuation surplus (the difference between assets and liabilities excluding shareholders funds). However, to operate in competition with others, the new companies reportedly planned to offer bonuses by bringing in additional start-up capital. Many analysts pointed out that, though the entry of several private insurers and their rigorous advertising and marketing efforts had led to intense competition in the Indian insurance market, LIC continued to dominate it. To make LICs market share come down, many private insurers reportedly following the way of personal finance companies.Increased competition in the personal finance business led companies (into housing finance and credit cards). For instance, to attract customers from competitors by offering lower interest rates and easier installment schemes. These strategies, known as buyouts, were widely used by US-based insurers, and analysts felt that the Indian market would replicate these trends. However, analysts also pointed out that buyouts or motivated surrenders would not succeed as a strategy for marketing individual policies. They added that the current legislative provisions were not enough to deal with such practices, and they needed to be strengthened. But some analysts have pointed out that with the vast untapped market and impending reforms in pension and health insurance, there would be no players adopting buyout strategies in the short term in India.In March 2002, the government permitted private insurers to offer annuity products to beneficiaries of the approved superannuation funds run by corporates. Earlier, companies used to deposit gratuity funds in the group gratuity scheme run by LIC or in a post office savings account or in an account in any scheduled bank. When new private players were allowed to enter the market, companies could deposit gratuity funds in the gratuity schemes of private insurers. The government also offered tax rebates on group gratuity schemes offered by private insurers. Analysts expected that, ultimately the customer would stand to gain the most because innovative and consumer-friendly products were offered as a result of the above.

INTERVIEW QUESTION1) Sir, can you tell me about the current market scenario?Ans: India is fifth largest life insurance market in the world emerging insurance economic and is growing 30-34%.2) Sir, how the insurance market is likely to be in near future?Ans: Insurance market increase day by day brings awareness among people due to advertisement and private company. Insurance company has great scope in future.3) Sir, can you tell me about the percentage of growth in life insurance market?Ans: Only this year 2011 has increased by 20% (LIC) Every year increased by 15-20%4) What type of market strategy is used by your company to promote your product?Ans: Marketing strategy like- Personal visiting SMS service Leaflets Hoarding Agent

5) Please explain the importance of life insurance in case of the various natural calamities?Ans: Many people die or get injured in the wake of natural calamities. Now a days people are more aware about t=life insurance so the life insurance becomes necessity. People want to be safe from several uncertainties in their life. Taking life insurance is a part of preparedness the support of which are available after disaster occurrence.

CONCLUSIONOver the past three year around 40 companies express interest in entering the insurance sector and many foreign and Indian companies have arrange anticipatory alliance. The threat of new player taking over the market has been employed. As is witnessed in other countries where liberalization took place in recent year we can safely conclude that nationalized player, will continue to hold strong market share position, but there will be enough business for new entrants to be profitable. Opening up of the new insurance sector will certainly mean new problem and better and improved customer service. Both new and existing player will have to explore new distribution and marketing channels. Potential buyer for more of life insurance in the middle class. New insurer must segment the market carefully to arrive at appropriate product and pricing, recognizing the potential in the past three years the nationalized insurer have already begin to target rise like pension, women, children.

BIBLIOGRAPHYBOOK:1. Indian Insurance Sector2. ICICI Prudential booklet3. Risk and ManagementMAGAZINE:1. Insurance (chronicle)2. Times of IndiaWEBSITES:1. www.LICIndia.com2. www.Insurancesector.com3. www.iciciprulife.com4. www.Economictimes.com5. www.Bimaonline.com6. www.EasylifeIndia.com

27