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Concept of Insurance

Insurance is a contract by which one can protect oneself against specific losses by paying a premium over a period. On one hand, human life is subject to various risks-risk of death or disability due to natural or accidental causes. Humans are also prone to diseases, the treatment of which may involve huge expenditure. On the other hand, property owned by man is exposed to various hazards, natural and man-made. When human life is lost or a person is disabled permanently or temporarily, there is a loss of income to the household. The family is put to hardship. Sometimes survival itself is at stake for the dependents. When it comes to property, loss or damage to property results in either whole or partial loss in income to the person or entity. Risk has the element of unpredictability. Death/disability or loss/damage could occur at anytime. Losses can be mitigated through insurance. Insurance is a commodity which offers protection against various contingencies. Insurance products available for life and non-life are many. In non-life, apart from personal covers such as accident covers and health insurance, there are products covering liabilities under a particular law and or common law. The various products are designed to cater to different needs of an individual or industry such as fire insurance policy on multi-storied building, householders policy.

An insurance contract promises to make good to the insured a certain sum in consideration for a payment in the form of premium from the insured. Human life cannot be valued. Hence, the sum assured is by way of a benefit in the case of life insurance. Life insurance products provide a definite amount of money to the dependants of the insured in case the life insured dies during his active income earning period or becomes disabled on account of an accident causing reduction/complete loss in his income earnings. An individual can also protect his old age when he ceases to earn and has no other means of income by purchasing an annuity product. A personal accident covers is also for protection. In the event of death or disability, permanent or temporary, of the insured, it provides for compensation which is either the whole or a percentage of the Capital Sum Insured depending on the kind of loss. In the case of Health Insurance, the policy seeks to cover expenses towards treatment of diseases and /or injury up to the sum opted by the insured. In respect of insurance relating to property, there are many products available. Property may be covered against fire and perils of nature including flood, earthquake etc. Machinery may be insured for breakdown. Goods in transit can be insured under a marine cargo insurance cover. Insurance covers are also available for ships and other vessels. A motor insurance policy covers third party damage as well as damage to the vehicle. Insurance of property is based on the principle of indemnity. The idea is to bring the insured to the same financial position as

he/she was before the loss occurred. It safeguards the investment in the property. Where there is no insurance, losses can mar a project or an industry. General Insurance offers stability to the economy and to the society. Insurance offers security and so peace of mind to the individual. The concept of insurance is that the losses of a few are made food by the contribution from many. It is based on the law of large numbers. It stemmed from the need of man to find a solution for mitigation of losses. It also reflects the nature of man to find a solution collectively. It is important for all to understand the various products that life and general insurance companies offer before they make a choice as to the product they want to buy. As per regulations, insurers have to give the various features of the products at the point of sale. The insured should also go through the various terms and conditions of the products and understand what they bought and met their insurance needs.

Concept of insurance
Life insurance is a contract by which one can protect oneself against specific losses by paying a premium over a period of time. Since each one of us, during our lives are faced with numerous risks- falling health, financial losses, accidents and even fatalities, our instinct drives us to cover those losses risks. Though an insurance cover cannot protect against the emotional losses arising out of these risks, it softens the economic crisis that usually accompanies these losses. Life Insurance gains much more value if an individual is in a nuclear family. Unlike in the traditional joint family system, in a nuclear family,

support from the extended family cannot be counted upon. So it is vital that an individual has an insurance cover as the protective shield against unfortunate losses. Everyday when any one of us opens the daily morning newspaper we find a number of news stories reporting a number of accidents. This leaves us wondering that what will happen if this tragedy happened to us.

A person may just be relieved of this fear if he/she has insurance. Life insurance cannot return the person who has died but still it can provide his/her family with monetary assistance, once that person is not with them. This makes life insurance vary important in todays turbulent times.

Necessity of Insurance:Life is a series of milestones that follow one another relentlessly-like planning childs education, their marriage, investing in and protecting ones assets, retirement plans etc. to mane just a few. Often on milestone defines the next. And, therefore, all of them demand careful financial planning much ahead of time. So, that we are not stranded midway to our goals. Or worse- our loved ones are not able to live the dreams we dreamt for them. Life insurance plays a role in helping to plan our life .the need of life insurance is as follow: Temporary needs and threats: The original purpose of the life insurance remains an important element, namely providing for replacement of income on death etc. like the case of the breadwinner dying an early death.

Regular Savings:Providing for ones family and oneself as a medium to

long term exercise has become a more relevant exercise in recent times as people seek financial independence from their family. Investments:The building up of savings while safeguarding it from the ravages of inflations also a part of insurance. As while regular product investment products are traditionally lump sum investments were the individual makes one-time payment. Retirement:Provision for ones later years becomes increasingly necessary especially in the changing cultural and social environments. One can buy a suitable insurance policy, which will provide periodical payments in ones old age.



History of Insurance in India

The business of life insurance in India in its existing form started in India in the year 1818 with the establishment of the Oriental Life Insurance Company in Calcutta. The origin of insurance is very old. The time when we were not even born; man has some sort of protection from the unpredictable calamities of the nature. The basic urge in man to secure himself against any form of risk and uncertainty led to the origin of insurance. The Indian life insurance company act 1912 was the first statutory body that started to regulate the life insurance business in India. By 1956 about 154 Indian, 16 foreign and 75 provident firms were been established in India. Then the central government took over these companies and as a result the LIC was formed. Since then LIC has worked towards spreading life insurance and building a wide network across the length and the breadth of the country. After the liberalization the entrance of foreign players has added to the competition in the market.

Some of the important milestones in the lifer insurance business in India are: Year 1912 Important milestones The Indian Life Assurance Companies Act enacted as the First statute to 1928 regulate life insurance business. The Indian Insurance Companies d Act enacted top enable the government to collect statistical information about both life and general insurance business. 1938 1956 Rs. 5 crore from government of India Legislation amendment for protecting the interests of the insurance business. 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of parliament , viz., LIC Act, 1956, with a capital contribution of

Reforms of Insurance Sector:--

In 1993, Malhotra Committee, headed by former finance secretary and RBI Governor R.N.Malhotra, was formed to evaluate the Indian Insurance Industry and recommended its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The committee came up with the following major provisions: Private companies with a minimum paid up capital of 1bn should be allowed to enter the industry. Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. Only one state level life insurance company is allowed to operate in each state. Government stake in the companies to be brought down to 50%. Then insurance act should be changed. An Insurance Regulatory body should be set up. Mandatory investments of LIC life fund in government securities to be reduced from 75% to 50%. GIC and other subsidiaries are not allowed to hold more than 5% in any comp-any. LIC should pay interest on delays beyond 30 days. Insurance3 Companies must be encouraged to set up unit linked plans.

INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY: The IRDA since its corporation as a statutory body in April 2000 gas fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Reforms in the insurance sector initiated with the passage of the IRDA Bill Parliament in December 1999.IRDA has put inn a framework of globally compatible regulations. In the private sector 15 life insurance and 15 non-life insurance companies have been registered. The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products. The other decisions taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companied was the launch of the IRDAs online service fir issue and renewal of licenses to agents. IMPACT OF LIBERALIZATION: Poised at a phenomenal growth of 500%, the Indian insurance industry is expected to reach US$ 60 billion in the next four years. This is attributed mainly to the soaring demand in semi-urban and rural areas. While there are as many as 27 direct insurance players, more await their foray into the county. India is turning out to be a crucial market, with premium from India accounting for almost 25% of Asia and Middle Easts gross written premium for royal & sun alliance. The group expects the Indian market to double again in the next five years substantially increasing the regions share in world insurance.

Allianz, New York, Prudential, standard life, AIG, Aviva, Axa, Metlife and ING are all multinational insurance companies that have joint ventures in the country. Yet another foreign insurance player entered the country when Religare, a Ranbaxy group company providing financial services, joining hands with the Dutch insurer action

INSURANCE SECTOR OF INDIA: The insurance sector was opened up for private participation in the year 1999. The reasons that prompted the government to bring in reform in the insurance sector are well known. While the Public Sector Insurance Companies made enormous contribution in the spread of awareness about insurance, and expanded the market, it was recognized that their reach was still limited, the range of products offered restricted and the service to the customer inadequate. It was also felt that the rapid economic growth witnessed in the 90s cannot be sustained without a thriving insurance sector. It was also recognized that India has a vast potential that is waiting to be tapped and this could be achieved when sufficient competition is generated and it is exposed to the developments in the rest of the world. The insurance sector was, therefore, opened up for private sector participation with provision for limited foreign equity exposure. We have now four years experience of the public and private sector together operation in the market. Indian insurance business, which remained under developed with low levels of insurance penetration and insurance density has shown signs of improvement. The insurance penetration i.e. premia as percentage

of GDP has increased from 2.32%in 2000 to 2.88% in 2003. The insurance density i.e. premia per capita has increased from USD 9.90 in 2003. The overall world rankings in terms of total premium volumes have improved from 23rd in 2000 to 19th in 2003. The world ranking in terms of premium volumes has also improved from 20th in 2000 to 18th in 2003. The share in world in world market has increased from 0.50% to 0.81%. The total premium collected by the insurers both life and non-life in the years 1997-98, 2000-01 and 2003-04 in crores.

70000 60000 50000 40000 30000 20000 10000 0 1997-98 2000-01 2003-04 LIFE INSURANCE NON-LIFE INSURANCE

The diagrams represents that there is 83% increase in the last three years over the base year 2000-01. There was also an increase of 66% from 1997-98 to 2000-01 after the opening up of the sector. The market share of the private players has also to be seen in the context of this enlarged market. This is also

an evidence to show that the rate of growth of public sector undertakings had not shown any decline after the entry of private players.

There is also an increase in non-life insurance rankings in term of premium volumes from 29th in 2000 to 28th in 2003. The share on the world market has increased from 0.25% to 0.29%. The LIC has concentrated on retaining its market in traditional products like endowment plans and money back and slackened its hold in the world market. It has simultaneously started experimenting with new products like ULIP where there is private sector domination. I have no doubt that LIC continue to play a major role in the life insurance market. This would, in turn, prompt the private companies to innovate, find niche markets and expand into the rural areas. As a result the insurance penetration would increase and the customer would stand to gain. We are already witness the beneficial effects of this type of competition between the public and private sector. The pension market has been developing in a big way which would benefit the large section of the people in the organized and unorganized sector. There is a thriving Unit Linked insurance market that has been generated exclusively by the private sector. The annuity market has started growing. There is a plethora of new and innovative products with a variety of benefits as riders from which they can choose. They can buy products and services that they need while hitherto they

were purchasing products as they alone are available in the market. This choice has empowered the customers and this is a positive signal.

In the case of General Insurance also, the public sector has responded to the challenge by entering into the corporate agency relationships with providers of goods and services. The scope for innovation being limited in the tariff market, the private general insurance companies seem to be concentrating on provision of total risk management services to their corporate clients. This has enabled them to make in roads into the profitable corporate accounts of state insurers. In addition the private sector has concentrated on providing a host of service to their clients like point of sale issuance of policies, cashless settlement in the case of motor repairs, and SMS alerts on motor claims status. The accent is on providing high-class service to the customers and earning goodwill which would in due course help access large corporate accounts. The general insurers have to come out with innovative products in the personal lines if they are to expand business. I have no doubt that this would happen and the IRDA would be happy to facilitate it by removing any regulatory or tariff related obstacles. In addition to the growth of insurance market the other area where there is significant beneficial change with the entry of the private insurance companies is in the area of insurance intermediation. Till two years ago, the only mode of distribution or life insurance products was through agents. We have today alternate channels like banc assurance, brokers, Corporate agents and direct marketing through internet. Though it is too early to predict, banc assurance has the potential to emerge as a significant distribution mechanism. Banks have not only data from which they can identify potential clients, but have also extensive reach and provide a point of contact for the insured. The bank branch unlike an agent cannot be elusive after the sale of the product and has to respond to the needs of the insured. If there is proper disclosure at the time of sale of policy and efficient post sale service, there will

be significant increase in the use of this model by the insurers to enlarge their business. The insurance broker offers the most efficient distribution system through which clients purchase commercial insurance. As the non-life insurance market opens gradually, the value of the insurance brokers role will be better understood. There will be increasing opportunities to serve the needs of midsize companies and small enterprises by delivering the specific services these clients need and in the way they want them delivered. This implies that there is enough business for a large number of brokers for the present and an early start would give them adequate time and opportunity to equip themselves with necessary skills to provide professional services when the market is finally detariffed. Corporate Agency is another area, which has been expanding rapidly. This is a new institution and we have no experience of the functioning of this new class of intermediary, as such an institution is not preventing in insurance markets in the world. While this model has the potential to reach a large section of the population in a short time, there are concerns about the mode of sale of the policies. Insurance products are becoming complicated and unless the agent is conversant with benefits and conditions attached to the policy, there is a distinct possibility if the sale being affected without full disclosure. While this may not be international repercussions could have farreaching consequences. The insurers will have to be extremely careful in dealing with corporate agents and keep a vigilant eye on the way the sales are affected. The IRDA would be issuing some guidelines in the manner of selection of corporate agents, the manner in which their activities should be monitored and the precautions to be taken to ensure that there is complete disclosure to the clients of the policy implications.

In spite of the proliferation of the intermediary channels, the traditional agent continues to play a dominant role in the sale of insurance policies. The regulations provide for minimum qualifications, specified training programme followed by a pass in the test conducted by the insurance institute of India for becoming an agent. The insurers have been aggressively recruiting candidates as agents and after getting them trained sending them for the examination. In view of the large numbers the Institute is finding it difficult to exercise the required controls for conducting the examination. We have come across some irregularities in the conduct of both training and the examination. I have no doubt that the insurers are interested in recruiting for their agency force a person with good academic qualification and with impeccable credentials and conduct. While from the Regulatory side we shall take action necessary to ensure the fair and proper conduct of training and examination, I would appeal to the CEOs through this forum to send the message down to their HR managers that they should exercise due diligence in the recruitment of agents. A significant feature in the post reforms era is the ability of the agency force to assess the requirements of risk cover for their prospect and suggest the policies that suit their individual requirements it may be recalled that one of the criticisms against the public sector insurers is that they concentrated on side of policies without looking into the needs of the









underinsured. The average size of the life insurance policy before the opening up of the sector was around Rs. 50,000/-. This has now risen to about Rs. 80,000/-. The policies sold by the private insurers are in the range of Rs. 1.1 lakh to Rs. 1.2 lakh, way above the industry average. The limited coverage in the rural areas and the available sections of the society continues to be a source of concern for the regulatory body. While the private insurers are adhering to the targets stipulated in the Regulations, there is need for a greater involvement of the management at various levels so that the product that is finally delivered serves the needs of those targeted group. We have streamlined the definition of RURAL AREAS to bring it on par with the classification followed by the Census Department to avoid confusion on what constitutes a rural area. In the case of coverage of the socially disadvantaged sections, the IRDA has come out with a draft micro insurance regulation to facilitate easy coverage and provide quality service to the insured. As we look at these four years, one can reasonably be proud of the strides made by the industry. We are witnessing a demographic change in the country and the younger generation which is exposed to the outside world demands products and services which are at par with what is available in the advanced countries. This is the biggest challenge. I have no doubt that the Indian insurance companies would face this challenge and provide services on par with services provided in the advanced

countries. The regulatory regime would be happy to facilitate this process whenever its intervention is required. SIZE: Insurance is a $10 billion (premiums) industry in India: Grew by 25% in 2004-05 over the previous year. In life insurance, the total premium collected in FY 2004-05 was $5.8 billion for 26.2 million policies: Growth of 36% over 200304. Non-life insurance Motor, marine, fire and health insurance are the key segments. For Non-life insurance, the premium collected in FY 2004-05 was $4.2 billion: Growth of about 12.8% over 2003-04.

STRUCTURE: INDIAN Insurance market was opened to private & foreign investment in 1999-2000. Major international players like AIG, Aviva, Metlife, New York, Prudential, Allianz, Sun Life, Standard Life and Lombard are already
Present with minority stakes in joint ventures with Indian

companies for both life and non-life segments.

Life insurance market is still dominated by Life Insurance Corporation (LIC) a public sector company which has a 71.56% share of the market in April, 2007. In Non-life insurance, private sector companies (almost all are joint ventures with foreign insurers) account for 20% of the market and have grown at 60% per annum. COMPETITIVE STRUCTURE IN INSURANCE SECTOR: There are presently 16 players in the Insurance sector. The countrys largest life insurer, LIC, new premium grow 57 per cent to Rs. 2,134 crore in April by selling 15,89,684 policies against Rs. 1,355 crore a year ago. It had a market share of 71.56% in April. The 15 private players together saw their business grow 32% to Rs. 848 crore with a market share of 28.44 %. ICICI Prudential topped the private players chart with its premium income rising 84.5% to Rs. 271 crore and had 9.08% share of the market. Bajaj Allianz, which saw 15% decline in business, collected Rs. 124 crore with a market share of 4.16%.


INSURERS LIC ICIC Prudential Bajaj Allianz SBI Life HDFC Standard Max New York Life Tata AIG Aviva Reliance Life Birla Sunlife Kotak Mahindra Old Mutual ING Vysya Met Life Shriram Life Sahara Life Bharti Axa Life

PREMIUM (Rs. Crore) 2134.00 271.00 124.00 90.00 70.00 69.00 48.00 39.00 33.00 28.00 26.00 22.00 19.00 4.50 1.70 0.72

FUTURE OF INSURANCE IN INDIA Liberalization of this sector has helped bring about several positive developments as: The markets size has expanded. New products are entering the market. Innovative channels of distribution are being used. Customer servicing has improved tremendously. The insurance market is likely to grow at a rate of 22-27 %, giving enough room to all the players to grow. Of course ultimate success will be determined by the servicing and customer satisfaction. However, consumer awareness level is still off the mark. According to the recently conducted FICCI survey on the Present

State of Indian Insurance Industry, the awareness levels regarding insurance are still in the realm of medium to low. This clearly indicates the onerous task that companies have in creating awareness about need to insure and also tremendous potential they have in expanding the markets by getting more customers in their fold by increasing awareness levels. Despite several positive developments and entry of several large private players in the market, there are certain areas, which need to be delivered in order to reap full potential of privatization. In fact, the companies should start looking at the B&C population segments, as the metro and large urban market will saturate in 3-5 years time. The success of the companies will be determined by the insurers ability to innovate and distribute simple products for B&C population segments. The 26% Foreign Equity in insurance Joint Ventures continues to be an issue of concern and needs to be reviewed. I am sure government in due course will certainly look at it. Also, in light of recent talk on benchmarking FDI limits for all sectors at 74%, would this have any implication on insurance sector as well? The issue of rebating has been bothering the regulator as well as the players. This needs be looked at seriously to ensure regulated and sustained growth of the Insurance market. Taxation issue on the life side continues to bother the private insurance companies. Desertification is another critical element of insurance reforms. This sooner or later will become a reality, as tariff and liberalization do not go hand in hand. Worldwide, markets have gradually moved to

Desertification. It is, therefore, important to chalk out a roadmap, prepare all the stakeholders of its likely impact, and make the process less painful. Health Insurance has a great potential in the country but remains highly underdeveloped in India. According to some estimates, only 3% of Indias population is covered under some form of voluntary health insurance schemes. POLICY: FDI up to 26% is permitted under the automatic

route subject to obtaining a license from the Insurance Regulatory and Development Authority (IRDA). OUTLOOK: Indian Insurance Market is expected to be around Plans to increase FDI up to 49%. IRDA is the regulator for the Insurance Industry.

$25 billion by 2010. Expected CAGR of over 20% p.a. POTENTIAL: Largely untapped market: about 0.6% of the global

market for 17% of the worlds population.

Nearly 80% of the Indian population is without Life, Insurance penetration is low at 2.9% as compared Non-life penetration is even lower than 1% in 2003. Per capita life insurance premium in India in 2004 Strong economic growth with increase in affluence

Health and Non-life insurance. to the world average of over 8%.

was $16 as compared to the world average of $292. and rising risk awareness leading to rapid growth in the insurance sector. Many more international players including AXA Investment opportunities exit in both life and non-life Total estimated investment opportunities of $4-5 have announced plans to enter India. segments. billion.


About us
Bajaj Allianz Life Insurance Company Limited is a joint venture between Allianz SE, one of the worlds largest insurance companies and Bajaj Auto, one of the biggest 2 & 3- wheeler manufacturers in the world. Allianz SE is a leading insurance conglomerate globally and one of the largest asset managers in the world, managing assets worth over a trillion Euros. Allianz SE has over 115 years of financial experience and a strong presence in over 70 countries. Bajaj Allianz life insurance company was incorporated on 12th March 2001, when it got certification of Registration from the Insurance and Regulatory Development Authority. Bajaj Auto has a share of 74%, whereas Allianz has the remaining 26%. In the very first year, the company made a strong position for itself in the industry and was reckoned amongst the top private insurers. The premium income of the company as on 31st March 2006 was Rs. 1285 crores, whereas the profit after tax made was Rs. 52 crores. Bajaj Allianz has a Pan India network covering over 100 towns from Jammu to Thiruvananthapuram and aims to spread its operations in many other cities.


Bajaj Allianz life Insurance co. is a joint venture between Bajaj SE and Bajaj Auto India ltd. ALLIANZ SE:

I. Worlds largest Insurance company by Revenue-RS 5, 20, 353 cr.

II. Worldwide 2nd by gross written pemimum-RS4, 77,980cr.

III. 3rd largest asset under (AUM) largest amongst insurance COS AUM of

rest, 95, 94, 200 cr.

IV. 11th largest corporation in the world.

V. 50% of global business from life insurance. Close to 60 million lives insured globally. VI. 6.Established in 1890 , 110 years insurance more than 70 countries , 173,750 employees world wide, insurance to almost half of the fortune 500COS.

BAJAJ AUTO: I. One of largest 2& 3 wheeler manufacturer in the world. II. 2 million + vehicles on the roads across the globe.

III. Managing funds over RS 5329 cr. IV. Bajaj Auto finance one of the largest auto finance COS in India. 5. RS 6340 corers turnover & profits after tax of 767cr in 2005.


VISION: To be the best Life Insurance Company in India to buy from, work for

and invest in. To be the first choice for customers, and provide job satisfaction to the employees and create shareholder value. The organization strives to excel in its products and services, providing total customer satisfaction SHARED MISSION: To be in the Top 3 new life insurance companies in India by new

business and in force business by 2004 To have PAN India presence. To provide highest quality service by ensuring: Highest customer retention in industry (target 90% first year)

Every customer will be contacted by the company at least once per year Company respond to customers /agents within 48 hours Embrace technology to optimize efficiencies

ACCELERATED GROWTH FISCAL YEAR NO. OF POLICIES SOLD NEW BUSINESS IN FY. in F Y.(RS in corers) 21376 115965 186443 288189 781685 2079217 7 69 180 857 2717 4270

2001-2002(6 mths) 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

It has achieved iAAA rating, by ICRA Limited and has the highest claimspaying ability and a stable position in the market. In a 2006 survey, Business World has rated it among the Most Respected Companies, putting it at No.2 position in Insurance sector Bajaj Allianz Life Insurance is the leading private sector life insurer and has offices in over 900 towns across the country. In FY 2006-07 Bajaj Allianz Life Insurance issued over 2 million policies (highest in Private Sector) and collected over Rs 5300 crores in premiums No.1 Pvt Life Insurer in Retail Business in 2005-06. Whopping growth of 216% for the FY 2005-06. Have sold over 15,00,000 policies to the satisfied customers Is backed by a network of 750 offices spanning the country.

since th Bajaj Allianz made a Rs. 167 crore profit before taxes. After generating an amount of Rs. 105 crores, it became the first of its kind to cross the mark of Rs.100 crores in profit after tax. On 31st March 2008, Bajaj Allianz General Insurance collected a premium income worth Rs. 2578 crore. This marked a growth by 43 % for the company e last year.

In the first three months of 2008-09, Bajaj Allianz collected Rs.733.53 crores as gross premium against Rs.573.73 core last year recording a 28% growth.


Kamlesh Goyal CEO

Anil singh

Chief actuary& Head product develop ment

Malay Ghosh

ECJ Augusine

Head agency sales

Head strategic initiative

Rajesh Viswandhan

Niraj Kumar

Sashi Krishnan

G B Laddha

V Philip


Head alternate business

Investment officer

Investment consultant

Head customer service & new initiative

Jaydeep chaure Head HR

Sanjay jain Head mkt.

AS narayana Bancass -urance

JK Bhagat Head corporate business

Safi geroge Head operation

Ishta.M. Chief informat -ion officer

Shabhir S. Head internal audit

Yogesh Gupta Head business Procure.

MS Siddhu Head traditio nal busines

Manish Dwivedi Head direct Mkt.

Harish Nambiar

Sameer Bakshi Company sectary

AVP legal

Board Members:1. Rahul Bajaj 2. Niraj Bajaj 3. Sanjiv Bajaj 4. Ranjit Gupta 5. Dr. Werner Zedelius 6. Heinz Doll berg 7. Don Nguyen 8. Alan Wilson 9. Sanjay Asher 10. Suraj L Mehta 11. Dipak Kumar Prodder

Rahul Bajaj
Kamesh Goyal Ranjit Gupta Rajesh Viswanathan Anil Singh Chairman Alternate Director & Chief Executive Officer Director Chief Financial Officer Appointed Actuary

Sameer Bakshi

Company Secretary

Channel Partners

1) Standard chartered. 2) Syndicate Bank. 3) Placement sales and services ltd. 4) Team life care co (India) ltd. 5) GE Money. 6) ECPL co pvt. Ltd.
7) The cosmos cooper


Market linked insurance plans invest the premium in to the equity, debt and cash markets by the way of allocating units, which like any other mutual fund have a NAV and the customer is free to switch between one fund class to another depending on the risk factor he wishes to be in. ULIPs offer a

better return than the traditional endowment plans and offer a great deal of flexibility along with great returns making them the finest product offering. We at Bajaj Allianz Life Insurance have developed a number of ULIP products which range from single premium to a regular premium option along with investment funds ranging from index funds to mid-cap funds and debt market linked funds Regular Premium New UnitGain Super
UnitGain Plus Gold UnitGain Plus Gold

UnitGain Plus Gold

YoungCare PlusNew FamilyGain-R YoungCare

Single Premium
New UnitGain Premier SP New UnitGain Plus SP

Bajaj Allianz Life Insurance offer Retirement Plans which will make sure that we are there to support you in every stage of your life and your savings today become your wealth and support for your future years to come. Annuity

Pension Guarantee Retirement Future Income Generator New UnitGain Easy Pension Plus RP Swarna vishranti New UnitGain Easy Pension Plus SP Future Secure

Saving Plans, which offer bonuses, are excellent long term saving instruments with complete safety. Our products offer additional benefits which include 4 times life cover at little extra costs, limited premium payment terms and compounded reversionary bonuses making it a very good long term investment. Endowment InvestGain SaveCare Economy SP Life Time Care Super Saver Money Back CashGain

The sole objective of Term plans is to serve the protection needs of the customers and by doing so, safeguard ones family from the financial

implications of unfortunate circumstances that one cannot foresee. These plans are pure risk cover plans with or without maturity benefit. These pure risk plans cover your life at a nominal cost and you may want to take this plan to cover your outstanding debts like a mortgage, a home loan etc Protector Term care New risk care


Todays lady is an inspiration to her family. She takes important decisions in every household and at work. To cater to women's special needs we offer innovative women specific plans which provide investment benefits, savings, retirement solutions and medical insurance. Our special plans help mothers plan for their children's education, save for the future and take care of all medical emergencies in the family. Our Regular investment and savings plan, offer: 1. Investments along with critical illness benefits which provide good returns, long term saving and protection incase of a medical emergency 2. Investment plans with accidental coverage 3. Children's education planning 4. Specialized retirement income plans for homemakers to provide a secure and financial future

House Wives Working Women


At Bajaj Allianz Life Insurance we offer unique hospitalisation-cum-insurance plan that takes care of your hospitalization bills and also provides crucial financial support to your dependents in case of your unfortunate death. Our health insurance plans offer a sound protection to safe guard your family from any medical emergencies and will make sure that financial problems are least of your worries in trying to get yourself treated. We offer cash less Mediclaim facility across 2000 hospitals in over 300 towns and provide best treatment in the finest hospitals with our health insurance products. Care first Health care Family care

Ever wondered why you need an insurance policy for your child? As a parent, you always dream the best for your child including marriage, higher education, or that hand holding for a start in life. Whether you are there to see your child grow up and settled or not, your child feels your love in the

financial support arranged by you through our wide range of Children's insurance policies taking him from one milestone to another. Saving early and saving regularly for your child helps combat inflation and ensures higher yields. If you take an insurance policy for your child you can take advantage of lower premium rates and ensure that your children remain covered throughout adult hood, at a much lower rate. This also instills a saving-habit in your children at a young age developing them as and when the policy vests in them

Bajaj Allianz Child Gain Funds for critical stages in your childs life like Graduation Post Graduation

Marriage Start a business 4


We at Bajaj Allianz Life Insurance continuously try to improve our products and services so that our customers get the best buy. Our recently launched products are: Family fortune Fortune plus

Capital Shield Century Plus

One of the best ways for employers to retain their employees is to show them that their organization cares not only for them but also their families. At Bajaj Allianz Life Insurance we offer customized insurance plans, which safeguard your employees interests and show your commitment to your employees. Bajaj Allianz Life Insurance Group Plans offer Financial stability to employees Ease of operations and fund management Credit Shield Group Term Life(Non Employer Employee) Group Suraksha Swayam Shakti Suraksha Group Loan Protector Group Income Protection Group Term Life(Employer Employee Group Annuity Group Save Plus
New Group Superannuation

Group Term Life in lieu of EDLI Group Leave Encashment Scheme


Their Micro Insurance products Alp Nivesh Yojana Jana Vikas Yojana Saral Suraksha Yojana



During my specified training at Bajaj Allianz Life Insurance, my job profile was Effectiveness of Training given to Advisors. Training refers to the process if learning a sequence of programmed behaviour. It is a short-term process utilizing a systematic and organized procedure by which nonmanagerial personnel learn technical knowledge and skills for a definite purpose. During the training period, we are the trainees in the company, receiving training from the unit managers. The type of training we are receiving is on the job-training, i.e. training after the appointment as financial advisor. Once the person is recruited, he undergoes 50 hours of training given by the institutes outside the company which are recognized by IRDA followed by an exam by IRDA (Insurance Regulatory Development Authority). If the person is able to pass the exam, he/she becomes the Advisor for that company and has to bring business for them. These Advisors are also called IFAs (Independent Financial Advisors). After becoming IFA, the advisors have to undergo training for 4-5 days through which selling skills and product knowledge is imparted by

the company and this training is provided to them by the company and inside the company premises.

MEANING OF AGENTS/ADVISORS:An agent is one who acts on behalf of others. An Agent is a person employed to do any act for another or represent another in dealing with a third person. In the insurance industry, the term agent is applied to a person engaged by the insurer to procure new business. IFAs are qualified professionals who can provide invaluable help to the customer in identifying the product that suits his personal requirements.

WHO CAN BECOME AN AGENT? As per provisions of Section 184 of the Indian Contract Act, between 'the principal' and 'the third person', any person may become an agent. If a minor is employed as an agent, the principal would be bound by his acts. But the minor himself will not be liable to his principal.

ROLE OF ADVISOR:To identify prospective customers by providing them the complete information about the products offered, providing tailor-made solutions to cater their individual needs, conduct regular reviews to keep customers on track, achieve

targets and also providing them better services which is most important in life insurance because unlike other savings which is most important in life insurance because unlike other savings or investment plans, life insurance is a long term commitment.

ADVISOR POSSESS: Confidence Self Motivation Persuasion Urge to be financially independent Relationship skills Recognition programs Foreign trips and seminars Club membership

Training: Training is the process of imparting the knowledge and skill to the new as well of to the existing employees. It helps in improving the performance of the employees of the company.

Technique of training: The technique of training adopted by the company is ON THE JOB TRAINING. The company is following the technique of on the job as it helps the company and the advisor both: : Reducing cost as no additional personnel of facilities are required by the company because unit managers and training manager provides the training. The trainees (advisors) learn the rules and regulations of the company. It is most appropriate for teaching the knowledge and skills as they are acquired in a relatively short period, says some days. The advisors are also encouraged as they are getting the training after their appointment as the advisors in the company. The company is following the technique of JOB INSTRUCTION TRAINING (JIT) as the advisors requires skilled trainers, extensive job analysis, training schedules and prior assessment of trainees job knowledge. The programme involves listing all necessary steps in the job, each in proper sequence. These steps show what to do, how to do, why to do etc. It is four step process starting with a. Preparation of trainees for instruction.

b. Presentation of the instructions, giving essential information in a clear manner. c. Encouraging the questions and allowing the trainee to work along and the trainer follows up regularly.
d. Having the trainee try out the job to show that

he/she has understood the instructions The company also provides practical training. Theoretical training is interspersed with practical appointment settings with potential customers, giving advisors a feel of how their business will work from the very first day.

PARTS OF TRAINING: Training provided to the advisor is provided in two parts, i.e., before the attainment of license and after the attainment of license but both are the on the job training.

Training before attainment of license:-

Training given to the advisor is on the job training. After the recruitment of the advisor, who possess the age of majority (above 18 years) and is not abide by the Indian law for carrying any type pf business or lawful activity, has to undergo 50 hours training which is provided to fulfill the following need: To increase or to impart the knowledge of insurance, its working, products, different insurance companies in the market. To guide them how to attract the customers. To help the company to increase the efficiency of the agents by guiding them how to do insurance related calculations. To enable them to pass the examination taken by IRDA before giving the license to the agents for operating as financial advisors. To build confidence in them by ensuring them that they will become good agents.

Training after the attainment of license:After the attainment of the license from IRDA, the agents become IFAs and can work independently for the company. Moreover, an agent can also work for the company without license by fulfilling certain formalities like filling of a form etc. but the attainment of license creates confidence in the agent, company and the customer. The training after the acquirement of license is provided to the advisors inside the

company premises as it is provided either by the unit managers, to whos team the agent belong or by the training manager. Although the company cannot pass the license to the agent and doesnt permit the agent to carry the business as long as he/she takes part in this training activity. Presently this training programme is conducted by the training manager Mr. Sharma This training programme is being carried out for the following purposes: To make the agent aware of the company, its profile, its

success, its portfolio. To motivate the agents before starting up of their work by telling them that they belong to a prestigious organization which helps in satisfying the esteem and security needs along with the physical needs of the agents. To enable them to stand in front of the customer with full confidence, courage and full information. To make the agents aware of the history, structure, achievement etc. of the company (introducing the company to the agents). To provide the knowledge about the company products. To know how the company is better than its competitors.

Training to old advisors:-

The existing advisors are also provided with the training programme from time to time when: New product has been launched by the company. The unit manager notices down fall in the progress or the working of the agent. The manager thinks the agent needs more training for his/her effective working. The manager thinks more training will help the advisors to achieve his/her targets effectively. The manager thinks that the training will help the advisor in its growth and development.

STEPS IN THE TRAINING PROGRAMME: The company also follows the steps for performing the training programme. The following steps are followed by the company:1. Discovering or identifying training needs:The first step in the training programme is the identification of the need of training. Our company also identifies the need of the training as new advisors need for knowing their work, its performance, duties, companys background and expectations of the company from them. Existing advisors need training for improving their skills, increasing their knowledge and their confidence.


Getting ready for the job:After the identification of the needs of the training

programme, the nest step is to decide to whom to give training as the need of training to different advisors differs (existing advisor require different training than a new advisor).


Preparation of the learner:-

The next step is the preparation of the learner (the person who has to receive the training). It involves steps like I. Putting the learner into ease (making him comfortable and friendly and removing his nervousness). II. Stating of the importance and ingredients of the job and its relationship to work flow (telling him what he has to do and what position he acquires in the company). III. Explaining what will be taught to him in the programme. IV. Creation of interest and encouraging queries and questions from the advisors to know what he already knows about his work. V. Explanation of the whole job and relating it to some job which the advisor already knows (relating selling of products to selling of refrigerator). VI. Familiarizing the advisor with the products rewards etc. 4. Presentation of the operation and knowledge:-

The next step is the trainer shows the operations (what to do, how to do, how to speak and how to attract the customers). The trainer teaches them to be patient, generous, polite, well-dressed, courteous etc. with the customers. 5. Performance tryout:The trial of the performance of the advisor is the next step. In this step, the advisors are asked to go through presentations which he/she has to present to the customers. The presentations are being done so that the trainer comes to know how much he/she is successful in imparting the skills to the advisors. This step helps in the correction of the mistakes of the advisors and it builds confidence in the advisors that they can give presentation in a better way than the other trainees. 6. Follow up: The last step is the testing of the effectiveness of training efforts. This consists of: I. Putting the advisors in his/her own. . II. Tapering off extra supervision and close follow-up until he is qualified to work with normal supervision. III. Checking frequently to be sure that the advisor had followed instructions Training period: Training period after the attainment of license is of 4-5 days, but it sometimes extends to a week depending upon the ability and

knowledge of the advisor. Before the attainment of license, 50 hours training is given to the advisor. Supporting material for training:a) Lectures (followed by reading assignments), conferences, seminars, staff-meetings. b) Role playing c) Problem solving sessions. d) Use of hand books, manuals etc. e) Books, slides, movie projectors, filmstrips, tape recorders

Principles of training followed by the company: Properly planning in a logical sequence of the programme so that each step builds upon the previous one and the probability of success increases. Identification of components of tasks of final desired performance, assuring that each component is fully achieved and arranging the total learning situation in a sequence. The job performance is related to the rewards and explains how Clarification of the foals of the training and explanation of how the training will improve his/her performance and there by boost his/her rewards.

Proper feedback to the trainees as people work even faster when they are told about their achievements. Simplification of complex problem and discovery of new alternative solutions to create an atmosphere of relaxation. Training programme adopted by the company is adapted to the training speeds of the separate trainees. The company followed the principle of avoidance of distraction as distraction makes the learning process ineffective. The company provides the training to the advisors in a separate Classroom/room which is in the office but where only trainers and trainees are allowed.

TRAINING EVALUATION: Training Evaluation refers to the analysis of training programme to see that whether the advisors have gained something from the training. The main objective of training evaluation is to determine the ability of the advisors in the training programme to perform jobs, for which they are trained, the specific nature of training deficiencies, whether the trainees required any additional on the job training and the extent of training not needed for the participants to meet job requirements. The company followed the following principles for the evaluation of training programme:-

I. Evaluation specialist must be clear about the goals and purposes of evaluation. II. Evaluation must be continuous. III. Evaluation must be specific. IV. Evaluation must provide the means and focus for advisors to be able to appraise themselves, their practices and their products. V. Dates are being set for each phase of the evaluation process. A sense of urgency is developed.

Code of conduct:The IRDA necessitated the training programme for the financial advisors to improve their skills and imparting in the knowledge of about the company, its products and about the rules and regulations of the insurance industry and of the company to which they belong.

TRAINING INITIATIVES TAKEN BY BAJAB ALLIANZ: The following training initiatives are taken by the company:-

FOUNDATON PROGRAMME:Independent of their work experience, the foundation program will perfect the advisors knowledge about the Insurance Industry; equip

them with the excellent selling skills along with the Comprehensive knowledge about the products.


Advisors achievements in the first three

months of business will be acknowledge with the companys Sprint and RACE awards. These are the trophies accompanied by the certificate and point rewards to the advisors for getting off to a flying start.


of field experience, this programme will give them the practical insights on objections handling and generate ideas to get new customers and of premium policies.



What has been the training technique for the year 2007-08?

The training is on the job training and more specifically it is job instruction training.

Why do you prefer this job instructing training?

In this method of training the trainee learns fast through practice

and observation. Do you find any development in the advisors after undergoing training process? Yes, the undergoing training process helps in developing the skills of the financial advisors. Do you think you need to increase the timings of

the training process? Yes, training periods timings need to be increased although advisors are being imparted with skills yet all the advisors are not fully trained i.e. Due to lack of time attention to each advisor

separately is not possible. Do you find any improvement in the

organization climate after training? Of course, the climate of the organization improves as when the advisors are well trained and have full knowledge, they act and

thinks like professionals which in turn create the working atmosphere.

next plan for training?

What will be the

The next plan for training regarding same i.e. on the job but we want to bring a slight change in the training programme. Advisors before starting their job will be attached with the unit managers or the old successful advisors. Why you have adopted such type of training? We have adopted this type of training as the top authorities feel this method suitable. Not only the top authorities feel this method right, we also agree with them as this method is helping us and advisors. If you have to adopt a new method, which method will you adopt and why?
If we have to adopt a new method that method will be the method

of internship i.e. during the training period advisors will be paid with some amount of money. So that they will with more dedication Is the company satisfied with the period of training?

No, the company wants to increase the time period as this time period is not sufficient for all the advisors. Which skills company wants to impart in the advisors? The company wants to impart skills like confidence, self confidence, tactfulness while handling the customers, courtesy, honesty towards the customers and towards the company, dedication towards the work, concentration etc.

Do you think you are successful in imparting these

Yes, we are successful in imparting these skills but we are not

completely successful as different customer shows different behaviour and advisors also possess different behaviour and attitudes.

How is BAJAJ ALLIANZ better than other companies like LIC?

The products offered by BAJAJ ALLIANZ are better than LIC and it

also offers incentives and higher commissions than LIC. training? How you decide that the existing advisors need

Whenever the performance of the advisors is not up to the

expectations of the company and at the time when new products are being launched by the company. Do you have problem solving sessions

even after the training programme is over? Yes, of course, there are problem solving sessions carried out by either the trainer or sales manager. Apart from that, there is one weekly meeting of the advisors with the unit managers and monthly meetings with the sales managers.


Name of the training centers Period of course Designation and area of postings


How far knowledge training inputs are given in job assigned

a) fully related b) not at all related


How far training inputs have helped in performing the areas in

which we are working?


What topics you suggest are to be included in training

programme based on your experience after the training?

POST TRAINING EVALUATION BY CONTROLLING OFFICER: 1. Working of advisors after attending the course: a) b) acquisition of knowledge acquisition of skills

2. Public Relations a) Team Spirit b) Motivation Application of knowledge

2. Whether the course is relevant to present requirements?

3. Any suggestion for imparting the course?

4. Any suggestion regarding imparting of more skills to the existing


5. Any suggestion regarding timings and course period of the training course?

6. What should be done to solve the problems faced by the advisors in more effective manner?

7. Will something additional be done apart from the existing method of solving the problems of advisors?



1. Bajaj Allianz is a joint venture of ALLIANZ SE (worids largest

insurance company) and Bajaj Auto (2nd or 3rd largest two wheeler company
2. Bajaj Allianz

is one of the

largest private player in the insurance

3. It has its distribution channel spread through major cities to cater greater

population. 4. Bajaj Allianz offer its product at a low premium in comparison to ICIC Prudential. 5. Although the company has a big structure yet it is able to avoid delay in decision making and solving the problems of advisors during training and after training and the problems of customers.. 6. Effective doubt clearing sessions are being carried out to help advisors. 7. Constructive feedback concerning progress in training and

implementation of new acquired abilities.

8. Advisors are provided with personal assistance when he encounters learning obstacles. 9. No delays in handling grievances of the customers and problems of advisors and other employees working in the company. 10. A fixed salaries is given to its advisors.


1. High targets are being set for advisors and sale managers. 2. Low product awareness among public and advisors. 3. Low manual training sessions..
4. Higher premiums as compared to other companies.

5. Target high income group only. 6. The benefits of training are not cleared to all the advisors.
7. No rewards to trainees for carrying out effective training programme. 8.

No proper plan for training.

9. Limited counseling and consulting services to the rest of the organization. 10.Same method of training to all types of financial advisors.

1. Weak perception of private players in the minds of the Indian people due to frequent financial scams. 2. Large number of insurance players. 3. Existing wrong business, practices of companies like LIC first premium is paid by their agents where as IRDA suggests that even forms to be filled by the client themselves.

1. Huge market is literally untapped. Out of estimated 320 millions insurable

markets only 20% of the population is insured.


1. It should be ensured that at least 99% of the attendance should be there at training period as Only 40% used to attend 50% attend often 10% attend very often. 2. More space will be provided as the space is less and the advisors are more. 3. Customer queries regarding ULIPs should be handled carefully by the financial advisor. 4. Tough competition has been given by the LIC Co. Ltd. To contain this competition we have to leverage our competence by showing as an efficient player in the market and who works on performance and transparency in working. 5. Government personnel can be sold products like insurance cum pension plans, child policies and long term investment plans. 6. Proper differentiation between ULIPs and traditional plans and their benefits should be told to the advisors.

7. Awareness of products through publicity, hoarding, road shows. 8. Adoption of new and improved methods for attracting the customers. 9. To appoint advisors and get them trained for attracting the rural market as the perceptions, needs, beliefs etc. of the rural population are different from urban population. 10.Provide motivational schemes to the trainees (advisors), so that they can work with confidence and zeal. 11.Provide the students with the sufficient formal training, so that they can carry out their task with ease. 12.Specialised training should be provided to employees who have public training.

Difficulties faced: The following are the difficulties faced by me are:-

I. From the organization point of view:-

Not enough training was provided: as the rules set by the company are not very flexible. Not only this, the sales manger, unit manger, training personnel is ready to bring a slight change in the programme as this programme is kept private only for the persons who are going to be associated by the company and not to the outsiders. Sometimes, the trainer got irritated after he was being asked any type of query.

II. From the managers point of view:The managers dont have sufficient time to answer the queries. They dont want reveal all the facts except those which increases the goodwill of the company and goodwill of them. Apart from that, only trainers, managers, advisors and company employees are allowed to go the place where training programmes is carried out.


While working on the project, the following limitations are faced:-

1. The qualifications, education and understanding capabilities of the advisors, managers. 2. Lack of expertise being a trainee.

3. Lack of time and resources as compared to the research organizations that take up such studies.



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