ASSIGNMENT-3 OF
BANKING AND INSURANCE
(TATA AIG & New India Assurance Co. )
SUBMITTED TO:- Ms. Razia Sehdev. SUBMITTED BY:- B. Triveni (A09) (Introduction of the companies and its products) 6 Kanica Mahajan(A27) (Swot analysis) 11 Pulkit Arora (A14) (Introduction of the companies and its products) 7 Prince Lawerence(A16) (Finding and Suggestions) 09 Harkirat(A06) ( Growth Prospective) 9
SECTION
Q1809
TATA AIG LIFE INSURANCE
Tata AIG Life Insurance Company offers a broad array of life insurance products to individuals, associations and businesses of all sizes, with a wide variety of additional coverage to ensure that customers can find an insurance product to meet their needs. Tata AIG Life is a joint venture of the Tata Group and American International Group, Inc. (AIG). Tata AIG Life combines the Tata Groups pre-eminent leadership position in India and AIGs global presence as one of the worlds leading international insurance and financial services organization. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 per cent. Tata AIG Life provides insurance solutions to individuals and corporate. Tata AIG Life Insurance Company was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001. Tata aig is putting emphasis on giving better services to its customers, coming with new and competitive plans in pension plans category.
Tata aig ranked 32nd on MDRT chart
Tata aig life apex pension plan offer retirement solutions with highest NAV guarantee
Mission and vision statement
Mission : To be India's most preferred life Insurance Company. Vision : To create unmatched value for our customers, employees, business partners and shareholders by delivering remarkable service that is consistent, fair and transparent. Values : Values represent the core, shared beliefs that guide how to act and work together to achieve goals. Tata aig life insurance share a set of 6 core values: Customer First, People, Passion, Performance, Integrity and Empathy. 1) Customer First: Anticipate their priorities. Exceed their expectations. 2) Integrity: They believe in conducting business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny.
3) People: work cohesively with their colleagues across the Group and with their customers and partners around the world, building strong relationships based on tolerance, understanding and mutual cooperation. Strive to develop diverse talent and reward excellence. 4) Performance: Constantly strive to achieve the highest possible standards in their day-to-day work and in the quality of the goods and services we provide. 5) Respect: We must be caring, show respect, compassion and humanity for our colleagues and customers around the world, and always work for the benefit of the communities we serve.
Product categories
For Children:
Tata AIG Life Assurer Career Builder Tata AIG Life Assure Educate at 18 & Tata AIG Life Assure Educate at 21 Tata AIG Life Assure 21 Years Money Saver Tata AIG Life Invest Assure Plus Tata AIG Life Invest Assure Flexi Tata AIG Life Invest Assure Flexi Tata AIG Life United Ujjwala Bhavishya
For Adults:
Tata AIG Life Assure One year/ Five Years/10 Years/ 15 Years / 20 Years / 25 Years Lifeline Plans, and Term to age 60 known as Assure Lifeline to Age 60 Tata AIG Life Assure 10 Years / 20 Years / 30 Years Security & Growth Plans Tata AIG Life Assure 21 Years Money Saver Tata AIG Life Assure Golden Years Plan Tata AIG Life Easy Retire Tata AIG Life Health Investor Tata AIG Life Invest Assure Extra Tata AIG Life Invest Assure Care Tata AIG Life Health First Tata AIG Life ShubhLife Tata AIG Life Health Protector - 5 Year Guaranteed Renewal Accident and Health Plan Tata AIG Life InvestAssure Optima
For Retirement Plans:
Tata AIG Life Assure Golden Years Plan Tata AIG Life Assure 10 Years / 20 Years / 30 Years Security & Growth Plans Tata AIG Life Assure 21 Years Money Saver Tata AIG Life InvestAssure II
Tata AIG Life InvestAssure Future Tata AIG Life Nirvana
For married women:None
Swot analysis of products of Tata AIG
StrengthsTata AIGS brand name-Tata is a well renowned brand name in India. People trust the name of Tatas. AIG is well recognized brand in the international insurance sector. Hence it has a strong brand presence. Hence it has a strong brand presence. Product flexibility All the insurance products are according to the customer needs. Rural penetration-The Tata AIG is the targeting the rural area people. The rural market in India is very huge and growing. People in rural markets recognized the brand name Tata. Rate of return -The ULIP policy of the Tata AIG has given the highest rate of return. It has given 7% rate of return to its investors.
Weakness
Poor promotion activity-The Tata AIGS promotion of its insurance product is not very efficient people are not aware of its products and services. Dominance of public sector in life insurance -Life insurance sector in India is still dominated by the public sector life insurance corporation. Private sector companies are finding companies are finding it very difficult to penetrate the life indurance market.
Opportunity
Higher potential:-Only 20% of Indian population is insured. With growing slandered of living there is a huge opportunity for private insurers to penetrate the market. Tax benefit:-Life insurance is taken up for the purpose of tax savings with growing income levels the market for private life insurance should become bigger. Improved technology: Technology is improving now paperless transactions are [Link] life customers need flexible and customizable policies. So if they provide them the facility of selling the policies online more the customer will go for these policies. Like mobile banking companies can provide mobile insurance facility.
Threats
Lack of awareness among the people -This is the biggest threat found in this sector. Most of the people are not aware about the importance and the necessity of the insurance in their life. They are not aware how useful life insurance can be for their family members if something happens to them. Perception of the people towards insurance sector -People still consider insurance just as a tax saving device. So today also there is always rush to buy an insurance policy only at the end of the financial year like January, February and March making the other 9 months dry for this business. Increased competition -Today the competition in the insurance sector has become very stiff. Currently there several life insurance companies working in India including the LIC. Today each and every company is trying to increase their insurance advisors so that they can increase their reach in the market. This situation has created a scenario in which to recruit life insurance advisors and to sell life insurance policy has become very fast.
GROWTH PROSPECTIVE OF THE COMPANY
The TATA-AIG life insurance company was incorporated in 2001 and is a joint venture between the TATA Group and the American International Group(AIG). The TATA group holds a 74% stake where as the AIG holds the remaining 26%. The company provides insurances to corporates as well as individuals American International Group, Inc. (AIG):
The Shriram Group - It is one of the largest and well respected financial services companies in India. The main operations are carried on in the fields of chit funds, truck financing, consumer durable financing, stock broking, insurance broking and life insurances. The company has around 30 lacs chit fund subscribers and operates through a network of 630 offices country wide. It has an agency force of more than 75,000 employees, the largest in the private sector. Operations: TATA-AIG has its operations spread in 11 states across India with a relationship management team for each state. It offers a wide range of products to individuals, associations and businesses of all kinds with a wide variety of other advantages as well. They help their customers achieve their goal of financial security. They have their insurances divided under three sub headings as children, adults and retirement planning.
Present Market Share OF TATA AIG
Total premium increases by 253 % to 254 crores. First year premium moves up by 245% to 180 crores Total sum assured goes up by 116% to RS 11485 crores Rural insurance sales increases by 152% to 23034 crores Over 160000 new individual lives insured during FY 2003-2004 Over 800000 new individual lives insured by Tata AIG through its white bouquet of individual and group life insurance policies, Superannuation and Gratuity product still date since inception.
FINDINGS
Tata AIG one of the key private player in Indian insurance industry. The market share of TATA AIG is considerably increasing and presently it is 7% Premium charged by Tata AIG is competitive in the industry. There are only few branches in India
Advertising in TATA AIG is not effective so it is not reaching to people effectively Company has got a very good trained marketing team to sell its product. Company is enjoying the confidence of various sections of policy holders. People trust more to this company and they are very much feeling secured to invest in this organization.
SUGGESTIONS
Tata AIG has to increase the number of branches. Tata AIG can come up with affordable and feasible policy for younger and retired people. Company can target various sub urban and rural insurable population by policies for rural people. Tata AIG must launch some of the products for the Married women to attract them and make them invest in the insurance company . As the business world is very dynamic in nature, so as the insurance sector so the companies must keep on exploring the outer world and its customers so that they can flourish in the upcoming dynamic world.
New India Assurance
New India is a leading global insurance group, with offices and branches throughout India and various countries abroad. The company services the Indian subcontinent with a network of 1068 offices, comprising 26 Regional offices, 393 Divisional offices and 648 branches. With approximately 21000 employees, New India has the largest number of specialist and technically qualified personnel at all levels of management, who are empowered to underwrite and settle claims of high magnitude. New India has been rated A" (Excellent) by [Link] Co. Making it the only Indian insurance company to have been rated by an international rating agency.
PRODUCTS
1. FIRE INSURANCE:
FIRE INSURANCE: NEW INDIA ASSURANCE In the case of fire insurance under NEW India company propertiest covered include all moveable and immovable properties of the land proposer (excluding transit) Buildings Plant and machinery, accessories and equipmqnts Stocks Cables, pipings, furniture, fixtures Specific items like precious stone computer system records
For stocks special policy is available: This policy takes care of the fluctuation in the values of the stock market. The
insured minimum amount per location is Rs. 1 crore. Before the last date of the declaration of the succeeding month one needs to submit the average highest value at risk on each day or on any day the highest value. Floater policy takes care of the changes in the value at different locations. In all
locations for all stocks single sum is insured. To cover the entire stocks normal premium loading is required all location. The perils covered are lighting, fire, implosion/explosion, bush fire Perils not covered are ionizing radiations and radioactivity, contamination and
pollution.
2. MACHINERY BREAKDOWN:
It is a policy, which covers financial loss incurred by the insured due to loss or damage to machinery as a result of sudden accidental electrical and mechanical breakdown. All types of industrial machinery like compressors, pumps, turbine etc. and also electrical machines like transformer, electrical motor, generator etc. are covered under this policy It should be noted that the sum insured should represent the present day purchase value of a similar new machine including all incidental expenses like custom duties, taxes, excise, freight, insurance charges, handling charges etc IT PROTECTS THE INSURED FROM THE FOLLOWING RISKS
Faulty material/workmanship of the machine Action of centrifugal forces contributing to disruption of the rotating parts Failure of lubrication due to malfunctioning of lubricating oil pumps and its breakdown. Malfunctioning and failure of safety devices. Electrical short-circuiting including electrical fire originating from failure of insulation and over voltage or under voltage conditions. Abrupt and sudden stoppage of other connected machinery. Entry of foreign bodies in running machine.
Inexperienced operations causing damage due to error of judgment or error in operation If additional premium is paid then some more risks are covered for example:
Damage to foundation of machinery Damage to oil in electrical apparatus Express freight (excluding air freight), holiday rates, overtime charges Airfreight Additional custom duty i.e the additional percentage of duty payable at the time of reimport for replacement over and above the percentage of duty included in the original sum insured. Own surrounding property i.e. damage to the insureds own existing property or property in his custody or control (not included in the sum insured of the policy) due to any damage to the insured machines which is covered under the policy.
Third party liability i.e. liability falling on the insured for bodily injury to any other party other than those covered by the policy or for property damage belonging to such other party
IT DOES NOT INCLUDE
Fire and related perils. Theft. Terrorism Overloading experiments. Willful acts or gross negligence. Gradual flaws or defects not necessitating immediate stoppages. Normal wears and tear. Consequential losses. Pre-existing defects
PERSONAL
1. MOTOR INSURANCE:
MOTOR INSURANCE: NEW INDIA ASSURANCE
1(a). Loss or damage by accident, fire, lightning, self-ignition, external explosion, burglary, housebreaking or theft, malicious act. 1(b). Riot and strike; terrorism; earthquake; flood, cyclone and inundation 1(c). Whilst in transit by rail, road, air, elevator, lift. Liability for third party injury/death On payment of appropriate additional premium, loss/damage to electrical/electronic accessories, PA cover for drivers, insured or any named person, unnamed passengers can also be taken. Certain discounts in premium are also available.
NOT COVERS
Consequential loss; depreciation; wear and tear; mechanical and electrical breakdown; failure or breakage. When vehicle is used outside the geographical area; when used contrary to limitation as to use;
driven by a person other than the driver stated in driver's clause
War perils, nuclear perils and drunken driving
2.
PERSONAL ACCIDENT POLICY:
NEW INDIA ASSURANCE
PERSONAL ACCIDENT INSURANCE: This policy offers compensation in case of death or bodily injury to the insured person, directly and solely as a result of an accident, by external, visible and violent means Different coverages are available ranging from a restricted cover of Death only, to a comprehensive cover covering death, permanent disablements and temporary total disablements It also has family packages and group personal accident insurance
FOLLOWING ARE THE COVERAGES PROVIDED
Death cover wherein 100% of the capital sum insured is payable Loss of two limbs / both eyes / one limb and one eye wherein 100% of the capital sum insured is payable. Loss of one limb or one eye wherein 50% of the capital sum insured is payable. Permanent Total Disablement other than above e.g. paralysis due to an accident, wherein 100% of the capital sum insured is payable Permanent Partial Disablement e.g. total and irrevocable loss of use of a finger due to an accident. In such cases, a percentage of the capital sum insured as specified in the policy is paid. Temporary Total Disablement for eg fracture In such a case, a weekly payment of 1% of the capital sum insured subject to a maximum limit, is paid for the number of weeks or part thereof (maximum 100 weeks), during which the insured person is totally disabled.
The policy also covers expenses incurred for carriage of dead body from place of accident to the residence subject to a limit of 2% of the capital sum insured or Rs.2,500 whichever is less. Under an Individual Personal Accident policy or Family Package Policy, an education fund is payable for a maximum of 2 dependent school going children, in case of death or permanent total disablement of the insured person.
SOCIAL PRODUCT
New india life insurance policy
[Link] Health Insurance Scheme for APL families Features of this policy
Policy will be available to groups consisting of more than 100 families. It should
cover all eligible members under one group policy only . The Group Policy will be issued in the name of the Group/Association/Institution
with a schedule of names of the members including his/her eligible family members forming part of the policy. This Policy also covers reimbursement of Hospitalization expenses for
illness/diseases contracted or injury sustained by the Insured Person.
2. Student Safety Insurance This insurance is available to schools, colleges or other educational institutions. The policy is issued in the name of the Institution. The claim amount is payable to the parent/guardian as recorded in the school register. All students are to be covered. Additional students are covered during the policy period at extra premium. But no deletions are allowed. FOLLOWING RISKS ARE COVERED.
Death (Capital Benefit) : Rs 10,000/Loss of two limbs, two eyes or one limb and one eye : Rs 10,000/Loss of one limb or one eye : Rs 5,000/Permanent total disablement from injuries other than those mentioned above : Rs 10,000/-
Permanent partial disablement (percentage of benefits as given below on the capital benefit of Rs 10,000/-) Limit up to Rs 500/- (any one accident, any one year)
SWOT OF NEW INDIA ASSURANCE COMPANY
STRENGTS
1)The company has maximum number of Offices - In India and Abroad Trained and technically qualified staff 1068 fully computerized offices across India. 2)The company have achieved "A-" (Excellent) rating by A.M Best & Co (Europe) First domestic company to be rated by an International Rating Agency 3) It has a Superior capital position and a Strong operating performance Strong market position 4) New India Assurance is the only Company which develops significant International operations and is having a long record of successful trading outside India.
WEEKNESSES
1) The company doesnt have the advisors for their company. 2)The company is facing Challenges in developing a common industry code of conduct, contributing to a common catastrophe reserve fund, and chalking out agreements between insurers to settle claims to the benefit of the consumer. 3) This company is dealing in general policies like vehicle insurance , marine insurance.
OPPERTUNITIES Higher potential:-Only 20% of Indian population is insured. With growing slandered of living there is a huge opportunity for private insurers to penetrate the market. Tax benefit:-Life insurance is taken up for the purpose of tax savings with growing income levels the market for private life insurance should become bigger. Improved technology: Technology is improving now paperless transactions are [Link] life customers need flexible and customizable policies. So if they provide them the facility of selling the policies online more the customer will go for these [Link] mobile banking companies can provide mobile insurance facility.
THREATS
1) The contribution of foreign participation is increasing for ex- 26% of equity capital depends on foreign partners. 2) There are many changes in the defined regulatory roles of IRDA (Insurance regulatory development). 3) There are new substitute products are emerging which make very difficult to attract the customer towards the main products. 4) Government regulations on issues like health care and terrorism can quickly change the direction of the insurance.
GROWTH PROSPECTIVE OF THE COMPANY
GROWTH OF GENERAL INSURANCE PRODUCTS We all know that both the companies have very high prospects of growth in the future as nowadays government have started giving flexibilities and have also make their rules and regulations transparent and easy to understand even by a common [Link] we have a look at the demographics we come to know that huge amount of population has come above the poverty line in the past 5 years which has allowed people to think beyond their basic needs of food, clothing and shelter and not only this we all come to know that there has been drastic shift from non working women to working women so for this reason automobile sales have also increased as a result more insurance. Nowadays more trading and international business is being done and all the owners are only worried about how to cover the risk and general insurance products offer this facility such as marine, fire, theft [Link] know that India has the second largest population and it is only going to grow in futre so there is a large market waiting for insurance which still needs to be captured and even they can they can now start more concentrating on rural sector as well because majority of the people are not aware about insurance in the rural areas. MARKET SHARE OF NEW India is 20% and that of Shriram General Insurance is 14%. There is one mediclaim policy, which has market share of 8%in that category and it is received through hospitalization. There are chances of only increasing thae market shares but they really need to
pull their socks as the competition is growing everyday and many new entrants have started entering this industry.
FACTORS AFFECTING GROWTH OF PRODUCTS
Favorable demographics:Economic growth depends on, amongst other factors,
having large pools of high-quality labour supply. India has a young population of approximately 1.1 billion, the second-largest in the world after China, increasing at roughly 1.5% per year and it has also been seen that working population even in India has increased drastically Improving human capital; Nevertheless, economic growth does not merely depend
on the quantity of labour available, but increasingly on the quality of labour input. In this light, many companies has started opting for the insurance of their employees and we also know that the literacy rate has also increased and the people living below poverty line has also [Link] even India has lots of engineers, CAs , doctors etc
Globally integrated economy:India has made significant inroads in opening its economy since it joined the hands with WTO since then it has increased the foreign direct investment who usedto demand for the insurance for covering the risk and this is expected only to grow in future
Challenging yet improving macroeconomic and fiscal stability: We know that in
the 1990s India faced a fiscal deficit but know it is improving year by year. Government has started providing relaxation in norms
UNFAVORABLE FACTORS
Infrastructure bottlenecks: As a consequence of persistent shortfalls in public revenues, public investment has fallen continuously over the years which have resulted to infrastructure bottlenecks and despite having a very good transport system this sector faces problems related to capacity shortage and quality constraints. China spends 20% of its GDP on power, construction, transporatationetc
Evolving regulatory environment: we know that Indian government in order to protect from losses puts lots of restrictions which adversely affects the growth of the insurance products Transparent but overburdened leal system: Indian legal system is very clear and transparent but it is full of laws and regulations that some people dont take insurance just because they dont want to get into legalities.
FINDINGS
1) New India Assurance is the Only Company which development significant International operations and is having a long record of successful trading outside India. 2) It the First company to set up an Aviation Insurance Department in 1946. 3) The company is First Company to handle the Hull Insurance requirements of the Indian Shipping Fleet. 4) The company is the First Company to establish its own Training School. 5) It is the foremost company to introduce the concept of 'Model Office Training.
SUGGESTIONS
1) There is very high competition in the market so there is a need to offer additional consumer choices through the introduction of new products, services, and price options. 2) The company needs to promote customer education in general insurance products and services by holding workshops in various centers. 3) The company should set up proper grievance redressal mechanism in every operating office to educate the clients about the system of grievance redressal thorough ombudsman. 4) The company should adhere to the IRDA guidelines in protecting the policyholders' interest.
5) The company should start offering products other than general products/