Sunteți pe pagina 1din 40

CONTENT TOPIC

History Functions of Insurance Insurance Companies About MAX NEW YORK LIFE The Max Vijay New Product Development Process Multi Channel Distribution Product Life cycle Product Hierarchy Types of Marketing in the Service Industry Product Levels of an Insurance Industry Diversification by Max Vijay Customer Expectation Customer Satisfaction Customer Relationship Management Modern Customer-Oriented Organization Chart Differentiation Strategies Brand Philosophy Positioning Two Way Stretch Emerging Trends in the Insurance Sector SWOT analysis Bibliography 17 19 20 21 23 25 26 27 28 29 31 32 33 34 36 37 38 39

PAGE
1 3 9 12

Brief History of Insurance Sector in India


The insurance sector in India has entered in a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost 190 years. The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are: 1912 - The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928 - The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938 - Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public. 1956 - 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British.

Some of the important milestones in the general insurance business in India are:

1907 - The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957 - General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices.

1968 - The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972 - The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companys viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

Indian Insurance Industry: Learn about Insurance may be described as a social device to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of people associate themselves by sharing risk, attached to individual. The risk, which can be insured against include fire, the peril of sea, death, incident, & burglary. Any risk contingent upon these may be insured against at a premium commensurate with the risk involved. Insurance is actually a contract between 2 parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party happening of a certain event. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. With the help of Insurance, large number of people exposed to a similar risk makes contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good.

Functions of Insurance The functions of Insurance can be bifurcated into two parts:

Primary Functions Secondary Functions Other Functions

The primary functions of insurance include the following:

Provide Protection - The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. Collective bearing of risk - Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. Assessment of risk - Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. Risk is the basis for determining the premium rate also Provide Certainty - Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.

The secondary functions of insurance include the following: Prevention of Losses - Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured. Small capital to cover larger risks - Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty. Contributes towards the development of larger industries - Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery. The other functions of insurance include the following:

Means of savings and investment - Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance. Source of earning foreign exchange - Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways. Risk Free trade - Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover. The end of the year 2000 marks a significant change and growth of 'India Insurance' industry scenario. Monopoly of Public Sector Insurance company marks an end and Private companies makes inroad. Foreign companies, both Life and General flocked, collaborated and helped astronomical growth of 'Insurance Industry in India'. 'India Insurance' growth was long overdue. Within 1st 12 months of liberation of 'Indian Insurance Industry' 10 licenses for selling life insurance products and 6 licenses for selling non-

life products were issued to private companies. The Public sector giant LIC started losing its market share at the cost of stupendous growth of private players. Now 'India Insurance' industry has more than a dozen private life insurance players and 9 private general insurance companies. Aggressive and penetrative marketing strategy coupled with wide product bandwidth was an instant success among the ignorant masses. Most of the private companies registered more than 100% growth till then and are still continuing with such monstrous growth figures. Although, 'Insurance in India' is not regarded as a basic need but it is getting popular among semi urban to rural masses. Top rank private companies like ICICI Prudential Life Insurance, Tata AIG, and Bajaj Allianz etc are aggressively researching and innovating products for huge untapped rural 'India Insurance' market. Collaboration with micro finance companies, post offices, rural banks and village management authorities for selling insurance is doing wonders. Life insurance products cover risk for the insurer against eventualities like death or disability. Non-life insurance products cover risks against natural calamities, burglary, etc. They are not as popular as life products in the 'Insurance India's' portfolio. Until very recently it had only corporate buyers, but with natural disasters like, earth quakes, tsunamis, storms and floods becoming more frequent and damaging there has been a sudden spurt in sales of general insurance amongst individuals. Consumerism of life style goods and modern amenities has also contributed to its growth. With more awareness and wide bandwidth of insurance product portfolio the growth for 'India Insurance' story will only get more competitive and more affordable to all sections of Indian society.

Present Scenario
The Government of India liberalized the insurance sector in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Under the current guidelines, there is a 26 percent equity cap for foreign partners in an insurance company. There is a proposal to increase this limit to 49 percent. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector 12 life insurance and 8 general insurance companies have been registered. A

host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001. Non-Life Insurance Market In December 2000, the GIC subsidiaries were restructured as independent insurance companies. At the same time, GIC was converted into a national re-insurer. In July 2002, Parliament passed a bill, delinking the four subsidiaries from GIC. Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still dominate the general insurance business, the private players are slowly gaining a foothold. According to estimates, private insurance companies have a 10 percent share of the market, up from 4 percent in 2001. In the first half of 2002, the private companies booked premiums worth Rs 6.34 billion. Most of the new entrants reported losses in the first year of their operation in 2001. With a large capital outlay and long gestation periods, infrastructure projects are fraught with a multitude of risks throughout the development, construction and operation stages. These include risks associated with project implementation, including geological risks, maintenance, commercial and political risks. Without covering these risks the financial institutions are not willing to commit funds to the sector, especially because the financing of most private projects is on a limited or non- recourse basis. Insurance companies not only provide risk cover to infrastructure projects, they also contribute long-term funds. In fact, insurance companies are an ideal source of long term debt and equity for infrastructure projects. With long term liability, they get a good asset- liability match by investing their funds in such projects. IRDA regulations require insurance companies to invest not less than 15 percent of their funds in infrastructure and social sectors. International Insurance companies also invest their funds in such projects. Insurance costs constitute roughly around 1.2- 2 percent of the total project costs. Under the existing norms, insurance premium payments are treated as part of the fixed costs. Consequently they are treated as pass-through costs for tariff calculations.

Premium rates of most general insurance policies come under the purview of the government appointed Tariff Advisory Committee. For Projects costing up to Rs 1 Billion, the Tariff Advisory Committee sets the premium rates, for Projects between Rs 1 billion and Rs 15 billion, the rates are set in keeping with the committee's guidelines; and projects above Rs 15 billion are subjected to re-insurance pricing. It is the last segment that has a number of additional products and competitive pricing. Insurance, like project finance, is extended by a consortium. Normally one insurer takes the lead, shouldering about 40-50 per cent of the risk and receiving a proportionate percentage of the premium. The other companies share the remaining risk and premium. The policies are renewed usually on an annual basis through the invitation of bids. Of late, with IPP projects fizzling out, the insurance companies are turning once again to old hands such as NTPC, NHPC and BSES for business.

Re-insurance business
Insurance companies retain only a part of the risk (less than 10 per cent) assumed by them, which can be safely borne from their own funds. The balance risk is re-insured with other insurers. In effect, therefore, re-insurance is insurer's insurance. It forms the backbone of the insurance business. It helps to provide a better spread of risk in the international market, allows primary insurers to accept risks beyond their capacity settle accumulated losses arising from catastrophic events and still maintain their financial stability. While GIC's subsidiaries look after general insurance, GIC itself has been the major reinsurer. Currently, all insurance companies have to give 20 per cent of their reinsurance business to GIC. The aim is to ensure that GIC's role as the national reinsurer remains unhindered. However, GIC reinsures the amount further with international companies such as Swiss (Switzerland), Munich (Germany), and Royale (UK). Reinsurance premiums have seen an exorbitant increase in recent years, following the rise in threat perceptions globally.

Life Insurance Market


The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were underinsured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed. The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premiums of the 12 private players have tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, state owned LIC's new premium business has fallen. Innovative products, smart marketing and aggressive distribution. That's the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unitlinked insurance schemes they have a virtual monopoly, with over 90 percent of the customers. The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before privatization was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakhway bigger than the industry average. Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding the second phase of their expansion plans. No doubt the aggressive stance of private insurers is

already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo new customers. The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts.

Insurance companies:
IRDA has so far granted registration to 12 private life insurance companies and 9 general insurance companies. If the existing public sector insurance companies are included, there are currently 13 insurance companies in the life side and 13 companies operating in general insurance business. General Insurance Corporation has been approved as the "Indian reinsurer" for underwriting only reinsurance business. Particulars of the life insurance companies and general insurance companies including their web address are given below:

LIFE INSURERS

WEBSITES

Public Sector Life Insurance Corporation of India www.licindia.com

Private Sector Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com

ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited

www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com

GENERAL INSURERS Public Sector

National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited

www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in

Private Sector

Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited

www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com

Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation

www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com

REINSURER

General Insurance Corporation of India

www.gicindia.com

Company profile of MAX NEW YORK LIFE:

Max New York Life Insurance

Max New York Life wants people to view insurance as a financial protection and wealth creation instrument and not just a tax-saving tool. Max New York Life Insurance Company Ltd. is a joint venture between New York Life, a Fortune 100 company and Max India Limited, one of India's leading multi-business corporations. The company has positioned itself on the quality platform. In line with its vision to be the most admired life insurance company in India, it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. The strategy is to establish itself as a trusted life insurance specialist through a quality approach to business. New York Life is a Fortune 100 company that has over 160 years of experience in the life insurance business. Max India Limited is a multi-business corporate dealing in Clinical Research, IT and Telecom Services, and Specialty Plastic Products businesses. Max New York Life Insurance started its operations in India in 2000. It is the first life insurance company in India to be awarded the IS0 9001:2000 certifications. Max New York offers customized products tailored to suit individual's needs. With its various Products and Riders, there are more than 400 product combinations to choose from. Today, Max New York Life Insurance has a network of 57 offices spread over 37 cities all over India.

In line with its values of financial responsibility, Max New York Life has adopted prudent financial practices to ensure safety of policyholder's funds. The Company's paid up capital is Rs. 657 crore, which is more than the norm laid down by IRDA. Max New York Life has identified individual agents as its primary channel of distribution. The Company places a lot of emphasis on its selection process, which comprises four stages screening, psychometric test, career seminar and final interview. The agent advisors are trained in-house to ensure optimal control on quality of training. Max New York Life invests significantly in its training program and each agent is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the IRDA before beginning to sell in the marketplace. Training is a continuous process for agents at Max New York Life and ensures development of skills and knowledge through a structured program spread over 500 hours in two years. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. It has established a wide agency distribution network with 172 offices and representatives across 120 cities in India. The company has established additional channel with 22 banc assurance relationships, corporate tie-ups and a strong Direct Sales Team. Through its wide network of highly competent life insurance agent advisors, flexible product solutions and strong customer focus, Max New York life is creating a partnership for life with its customers in India. Max New York Life, one of Indias leading life insurance companies, expanded its presence in the southern region by opening its first general office in the city of Mysore. Max New York Life now has established a countrywide network of 172 offices and representatives across 120 cities in India. Max New York Life, which has till date sold over 1.53 million policies and recorded a sum assured of over Rs. 46,000 crore, has positioned itself on the quality platform. The company has developed a strong corporate governance model based on defined core values of caring, knowledge, excellence and honesty. Its strategy is to establish itself as a trusted life insurance specialist on the bedrock of quality of advice. The company has over 25,300 agent advisors, who are widely considered the best in the business.

Max New York Life aspires to be the "life insurance brand of first choice" amongst Indian consumers. To achieve this company will draw on New York Life's demonstrated competence in developing and managing a superior personal sales network. For the last 46 years consecutively, the largest number of agents qualifying for membership to the Million Dollar Round Table (MDRT) have been from New York Life. The MDRT is the industry's most prestigious organization comprising the world's most successful insurance agents. Max New York Life, a merit oriented and equal opportunities employer, is looking for a few good men and women who will spearhead the effort to realize this vision. Max New York Life wants people to view insurance as a financial protection and wealth creation instrument and not just a tax-saving tool. Since the launch of our operations, our focus has always been on providing risk protection and long-term wealth creation solutions to our customers. With a diverse product portfolio to meet customer requirements, it is evident that we are setting benchmarks in the marketplace and are well on course of realizing our vision to become Indias most admired Life Insurance Company. An ever expanding presence of Max New York Life offices across India reinforces our commitment to serving the nation. We are extremely pleased with our progress in the region and feel that opening an office in Mysore would help us educate people about the true potential and benefits of life insurance. As life insurance specialists, Max New York Life will continue to help consumers make the right choices to meet their financial goals, both for the short and long-term, through sound quality advice offered by our agent advisors and a right mix of product offerings. he added. Max New York Life has been instrumental in changing the paradigm of life insurance in India. It is the first life insurance company in India to introduce because related marketing. Children are at the very heart of Max New York Life's strategy. SOS Children's Villages of India is internationally recognized for its work in giving underprivileged children a wholesome life. The mission of SOS is "to help orphaned and abandoned children, by providing them with a family, a permanent home, education and strong foundation for an independent life." Its mission ties in with Max New York Life's philosophy of helping people secure the future of their near and dear ones.

Vision: Vision statement is Most Admired Life Insurance Company in India".

Mission: Become one of the top quartile life insurance companies in India Be a national player Be the brand of first choice Be the employer of choice Become principal of choice for agents

Max New York Life Values and Beliefs Excellence "In every aspect of work ranging from the in-house training institute to the detailed Personal Insurance Plan. Max New York Life is focused on achieving the highest standards of quality in every aspect of their business". Honesty "Is the heart of the Life Insurance business. Max New York believes that above all, Life Insurance is based on trust. Transparency, Dependability and Integrity will form the cornerstones of the Max New York Life experience." Knowledge "Is what makes experts. Max New York Life is focused on the Life Insurance business. Perfectly combining global expertise with local knowledge, Max New York Life is the Indian Life Insurance specialist." Caring "For the customer. Max New York Life is redefining the Life Insurance paradigm to focus on the needs of the customers. The Max New York service process is responsive, personalized, humane and empathetic."

Culture: Our "in house culture recipe" has some of the finest ingredients going into its making. Some of the more prominent aspects of our culture are stated below:

Customer comes first Do it right the first time Bias for result oriented action Financial strength and discipline Clarity of purpose International quality standards Inclusive Meritocracy Learning opportunities Fun at work Commitment to published value system

ACHIEVEMENTS MNYL Insurance felicitated with the Golden Peacock Innovation Award for the year 2008 for Excellence in innovation in conceptualizing and marketing Max Vijay. MNYL is the first life insurance company in India to be awarded the IS0 9001:2000 certifications. MNYL was among the top 25 companies to work with in India, according to 2003 Business world magazine, "Great Workplaces in India", MNYL was ranked at the 20th position. This survey is the local version of the "Great Places to Work" survey carried out every year in 22 countries Been among top five most respected private life insurance companies in India according to a 2004 and 2006 Business World survey. MNYL Insurance has emerged as one of the best employer in the recently announced Business Today-Mercer-TNS Survey of 'The Best Companies to Work For in India'. The company was ranked 7th in the survey and the best life insurance company to work for India.

THE MAX VIJAY NEW PRODUCT DEVELOPMENT PROCESS


A. IDEA GENERATION Since no other insurance company had ventured into the rural market, MNYL came with an idea to serve the lower strata of the society, which represents the maximum population in the country.

B. IDEA SCREENING Since Uttar Pradesh is the biggest and the most populous state in India, the company strategists suggested implementing Max Vijay scheme in all the 52 districts of the state. They felt that there would not be any dearth in the number of people who are ambitious and wish to achieve something in their lives, in such a populous state. C. CONCEPT DEVELOPMENT AND TESTING The scheme would be valid for 10 years Maturity period 10 years Max Vijay would give a choice to the customer for making payment using three premium options 1) Rajat 2) Swarna 3) Heera The sum assured from the policy is guaranteed with choice to invest any amount ranging from Rs.10 to Rs.2500000, anytime, anywhere. D. MARKETING STRATEGY DEVELOPMENT Affordable, accessible and flexible Widespread distribution network Payment through neighborhood retail outlets and grocery stores NGOs

E. BUSINESS ANALYSIS MNYL has set a target of achieving a collection of Rs.100 crore premium in three months through Max Vijay scheme. It further plans to implement the scheme to 50,000 customers in 52 districts through 15000 counters. F. PRODUCT DEVELOPMENT Minimum formality in buying the policy Premium can be paid easily just like TOPPING UP A MOBILE.

G. MARKET TESTING Before launching the scheme throughout India, they have chosen the state of Uttar Pradesh as a pilot project ( - testing). This also ensured that any drawbacks and loopholes, if any, would be corrected before launching the scheme nationwide.

H. COMMERCIALIZATION Commercialization involves the following four processes: 1) WHEN (timing): In commercializing a new product like Max Vijay, market entry timing is critical. MNYL was first to capitalize the opportunity created during the financial crisis and enter the untapped market. 2) WHERE (geographical strategy): Uttar Pradesh, the biggest and the most populous state was chosen. 3) TO WHOM (target market): Lower strata of the population, Rural India. 4) HOW: Tie up with Indian Oil Corporation: 2000 Kisan Seva Kendras Outsourcing agreement with technology major, IBM Recently, Mr. Amitabh Bacchan was roped in as the brand ambassador for Max Vijay product. The reason behind using him as a Brand ambassador is his strong association with the character Vijay who symbolized peoples hero who fought for the cause of the common man by standing up for their rights. His appointment as the brand ambassador for Max Vijay is a rebirth of the old Vijay, who is today propagating the cause of small savings and financial inclusion for the underserved masses of the country.

MULTI CHANNEL DISTRIBUTION MNYL has mainly used ZERO Level channels to sell its products to the customers. This helps in removal of the intermediaries which dilutes the profit. The various channels employed are: Insurance Agents Direct Selling Agents Internet Banc-assurance (First level): Here the Banks act as a mediator between MNYL & the customer. Hence it comes under the First Level Channel for distribution. Eg: It has tied up with Andhra Pradesh Rural Bank to distribute its products.

DIFFERENT CHANNELS OF DISTRIBUTION

i) Agency Channel:- In MNYL , business is done mainly through Agent Advisor. In India it has more than 55000 agents. Two Programs are run under Agency Channel AAP (Agency Association Program) CEIP ii) Banc assurance: Banc assurance is an innovative distribution channel involving banks to sell insurance products of Insurance Companies. MNYL has tied up with several banks. iii) Direct Sales Team (DST ):- Max New York Life Insurance makes a data base of potential customers; contact them on the telephone to market different policy of the company. iv) Alternate channel- Business is done through associate partners, internet etc.

PRODUCT LIFE CYCLE

The MNYL lies in the growth stage of the PRODUCT LIFE CYCLE (PLC). There has been a period of rapid market acceptance and substantial profit improvement. The different strategies that have been adopted by MNYL in this stage are as follows: Persuasive advertisements (display of regular ads during prime time shows) Addition of new product features Increase in the distribution coverage (tie-ups with IOC, AP Rural bank, Mercantile Bank etc.) It has shifted its focus from product-awareness to product-preference advertising.

PRODUCT HIERARCHY
Seven levels for life insurance sector are:

1. Need family: The core need that underlies the existence of a product family. E.g. security.

2. Product family: All the product classes that can satisfy a core need. E.g. savings.

3. Product class: A group of products having a certain functional coherence. E.g. financial instruments.

4. Product line: a group of closely related product w.r.t (e.g. life insurance) Functions same customers Channels Price range

5. Product Type: A group of items within a product line that share on of the possible forms of the product. E.g. term life insurance

6. Item: a distinct unit within a brand or product line distinguishable by size, prize, appearance, or some other attribute E.g. Max New York SMART Steps Plus insurance.

PRODUCT MIX AND PRODUCT-LINE LENGTH FOR MNYL


Life Plans 1) Five Yr Renewable & Convertible Plan 2) Level Term Policy Growth Plans 1) Life Maker Premium 2) Life Maker Gold 3) Life Maker Platinum 4) Max New York Life SMART Xpress 5) SMART Assure Child Plans 1) Children's Endowment to 18 (Par) Plan 2) Children's Endowment to 24 (Par) Plan 3) SMART Steps Health Plans 1) Lifeline MediCash Pension Plans 1) Easy Life Retirement (Par) Plan 2) SMART Invest Pension

2) Lifeline Wellness Plus 3) Lifeline MediCash Plus 4) Lifeline Safety Net 5) LifeLine Wellness

3) Whole Life Participating 4) Life Gain Plus 25 Participating Plan 5) 20 year Endowment (Par) Plan 6) Life Pay Money Back Plan

4) SMART Steps Plus

5) SMART Steps Single Premium

6) Max New York Life Lifeline Healthy Family

7) Endowment to Age 60 (Par) Plan 8) Life Gain Endowment Plan 9) Life Gain Plus 20 Participating Plan 10) Life Partner Plus

TYPES OF MARKETING IN THE SERVICE INDUSTRY


INTERNAL MARKETING As far as the Internal Marketing of the MNYL is concerned, it regularly motivates its employees to perform better in difficult times. Training is a continuous process for agents at MNYL and ensures development of skills and knowledge through a structured program spread over 500 hours in two years. This focus on continuous quality training has resulted in the company having amongst the highest agent pass rate in IRDA examinations and the agents have the highest productivity among private life insurers. MNYL has been awarded the best employer to work with; hence it shows the commitment it has towards its employees.

INTERACTIVE MARKETING MNYL has developed skills in its workforce i.e. agents to serve their clients effectively and with ease. The technology backup provided by the IBM also helps MNYL to have an edge over the other insurance companies.

PRODUCT STRATEGIES

The Insurance Industry exhibits the following FIVE product levels CORE BENEFIT: SECURITY BASIC PRODUCT: HEALTH, CHILD, LIFE, PENSION, GROWTH EXPECTED PRODUCT: CLAIM SETTLEMENT AUGMENTED PRODUCT: ELECTRONIC FUND TRANSFER FACILITY FOR CLAIM SETTLEMENT (DONE BY MNYL).

PRODUCT LEVELS OF AN INSURANCE INDUSTRY


MNYL has extended its brand by introducing the MAX VIJAY in a new Product Category.

The brand name remains the same i.e. MAX NEW YORK LIFE after the launch of the new product in the market. The product category was new in this case; it was specially designed to cater the lower strata of the society giving them multiple paying options of the premium.

DIVERSIFICATION BY MAX VIJAY

ANSOFF GRID

MNYL has diversified by introducing the Max Vijay Scheme, which is a new product and offered into a new market. The new market is Uttar Pradesh, since it was earlier catering to the other parts of the country.

CUSTOMER EXPECTATIONS:In the today era, Customer expectations are rising. Customers, faced with a dizzying array of insurance products expect customized offerings, value, ease of access, and personalization from insurers. Today, customers are expecting individual attention, responsiveness, customization and access. At the same time, they dont want to pay a premium for these services. High customer expectations and lower exit barriers could lead to increased customer attrition. To meet the customer expectations is a daunting task for todays insurance companies. If the customers expectations are met, then only he will be satisfied and continue your services. The company tries to utilize every moment of truth and tries to satisfy him at maximum possible touch points.

CUSTOMER SATISFACTION:
Customer satisfaction refers to the extent to which customers are happy with the products and services provided by a business. Gaining high levels of customer satisfaction is very important to a business because satisfied customers are most likely to be loyal and to make repeated orders and to use a wide range of services offered by a business. Since sales are the most important goal of any commercial enterprise, it becomes necessary to satisfy customers. For customer satisfaction it is necessary to establish and maintain certain important characteristics like:

a. Quality b. Fair prices c. Good customer handling skills d. Efficient delivery e. Serious consideration of consumer complaints.

Satisfaction is the feeling of pleasure or disappointment attained from comparing a products perceived performance (outcome) in relation to his or her expectations. If the performance falls short of expectations, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied. If the performance exceeds expectations, the customer is highly satisfied or delighted. MNYL is an ISO 9001-2001 Certified Company. Some of the benefits it provides to its customers are as follows:

MNYL issues Policies to its customers in quick time and with maximum accuracy. Fast settlement of Claims and demonstrate reliability and trust amongst our customers Effective touch points for the customers who are regularly working towards resolving customers queries and needs. MNYL is constantly designing products keeping in mind long term customer benefits and responsibly fulfills the regulatory requirements.

CUSTOMER RELATIONSHIP MANAGEMENT


Customer Relationship Management is the process of carefully managing detailed information about individual customers and all customers touch points to maximize customer loyalty. A customer touch point is any occasion on which a customer encounters the brand and productfrom actual experience to personal or mass communications to casual observation. Max New York Life Insurance Company has also undertaken various steps to strengthen its customer relationship management.

Max New York Life Insurance has announced the introduction of INTERACTIVE VOICE RESPONSE (IVR) service in 10 different languages. The leap is in a bid to enhance and improve max New York Lifes customer and distributor experience by availing the customer service in their own language. Sanjeev Mago, executive vice president, Customer Operations and Service Delivery, Max New York Life Insurance, said, "This initiative is yet another step towards improving customer satisfaction by enhancing their ease of resolving pre and post policy issues. At Max New York Life, we lay emphasis in interacting with our customers and distributors in their choice of language."

In order to improve its customer relationship management, MNYL has maintained internal records and marketing intelligence systems to maintain a database of profile and contact information of the customers.

Databases, Data Warehousing and Data Mining

MNYL Insurance has organized their information: Customer databases Product databases Salesperson databases

The most important of the above three is the customer database in which the profile and the contact information of the customer is saved. The customer database may even include the demographics and psychographics (activities, interests and opinions) according to which a customized policy is formulated for his/her needs. Carpet Bombing is also being done to target the random customers in order to spread awareness and market the policies at a large scale.

MYNL conducted a study in association with AC Nielsen, which revealed that the customers want return and protection in an insurance policy. Based on this study, the company launched Smart Express for a smooth ride through the volatile markets.

TRADITIONAL ORGANIZATION CHART


This is the system when managers believe the customer as the companys only true Profit Centre. It was the traditional approach and off late it was changed to the modern approach wherein customers are given prime importance.

This is the system when managers believe the customer as the companys only true Profit Centre. It was the traditional approach and off late it was changed to the modern approach wherein customers are given prime importance.

MAX NEW YORK LIFE FOLLOWED MODERN CUSTOMER-ORIENTED ORGANIZATION CHART

The Max New York Life culture is about: The customer comes first Do it right the first time Bias for result oriented action Financial strength and discipline Clarity of purpose International quality standards Inclusive meritocracy Learning opportunities Fun at work Commitment to published value system

DIFFERENTIATION STRATEGIES
Product Differentiation: MNYL decided to straddle more on life benefits than death benefits. On the basis of a study conducted on the category & competition they realized that the competitors were focusing on pure protection & family protection as a benefit. So MNYL decided to focus on the aspiration proposition thereby differentiating from their competitors. Services Differentiation: With the launch of Health Family Floater Plan MNYL became the first and the only company to offer benefits for congenital disorder. It also introduces some other significant firsts and best to the industry: Relevant and segmented benefit for parents Yearly increases on surgical benefits, even after claims Guaranteed renewability till the age of 75 years Highest number of Hospitalization Days and Daily Cash limits Highest number of critical illness covered Health insurance coverage for the longest duration - 10 years No upper limit on the family size.

Personnel differentiation: The companies differentiate themselves by having better-trained employees. MNYL provides 150 hours of training to their employees against the industry average of 100 hours. The result is they have some of the best Agent Advisors in the business. Backed by the best training and infrastructure, their expert Agent Advisor will spend time evaluating the customers needs rather than just selling. They are professionals who will thoroughly understand the customers needs before recommending the policy tailored to meet them. They offer the best products with Flexibility as their cornerstone.

Re-training: Following the stock market meltdown in 2009, a large number of MNYL financial advisors had stopped visiting their customers, since they did not know how to deal with their queries about the fall in the value of investment. At this juncture, MNYL felt that the financial advisors needed a fresh perspective & communication skills to address the needs of their customers. Thus they retrained & certified around 85,000 odd financial advisors.

BRAND PHILOSOPHY

Today, India sits as the cusp of greatness both in its potential and in its achievements. Some argue that it has already crossed that threshold and is destined for greatness no matter what. MNYL believes that there are examples of this greatness all around and is proud to chronicle it for our collective inspiration. MNYLs philosophy of Karo Zyaada ka Iraada is a salute to all those who happily challenge status quo and push the boundaries in the search and in the creation of a bigger, brighter tomorrow. The dream of a larger good is no longer confined to a limited few. MNYL intends to awaken todays India to re-look at itself, its realities and the possibilities and new ways to progress through its new business philosophy. Karo Zyaada ka Iraada appears at a time when people are happier if we could articulate and then live our ambitions.

POSITIONING
In order to achieve superior brand positioning, any marketer has to address three basic questions, which are: Who is the target group; what is the value proposition to them; is the communication effective or not. Positive answers to the above questions indicate that the companys brand positioning is successful and that the customers are receptive 2 the product. The target groups for MNYL 1. People in the age group of 30 45 years 2. People in the age group 20 50 years 3. People in the age group 18 70 years 4. Health conscious people 5. Large families 6. Rural and semi urban masses Value propositions to the target groups (in the same order followed for target groups)
On the basis of age demographics several children plans were there to target the segment of

people who lie within 30-45 years of age and for the education of their children. This target groups also includes married couples who are interested in securing the future of their children. Children's Endowment to 18 (Par) Plan, which provides an option to buy a permanent life insurance policy without medical underwriting. With the Stepping Stones (Par) Plan, the customers are entitled to make withdrawals for any unplanned expenses. Various plans like 20 year endowment plan, whole life participating plan etc. and various life plans have been designed exclusively for this target group. For this target group, pension plans have been designed to facilitate the customers to derive benefits post retirement. Various plans like Life maker premium plan, Life line safety net etc. have been designed to help customers derive benefits through health insurance policies. MNYL's Five Year Renewable and Convertible Term Insurance (Non-Participating) are particularly useful as a short-term protection plan. An important feature of this policy is that it allows the insured to convert the policy to a regular policy during the tenure of the policy. Max Vijay is a policy aimed to provide benefits to the rural and semi urban people.

Is the communication proper? MNYL has adopted an all persuasive brand positioning. The new television commercial (TVC) highlights the fact that today it is a general human tendency to desire and aim for more as against the old mind set of being content with whatever one has. The present trend is to dream bigger and a brand should partner that dream. MYNL believes that it is the age of consumerism and hence they its better to partner with their customers in their ambitions. The creative strategy captures that spirit. Through the TV commercial they have tried to highlight basic human tendency of 'Desire for More'. In addition to the TVC, MNYL have gone for the whole nine yards in terms of its marketing activities. As a part of its online promotions, MNYL has designed a game in the form of question and answer to not just engage better with the customers but also add to its database. The company had also advertised on websites. The company had promoted itself through malls, the Delhi Metro, traffic police stands, Mumbai railway stations and television programs such Big Boss, and Zee TVs Sa Re Ga Ma and also targeted the news channels. Nearly, 60 per cent of the marketing budget was spent on mass media and the rest 40 per cent on below-the-line (BTL) activities.

Media mix: MNYL had shifted its strategy from being a lot on 9 pm English news channels to mainstream popular family programs. They have done a lot of digital advertising as well. They have concentrated on TV by choice as part of their strategy.

TWO WAY STRETCH


MNYL, in order to achieve a higher market reach, has adopted a two way stretch. According to this strategy, MNYL has designed and delivered products and services for the two major segments affluent segment and the lower strata segment of the Indian population. 1. Up Market Stretch: Life Maker Premium Investment Plan MNYL wants to cash in on the affluent classs mentality to think beyond basic necessities of life i.e. Food, Clothes and Shelter. The latest Life Maker Premium Investment Plan gives consumers a lot of choices - especially when they are looking for Great life style, Big Home, their own well established Business and top of all - Protection for their family. Max New York Life Insurance provides customers a powerful investment-cum-insurance plan where they can direct their investments in the customized unit linked funds such as equities, money market instruments, investment grade corporate bonds, and government securities. These funds offer a wide range of returns based on market returns. Customers can choose to invest their premiums in one or more of these funds, depending on their risk taking ability. The switching feature of this policy provides customers the facility to change the investment pattern by moving from one fund to other fund(s) amongst the funds offered under this contract. In case of unforeseen urgent needs; the plan ensures easy liquidity to the customers by accessing their fund through surrender benefit. 2. Down market stretch (Max Vijay): Max Vijay is a savings cum life insurance plan aimed at the rural masses. This plan has been designed keeping in mind the lifestyle, income patterns and the needs of semi urban and rural people. It empowers millions of Indians to benefit from the economic boom in financial services that was hitherto denied to them. 'Max Vijay-Insurance Savings Box' or "Bima Gullak" combines the best of insurance and savings and gives customers a means to aggregate his earnings in a structured and well-planned manner.

Emerging Trends in the Insurance Sector Micro-insurance


The concept of micro insurance is to provide insurance to people living in rural areas & to people living below the poverty line. As Majority of Indias population is concentrated in the villages & most of them dont have access to any financial products. Hence the opportunity is huge as it is an untapped market.

According to IrDA, micro insurance products are those that provide term cover of between Rs 5,000 and Rs 50,000 for 5-15 years, or are endowment policies for 5-15 years that provide insurance of between Rs 5,000 and Rs 30,000.

As Micro Finance sector is in evolving phase, Innovations are required at all stages for products, in pricing policy and in delivery channels. Success of marketing micro insurance depends on understanding the social and cultural needs of the target population. Clients should also receive price differentials for using different channels. Groups & their promoters can provide ideal platform to kick start the micro insurance.

MNYL has targeted this segment with its MAX VIJAY product, which takes into account the unique needs of this audience. Max Vijay offers financial inclusion for a 10-year period, for minimum enrolment premium options of Rs 1,000, Rs 1,500 and Rs 2,500, respectively, and does not require compulsory time-bound renewals. Customers are given a privilege to deposit premiums any time from as low as zero to Rs 2,500 per day at their nearby retail shop or NGO. Max Vijay has received an encouraging response from the market, having provided financial inclusion to over 55,000 households and has reached average sales of 1,000 policies per day, Mehta said.

SWOT ANALYSIS
Strengths: Strong corporate governance model Quality products Adaptability to changes Strong Brand name Large networks Leading company in insurance sector Diversification of funds Well Efficient Management Weakness: Less awareness about all products of life insurance in market Low advertising Focus only on URBAN areas

Opportunities: Fast growing economy Scope for opening of new branches in state/country High growth of ULIP industry Increasing population will increase in insurance business Increasing per capita income in India Catering to the untapped rural and Semi-Urban market. Threats: Market uncertainty (Recession) Consumers do not invest easily Arrival of new entrants in the insurance industry. Cut throat competition within the industry

BIBLIOGRAPHY

Marketing management by Philip Kotler www.maxnewyorklife.com www.4psbusinessandmarketing.com www.wikipedia.com www.thehindubusinessline.com www.business-standard.com www.financialexpress.com www.businessweek.com www.afaqs.com www.investing.businessweek.com www.mydigitalfc.com www.nextbillion.net www.business.mapsofindia.com www.info2india.com http://www.researchandmarkets.com/reports/223363 http://www.nabard.org/pdf/report_financial/Chap_XI.pdf