Marketing a product or service that is designed, produced and sold as if all buyers were all the same is the typical mass-market philosophy. There is no recognition of the different demands, behaviors or attitudes of buyers, nor is there any attempt to differentiate the appeal of [...]]]>

Marketing a product or service that is designed, produced and sold as if all buyers were all the same is the typical mass-market philosophy. There is no recognition of the different demands, behaviors or attitudes of buyers, nor is there any attempt to differentiate the appeal of the appeal of the product or service among buyers. It vaguely aims at everyone with the same marketing mix and should lead to the lower costs and prices and create the largest potential market.

The major advantage of mass marketing is the cost savings it creates for production, promotion and distribution. The firm is dealing with a standardized product that appeals to everyone within the market for the product or service. Resources do not have to be expended on creating differentiation. Of course the big question is how long can you rely on mass appeal in an increasingly competitive market?

Long-term business success does not rely on cost minimization but profit maximization. Consumers are not all the same and are demanding products and services tailored to their individuality. Thus the notion of market segmentation and segmentation marketing becomes critical to competitive success. This means marketing in such a way so as to target specific markets and fulfill the needs or wants of them via differentiated products or services and differentiated marketing mixes.

The big advantage of segmentation marketing provided it was done properly, is increased profits and in some cases better achievement of organizational goals. Ultimately the form that can improve customer service through segmentation and target marketing can be a more effective competitor, which in turn enables the firm to achieve its organizational objective more effectively.

With the growth of technology and its integration into market research, companies are now getting an insight into the needs and wants of narrowly defined segments and in some cases, individuals. They can then ‘Micro-Market’ to these segments with products and services specifically targeted to their needs.

Each and every investor has to face risk while investing. What is Risk? Risk is the uncertainty of income/capital appreciation or loss of both. Risk is classified into: Systematic risk or Market related risk and Unsystematic risk or Company related risk.

Systematic risk refers to that portion of [...]]]> Portfolio Management

Each and every investor has to face risk while investing. What is Risk? Risk is the uncertainty of income/capital appreciation or loss of both. Risk is classified into: Systematic risk or Market related risk and Unsystematic risk or Company related risk.

• Systematic risk refers to that portion of variation in return caused by factors that affect the price of all securities. It cannot be avoided. It relates to economic trends with effect to the whole market. This is further divided into the following:

1 Market risks: A variation in price sparked off due to real, social political and economical events is referred as market risks.

2 Interest rate risks: Uncertainties of future market values and the size of future incomes, caused by fluctuations in the general level of interest is referred to as interest rate risk. Here price of securities tend to move inversely with the change in rate of interest.

3 Inflation risks: Uncertainties in purchasing power is said to be inflation risk.

• Unsystematic risk refers to that portion of risk that is caused due to factors related to a firm or industry. This is further divided into:

1 Business risk: Business risk arises due to changes in operating conditions caused by conditions that thrust upon the firm which are beyond its control such as business cycles, government controls, etc.

2 Internal risk: Internal risk is associated with the efficiency with which a firm conducts its operations within the broader environment imposed upon it.

3 Financial risk: Financial risk is associated with the capital structure of a firm. A firm with no debt financing has no financial risk. The extends depends upon the leverage of the firms capital structure.

It provides a framework of rules/regulations/instructions to the Scheduled Commercial Banks for undertaking certain financial services or para-banking activities as permitted by RBI.

What is ‘Universal Banking’?

Universal Banking is a superstore for financial products under one roof. Corporate can get loans and avail [...]]]> What is ‘Para Banking’?

It provides a framework of rules/regulations/instructions to the Scheduled Commercial Banks for undertaking certain financial services or para-banking activities as permitted by RBI.

What is ‘Universal Banking’?

Universal Banking is a superstore for financial products under one roof. Corporate can get loans and avail of other handy services, while can deposit and borrow. It includes not only services related to savings and loans but also investments.

Relationship between Para-Banking & Universal Banking?

Most of the rationales for regulating banks fall into broad categories:

1. Subsidiary Companies
2. Equipment leasing, Hire purchase business and Factoring services
3. Banks undertaking PD (Primary Dealer) business
4. Mutual Fund Business
5. Insurance business
6. Underwriting of Corporate Shares and Debentures & bonds of Public Sector Undertakings
7. ‘Safety Net’ Schemes

What Is Merchant Banking?

A merchant bank deals with the commercial banking needs of

• international finance,
• long term company loans, and
• stock underwriting

UNDERWRITING OF CORPORATE SHARES & DEBENTURES

1. The statutory provision contained in Section 19(2) & (3) of the Banking Regulation Act, 1949 regarding holding of shares in any company as pledgee / mortgagee or absolute owner, should be strictly adhered to.
2. The banks have to ensure that underwriting commitments should comply with the ceiling prescribed for the banks’ exposure to the capital markets.
3. Ensure that the portfolio is diversified
4. Sub-underwriting
5. Carefully evaluate the proposals
6. Banks should not underwrite issue of Commercial Paper by any Company or Primary Dealers
7. Banks should not extend Revolving Underwriting Facility to short term Floating
8. Rate Notes/Bonds or debentures issued by corporate entities.
9. An annual review covering the underwriting operations taken up during the year, with company-wise details of such operations, the shares/debentures devolved on the banks, the loss (or expected) from unloading the devolved shares/debentures indicating the face-value and market value thereof, the commission earned, etc. may be placed before their Boards of Directors within 2 months of the close of the fiscal year.
10. Banks/Merchant banking subsidiaries of banks undertaking underwriting activities are also required to comply with the guidelines contained in the SEBI (Underwriters) Rules and Regulations, 1993, and those issued from time to time.

UNDERWRITING OF BONDS OF PUBLIC SECTOR UNDERTAKINGS

1. Banks should subject the proposals for underwriting to proper scrutiny having regard to all the relevant factors and accept such commitments only on well-reasoned commercial considerations with the approval of the appropriate authority.
2. The banks should formulate their own internal guidelines as approved by their Boards of Directors on investments in and underwriting of PSU bonds, including norms to ensure that excessive investment in any single PSU is avoided.
3. Banks should undertake an annual review of the underwriting operations relating to bonds of the public sector undertakings, with PSU-wise details of such operations, bonds devolved on the banks, the loss (or expected loss) from unloading the devolved bonds indicating the face-value and market value thereof, the commission earned, etc. and place the same before their Boards of Directors within two months from the close of the fiscal year.

GUIDELINES FOR ‘SAFETY NET’ SCHEMES

1. Under such schemes, large exposures are assumed by way of commitments to buy the relative securities from the original investors at any time during a stipulated period at a price determined at the time of issue, irrespective of the prevailing market price.
2. In some cases, such schemes were offered without any request from the company whose issues are supported under the schemes.
3. Apparently, there was no undertaking in such cases from the issuers to buy the securities. There is also no income commensurate with the risk of loss built into these schemes, as the investor will take recourse to the facilities offered under the schemes only when the market value of the securities falls below the pre-determined price.

TERMS AND CONDITIONS FOR MARKETING MUTUAL FUND

1. Banks should only act as an agent of the customers.
2. Banks should not acquire units of mutual funds from the secondary market.
3. Banks cannot buy back units of mutual funds from their customers.
4. Proposal to extend any credit facility to individuals against the security of units of mutual funds.
5. Banks holding custody of mutual fund units on behalf of their customers.

PRIMARY DEALERS IN INDIA

1. ABN AMRO BANK
2. KOTAK MAHINDRA BANK
3. BANK OF BARODA
4. HDFC BANK LTD
5. HSBC BANK LTD
6. JP MORGAN CHASE BANK
7. CITI BANK LTD
8. CANARA BANK
9. CORPORATION BANK LTD

POST-2011, BANK BOOKS TO CARRY REAL NUMBERS

1. Bank will have to value assets on current rather than on historic cost.
2. Banks will have to adopt the international financial reporting standards (IFRS) by 2011.
3. State bank of India has already taken the initiative to shift from the current Indian standard of accounting to IFRS.

Download the Powerpoint presentation for PARA BANKING :

STRENGTHS :

India’s geographical location is a culmination of forests, deserts, and mountains ands beaches. Diversity of culture i.e. a blend of various civilizations and their traditions. A wealth of archeological sites and historical monuments.

WEAKNESSES

Lack of adequate infrastructure. A xenophobic attitude among certain sections of the [...]]]> Incredible India :

STRENGTHS :

India’s geographical location is a culmination of forests, deserts, and mountains ands beaches. Diversity of culture i.e. a blend of various civilizations and their traditions. A wealth of archeological sites and historical monuments.

WEAKNESSES

Lack of adequate infrastructure. A xenophobic attitude among certain sections of the people. No proper marketing of India’s tourism abroad. Foreigners still think of India as a land of snake charmers.

OPPORTUNITIES

More proactive role from the government of India in terms of framing policies. Allowing entry of more multinational companies into the country giving us a global perspective. As well as growth of domestic tourism is one of the factors of the development of the tourism industry.

THREATS

Economic conditions and political turmoil in other countries affects tourism. Aggressive strategies adopted by other countries like Australia, Singapore in promoting their tourism affects Indian tourism.

The Banking sector in India has always been one of the most preferred avenues of employment. In the current decade, this has emerged as a resurgent sector in the Indian economy. As per the McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded annual [...]]]> Introduction on Banking Sector

The Banking sector in India has always been one of the most preferred avenues of employment. In the current decade, this has emerged as a resurgent sector in the Indian economy. As per the McKinsey report ‘India Banking 2010’, the banking sector index has grown at a compounded annual rate of over 51 per cent since the year 2001, as compared to a 27 per cent growth in the market index during the same period. It is projected that the sector has the potential to account for over 7.7 per cent of GDP with over Rs.7,500 billion in market cap, and to provide over  1.5
million jobs.

Banks are defined as the  “Organizations which accepts deposits from the public and lend the same to persons, firms and companies for productive purposes. In the present time they are over and above this definition. Banks are providing innovative services with innovates styles. ATMs, Credit cards and Internet banking have changed the quality of delivery of services of banks. Banking services are growing with many new additions such as money transfers, Bancassurance, NRI services and so on. Promotion of service has been a challenging task. Banking services being of a sophisticated nature should be promoted carefully, clearly and innovatively.

Today, banks have diversified their activities and are getting into new products and services that include opportunities in credit cards, consumer finance, wealth management, life and general insurance, investment banking, mutual funds, pension fund regulation, stock broking services, custodian services, private equity, etc. Further, most of the leading Indian banks are going global, setting up offices in foreign countries, by themselves or through their subsidiaries.

As reported in the Economic Times, the country’s leading public sector bank, State Bank of India has plans to recruit 25,000 employees in the year 2009. Besides, its life insurance venture, SBI Life, has plans to hire 13,000 agents and 200 sales managers. Also, Punjab National Bank, the country’s second largest public sector lender, and Union Bank of India have plans of hiring 5,000 people each. The financial year 2008-09 has already shown the banking sector to be among the largest job providers in the country with over 50,000 vacancies being notified and filled up in the public sector banks alone.

Significantly, the RBI has the tenth largest gold reserves in the world after spending US$ 6.7 billion for the purchase of 200 metric tonnes of gold from the International Monetary Fund (IMF). The purchase has increased RBI’s share of gold holdings from approximately 4 per cent to about 6 per cent.

Following the recent financial crisis, new deposits have gravitated towards the public sector banks. According to RBI’s ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks: June 2009′, nationalised banks, as a group, accounted for 49.7 per cent of the aggregate deposits, while State Bank of India (SBI) and its associates accounted for 24.2 per cent. The share of other scheduled commercial banks, foreign banks and regional rural banks in aggregate deposits were 17.5 per cent, 5.6 per cent and 2.9 per cent, respectively.

With respect to gross bank credit also, nationalised banks hold the highest share of 50.4 per cent in the total bank credit, with SBI and its associates at 23.5 per cent and other scheduled commercial banks at 18.0 per cent. Foreign banks and regional rural banks had a share of 5.7 per cent and 2.4 per cent respectively in the total bank credit.

The report also found that scheduled commercial banks served 34,676 banked centres. Of these centres, 28,167 were single office centres and 62 centres had 100 or more bank offices.

The confidence of non-resident Indians (NRIs) in the Indian economy is reviving again. NRI deposits have increased by nearly US$ 3.7 billion in the first four months of 2009-10, despite the volatile movements in the interest rates. NRI fund inflows increased since April 2009 and touched US$ 45.33 billion till July 2009, as per the RBI’s September bulletin. Most of this has come through Foreign Currency Non-resident (FCNR) accounts and Non-resident External Rupee Accounts. India’s foreign exchange reserves rose to US$ 281.861 billion as on October 9, 2009 as against US$ 253.0 billion in April 10, 2009.

India has finalised negotiations for a US$ 2 billion loan from the World Bank to help recapitalise state-run banks.

List of Banks in India:

Nationalised Banks:

• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India
• Corporation Bank
• Dena Bank
• Indian Bank
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab and Sind Bank
• Punjab National Bank
• Syndicate Bank
• UCO Bank
• Union Bank of India
• United Bank of India
• Vijaya Bank
• State Bank of India

Private Banks:

• Axis Bank
• Bank of Rajasthan
• Development Credit Bank
• Dhanalakshmi Bank
• Federal Bank
• HDFC Bank
• ICICI Bank
• IndusInd Bank
• INGVysya Bank
• Kotak Mahindra Bank
• Laxmi Vilas Bank
• South Indian Bank
• Tamil Nadu Merchantile Bank
• Yes Bank

Foreign Banks:

• ABN- AMRO Bank
• Abu Dhabi Commercial Bank
• American Express Bank
• Bank of America
• Barclays Bank
• BNP Paribas
• Citibank
• DBS Bank
• Deutsche Bank
• HSBC Bank
• JP Morgan Chase Bank
• Standard Chartered Bank
• State Bank of Mauritius

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration on 2nd [...]]]>

Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Finserv Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Both enjoy a reputation of expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration on 2nd May, 2001 to conduct General Insurance business (including Health Insurance business) in India. The Company has an authorized and paid up capital of Rs 110 crores. Bajaj Finserv Limited holds 74% and the remaining 26% is held by Allianz, SE.

As on 31st March 2009, Bajaj Allianz General Insurance maintained its premier position in the industry by achieving growth as well as profitability. The company garnered a premium income of Rs. 2866 crore, achieving a growth of 11 % over the last year. Bajaj Allianz has made a profit before tax of Rs. 149.8 crore and has become the only private insurer to cross the Rs.100 crore mark in profit before tax in the last three years. The profit after tax was Rs.95 crores, which is also the highest by any private insurer.

Bajaj Allianz today has a countrywide network connected through the latest technology for quick communication and response in over 200 towns spread across the length and breadth of the country. From Surat to Siliguri and Jammu to Thiruvananthapuram, all the offices are interconnected with the Head Office at Pune.

Andheri(E).

The locations of every corporate offices of Bajaj Allianz is magnificent. They locate themselves in a  very professional manner. This indicates their corporate approach towards their work. Work culture is also conducive to such environment.

4. Promotion:

Huge advertisements on Television and radios.

Tele-marketing

Promotion in front of corporate offices

Internet Marketing

Hoardings and brochures

5. People:

People are the main assets of financial organization because of service factor attached to it. Here in this case of insurance business, talented and experienced personnel are required. Bajaj Allianz recruits highly intellectual persons with good market knowledge. They also provide training to brief them up about Bajaj Allianz to its new staff members. This is the reason they are No.1 position in General Insurance among private players. They create an emotional commitment and strong two-way relationship between the employees and the Company.

To have clear performance expectations and a clear return from the Company (working environment, development, reward, career opportunities etc), which helps employees to make a connection between their contribution and the progress made by the Company.

To inspire and empower people to achieve their best and reward them competitively for their contribution and provide attractive career opportunities.To build a learning culture which fosters personal development and professional mobility and upholds values of professionalism,innovation, pragmatism, team spirit, integrity.To respect and value individuals, their diversity and support them in their need to balance professional and personal lives.

6. Process:

The prestigious awards itself speaks the smooth functioning of the insurance activities. They have the highest claims paying ability and a fundamentally strong position. They want to be the first choice for insurers in the country. So, they understand the insurance needs of the customers and translate it into affordable products that deliver value for money. Below case study is a clear evidence of proof:

7. Physical Evidence:

Physical evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, including some of the following:

a) Business cards

b) Internet / Websites

c) Furnishings

d) Bajaj Allianz Building in Pune

e) Internal Infrastructure

Bharti AXA General Insurance is a joint venture between Bharti, one of India’s leading business groups with interests in Telecom, Agri Business and Retail; and AXA, world leader in Financial Protection and Wealth Management. Bharti Group holds 74% of equity and AXA holds 26% of the equity.

With a [...]]]>

Bharti AXA General Insurance is a joint venture between Bharti, one of India’s leading business groups with interests in Telecom, Agri Business and Retail; and AXA, world leader in Financial Protection and Wealth Management. Bharti Group holds 74% of equity and AXA holds 26% of the equity.

With a vision to become the leader and preferred company for financial protection in India, Bharti AXA General Insurance offers its customers – individuals and businesses- a wide range of products and services that meet their insurance needs. The values upon which its business practices are based are availability, attentiveness and reliability. The company leverages the Bharti Group’s large customer pool, and has developed a strong multi-channel distribution network in both urban and rural markets.

The company was incorporated on 13th July 2007. Headquartered in Bangalore, the company currently has 40 branches across India.

The Management team at Bharti AXA General Insurance consists of experienced leaders who are passionate about their company’s vision and goals and are committed to the development of Bharti AXA General Insurance as the preferred company for Financial Protection in India.

Bharti AXA presents an array of protective plans to suit clients personal and business requirements. Bharti AXA system of values are as follows:

a) Reliable – prompt settlements, customer service and professionalism.

b) Attentive – to customer needs as they change with time, and actively
listening to our customers.

c) Available – easy customer access to money and to our company, and    plans that have built-in flexibility and convenience.

Mission:

“To be the preferred company for general insurance in India”

Strategy:

Quality Policy – To provide fast, fair and friendly service to customers & partners

To achieve a leadership position in India through a multi-distribution, multi-product platform

To adapt AXA’s best practice blueprints as a sound platform for profitable
growth

To leverage Bharti’s local knowledge, infrastructure and customer base

To deliver high levels of shareholder return

To build long term value with our business partners by enhancing the proposition to their customers

To be the employer of choice to attract and retain the best talent in India

Strong distribution network & customer base of Bharti – provides access to customer base of more than 60 million

Strategic differentiators:

Multi channel execution capability

AXA’s current Asia product range which is a strong match to products sold to the masses

Global scale of AXA providing cost effective and speedy re-use of systems, products and business capability.

7 P’s of Marketing of Bharti AXA General Insurance:

1. Products and Services:

A)Retail Insurance:

a. Motor

b. Health

c. Personal Accident

d. Home

e. Shop

B)Commercial:

a. Fire

b. Engineering

c. Marine

d. Property Crime

e. Liability

f. Package

C)Rural:

a. Agricultural Pumpset

b. Cattle Insurance Policy

2. Price:

Pricing factor is decided on the basis of the type of products which the customer buys. But in true sense, pricing is very competitive as there are lots of competitors all over the country. Bharti AXA is a strong player in private companies and its price structure is highly competitive and reliable.

Example of Bharti AXA General Insurance:

Policy of Two Wheeler Insurance:

This policy provides the following covers

1.Accidental damage to the vehicle due to:

• Fire, lightning, self-ignition, external explosion, burglary, housebreaking or theft, malicious act.
• Riot and strike; terrorism; earthquake; flood, cyclone and inundation
• Whilst in transit by rail, road, air, elevator, lift.

2.Liability cover for:

• Third party injury or death
• Third party property damage caused to their property.

3. Place:

Bharti AXA General Insurance Co. Ltd.

Plot No. 844/4, Mazzanine Floor, Fun Republic,

Shah Industrial Estate, New Link Road, Andheri(W)

Mumbai:400053

Bharti AXA has selected good location in Mumbai. They are Fort and New Link Road of Andheri(W).

4. Promotion:

The following are the tools through which Bharti AXA promotes its general insurance business:

• Tele-marketing
• Internet
• Hoardings
• Personal Selling
• Advertisement through newspapers, business magazines and FM radio

5. People:

Bharti AXA has a vision to ascend to the “preferred company” status by 2012 – to be preferred by customers, shareholders and employees. The Company believes that by being available, attentive and reliable, it will become the preferred company for its customers. And its people are Human Capital who have a key role in this process, and it is committed to create an emotional commitment with its employees.

The company also have synergy of the Global best practices of AXA Group, the Country specific proven best practices of Bharti Group and supplement it with its own set of initiatives towards creating a culture that can attract best of the talents, nourish and retain them to achieve the long term Corporate Vision.

6. Process:

From the minute customers claim intimation is received, the Claims Team becomes active and acts efficiently and swiftly towards its settlement. This is part of their endeavour to make the Bharti AXA General Insurance customer experience always a positive one.

Bharti AXA CLAIMS MISSION is “Fast, fair and friendly services, delivered in a proactive, cost efficient manner through technology platforms.

Alongwith the claim procedure being so smooth, the general insurance customer is very much satisfied while taking policy. The customer is given every minute details about a particular policy which he wants.

7. Physical Evidence:

• Stationery
• Separate departments for smooth functioning of work like Public Relation Department
• Brochures
• Internet / Web Pages
• Business cards

General Insurance provides much-needed protection against unforeseen events such as accidents, illness, fire, burglary etc. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen [...]]]> General Insurance

General Insurance provides much-needed protection against unforeseen events such as accidents, illness, fire, burglary etc. Unlike Life Insurance, General Insurance is not meant to offer returns but is a protection against contingencies. Almost everything that has a financial value in life and has a probability of getting lost, stolen or damaged, can be covered through General Insurance policy.

Property (both movable and immovable), vehicle, cash, household goods, health, dishonesty and also one’s liability towards others can be covered under general insurance policy. Under certain Acts of Parliament, some types of insurance like Motor Insurance and Public Liability Insurance have been made compulsory.

With the opening up of the insurance industry to the private sector, the need for a strong, independent and autonomous Insurance Regulatory Authority was felt. As the enacting of legislation would have taken time, the then Government constituted through a government resolution an Interim Insurance Regulatory Authority pending the enactment of a comprehensive legislation.

The Insurance Regulatory and Development Authority Act, 1999 is an act to provide for the establishment of an Authority to protect the interests of holders of insurance policies, to regulate, promote and ensure orderly growth of the insurance industry and for matters connected therewith or incidental thereto and further to amend the Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and the General insurance Business (Nationalization) Act, 1972 to end the monopoly of the Life Insurance Corporation of India (for life insurance business) and General Insurance Corporation and its subsidiaries (for general insurance business).

Some of the General Rules:

1. Mis-description :

The insurance policy shall be void and all the premiums paid by insured may be forfeited by the insurance company in the event of mis-presentation or mis-declaration and/or non-disclosure of any material facts.

2. Reasonable care :

The insured shall take all reasonable steps to safeguard the property insured against any loss or damage. Insured shall exercise reasonable care that only competent employees are employed and shall take all reasonable precautions to prevent all accidents and shall comply with all statuary or other regulations.

3. Fraud :

If any claim under the policy may be in any respect fraudulent or if any fraudulent means or device are used by the insured or any one acting on the insured’s behalf to obtain any benefit under the insurance policy, all the benefits under the insurance policy may be forfeited.

4. Few basic principles of general insurance are :

a. Insurable interest

b. Utmost good faith

c. Subrogation

d. Contribution

e. Indemnity

5. Risks of loss not covered under general insurance are:

The loss or damage or liability or expenses whether direct or indirect occasion by happening through or arising from any consequences of war, invasion, act of foreign enemy, hostilities (whether war be declared or not), civil war, rebellion revolution, civil commotion or loot or pillage in connection therewith and loss or damage caused by depreciation or wear and tear. However the risk of loss or damage by war can be insured by payment of additional premium in some cases only.

General Insurance in the current scenario:

The total number of general insurers registered with IRDA has gone up to 22, with registration of SBI General Insurance Company Limited, a joint venture general insurance company promoted by State Bank of India and Insurance Australia Group, Australia, as a General Insurer in December 2009.

The four public sector general insurance companies—United India Insurance, National Insurance Company, New India Assurance and Oriental Insurance Company—have together grown at a slightly faster rate during the April-November period this year than the private players, for the first time since 2000 when private entry was allowed in the general insurance sector.

The Gross Direct Premium Income (GDPI) for the public sector grew at 11.05 per cent during April-November 2009 as against 5.98 per cent during the same period last year and as compared to the growth of 11.02 per cent by the private sector. According to IRDA data, out of US$ 5 billion premium garnered by the industry during the period, US$ 2.84 billion came from the four public sector companies compared to US$ 2.56 billion during the corresponding period last year. The PSU insurers also held on to last year’s market share of 57 per cent. New India managed to garner the highest premium at US$ 850 million in the first eight months of this fiscal. Private players grew 7.1 per cent during April-November period 2009-10 by collecting US$ 2 billion premium.

• Bharti AXA General Insurance Company is planning to infuse US$ 139.5 million of capital in the next five years. It is also looking at expanding its network and planning to add 500 agents during the current year.
• The summer paddy crop in Palakkad district and cashew crop in many districts of Kerala will be brought under a climate-based crop insurance programme during the ongoing rabi season. The scheme is being implemented jointly by the Union Agriculture Ministry, the Agriculture Department of Kerala and the Agriculture Insurance Company of India.
• Small and medium enterprises (SMEs) have become the preferred segment for general insurers, despite the former’s small size and unorganised nature of business. Over 60 per cent of the business underwritten in the corporate side is coming from the SME segment.

Project Insurance:

Insurance companies are also witnessing increasing demand for project insurance in the last few months. Corporates are beginning to demand project insurance across sectors such as power generation with the cover beginning right from the start of the project till it is declared ready for commercial use. Some of the big projects also take cover for financial loss arising out of delay in completion.

Industry players estimate that premiums collected from project insurance will be around US$ 216.2 million for the industry as a whole and is expected to increase significantly.

• Oriental Insurance Company Ltd will be offering comprehensive project insurance for the Tata Power Project at Mundra in Gujarat.

Health Insurance

Health insurance market was at around US$ 1.5 billion in 2008-09 and is expected to grow to US$ 9 billion by 2016-17. While health insurance policies are mostly provided by general insurance companies, life insurers contribute about five per cent to the overall health insurance business.

• Eyeing a place among the top three health insurers in the country within three years, Anil Ambani group firm, Reliance Life Insurance, has added a new vertical that would focus on developing the health insurance segment. The company would offer 3-5 year policies in the coming months and it plans to have a market share of about 10 per cent in the next three years.
• Apollo DKV Health Insurance has renamed itself Apollo Munich Health Insurance as a part of its five-year strategic plan to gain a five per cent market share. Apollo Munich is a joint venture between Asia’s largest integrated healthcare provider, The Apollo Hospitals Group, and Germany-based Munich Re’s segment, Munich Health.
• Max India is planning to invest US$ 43.25 million in its health insurance joint venture (Max Bupa) and will launch a product over the January–June 2010 period.
• Private life insurer, Aegon Religare, plans to enter the health insurance segment while continuing to focus on term insurance products.
• Star Health and Allied Insurance expects to invest US$ 38.9 million during the current financial year to grow its health insurance business, taking the total invested capital to US$ 67 million.

Major insurance policies that are covered under General Insurance are:

Home Insurance
Every man has a dream to own a house one day. For an ordinary person it takes a whole lifetime of savings to build a house. And one cannot predict a natural calamity like earthquake.

Health Insurance
It is said that a healthy mind resides in a healthy body. Hence it is very important to stay healthy. These days life is very fast and stressful.

Motor Insurance
Legally, no motor vehicle is allowed to be driven on the road without valid insurance. Hence, it is obligatory to get the vehicle insured.

Travel Insurance
Travel and tourism is one of the most fast growing sectors around the world. With rise in standards of living, more and more people are embarking on journeys and exploring new places.

Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual. A company that combines its international strengths and local advantages to offer its customers a wide range of innovative life insurance products, helping them in taking important financial [...]]]>

Kotak Mahindra Old Mutual Life Insurance Ltd is a joint venture between Kotak Mahindra Bank Ltd., its affiliates and Old Mutual. A company that combines its international strengths and local advantages to offer its customers a wide range of innovative life insurance products, helping them in taking important financial decisions at every stage in life and stay financially independent. The company is one of the fastest growing insurance companies in India and has shown remarkable growth since its inception in 2001. Kotak Life Insurance employs around 5,565 people in its various businesses and has 197 branches across 141 cities.

• Savings and Investment Plans:

Kotak Super Advantage

Kotak Platinum Edge

Kotak Endowment Plan

Kotak Money Back Plan

• Ø Child Plans:

Kotak Headstart Child Plans

Kotak Child Advantage Plan

• Ø Retirement Plans:

Kotak Long Life Wealth Plus

Kotak Long Life Secure Plus

Kotak Retirement Income Plan

Kotak Second Innings Plan

Group Plans:

Kotak Group Shield

Kotak Group Assure

Kotak Gratuity Group Plan

Kotak Superannuation Group Plan

Kotak Term Group Plan

Rural:

Kotak Gramin Bima Yojana

2. Price:

Pricing is an important element in the service sector. So Kotak Life Insurance has maintained a good pricing mix for child plan:

The disposable income in the hands of the prospects is found low or almost nil so Kotak has adopted his strategy that is beneficial to the end user and also paves the ways for increasing the insurance business.

The price mix decisions basically depend upon the premium that they are going to charge from the endusers. As in this case the premium charged will be low in the initial stages and will increase with the increasing age of the child. But in case if the child is physically disabled the premium charged will be high. The customers can even avail for loan facility if they opt for higher premium plan.Kotak life gives more importance to pricing strategy because they feel that it is the only means for attracting the customers in true sense.

3. Place:

Kotak Life has adopted the place strategy in such a way that a gap between the services promised and services offered is bridged over. Kotak agents, brokers, branch office, retail finance service distributors alliances with banks etc. play an important role in delivering their services to policy holders at the right time and at right place. This product is promoted in places like school, colleges and other child zone areas. This product is highly flexible as it is present for children in urban well as rural areas and thereby it facilitates mobility.

4. Promotion:

Advertisements

This product has been advertised through telecast media broadcast media and print media. Since this product is for children up to 17 years of age the focus of advertisement is on television which is more appealing. Kotak has recognized the need for this plan and therefore has adopted suitable marketing strategy which involves advertisements in popular kids channel like pogo, hungama, star plus etc.

Publicity

The PROs of Kotak Mahindra life insurance has publicized this product taking into consideration the eligibility and features and has thereby come with an appealing strategy emphasizing not only on children who are main benefit holders of this product but also the family who will actually pay the premium for this product. the PROS of Kotak life have developed a good rapport with hungama to publish   it can be seen from the banner of this plan that  the happiness is shown on parents face  as soon as they secure their child’s future  which is the prime motive of this plan. This plan gives your child the “azaadi” to realize his dreams even before he is an adult.

Sales promotion

The promotion activities are carried out by the agents, development officers and branch officers. Kotak life has promoted this plan by giving calenders dairies bags which they thought should be given as a token of gift along with the plan. Kotak life also conducts, seminars quiz, other contest, games in various malls and play schools. All such activities have increased the volume of saled and has also created a medium of awareness for the children.

Personal selling

As we know that customer is the king , Kotak gives utmost importance to personal selling of this product. Moreover, Kotak Life conducts special training session for its agents who will finally approach the end customers so that they can demonstrate effectively which will enable the end users i.e childrens to buy the product.

5. People:

People are most important component of marketing mix for the insurance industry. Sophisticated process of technological advances makes the way for the development of personnel in such a way that an organization succeeds in making possible a productive utilization of technologies used or likely to be used. Professional qualification requirements change as technology develops and evolves. The use of computers micro-computers, fax machines, sophisticated telephonic services, and e-mailing, inter-net and intra-net services have been found throwing a big impact on the perception of quality of services. This makes it essential that the insurance organizations also think in favor of developing personnel in line with the development and use of information technologies. The front line staffs as well as the branch managers are required to be given the training facility so that they are in position to make possible and effective use of the technologies. The insurance organization   bear the responsibility of the developing the credentials of their employees. In this context, it is also significant that they think about the behavior profile of insurance personnel. It is pertinent that the employees are well aware of the behavioral management they know and understand the changing level of expectations of users and make sincere efforts to fulfill the same. In this context, it is also significant that the senior executive while the recruiting, training and developing the insurance personnel make it sure that employees serving the organizations have  a high behavioral profile in which empathy  has been given due place. The psychological attributes becomes significant with the view point of influencing the prospect a retaining the users, it is in this context that the insurance companies need a rational plan for the development of insurance personnel. Kotak Life provides training to its employees for making them competitive in the insurance market.

6. Process:

In the current scenario, policyholders just log on to website and call insurance advisors to their home or office. This insurance advisors make customers aware about the new and advantageous product for them. Alongwith it also helps customers to ask any query related to any insurance products. So the process of taking life insurance is very convenient . It is due to private players entering into the market. But still the simplest model of life insurance takes place mostly. It is as follows:

• The client approaches the insurer through an agent with a proposal containing his personal details, income details, medical history, products ( the product describes the features provided by the insurer like maturity bonus, claims allowed etc. These features vary from product to product), sum assured (the amount for which the client is covered), term (number of years for which the client is to be covered) and premium amount (installment amount to be paid by the client to the insurer). The agent who brings this proposal is termed as a base/servicing agent for the proposal.
• The proposal will go through various stages of approval and risk evaluation by the “Central Processing Centre” of the Insurance Company. Upon final approval, a legal agreement, termed as policy, between the insurer and the client is prepared whereby the insurer covers the client for the sum assured. The client is also entitled for some additional benefits, if any, depending on the features of the product taken in the policy. The base agent gets a commission for the policy.
• The client pays a premium at regular intervals. These subsequent premiums are termed as renewal premiums. The base agent gets a commission on the renewal premium also.
• The client may come back with some alterations to the policy viz. increase/decrease in sum assured, increase/decrease of the term of policy etc. The insurer will make the relevant changes to the policy and will issue endorsements stating the alterations made and their effect on the policy.
• During the term of the policy, the client can submit claims. The insurer makes payment against the claim after verification. Depending on the type of claim the policy is either terminated or is kept in force.
• At the end of the term of the policy, the client gets the sum assured as part of the maturity benefit under life insurance policies. In addition to this the client will get the maturity bonus and any other benefits depending on the product feature.

7. Physical Evidence:

Physical evidence includes facility design, equipment signage, employee dress, tangibles, reports and statements.

Signage

Signage personifies the insurance company. It gives a identity by which users recognize the company. A signage depicts the company’s philosophy and policy. Following are some of the examples

Tangibles

Insurance companies give their customers and agents various tangible items like pen, letter pad, calendars. Such things try to reduce the intangibility characteristics of this industry.

Statements

The statements are punch line which briefly depicts the vision and attitude of a insurance company towards its users/potentials. It also indicates their business motive.