BUSINESS PLAN

FOR NEW ENTRANT IN

INSURANCE SECTOR
IRDA regulation for setting new insurance company

Company has to deposit 100 Cr. For taking insurance license.

Company has to strictly follow IRDA guidelines.

Company will form under the company act 1956.

Insurance act 1938

Company has to disclose their financial position every year.

In case of foreign partner Indian company will hold 74% and

foreign partner will hold 26% stake.

Company has to maintain 150% solvency ratio.

•ABOUT PATRENT COMPANY

•NEW COMPANY

•OWNERSHIP

•LOCATION AND FACILITIES

CE COMPANIES NAME AND LOGO

PLE Insurance company

Some one cares
COMPANY LOGO
Objectives

•To establish The People Insurance company in the

market for quality and value-priced insurance products
in Rural India.
 
•Maintain the standard service and also to ensure
proper returns to policy holders in the long run.
 
•Increasing awareness on financial security
 
Management Summary

Organizational Structure

Opportunities For New Entrants

Risk For New Entrant

Market Potential

   
 
 
 
 
 
 
Current market size of insurance industry in India
Forecasted market size for 2010
As per the forecasted market size
POLICIES SOLD : NON - LIFE , LIFE AND GENERAL
 

Insurer 2006 - 07 2007 - 08

 

Public Sector 33972092 38547040

 
Private Sector 12692053 18703219

Total 46664145
57250259
Forecasted sales for 5 years
Competition

Local independent brokers

Strengths - alternate markets
Strengths - Large advertising budget

Mass Markets ( including other companies )

Strengths - large advertising budget and very competitive prices.
Weakness - not local and largely unknown to our clients at the
present time.

Our own Companies

Strengths - already known to our clients; will be competitively
priced.
Weakness – no prior experience in this field
 
Group Plans - teachers, public employees
Strength - group pricing.
Weakness - very little obviously, since we insure very few of the
professions.
Market research

•Find information

•Observe Your
Competition

•Talk to Suppliers

•Talk to Customers

•Surveys and Focus

Groups
Market Analysis

•To know Customer

•The Right Product

•Positioning of Business
Market Segmentation
Marketing plan .

Emphasize service and ongoing support. We must avoid selling only one
policy at the lowest price for each customer and concentration account selling
which greatly enhances client retention.

Build an Insurance Partnership. The customer does not want to shop every
year for a new broker. Concentrate on building a long term relationship with
our customers and make the client and our staff appreciate the value of a long-
term relationship.

Focus on target markets. We must focus on personal and business customers

that we identify and select to insure, instead of allowing potential customers to
choose us, which could result in our brokerage attracting problem clients from
other brokers.
Marketing Strategy
•Promotion Strategy

•Distribution Strategy

•Positioning Strategy

•Pricing Strategy

•Sales Strategy
Initial steps for setting THE PEOPLE
INSURANCE in the market
•Small towns and local recruits

•Offices and branches

•Presence

•New location

•Innovative chain strategy

•Agent recruitment

•Regional focus
FORECSTED PROFIT FOR 5 YEARS
Major costs for the company
Commission payment

Operating expenses

Employee expenses

Advertisement and publicity

Training expenses
TRENDS OF COST OF DIFFERENT COMPANIES IN LAKHS
CALCULATION OF NPV

DISCOUNT RATE 0.15

INITIAL INVETMENT -600.00

CASH FLOW 1 86.9

CASH FLOW 2 143.64

CASH FLOW 3 229.95

CASH FLOW 4 274.08

CASH FLOW 5 288.26

NPV $30.78
CALCULATION OF IRR

INITIAL INVETMENT -600

CASH FLOW 1 86 . 9

CASH FLOW 2 143 . 64

CASH FLOW 3 229 . 95

CASH FLOW 4 274 . 08

CASH FLOW 5 288 . 26

IRR 17 %
As IRR is greater than the cost of capital that is 17 %
greater than
the 15 % we can accept the project .
THANK YOU