SUMMER INTERNSHIP PROGRAMME

NAME :- VIJAY POPATIIPM KOLKATASS BATCH 09- 11

TOPIC

Expansion of distribution channel

Needs of Insurance

Protection Against Uncertainties To Cover Risks

To Secure Life After Retirement Tax Relief

Financial Aid

MILESTONES1818- The business of Life Insurance in India started with the establishment of the Oriental Life Insurance Company in Kolkata.1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

I R D A

Enacted on 19 april,2000 to govern insurance industryPaved the way for private entitiesGovernment stake in the Insurance Companies to be brought down to 50% and should be given greater freedomPrivate Companies with a minimum paid up capital of Rs.1 billion should be allowed to enter the industryForeign companies may be allowed to enter the industry in collaboration with the domestic companies with 26% stake

List of some leading Insurance Industries

1. Life Insurance Corporation of India2. ICICI Prudential Life Insurance3. Bajaj Allianz Life Insurance4. SBI life Insurance5. HDFC Standard Life Insurance6. Birla Sun Life Insurance7. Reliance Life Insurance8. Max New York Life Insurance

9.Kotak Mahindra Life Insurance10.Aviva Life Insurance11.Tata AIG12.Met Life13.ING Vysya14.Shriram Life15.Bharti Axa Life

Market shares of different insurance companies in India IN 2009

Market surveyThe following is the market survey ,with a sample size of 100 individuals , within the Age group of 25-45,on their choice of Insurance company..

62

15 11 7 5010203040506070

LIC ICICI PRU MAX NEW YORK

SBI life HDFC

Number Ofpeople

Name of the companies

49

26

11 14

0

10

20

30

40

50

60

NumberOfpeople

Reason of the preferences

COMPARISON OF MARKET SHARES

74

6.97 5.66

64

8.93 6.98

48.1

13.710.3

0

10

20

30

40

50

60

70

80

LIC ICICI MAX NEW YORK

2007

2008

2009

PORTERS FIVE FORCES ANALYSIS OF INSURANCE INDUSTRY

•Threat of New Entrants  The insurance industry has been budding with new entrants every other day. Therefore the companies should carve out niche areas such that the threat of new entrants might not be a  hindrance.  There  is  also  a  chance  that  the  big  players  might  squeeze  the  small  new entrants. •Power of Suppliers Those who are supplying the capital are not that big a threat. For instance, if someone as a very  talented  insurance  underwriter  is  presently working  for  a  small  insurance  company, there exists a chance that any big player willing to enter the insurance industry might entice that person off. •Power of Buyers No individual is a big threat to the insurance industry and big corporate houses have a lot more negotiating capability with the insurance companies. Big corporate clients like airlines and pharmaceutical companies pay millions of dollars every year in premiums. •Availability of SubstitutesThere exist  a  lot  of  substitutes  in  the  insurance  industry.  Majorly,  the  large  insurance companies provide similar kinds of services – be  it auto, home, commercial, health or  life insurance. 

FACT SHEET OF MAX NEW YORKFounded 2000

Started Operations APRIL 2001

Headquarters New Delhi, India

Chairman Analjit Singh

CEO & Managing Director Rajesh Sud

Paid-Up Capital Rs. 1,782 crore

Sum Assured Rs 1,14,340 crore

Number of Policies Sold More than 4.2 million

Employees 10,813

Agent Advisors 75,832

Number of Products (Individual) 39

Number of Riders/Options (Individual) 8

Product Combinations Possible (Individual) Over 800

Number of Products (Group) 6

Number of Riders/Options (Group) 7

Number of Offices 715

Number of Offices Dedicated To Rural Business 139 (21 hub offices, 118 spoke offices)

MDRTs 218 (for calendar year 2008)

Trainers 797

MANAGEMENT & BOARD OF DIRECTORS

SWOT ANALYSISSTRENGTHS WEAKNESS

Dedicated Employees.Strong and popular

brand name, image. Diversification of

funds.Innovative products

like i-genius.Well efficient training

programs for advisors.

Lack of good services. Lack of awareness about

insurance among people. Less coverage in Rural Areas. High targets for the financial

advisors and sales department. Many competitors in the market

sell same products with a slight difference in the premium and offering.

OPPURTUNITIES THREATS

Fast growing economy. Increasing per –capita

income in India. Saving behavior. High growth of ULIP

industry. Huge market is still

untapped out of 320 million insurable markets only 20% is insured.

Health insurance and pension scheme have an estimated market potential of 15 billion.

Players like LIC, Bajaj and other competitors have low premium for similar products.

Entry of many other private companies with equally strong experiences and financial strengths of foreign partners is making the competition difficult and saturating the urban market.

LIC has woken up from sleep and is following competitive strategies. Its huge surplus in life fund gives a capability to lodge a price war.

MARKET SHARE OF MAX NEW YORK LIFE INSURANCE

Recruitment Process Stages

Role of Distribution Channels in Value Creation in insurance companies

Distribution accounts for the largest element in insurers’ costs and impact the profitability.Distribution capabilities strongly influence product design in insurance.Distribution channels have a direct impact on the insurers’ market image.Integrity of distribution channel is the key concern of the regulatory mechanism.

Importance of Distribution Channels

We need more alternative channels in India to sharply increase penetration levels.Emergence of new channels is in the interest of consumers.Widening and strengthening the channels will help the insurance industry to become more competitive and healthy.

CONCLUSION

TO SUM UP EXPERIENCE IN MAX NEW YORK LIFE WAS

AMAZING IT OPENED MY EYES TO ROUGH CORPORATE

LIFE. IT ALSO HELPED IN UNDERSTANDING INSURANCE

INDUSTRY IN MUCH MORE POSITIVE WAY.