INTRODUCTION

In a professional carrier it is always desirable and advisable to have some

practical knowledge besides the theoretical knowledge we use to have during the

tenure of study in the faculty of management studies under the IME, Sahiabad.

Project work is nothing but a process which we generally call “Training”. The

demand of competition & economy, the individual adjustment, job, personal

changes and change in volume of business & to improve the personal skill, the

training program becomes essential.

Dr. Jeff Harries (Junior) has rightly said, “Training on any showed have as its

objective the direction or improvement of behavior so that the performance of the

training becomes more useful and productive himself and for the organization of

he is apart”.

Training normally contracts on the improvement of operative skills, interpersonal

skills and decision-making skills or a combination of these, “Training is an

application of knowledge”.

The following content discusses the methodological aspects of this study, “SWOT
SWOT

analysis of ULIPs,
ULIPs of Bajaj Allianz Life Insurance Co. Ltd. New Delhi”.

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 COMPANY PROFILE

Bajaj Allianz Life Insurance Co. Ltd.

Bajaj Allianz Life Insurance Co. Ltd. is a joint venture between two leading
conglomerates- Allianz AG, one of the world's largest insurance companies, and
Bajaj Auto, one of the biggest 2 and 3 wheeler manufacturers in the world.

• No.1 Pvt Life Insurer FY 2005-06 Leading by Rs. 78 Cr. (source IRDA
Report).
• No.1 Pvt Life Insurer in Retail Business, Leading by Rs. 339 Cr.
• Whopping growth of 216% for the FY 2005-06
• Have sold over 13, 00,000 policies to satisfied customers
• Is backed by a network of 550 offices spanning the country

▪BAJAJ ALLIANZ LIFE

A Household Indian Name teams up with a global conglomerate

▪ALLIANZ GROUP
A global giant with operations in over 70 countries

▪BAJAJ GROUP
Bajaj Group is a Rs. 4000 crore auto giant

▪BAJAJ ALLIANZ GENERAL

The fastest growing general insurance company in India

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VISION: -
•To be the first choice insurer for customers.
•To be the preferred employer for staff in the insurance industry.
•To be the number one insurer for creating shareholder value.

MISSION:-
As a responsible, customer focused market leader, we will strive to understand the
insurance needs of the consumers and translate it into affordable products that
deliver value for money.

VALUES:-
▪ Customer delight the guiding principle.
▪ Ensuring world-class solutions & services
▪ Offering customized products.
▪ Transparent benefits.

COMPANY’S OBJECTIVES: -

 To be one of the top private life insurers in terms of new business

premium& profitability.

 To provide products with maximum values to customers in

accordance & consistent with Govt rules/ policies.

 To earn a reasonable rate of interest on investments.

 To achieve high growth.

 To create strong position in field of insurance sector & development

of new products.

 To achieve minimum premium target of every year (with less than

30% single premium).

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  Ensure to retain staffs that are key resource.

 To further enhance the distribution network for provide the service

to customers throughout the country through the expansion of
network.

Shared Vision of Bajaj Allianz Life

A household name in India teams up with a global conglomerate...

Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is the
largest manufacturer of two-wheelers and three-wheelers in India and one of the
largest in the world.

A household name in India, Bajaj Auto has a strong brand image & brand loyalty
synonymous with quality & customer focus. With over 15,000 employees, the
company is a Rs. 4000 crore auto giant, is the largest 2/3-wheeler manufacturer in
India and the 4th largest in the world.

AAA rated by Crisil, Bajaj Auto has been in operation for over 55 years. It has
joined hands with Allianz to provide the Indian consumers with a distinct option
in terms of life insurance products.

As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has the
following to offer -

• Financial strength and stability to support the Insurance Business.

• A strong brand-equity.

• A good market reputation as a world-class organization.

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• An extensive distribution networks.

• Adequate experience of running a large organization.

• A 10 million strong base of retail customers using Bajaj products.

• Advanced Information Technology in extensive use.

• Experience in the financial services industry through Bajaj Auto Finance

Ltd.

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 INDIAN OPERATIONS

Growing at a breakneck pace with a strong pan Indian presence Bajaj Allianz has
emerged as a strong player in India...

Bajaj Allianz Life Insurance Company Limited is a joint venture between two
leading conglomerates Allianz AG and Bajaj Auto Limited.

Characterized by global presence with a local focus and driven by customer

orientation to establish high earnings potential and financial strength, Bajaj
Allianz Life Insurance Co. Ltd. was incorporated on 12th March 2001. The
company received the Insurance Regulatory and Development Authority (IRDA)
certificate of Registration (R3) No 116 on 3rd August 2001 to conduct Life
Insurance business in India.

Bajaj Allianz- THE PRESENT

 Product tailored to suit your needs.

 Decentralized organization structure for faster response.

 Wide reach to serve you better – a nationwide network of 700 + branches

 Specialized departments for Bancassurance, Corporate Agency and Group

Business.

 Well-networked Customer Care Centers (CCCs) with state of art IT

systems.

 Highest standard of customer service & simplified claims process in the

industry.

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 Website to provide all assistance and information on products and
services, online buying and online renewals.

 Swift and easy claim settlement process.

Tie Ups with Banks

Pioneers of Bancassurance in India...

Having pioneered the phenomenon, Bancassurance is one our core business
strategies.

Two of Bajaj Allianz strong Bancassurance tie-ups are:

• Standard Chartered Bank
• Syndicate Bank

Bajaj Allianz has developed a range of life insurance products exclusively for our
Bancassurance partners. Also, our products are customized to suit specific needs
of banks.

Bajaj Group
Bajaj Auto Ltd, the flagship company of the Rs. 8000 crore Bajaj group is the
largest manufacturer of two-wheelers and three-wheelers in India and one of the
largest in the world.

A household name in India, Bajaj Auto has a strong brand image & brand loyalty
synonymous with quality & customer focus.

A STRONG INDIAN BRAND- HAMARA BAJAJ

≈ One of the largest 2 & 3 wheeler manufacturers in the world

• 21 million vehicles on the roads across the globe

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• Managing funds of over Rs 4000 cr
• Bajaj Auto finance one of the largest auto finance cos. in India
• Rs. 4,744 Cr. Turnover & Profits of 538 Cr. in 2002-03
• It has joined hands with Allianz to provide the Indian consumers with a
distinct option in terms of life insurance products.
≈ As a promoter of Bajaj Allianz Life Insurance Co. Ltd., Bajaj Auto has the
following to offer -
• Financial strength and stability to support the Insurance Business.
• A strong brand-equity
• A good market reputation as a world-class organization
• An extensive distribution network.
• Adequate experience of running a large organization.

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Allianz Group

Allianz Group is one of the world's leading insurers and financial services
providers.

Founded in 1890 in Berlin, Allianz is now present in over 70 countries with

almost 174,000 employees. At the top of the international group is the holding
company, Allianz AG, with its head office in Munich.

Allianz Group provides its more than 60 million customers worldwide with a
comprehensive range of services in the areas of: -

• Property and Casualty Insurance,

• Life and Health Insurance,
• Asset Management and Banking.

ALLIANZ AG - A GLOBAL FINANCIAL POWERHOUSE

Worldwide 2nd by Gross Written Premiums - Rs.4, 46,654 cr.

3rd largest Assets Under Management (AUM) & largest amongst
Insurance cos. - AUM of Rs.51, 96,959 cr.
• 12th largest corporation in the world
• 49.8 % of global business from Life Insurance.
• Established in 1890, 110 yrs of Insurance expertise.
• 70 countries, 173,750 employees worldwide.

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BAJAJ ALLIANZ GENERAL

Bajaj Allianz is the fastest growing general insurance company in India…

Bajaj Allianz General Insurance Company Limited is a joint venture between
Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of
expertise, stability and strength.

Bajaj Allianz General Insurance received the Insurance Regulatory and

Development Authority (IRDA) certificate of Registration (R3) on May 2nd,
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 Auto holds 74% and Allianz, AG, holds the remaining 26%.

A Partnership Based on Synergy

Bajaj Allianz offers technical excellence in all areas of General and Health
Insurance as well as Risk Management. This partnership successfully combines
Bajaj Auto's in-depth understanding of the local market and extensive distribution
network with the global experience and technical expertise of the Allianz Group.
As a registered Indian Insurance Company and a capital base of Rs. 110 crores,
the company is

• Fully licensed to underwrite all lines of general insurance business

including health.
• With management control by Allianz AG.

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ORGANIZATION STRUCTURE

DIRECTOR

VICE PRESIDENT

SR. BRANCH
MANAGER

BRANCH MANAGER

SR. SALES MANAGER

SALES MANAGER

ASSISTANT
MANAGER

MANAGEMENT
TRAINEE

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 PRODUCTS

Bajaj Allianz, realize that people seek an insurer who they can trust their hard
earned money with. Allianz AG with over 110 years of experience in over 70
countries and Bajaj Auto, trusted for over 55 years in the Indian market, together
are committed to offering you financial solutions that provide all the security you
need for your family and yourself.

Bajaj Allianz brings to you several innovative products, the details of which are…

INDIVIDUAL PLANS

Innovative Plans for Individual Life Insurance needs

GROUP PLANS

Competitive Plans for Group Life Insurance Needs

INSURANCE FOR NRI’S

Special NRI Offers

ADDITIONAL BENEFITS (Additional protection for you & your family):

Bajaj Allianz offers the flexibility to enhance basic insurance policy by attaching
additional benefits that give more protection to you and your family. You can
choose to take all or some of the additional benefits. Bajaj Allianz allows you to
redesign your life insurance coverage to suit your needs, providing total
protection against these uncertainties.

Individual Plans: -

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LAON PROTECTOR
A Mortgage Reducing Term Insurance Plan
This is the perfect plan to protect the family from the repayment liability of
outstanding loans, in the unfortunate case of death of the loanee. There is also an
option to cover the co- applicant of the loan at a very nominal cost under this
plan...

CHILD GAIN
Children's Policy
Right from providing for your child's education to securing a bright future, this
plan is tailor- made to suit your child's needs...

NEW UNIT GAIN PLAN

A Unit Linked Plan
This amazingly flexible Unit linked life insurance plan provides you the
opportunity to participate in market linked returns while enjoying the valuable
benefits of life insurance...

CASH GAIN
Money Back Plan
This is the only money back plan that offers quadruple protection, going up to 4
times the basic sum assured, and a family income benefit...

SWARNA VISHRANTI
Retirement Plan
In addition to life insurance and attractive tax benefits, this plan enables you to
make adequate provisions for your years after retirement as well...

INVEST GAIN
An Endowment Plan
This savings plan combines high protection (up to quadruple cover) with a unique
family income benefit...

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RISK CARE
Pure Term Plan
This plan enables you to provide financial security to your loved ones at the
lowest possible cost...

TERM PLAN WITH RETURN-OF- PREMIUM

An economic way of providing life cover, this plan also ensures the return of all
premiums at the time of maturity...

LIFE TIME CARE

Whole Life Plan
This whole life plan provides survival benefits at the age of 80 thereby making
sure you are financially secure at the time when you need it the most...

KEYMAN INSURANCE
A Promising Business Opportunity
Key man Insurance provides you with the unique opportunity to protect your
business against the unfortunate loss of key people, while giving you valuable tax
advantage and a lovely tool to help employee loyalty too...

NEW UNIT GAIN PLUS

The thumb rules for buying insurance is that your insurance needs are minimal in
your early earning years, increase with added responsibilities (Marriage, children,
loans etc.) and taper off by the time you retire. It is difficult to find a single
insurance plan that can take care of all your changing requirements in life –
additional protection, more money to invest, sudden requirement of cash or a
steady post-retirement income...

RIDERS UNIT GAIN PLUS

Bajaj Allianz Additional Benefits – Additional protection for you and your family
available with Unit Gain Plus...

NEW UNIT GAIN EASY PENSION PLUS

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Unit Linked Retirement Plan without life cover
Bajaj Allianz Unit Gain Easy Pension is a plan that helps you take control of your
future and ensure a retirement you can look forward to. This is a regular premium
investment linked deferred annuity policy. Available as: Unit Gain Easy Pension
Regular Premium & Unit Gain Easy Pension Single Premium.

SWARNA RAKSHA- ROC

A fixed annuity for life will be payable, and on death of the annuitant, the
nominee will be entitled to receive an amount that is equal to the lump sum used
to purchase the annuity.

MAHILA GAIN RIDER

The unique plan that takes care of you and your loved ones and provides benefits
like
• Critical Illness Benefit
• Reconstructive Surgery Benefit for Breast(s) due to Breast Cancer
• Congenital Disability Benefit
• Complications of Pregnancy Benefit.

HEALTH CARE
This is a three-year health insurance plan, providing comprehensive health cover
with life insurance benefit. You can choose the amount of cover for each benefit
separately in multiples of the minimum cover amount, subject to a maximum
multiple of 10.

NEW UG PREMIER
• Up front Allocation of 105% of single premium on day 1
• 100% of the top-ups are allocation
• Flexi maturity after 6 years

NEW UG SUPER
• Highest allocation Up to 93%

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• Guaranteed life cover

NEW FAMILY GAIN

• The only Unit linked insurance plan with ethical equity fund.
• Suits religious investment guidelines as well.

SAFE CARE ECONOMY - SP

• An ideal plan for a one-time lump sum investment that provides for savings with
high risk-cover.
• An investment that provides financial security and liquidity.

An ideal plan for a one-time lump sum investment that provides for savings with
high risk-cover. This Single Premium investment plan for 10 years is also
participates in the profits of the company.

Group Plans: -

GROUP SUPERANNUATION SCHEME

Assure your Employees a financially secured; stable and independent post
retirement life.

Group Superannuation Scheme will be established under an irrevocable trust, with

trustees appointed by Company taking care of the administration.

GROUP CREDIT SHIELD

Available for Employer- Employee Groups and Non Employer- Employee
Groups.

This scheme insures the loan amount outstanding in the account in case of
premature death or disability...

GROUP TERM LIFE

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Available for Employer- Employee Groups and Non Employer- Employee
Groups.

This scheme covers the members of an organization against the risk of premature
death or disability...

GROUP TERM LIFE

In lieu of EDLI (Employees Deposit Linked Insurance Scheme)

This scheme is a better alternative to the Employees Deposit Linked Insurance

Scheme, 1976, under Sec 17 (2) of the Employees Provident Fund and
Miscellaneous Provisions Act...

GROUP GRATUITY CARE

Giving your Employees and their families the heartening reassurance of your care
and financial security

Group Gratuity Care is a Multi Featured Employee Welfare Scheme, which

addresses your Gratuity liability with flexibility like never before.

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Insurance for NRI's
You can now easily steer your savings from overseas to
conveniently meet your family's needs - now and in the future.
All Indians have an underlying need to feel secure, to care for the loved ones and
to provide for old age. The need is felt more when you are away from your
Homeland. But being away from India doesn't mean you have to compromise on
the safety and security of your loved ones.

In fact, you can now easily steer your savings from overseas to conveniently meet
your family's needs - now and in the future.

Bajaj Allianz understands your need. The need to do something fruitful for your
loved ones. The urge to let them know that you care. That's why we introduced
the NRI Insurance services. Now, you can invest your hard earned money in India
and in the bargain ensure your family's future.

CARE SOLUTIONS FOR NRI,s: Bajaj Allianz offers a large suit of products to
cater every insurance need that you have. Our care solutions include:

1. Invest Gain - Our 'With Profits Endowment Plan’.

2. Cash Gain - Our 'With Profits Money Back Plan'.
3. Child Gain - Our 'With Profits Money Back Plan' for children.
4. Lifetime Care - Our 'With Profits Whole of Life Plan'.
5. Swarna Vishranti - Our 'With Profits Differed Annuity Plan'.
6. Unit Gain - Our 'Unit Linked Whole of Life Plan'.

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COUNTRY WIDE NETWORK: -

Agency Channel: -

Currently company over 570 offices- Branches & Satellites, with “Hub & Spoke”
structure.

Bancassurance: -

The company has some 3 banks; 12 co-operative banks, & 7 Regional Rural
Banks tie-ups, which are managed by the Bancassurance team.

Alternate Channels: -

The focus area are Corporate Agency, Franchisee, Broker, NRI business, Small
cooperative banks; Group business & Rural and Social Business.

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Focused Sales Network
Focused Sales Network

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Performance of Bajaj Allianz Life

An Impeccable track record across the globe in providing security and cover for
you and your family...

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Allianz AG with over 110 years of experience in over 70 countries and Bajaj
Auto, trusted for over 55 years in the Indian market, together are committed to
offering you financial solutions that provide all the security you need for your
family and yourself.

Key Achievements in FY 2005-06 (Acc. to IRDA & Bajaj Allianz report): -

• No.1 Pvt Life Insurer FY 2005-06, Leading by Rs. 78 Cr

• No.1 Pvt Life Insurer in Retail Business, Leading by Rs. 339 Cr

• Whopping growth of 216% for the FY 2005-06

• Have sold over 13, 00,000 policies to satisfied customers

• Is backed by a network of 550 offices spanning the country

• Accelerated Growth

• Assets under management Rs 3,324 cr

• Shareholder capital base of Rs 500 cr

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 YEARLY PERFORMANCE OF BAJAJ ALLIANZ

Fiscal Year No of policies sold in FY GWP in FY

2001-2002 (6mths) 21,376 Rs 7 cr

2002-2003 1, 15,965 Rs 69 cr
2003-2004 1, 86,443 Rs 221 cr
2004-2005 2, 88,189 Rs 1002 cr
2005-2006 7, 81,685 Rs 3134 cr

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 GRAPH OF PERFORMANCE

3500

3134

3000

2500
GWP in FY (Cr)

2000

1500

1002
1000

500
221
69
7
0
21,376 1,15,965 1,86,443 2,88,189 7,81,685
2001- 2002-2003 2003-2004 2004-2005 2005-2006
2002(6mnths)
GWP in FY (Cr) 7 69 221 1002 3134

Yearly sales of policies

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 OVERVIEW OF ULIP

Unit Linked Insurance Plan (ULIP)

A policy, which provides for life insurance where the policy value at any time
varies according to the value of the underlying assets at the time.

ULIP is life insurance solution that provides for the benefits of protection and
Flexibility in investment. The investment is denoted as units and is represented by
the value that it has attained called as Net Asset Value (NAV).

ULIP came into play in the 1960s and became very popular in Western Europe
and Americas. The reason that is attributed to the wide spread popularity of ULIP
is because of the transparency and the flexibility which it offers.

As times progressed the plans were also successfully mapped along with life
insurance need to retirement planning. In today’s times, ULIP provides solutions
for insurance planning, financial needs, financial planning for children’s future
and retirement planning.

Features of ULIP: -

ULIP distinguishes itself through the multiple benefits that it provides to the
consumer. The plan is a one-stop solution providing: -

• Life protection
• Investment and Savings

• Flexibility
≈ Adjustable Life Cover
≈ Investment Options
• Transparency

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 • Options to take additional cover against
≈ Death due to accident
≈ Disability
≈ Critical Illness
≈ Surgeries
• Liquidity
• Tax planning

Additional Benefits: -

ULIP gives an insurance cover and an accident cover along with section 88
benefit, whereas, the other instruments do not offer this.

Death Benefits: -
 Option to pay:
 Sum Assured or Fund Value, whichever is higher.
 Sum Assured + Fund Value
 The first one has the advantage of competitive quotation, while the
second has the advantage of better protection.
 Flexibility to choose from a range of Sum Assured for a given
premium. Have a Min. and Max. SA linked to premium

Withdrawals – The key feature

 Withdrawal is the key advantage that UL policies offer over traditional

policies.
 Full/Partial Withdrawals allow liquidity, a key differentiator from
traditional products.
 Partial Withdrawal can have limits on:
• Min. balance to be kept
• Max. Withdrawal amount

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  Time to allow partial/full withdrawals – 2 to 3 years, depends on product
profitability.
 Surrender Penalties also may be there for early withdrawals to protect
company profits.

Premium Holiday
Another key advantage of UL policies

 During premium holiday, the benefit of protection continues, even if

premiums are not paid, so long as there are units available.
 Huge customer benefit, because the customer is not obligated to
continuation of premium payments for life insurance protection to
continue.
 Easy to explain and sell to the customer

For the generation of insurance seekers who thrived on insurance policies with
assured returns issued by a single public sector enterprise, unit-linked insurance
plans are a revelation.

Traditionally insurance products have been associated with attractive returns

coupled with tax benefits. The returns part was often so compelling that insurance
products competed with investment products for a place in the investor's portfolio.

The subsequent softening of interest rates introduced a degree a much-needed

rationality to insurance products like endowment plans; attractive returns at low
risk became a thing of the past. The same period also coincided with an upturn in
equity markets and the emergence of a new breed of market-linked insurance
products like ULIPs.

While in conventional insurance products the insurance component takes

precedence over the savings component, the opposite holds true for ULIPs.

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More importantly ULIPs (powered by the presence of a large number of variants)
offer investors the opportunity to select a product which matches their risk
profile; for example an individual with a high risk appetite can shun traditional
endowment plans (which invest about 85% of their funds in the debt instruments)
in favor of a ULIP which invests its entire corpus in equities.

In traditional insurance products, the sum assured is the corner stone; in ULIPs
premium payments is the key component. ULIPs are remarkably alike to mutual
funds in terms of their structure and functioning; premium payments made are
converted into units and a net asset value (NAV) is declared for the same.

Investors have the choice of enhancing their insurance cover, modifying premium
payments and even opting for a distinct asset allocation than the one they
originally opted for.

Also if an unforeseen eventuality were to occur, in case of traditional products,

the sum assured is paid along with accumulated bonuses; conversely in ULIPs,
the insured is paid either the sum assured or corpus amount whichever is higher.

Insurance seekers have never been exposed to this kind of flexibility in

traditional insurance products and it would be fair to say that ULIPs
represent the new face of insurance.

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Unit-linked policies are said to be unbundled
What is
Advantages Unit-Linking?
of Unit Linking: -
Explicit charges are assessed against the policy - the premiums paid
belong to the policy-owner (like a bank deposit
 Choice of investments
Unit-linked policies make use of unit-linked funds
 Several fund managers
A unit-linked policy is one whose underlying investments is
 Several fund choice under each fund manager
identifiable and determines its cash values.
 Different risk profiles
Unit linked policies should be matched
 Switching between funds
The
 unit-linked
Flexibility policy liability should be matched by holding the
appropriate asset or assets to which it is linked.
 Sum Assured
 Premium Payment
 Withdrawals
 The roll-up advantage of Insurance – No tax on maturity benefits helps
unit linked products to be positioned as –
 Savings plan
 Attractive
Some Investmentelement is added to the coverage
life insurance
 Annuities that are tax advantaged
 Policyholder participates fully in the rewards and risks - which is
favorable for the company in a declining interest rate scenario.
 Rupee Cost Averaging – takes out the risk in investments significantly

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 Background to Unit Linked Policies

U.K. had the most successful development of unit linked business

worldwide

First UL policies were launched in the sixties.

There was a rapid increase in new regular premium business.

Even more rapid increase in Single Premium (grew to over 3x level of

regular premiums in by 1990s).

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 Traditional Product

Cannot Change
Premiu

Acquisition
Death
Savings benefit Cash
m

and &
maintenance amoun value
expenses t

Insurance
cost
Cannot Change
Black
box Cannot Change

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 Unit Linked product

Premium Can Change

Can Change
Distribution
cost
Customer
Investme
account Expenses
nt value (like a and
bank a/c) mortality
returns charges

Partial Death Benefit

withdrawal or
surrender Can Change

32
 Successful Markets of ULIPs

Sold Unit-linked plans In

Country from market share (%) year Comments / (sources)

UK Early Life Pension

1960s 26% n/a 1975 Market share is % of all
46% 44% 1985 new individual business
40% 55% 1995 (using AP plus 10%SP)
43% 59% 1996
40% 51% 1997
43% 52% 1998 (Source : ABI)
40% 53% 1999

USA c1970 Universal Variable

but in 38% 4% 1985 Market share is as UK
effect 24% 15% 1995 Figures exclude extra
from 22% 20% 1996 “dump-ins”
late 21% 29% 1997
1970s 20% 34% 1998 (Source : LIMRA)
19% 40% 1999

Canada Late 8% 1986 Market share is as UK

1970s 34% 1995 Figures exclude extra
38% 1996 “dump-ins”
44% 1997
52% 1998 (Source : LIMRA)
54% 1999

Sweden c1990 Life Pension Market share is as UK

61% 33% 1996 (Source : Swedish
82% 37% 1997 Insurance Federation)
Ireland/ Early
th
Australia 1960s Over 70% 1995 9 Colloquium,
Groupe Consultatif

Netherlands Early 21% 1996 Market share is % of all

1980s 35% 1997 individual life new AP
43% 1998
48% 1999 (Assurantie Magazine)

Why has unit linked been successful?

 Public awareness of investing, directly or indirectly in the share market

 Historically shares offer a satisfactorily real investment return (Average

10 year return around 12-14%)

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 Pressure to design products directly linked to share

 A more modern approach to risk management, transparency and bonus

distribution.

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 OBJECTIVE OF THE RESEARCH

The purpose/ objectives of this study have many folds. These are: -

 To find out strength, weakness. Opportunity and threat of ULIP (SWOT

analysis) for Bajaj Allianz.

 To estimate the market share of Bajaj Allianz Life Insurance Co. Ltd in
private insurance sector.

 To estimate the market share of Bajaj Allianz Life Insurance Co. Ltd in
whole life insurance sector.

 To do the comparative study of ULIPs product profile of Bajaj Allianz

Life with competitor organization’s ULIPs profile.

 To know and analyze the various factors affecting the sales of the ULIPs.

 Based on the above, to suggest measures to improve ULIPs and to

increase the sales of ULIPs.

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 IMPORTANCE OF STUDY

As it is known that if a student desires his education to be repelled the practically,

he must presume the responsibility entails his sincerity and dedication to learn
and act as a safeguard from the deviation of the desired goal.

The training and project is a result underlying the above idea and so the
importance of study is to help the student to acquaint himself with the market of
organization, their products and services, other activities regarding customer
orientation and satisfaction.

SOURCES OF INFORMATION: -

Coming to the source of information, I have mainly used primary source, i.e.
interview, questionnaire, conversation etc. Besides these I have also studied some
files of the organization and also used some secondary source i.e. published
materials and records etc. And also visit to websites for getting the information.

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 RESEARCH METHODOLOGY

MARKET SURVEY: -

Market survey is one of the most widely used marketing research techniques.
Market survey is at time viewed as synonymous with market research. This is
erroneous. It has to be understood clearly that market research is just one of the
techniques of Marketing Research and is not synonymous with Marketing
Research. It is just one of the method of collecting the marketing information
required for carrying out the given marketing research task. It is used if the
required data is not available from the organization/ company’s internal records
and from external published resources. It amount to original field research work
for collecting the primary data. There are two types of market survey & sample
survey.

STEPS INVOLVED IN A MARKET SURVEY: -

Steps involved in a market survey are noted below. It is worth mentioning that
some of the steps will be applicable to the research task as a whole, as explained
at the beginning of this chapter as well as market survey techniques.

Steps in Market survey: -

 Planning the survey

 Problem definition
 Selection of the survey method
 Sampling
 Questionnaire development
 Pilot survey

37
 Field Work: -

 Selection and training of investigator.

 Interviewing/ collection of data
 Supervision
 Analysis and interpretation
 Editing
 Tabulating, processing (mechanical/ manual) and interpreting
 Statistical analysis and interpretation

Report Making: -

 Summarizing finding and recommendation.

 Report writing

SELECTION OF SURVEY METHOD: -

Different methods are available for contacting the respondent and collecting the
respondent and collecting data. Interview is the most common method. Different
types of interviews can be implied such as personal interview, telephonic
interview, and mail interview depending on the context.

The interview may structured or unstructured, direct or indirect. Sometimes a

depth or a qualitative interview is implied to elicit information.

a) Mail Interview:
As per this approach, the questionnaire along wit a covering letter explaining
the purpose of the study are sent to the respondent in the sample. Obviously
this method cannot be use if respondents are illiterate.

38
b) Telephonic interview:
Another method is the telephonic enquiry method. This method of survey is
extensively used in developed countries. In India, the scope for this method is
relatively narrow. It can be used for certain types of products.

I have chosen questionnaire method for the interview. A questionnaire was

prepared to gather relevant information from the respondents visited. The
design of the sample is given below: -

1. Universe: -
All executive level employees and in New Delhi and around New Delhi
area.

2. Sampling unit: -
Offices and banks.

3. Source list: -
Gather from visiting to offices like banks & other offices and some from
other sources also.

4. Types of respondents: -
a. Executives
b. Bank employees

5. Sample size: -
60 of people

6. Sampling procedure: -
There are approximately 14 life insurance companies, which are providing
ULIP in and around New Delhi. Bajaj Allianz assigned 4 companies to me
for the comparative analysis of ULIP.
And for other objectives of research; I have chosen 60 on the basis of
location.

39
7. Collection of data: -
Both primary and secondary data were collected to fulfill the objectives of
the project research.

8. Analysis of data: -
The collected data were then tabulated converted in to percentage for the
further analysis. Finally findings and conclusion were drawn for the
improvement of Bajaj Allianz Life insurance co ltd market share and
increase the sales of ULIPs.

40
ULIP stands for Unit Linked Insurance Plan

This plan is started in India for the very first time by UTI bank…

Now we have so many companies. There are many companies which provide
ULIP services, e.g. UTI, ICICI Prudential, Birla Sun Life, HDFC Life to name a
few.

ULIP stands for Unit Linked Insurance Plans. ULIP is a combination of Insurance
as well as Investment. It is a mutual fund kind of investment with Insurance
coverage that to according to the choice of the customer.

It serves dual purpose. It not only gives to Life Cover but your money is invested
in equity funds which has the probability of increasing your money at maturity
many folds at the time of maturity

This plan is actually like a mutual fund investment in which u can have life
Insurance with tax rebate and one more extra facility, you can make your black
money in white here and it is legal. Dividends are higher. No needs to invest for
to long just pay only for three years and sit relax.

Since the insurance plans are generally for long terms say 20-25 years the risk
associated with ULIP is practically nil since during this tenure markets fall and
rise many times.

Some more info on ULIP

To put it simply, ULIPs attempt to fulfill investment needs of an investor with
protection/insurance needs of an insurance seeker. ULIPs work on the premise
that there is class of investors who regularly invest their savings in products like
fixed deposits (FDs), coupon-bearing bonds, debt funds, diversified equity funds
and stocks.

41
There is another class of individuals who take insurance to provide for their
family in case of an eventuality. So typically both these categories of individuals
(which also overlap to a large extent) have a portfolio of investments as well as
life insurance. ULIP as a product combines both these products (investments and
life insurance) into a single product. This saves the investor/insurance-seeker the
hassles of managing and tracking a portfolio of products.

In ULIP's the premium is collected from the customer and a portion of the
premium is invested in the market and the remaining goes to the company as
administrative costs. Invested portion is kept in a mutual fund maintained by the
company in the form of units. The Net Asset Value (NAV) of the fund ascertains
the growth of the fund.

Generally ULIP's are whole life policy where in premium payment the customer
fixes term and the coverage will be for a lifetime (Up to 70 Yrs) even though you
are not paying the premiums for the Lifetime. You also have the option of exit by
withdrawing your money partially or fully after paying 3 years of premium.

ULIPs OF BAJAJ ALLIANZ LIFE ARE: -

NEW UNIT GAIN PLAN

A Unit Linked Plan
This amazingly flexible Unit linked life insurance plan provides you the
opportunity to participate in market linked returns while enjoying the valuable
benefits of life insurance...

NEW UNIT GAIN PLUS

The thumb rules for buying insurance is that your insurance needs are minimal in
your early earning years, increase with added responsibilities (Marriage, children,
loans etc.) and taper off by the time you retire. It is difficult to find a single
insurance plan that can take care of all your changing requirements in life –
additional protection, more money to invest, sudden requirement of cash or a
steady post-retirement income...

42
RIDERS UNIT GAIN PLUS
Bajaj Allianz Additional Benefits – Additional protection for you and your family
available with Unit Gain Plus...

NEW UNIT GAIN EASY PENSION PLUS

Unit Linked Retirement Plan without life cover
Bajaj Allianz Unit Gain Easy Pension is a plan that helps you take control of your
future and ensure a retirement you can look forward to. This is a regular premium
investment linked deferred annuity policy. Available as: Unit Gain Easy Pension
Regular Premium & Unit Gain Easy Pension Single Premium.

NEW UG PREMIER
• Up front Allocation of 105% of single premium on day 1
• 100% of the top-ups are allocation
• Flexi maturity after 6years

NEW UG SUPER
• Highest allocation Up to 93%
• Guaranteed life cover

NEW FAMILY GAIN

• The only Unit linked insurance plan with ethical equity fund.
• Suits religious investment guidelines as well.

43
Marketing Network: -

Bajaj Allianz Life countrywide network of over the 570 offices- branch &
satellites offices, over 6050 STMs & over 109,000 ICs and the Company is
divided in to 11 regions.

Bajaj Allianz Life’s network of 570 offices & increasing these offices ensures that
life insurance products reach to the customer “at the right place & right time”.

Market share is 8% among whole life insurance sector and 27% among pvt life
insurance sector, with sales of 13,00,000 policies.
And Collection of premium over Rs. 3130 crores achieved in Fiscal year 2005-
2006. Bajaj Allianz life serves no of customers every day “big or small” with
equal zeal and care; with focus on improvement of products and in additional
facilities, value added services & good return.

44
 Guidelines of IRDA on ULIPs
In its final guidelines on Unit Linked Insurance Products (ULIP), the Insurance
Regulatory and Development Authority has said that insurers have to ensure that
the benefit payable on death under a single premium product should be at least
125 per cent of the single premium paid.

In non-single premium products, the regulator has said that the death benefits
should be a formula (0.5 x term of the policy x annualized premium) or (5 x
annualized premium) whichever is higher.

ULIPs are products that provide partial insurance cover along with a substantial
sum out of the premium being invested in equity and debt instruments to provide
investment returns to the holder of the units. However, there were concerns that
the products often lack adequate insurance protection.

The IRDA has said that the sum assured payable on death shall not be reduced at
any point of time during the term of the policy except to the extent of the partial
withdrawals made during the two-year period immediately preceding the death of
the life assured. However, on attainment of 60 years of age of the life assured, all
the partial withdrawals may be set off against the sum assured payable on death.

Moreover, no cover should be extended after the expiry of the policy term and
only settlement options (which are clearly outlined at the commencement of the
contract) may be allowed. The minimum policy term shall be five years.

The IRDA has said that a unit-linked product must have a guaranteed sum assured
payable on death and may have a guaranteed maturity value.

Moreover, guarantees provided on death, and/or on maturity shall be reasonable

and consistent in relation to the current and long-term interest rate scenario. In
this regard, demonstration of proper pricing, including the appropriateness
through sensitivity and scenario testing shall be required under the File and Use, it
said.

45
The regulator has said that insurers should ensure that all ULIP products that do
not conform to the guidelines must do so by June 30, 2006.

ULIPs have emerged as popular products and the insurance sector has been
witnessing significant growth during recent years. The IRDA has said that
considering the several features differentiating the linked insurance products from
the traditional insurance products, a review of the products has become necessary.

46
 Mutual funds vis-à-vis ULIPs

There is a huge difference between Mutual Funds and Unit Linked Insurance
Plans – the first one being a pure investment product while the second an
insurance-cum-investment product. However, the way they are marketed, an
investor gets an impression that both are more or less same and he has to make a
choice between the two.

Investors should note that these are different products with different features and
costs. It is important that there should be a proper match of these features with the
investors’ needs. ULIPs are good for an investor only if the investment horizon is
long term i.e. around 10 years or more. For short to medium term, ULIP should be
a ed. Instead one should opt for a mutual fund for the investment need and take a
term policy for the insurance need.

Before concluding this cautionary note, one more point merits attention. A part of
the blame for wrong advice lies with the investors. Investors want a pass-back of
a part of the commission earned by the agent. This sometimes is as high as 90-
100%. Financial advisor is not doing social service. Therefore, by asking him to
pass-back, an investor is taking away a part of his earnings.

Being a well-informed investor doesn’t mean that you yourself become an expert.
One should be knowledgeable enough to understand and appreciate the basics of
various investment opportunities and a being duped by unscrupulous advisors.

Are ULIPs similar to mutual funds?

In structure, yes; in objective, no. Because of the high first-year charges, mutual
funds are a better option if you have a five-year horizon.

47
But if you have a horizon of 10 years or more, then ULIPs have an edge. To
explain this further a ULIP has high first-year charges towards acquisition
(including agents’ commissions).

As a result, they find it difficult to outperform mutual funds in the first five years.
But in the long-term, ULIP managers have several advantages over mutual fund
managers.
Since policyholder premiums come at regular intervals, investments can be
planned out more evenly.

Mutual fund managers cannot take a similar long-term view because they have
bulk investors who can move money in and out of schemes at short notice.

48
Why do insurers prefer ULIPs?

Insurers love ULIPs for several reasons. Most important of all, insurers can sell
these policies with less capital of their own than what would be required if they
sold traditional policies.

In traditional ‘with profits’ policies, the insurance company bears the investment
risk to the extent of the assured amount. In ULIPs, the policyholder bears most of
the investment risk.

Since ULIPs are devised to mobilize savings, they give insurance companies an
opportunity to get a large chunk of the asset management business, which has
been traditionally dominated by mutual funds.

49
 DATA ANALYSIS & DATA INTERPRETATION

INDUSTRY MARKET SHARE (LIC & PVT)

7% 8%
9%
2%
3%

71%

Bajaj Allianz Life LIC

HDFC Standard Life Birla Sunlife
ICICI Prudential Others

Bajaj Allianz Life market share is at second place with 8% behind that of
LIC market share 71%.
ICICI Prudential is third with 7%.
Others with 9% including SBI Life, ING Vysya, Tata AIG etc; followed by
Birla Sunlife, HDFC Standard Life among whole insurance sector (Govt &
Pvt.).

50
 MARKET SHARE IN PVT SECTOR

25.7,
31.2,
26%
30%

10, 10%
6.6, 7%

26.5,
27%
ICICI Prudential HDFC Standard Life
Bajaj Allianz Life Birla Sunlife
Others

Bajaj Allianz Life market share is highest with 27%.

ICICI Prudential is second with 26%.
HDFC Standard Life is third with 10%.
Birla Sunlife is with 7%.
Others are including SBI life, Tata AIG, ING Vysya, Aviva, etc with 30%
among private insurance sector.

51
 No of ULIPs provided by companies

ULIPs OF COMPANIES

6
NO OF ULIPs

4
7
3 6
5
2 4
1

0
Bajaj Allianz HDFC ICICI
Birla Sunlife
Life Standard Life Prudential
NO of ULIPs 7 6 5 4

COMPANY NAME

52
 Minimum premium in ULIPs of different companies

MINIMUM PREMIUM IN ULIPs

25000

20000

MIN 15000
PREMIUM
(In Rs.) 10000

5000

0
Bajaj Allianz HDFC ICICI
Birla Sunlife
Life Standard Life Prudential
Min Premium (In Rs.) 15000 10000 25000 20000

COMPANY NAME

53
 Funds provided by companies in ULIPs

Funds providing by companies

7
6
6
5
No of funds

4 4
4
3
3
2
1
0
Bajaj Allianz HDFC Standard
ICICI Prudential Birla Sunlife
Life Life
No of fund 4 4 6 3
Company Name

54
 Free switches provided by life insurance companies in ULIPs

FREE SWITCHES (EVERY YEAR)

30
24
NO OF FREE SWITCHES

25

20

15

10

5 3 4
2
0
Bajaj Allianz ICICI HDFC
Birla Sunlife
Life Prudential Standard Life
No of free switches 3 4 2 24

COMPANY NAME

55
 Prime factors affecting the ULIP sales

Min premium
12% Return
18%
Lack of Services
knowledge 10%
23%
Lack of
contacts
Credibility
10%
27%

Return Services
Lack of contacts Credibility
Lack of knowledge Min premium

Credibility is most affecting factor. Lack of knowledge is also second great

factor after credibility, which is affecting sales of ULIP. Other factors are
also there.

56
 SWOT ANALYSIS

S- Strength: -

1. Insurance cover provide in ULIPs not in mutual fund.

2. Past year performance of ULIP funds of Bajaj Allianz.
3. Flexibility in ULIPs to invest in more than one fund.
4. Withdrawal after 3 year, which is not present in traditional plans.
5. Tax benefit on withdrawals comparison to savings etc.

W- Weakness: -

1. It is purely private company.

2. Less awareness among peoples about ULIPs.]
3. No guaranteed return on ULIP.

O- Opportunity: -

1. Increase of market share in life insurance sector.

2. Increase in sales of ULIPs by providing attracting returns.

T- Threat: -

1. Threat from existing players and new entrants.

2. Competitor’s position in eyes of customers.

57
 FINDINGS

In INDIA, since there is volume of insured persons is around 12% of total

population, which is very low; so there is a very great opportunity to increase the
business. Bajaj Allianz marketing its life insurance policies as well as ULIPs
through out country through the STMs and ICs. Findings are listed below: --

1. LIC having highest market share at 71% and Bajaj Allianz life is place at
second having 8% among whole life insurance sector
2. Bajaj Allianz life having highest market share with 27% in pvt life
insurance sector.
3. Bajaj Alllianz life is no 1 in premium collection in pvt life insurance
sector according to IRDA report.
4. Bajaj Allianz life’s ULIP can give very good and attracting average return
comparison of competitors on the basis of fund’s past performance
(According to survey of OUT LOOK MONEY).
5. The company facing the problem of credibility.
6. A very good percentage of people are not aware of ULIP.
7. A major no of people are in favor of lowering the minimum premium size
and fixing some guaranteed return.
8. To increase the sales of ULIPs Bajaj Allianz should emphasize on
interacting with people, think about minimum guaranteed return on ULIP
and provide improved customers services.

58
 SUGGESTIONS

Based on the SWOT analysis and findings, recommendations are as follows: -

 Bajaj Allianz life should go for industrial client by some contracts with
different organization and industries, where they can get bulk customers.

 Need based services & loyalty or association bonus facilities to be offered

to old Bajaj Allianz customers.

 There should be a minimum fix return on ULIP.

 Bajaj Allianz life to improve up on the contact for awareness.

 In order to increase the sales of ULIP product; company may organize

program for public to give the knowledge about the company & its
products.

 ULIPs minimum premium payment should be minimized.

59
 LIMITATIONS

 Duration of time period for doing research was short.

 Some of the respondents were not giving response to queries due their
busy time schedule.

 Size of sample.

 Lack of proper resources.

60
 CONCLUSION

There are around 13 life insurance companies, which are providing ULIP. How
ever the market share of Bajaj Allianz is only 8% in whole life insurance sector &
27% in pvt life insurance sector. The main reason for this participation is problem
of contacts, lack of knowledge among people about company and ULIP &
commercial terms.

From the SWOT analysis and findings, it is recommended to initially tap the
valuable industries, groups & enter in to contracts. The key staff has to establish
good contacts at every office level & take suitable means for improves the
customer contacts & relation with them. Focus on the increasing credibility
among the people & take suitable action for that.

61
 BIBLIOGRAPHY

Books & magazines: -

• Outlook money (Jan 06)
• Outlook money (July o6)
• 4p’s (June 06)
• Business economy (June 06)

• Research methodology by C R Kothari (2nd edition)

• Financial management by I M Pandey (9th edition)

Website: -
o www.bajajallianzlife.co.in
o www.hdfcinsurance .com
o www.birlasunlfe.com
o www.google.co.in
o www.yahoo.com
o www.iciciprulife.com

Personal interviews: -
• Mr. Barun K Sinha, advocate, Supreme Court & high court, New
Delhi.
• Dr. R. S. Nagar, ghaziabad.
• Mr. P.K. Srivastava, Manager (BOB, Ghaziabad).
• Mr. Vinay Roy, Manager (Allahabad bank, Ghaziabad).
• Dr. Kirti Gupta, Ghaziabad.

62
ANNEXURE

63
 QUESTIONNAIRE

Kindly answer the following question either by making tick or by specifying

valuable comments: -
PERSONAL DETAILS: -
Name… Address…
DOB… Marital status….
Sex Male Female

1. Are you insured?

Yes No

2. How many dependents are in your family?

3. In your opinion, what purpose does life insurance serves?

A). Tax saving B) Safe investment

C). Greater return D). Retirement benefits
E). Any other (Please specify)…

4. Which company is your life insurer?

a). LIC
b). ICICI Prudential
c). Bajaj Allianz
d). Birla sun life
e). Any other (Plz specify)

64
 5. Which is your most preferred policy?
a). Money back d). Endowment
b). Childcare e). Any other
c). Pension

6. What factors do you consider while looking for a life insurance policy?
a). Premium amount
b). Loan facility
c). Higher returns
d). Maturity period
e). Convertibility
f). Any other

7. Do you have insurance cover in mutual fund?

8. How much do you know about ULIPs?

9. How much do you know about Bajaj Allianz ULIPs?

10. Do you have any life insurance policy, which is providing investment,
insurance and withdrawal?

11. What do you think that ULIP plan is more beneficial & better than
other insurance or investment products?

65
12. Are you getting these benefits in other instruments of investment
like mutual fund or shares?

66