After several rounds of discussions and debate, some of the deals were finalized. The companies that have agreed to associate with Bajaj Allianz Life Insurance Co. Ltd. are: As Corporate Agents:
• Parag Parikh Financial Advisory Services Ltd. • Integrated Enterprises India Ltd.
• Ace Richesse As Brokers: • Tower Insurance • Wealth zone • K R Choksey As Franchisee
• Hemdev and Sons
• Blue Chip Investments and Finance
Short corporate profiles of these companies are as under:
PARAG PARIKH FINANCIAL ADVISORY SERVICES LTD.
Parag Parikh Financial Advisory Services Ltd. is a leading Investment Advisory Firm with a reputation built on performance. With over 2 decades of rich and varied experience, a thorough knowledge of the markets, proficiency in risk management, innovative and focused research, Parag Parikh Financials offer advise on investing in the equity and fixed income markets and mutual funds.
The client base includes Financial Institutions, Mutual Funds, Foreign Institutional Investors, Banks, Corporate and Individual Investors. Services offered are:
• Investment Research
• Institutional Equity and Fixed Income Broking • Derivatives Broking
INTEGRATED ENTERPRISES INDIA LTD.
Integrated Enterprises is a 32-Year-Old Professionally-managed Public Limited Company. It has over 100 Branches across the country serving over 5 lakh investor families. The company is a trusted household name in Investment Counseling with a service spectrum unto 2 Lac Demat Accounts.
The investment advisory services include Marketing Corporate Fixed Deposits, Debentures, Public Sector Bonds, Mutual Funds, UTI and Public Issues. It also facilitates Buying & Selling of Securities through NSE, Opening of Depository Accounts, Demat and other related activities.
Besides offering other corporate and tax related services it is also into Marketing Life, Health & General Insurance Schemes.
ACE RICHESSE (INDIA) PRIVATE LIMITED
Ace Richesse (India) Private Limited is a part of the renowned Shapoorji (SP) Group, the multi-billion-business conglomerate. ACE, a financial boutique offers a full range of financial services and products ranging from equities to mutual funds to enhance your wealth and hence, achieve your financial goals.
Arihant group, which is an associate of ACE, is a corporate member of the Bombay Stock Exchange (BSE) and the National Stock Exchange of India Limited (NSE), the Multi Commodity Exchange (MCX), the National Commodity and Derivatives Exchange (NCDEX) and Depository Member of NSDL. Its operations include stock broking and distribution of various financial products-including private and secondary placements of debt equity and Mutual Funds.
ACE provides to its clients with real-time service, multi-channel & 24 x 7 access to all information and products. They serve the needs of all kinds of investors with a user- friendly state of the art, cost effective trading facility.
Their aim is to set up a comprehensive retail distribution system to deal with a variety of clients and products. This system includes its own sales staff and retail network spanning across the country.
• Institutional business, • Private client services, • Client fund management and
• Retail distribution of Mutual Funds, Depository Services, Loans and other Financial Services.
TOWER INSURANCE & REINSURANCE SERVICES (INDIA) PVT LTD
Tower was established in 1979. After change of Insurance Regulations in India, TOWER was among the first 3 to get license from Insurance Regulatory Development Authority as COMPOSITE BROKER both for reinsurance & direct broking. They provide insurance solutions to corporate and individuals to enable them manage their exposures successfully. They specialize in:
• Property • Liability • Engineering • Marine • Aviation WEALTHZONE
Wealth Advisors (India) Pvt Ltd, a full service investment advisory company of the JV Gokal group, has launched insurance broking services through its subsidiary WAI Insurance Broking Services (WAI IBS). Wealth Advisors currently has a presence in Chennai, Bangalore, Delhi, Mumbai and Coimbatore and offers wealth management services to its high net worth clients and services corporate clients based on their investment needs.
Its retail division, Wealth zone, is a one-stop-shop for financial products distribution to the retail investors and operates through 25 outlets across the country.
K R CHOKSEY
Kisan Ratilal Choksey Shares & Securities Pvt Ltd, a Full Service Broking House offering comprehensive personal financial solutions was established in 1979 and has since then been servicing an eclectic clientele comprising High Net Worth Individuals, Corporate, NRI's, Mutual Funds, Insurance Companies, Banks as well as Other Financial Institutions. KRChoksey has been dedicated to creating growth-oriented investment solutions to suit its Investor Clients financial priorities - their current needs and future obligations.
Insurance provides varied solutions addressed to the various vulnerabilities felt by an individual today.
The KRC Insurance Division helps you identify the particular Insurance Product that provides you with maximum returns and gains for a protected future. The KRC Insurance Division carefully matches the Insurance Products available to your personal and financial profiles and then offers you suitable solution options.
HEMDEV & SONS
The company is owned by Mr. Nandlal H. Hemdev. The company is involved is several businesses specially Inter Corporate Finance, Mutual Fund and PSU Bonds. For the first time they are taking up a franchisee with any life insurance company.
BLUE CHIP INVESTMENTS AND FINANCE
The company is owned in partnership by Mr. Atul Karve and Mr. Deepak Pandit. The company has qualified Million Dollar Round Table, USA. They are into:
• Equity Trading, Demat • Life Insurance
• Mutual Funds, Postal Schemes, IPOs • Retirement Planning, Pension Plans • NRI Investments, Will, Agreements • Taxation, Tax-free Investments
CHAPTER 5 CONCLUSION
5.1 RECOMMENDATIONS
As the numbers indicate, private participants are making steady inroads into a territory that was once LIC's sole preserve. To a considerable extent, product innovation has played a vital role in this achievement, as is vindicated by the success of unit-linked plans. The company must overcome the mindset of the customer that life insurance is Life Insurance Corporation of India (LIC).
The Population of India is 1 Billion. Our economy is 5th largest in the world in terms of Purchasing Power Parity (PPP). The GDP growth Rate has been over 6% per year on an average for the last decade. The Savings Rate is around 26% of GDP. The estimated middle class population is 300 Million, while the insured population is 70 million only. So there is huge scope in the Indian market.
• Portfolio Composition: Portfolio composition for unit linked plans is decided by the insurance companies and is not regulated by the IRDA. This may make an investor gravitate towards a plan that invests purely in equities, ignorant of the risks associated with such a decision, and attracted solely by the prospects of high returns. The company should take care of the same, so that it can give higher returns.
• Disclosure: The one problem with analyzing insurance companies is that the disclosure usually isn't enough. Proper analysis requires substantial disclosure of things like reserve ratios, exposure to catastrophic/environmental loss, and details of the company's operations. This isn't to say that the financial statements are not enough for adequate analysis, but to dig really deep, a person needs more information. To make people happy, complete information should be disclosed.
• Need for Marketing: As far as the company is concerned, the partners want the company to invest in marketing and make it a year long campaign. The importance of marketing to enable continued success of business cannot be ignored. Service industry is all about experience. So the people should be made to realize that they will get a good experience if they get associated with BJAZ. For the same aggressive marketing should be done. It also has to remove the perception that anything that looks good is expensive
• Joint Calls: They also expect more joint calls to take place. Some of the partners want more help from the company in lead generation and relevant support for the same. Some of them want BJAZ to reveal information about the clients who have rejected any kind of relationship with the company.
• Services: Moreover, the partners also want the company to improve on the service front. The back office staff should be increased. This will help in providing personalized service to the clients, so that the commissions reach the party on time and the partners get up to date information about the upcoming products, schemes and competitions.
• Tap Insured Market: The Company can also run the risk of tapping an already insured market for repeat insurance instead of tapping new virgin pockets in the market. This can help the company in reducing the cost that is involved in educating the people.
• Work-site Marketing: With changes in human resources management polices and compensation packages, work site products do have a definite market that cannot be ignored. This would help in maintaining a high hit ratio with the intermediaries.
So, the company should work on the above mentioned front to satisfy the existing client base.
5.2 LEARNINGS
• HARMONIZATION OF PERSONAL AND PROFESSIONAL LIFE
Summer internship was my first step in the corporate world. My project being a live project in Mumbai made me audacious and instilled in me the power to confront anything and everything.
• APPLICATION OF CONCEPTS, TOOLS, TECHNIQUES AND SKILLS LEARNT AT THE INSTITUTE
While doing my summer internship I realized the importance of comprehensive knowledge gained at the institute. The concepts, tools and techniques of all the subjects ranging form Organizational Behavior to Analysis of Written Cases and Communication, Financial Management to Marketing Management, Strategic Management to Marketing Research, were applied to real life business situations.
• AUGMENTATION OF SOFT SKILLS
The project also helped in augmenting my soft skills, which will help me a lot in the future. My learning’s were: -
Adjusting with the work environment of the company Teamwork
Presentation skills in the actual market Handling the various organizational issues Meeting Deadlines
Punctuality and Discipline Patience
• FUTURE LEARNING
I got insight into the nitty-gritty of the sector and its future. Not only I tried to apply our first year MBA lessons into the project but also got a focus for learning in the second year. I would attempt to relate the second year lessons with my internship experiences and try to learn further. This would help me prepare for the final placement.
5.3 CONTRIBUTION
Apart from being an enriching experience for me, the summer training contributed to the organization as well.
• CLOSURE OF DEALS
The deals that have been closed will engender huge amount of business for the company. KR Choksey being the second corporate agency with the company is itself expected to give more than One Crore of business annually to the company. Another national tie-up with Ace Richesse will also generate handsome revenue for the company.
• DATABASE GENERATION
In a limited span of two months it was not possible to extract business from the new deals, which were closed. But significant contribution has been made in terms of lead generation. Complete database was given to the company, which would surely be of further reference to the organization.
• RESEARCH
Through the profiling of existing clients and the response generated from the questionnaire the analysis made was reported to the company, which will help the company to know about its:
Competitive position
Satisfaction level of its clients Areas of improvement
Products Service Relationships
BIBLIOGRAPHY
Literature Review
• Annual Report, Bajaj Allianz life Insurance Company limited.
• http://www.ciionline.org/Sectors/62/Images/INSURANCE%20IN%20IN DIA.pdf.
• Proposal form and other documents used by the company for entering into a new agreement
• Various PowerPoint Presentations given by the company for study of plans, tax, underwriting and channel study etc.
Internet Industry Study • http://www.irdaindia.org/ • http://www.etstrategicmarketing.com/ Company Study • http://www.allianzbajaj.co.in/ McKinsey 7S Model • http://www.domain- b.com/finance/insurance/allianz_bajaj_life/20041013_aims.html • http://www.mib.com/kd/html/Insurance_Distribution_India.html Porter 5 Forces Model
Profiling • http://www.highbeam.com/ • http://www.springlakestudios.com/the_system/ • http://www.expresscomputeronline.com/20040216/indiatrends02.shtml Database generation • http://www.mumbaipage.com/ • http://www.allpages.com/ • http://www.maharashtradirectory.com/ • http://yellowpages.sulekha.com/mumbai.htm • http://www.mumbainet.com/index.htm
• “Just Dial” services in Mumbai were also used for the updating the database, generated through the above sources.
ANNEXURE A
PLANS – BAJAJ ALLIANZ
Some of the highly selling products of Bajaj Allianz are:
• INVEST GAIN
It is a participating (with profits) endowment plan. There are limited premium payment options available. There are Minimum Guaranteed Benefits at Maturity or Death, whichever is earlier. The Minimum Guaranteed Benefit is the “Sum Assured”. The Minimum Guaranteed Benefit is enhanced by participation in profits (compounded reversionary bonuses), as declared by the company.
The payouts in case of death will be the sum assured plus declared compound reversionary bonuses plus interim bonus (the bonus amounts being the amount accrued from the sum assured plus bonuses thereon). However, if the insured person’s age is below 7 at the time of death, then the death benefit equals the sum of all premiums paid.
In case of death after 15 full policy years, the company may pay terminal bonus for in-force policies. The policy terminates on death of the life assured.
The policyholder may select the following Additional Benefits. • Family Income Benefit
• Comprehensive Accident Protection • Critical Illness Benefit
• Hospital Cash Benefit
The policy term of the additional benefits is equal to the term of the policy.
Premiums
Under this plan, we offer premium payment terms that are equal to the policy term and limited premium payment terms as well.
• CASH GAIN
Cash Gain is the only money back product to offer quadruple life cover. The additional amount payable for extra protection is also nominal. It is a participating (with profits) money back plan. The customer has a choice of 4 terms – 15, 20, 25 and 30 years. Cash benefits are payable every 1/5th year of the selected term. A total of 4 Cash Benefits payable - whatever be the term, plus the maturity benefit. The number of payouts = 5, including maturity benefit. Most companies offer only 4 payouts.
75% of Sum Assured are paid out as 4 Cash Benefits. 50% of Sum Assured are paid with bonuses as maturity value. A total of 125% of Sum Assured + bonuses is thus paid out. The maturity benefit would also include reversionary bonuses and a possible terminal bonus.
Despite Cash benefits at regular intervals, the life cover is uniform.
Note: The total payouts are 125% of the Sum Assured. This is a guaranteed payment, a USP. Most companies pay only 100% of the Sum Assured.
The customer may select any 1,2 3 or 4 or any combination or all of the following additional benefits:
• Family Income Benefit
• Comprehensive Accident Protection • Critical Illness Benefit
• Hospital Cash Benefit
USP: No other money back product offers the Family Income Benefit.
The basic First Year commission for Cash Gain is now 25%, instead of 20% for Cash Care. With Additional FYC, the total first year commission can go up to 40% of the FYP, instead of 32% for Cash Care. That is an increase of 8% in the First Year Commission itself over Cash Care.
• RISK CARE
This is a non-profit pure term insurance plan providing basically death cover equal to the sum assured. It is available as Regular Premium and Single Premium. There is no survival or maturity benefit, and therefore, the premiums are very low. For policies other than the single premium plan, the policyholder can opt for additional benefits like Critical Illness Benefit, Hospital Cash Benefit, Accidental Death Benefit, Accidental Permanent Partial/Total Disability Benefit and Waiver of Premium Benefit.
High Sum Assured Rebate (HSAR)
Premium discount will be offered for all policies where the sum assured exceeds the minimum sum assured by at least Rs. 10,000.
For Risk Care Economy Single Premium
For each full Rs.10, 000/- by which the sum assured exceeds the minimum sum assured, i.e. Rs. 100,000/-, there would be a discount of Rs. 40/-.
For all other Risk Care packages (Regular Premium)
For each full Rs.10,000/- by which the sum assured exceeds the minimum sum assured, i.e. Rs. 100,000/-, there will be a discount of Rs. 5/-.
• SWARNA RAKSHA ROC – The Immediate Annuity Plan
This is a retirement income plan, to help people get a regular income post retirement. The benefits under this policy vest on the Purchaser/annuitant on the date of commencement.
The benefit payment would be as under:
Life Annuity with Return of Purchase Price: A fixed annuity for life will be payable.
Life Annuity with Return of Purchase Price: On death of the annuitant, the nominee will be entitled to receive an amount that is equal to the lumpsum used to purchase the annuity.
The amount invested under this plan and all policy payments made by Allianz Bajaj Life Insurance Company under this plan are subject to tax as per the provisions and existing tax guidelines prevalent at the time of payment. The amount invested is allowed tax benefit under Section 80CCC (1) of the Income Tax Act, as of now.
• UNITGAIN PLUS
This is a whole of life, regular premium payment, investment linked life insurance policy. A major part of the premiums are invested in units. The units cannot be traded in the Open Market.
In UnitGain Plus, the customer chooses the Premium level. Based on that, there is a range of Sum Assured between a Minimum and Maximum level, which he/she can choose.
The death benefit is the higher of:
a) The Sum Assured chosen (less the value of units withdrawn by partial surrenders)
Or
b) The value of units.
The mortality charge is zero once fund value crosses SA. The death benefit may be increased without any underwriting every 3rd policy year up to 4 times. The policyholder has the option to decrease the Basic SA at any time.
It is a whole of life policy – i.e. there is no maturity date. However, it can be positioned as a whole of life, endowment, money back or any combination thereof and even as a regular tax free regular income plan for the customer.
There is option to withdraw cash – partially or fully, anytime after full 3 years premiums have been paid.
The following additional benefits are available with UnitGain Plus: • Accidental Death Benefit (ADB)
• Accidental Permanent Total/Partial Disability Benefit (APT/PDB) • Critical Illness Benefit (CI)
• Hospital Cash Benefit (HC)
The additional benefit charges are level premium – i.e. they will remain constant during the tenure of the policy. Charges are deducted only till age 65. Charge for additional benefits is deducted through monthly cancellation of units. The customer may decide how long he wishes to pay the premium. There is no fixed premium payment term.
The allocation rates for regular premium are: • 76% in Y1
• 97% in Y2 onwards.
Allocation of top-up premiums as well as incremental amount of regular premium is 98%.
Allianz Bajaj offers a choice of 5 funds to the customer. • Equity Index Fund (Equity Fund tracking NSE NIFTY)
• Equity Plus Fund (Pure Equity Investment advised by DSP Merrill Lynch) • Debt Plus Fund
• Balanced Plus Fund • Cash Plus Fund
PREMIUM CALCULATIONS (arbitrary figures)*
(*Source: CareQuote v 8.0)
Premium Payment
Term: 20 Benefit Term: 20
Invest Gain Cash Gain Swarna Raksha I - Life
Main Benefit Sum Assured