on
Submitted to :
Submitted By :
MBA-A
1
Summer Project Certificate
NAME OF FACULTY
2
Declaration
This is to certify that Mr Prashant Kumar Chauhan student of MBA (2010-2012) Northern
India Engg.College , GGSIPU has done his live Summer Internship project under my guidance
and supervision from 8th June 2011 to 30th July 2011. He has completed the project titled
“Current market scenario & potential vis-à-vis channel mix for non-motor retail products
of Future Generali” towards the fulfillment of MBA under my supervision.
During his project he was found to be dedicated, sincere and attentive to small details whatsoever
told to him.
Sr.Manager-L&D- North,
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Acknowledgment
My Project work with Future Generali as a summer trainee has been a great learning
experience. It added a great value to my overall knowledge, thinking ability and personality as a
whole. I was exposed to the real market and gained first hand invaluable experience in the
insurance industry.
I would like to bestow my gratitude to all who helped me during the course of the project
for their inspiring guidance and kind advice throughout the project work.
I am highly thankful to the whole team of Future Generali India Insurance Co. Ltd., zonal
office, New Delhi for providing me with the opportunity and facility of learning in their
organization. I would like to extend my deep gratitude to my industry guide and mentor Mr.
Amarjit Singh Saini, Sr.Manager-L&D- North, Future Generali India Insurance Co. Ltd.
for his assistance and useful comments.
I would also like to extend my special thanks to Mr. Himanshu Sharma, Deputy
Manager,Operations for his support, cooperation and guidance while making me understand the
operations department functioning.
Finally, I would also like to thank my parents and all my dear friends for their kind
cooperation, advice and encouragement during the long and arduous task of preparing this report
and carrying out the project
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Table of contents
Chapter no. Topic Page no.
1 Title page 1
2 Summer project certificate 2
3 Declaration by Industry mentor 3
4 Acknowledgment 4
5 Table of contents 5
6 Executive summary 6
7 Company profile 7
8 Introduction 8-10
9 Review of literature 11
10 Statement of Problem 12
11 RESEARCH METHODOLOGY 13
5
Executive summary
The given topic “Current market scenario & potential vis-à-vis channel mix for non-motor retail
products of Future Generali” basically tries to cover the non-motor retail market which majorly
includes health insurance and personal accident insurance market.
The scope of non-motor retail business insurance products like the health & personal accident
insurance plans is a very wide topic and requires very detailed study of the current market
scenario and future possibilities.
The major emphasis in this project research is given on health insurance business and its scope.
The project required a three way research approach for understanding the current market
scenario of the health insurance business-
To understand the perspective of the public and check their knowledges about health
insurance. This was done through a research conducted in many locations in Delhi-NCR.
To understand the perspective and thinking of the selling channels/ intermediaries like
agents and brokers regarding health insurance business in Delhi-NCR.
To study the approach of various other established general insurance companies in India,
and then relate their approach with the approach taken by Future Generali.
6
Agents still follow old and established methods for identifying new clients, and
do not put in much effort in making the public understand the importance of
health insurance
Other channels like brokers are now using modern techniques like internet
advertising, telephone calling etc to approach customers and try to persuade big
clients for group health cover.
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Company profile
Future Generali is a joint venture between the India-based Future Group and the Italy-based
Generali. Future Generali is present in India in both the Life and Non-Life businesses as Future
Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.
Future Group:
Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of India’s leading
business houses with multiple businesses spanning across the consumption space. While retail
forms the core business activity of Future Group, group subsidiaries are present in consumer
finance, capital, insurance, leisure and entertainment, brand development, retail real estate
development, retail media and logistics.
Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square feet of
retail space in 71 cities and towns and 65 rural locations across India. Headquartered in Mumbai
(Bombay), Pantaloon Retail employs around 30,000 people and is listed on the Indian stock
exchanges. The company follows a multi-format retail strategy that captures almost the entire
consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons,
a fashion retail chain and Central, a chain of seamless malls. In the value segment, its marquee
brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian
bazaars with the choice and convenience of modern retail.
Other group companies include, Future Generali, the group’s insurance venture in partnership
with Italy’s Generali Group, Future Brands, a brand development and IPR company, Future
Logistics, providing logistics and distribution solutions to group companies and business partners
and Future Media, a retail media initiative.
Through its partner company, Blue Foods the group operates around 100 restaurants and food
courts through brands like Bombay Blues, Spaghetti Kitchen, Noodle Bar, The Spoon, Copper
Chimney and Gelato.
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Introduction
A country like India, where the population is approx 120 crores, and a major part of the
population lives in rural areas. It is no hidden secret that of this rural population the majority is
deprived of health facilities, and the basic reason for this is less number of hospitals in rural areas
and also low income of the people living in rural areas which does not allows them to get
medical treatment in urban areas.
So it’s very clear that every household in India needs a health insurance cover. One question
which arises is that it has been 64 years since independence yet people of India are not much
aware about the importance of health insurance in their life.
Let us look at the following factors which provide an indication about opportunities in India as
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Burden of disease (%) 21% of global disease burden
As we can see that India bears 21% of the global disease burden, so it is very clear that if
properly implemented India can become one of the biggest market for health insurance products.
It also becomes very clear that the PSU although they hold a very strong part of the current
available health insurance market have not fared that well as they should have considering the
fact that they are in the market for such a long time.
And this fact becomes even more amusing when the same council also disclosed that annual
household expenditure on medical facilities in India is 6.7% of their annual income.
We can notice one thing that India shares only 2% of the world land but accommodates about
21 % of the world population on this land, this also makes us think that the population of India
thus is very vulnerable to various kinds of dangerous diseases.
If we go towards the data for literacy rate, it is 65.38%of the overall population, thus about 35%
of the population is still illiterate or better say uneducated, thus they won’t be able to understand
the importance of health and health insurance. This particular section of the society thus needs to
be made aware and it is a big untapped market for insurance companies to crack down to them
and make them aware regarding health insurance cover.
We can also see that only 9%of the rural population is getting proper sanitation facilities. What
does this mean?? This means that 91% of the rural population is living without proper sanitation
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facilities. It also indicates that they are very highly vulnerable to diseases like malaria, dengue,
plague etc, which are the result of poor sanitation and cleanliness facilities. Thus we can clearly
see that a major population is under the danger of getting attacked by various kinds of diseases.
In fact they are getting attacked by various diseases due to this reason only.
One of the data also reveals that 98% of the rural population is getting safe drinking water,
whereas only 90.2 % of the urban population is getting safe drinking water. Since safe drinking
water is the basic requirement for a good health, it once again makes us think that about 10% of
the urban population is not getting proper water to drink and thus they are vulnerable to various
kinds of diseases.
One of the sad facts the above table reveals’ is that about 26% of the population in India is living
below poverty line and cannot afford proper food or living conditions. It is this section of the
society which faces the majority of attack by various diseases and do not get any proper health
care facilities due to their inability to afford good hospitals. This section if we talk about in
numbers ranges to about 30 crores in population.
If about 30 crore people are living vulnerable to diseases just because they do not have sufficient
money to afford good hospitals, we can very well assume what are the scope of health insurance
companies to provide health insurance companies.
We can also see that poverty line limit is Rs 327 in rural and Rs454 in urban areas, which
accounts for near about $7 in rural areas and $9 in urban areas. Thus we can see the poverty line
limit is really very very low, so even if someone is said to be above poverty line, it does not
mean that he is having a very good income and can afford proper healthcare facilities by him.
When the survey was being conducted major response did not come from people who had cover
from any PSU, the following chart will make clear what the response of people was when they
were asked about the company from which they had taken health insurance cover.
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So by studying the above table, we can very well understand the fact that health care needs and
requirement of a good health policy for everyone is a huge necessity in India today and there is
ample opportunity for this business to make a mark and also serve the society. The government
needs o study the above figures, so that they can accordingly design health care facilities and
insurance cover for the major section of the society.
Review of literature
Healthcare in India
The majority of the Indian population is unable to access high quality healthcare provided by
private players as a result of high costs. Many are now looking towards insurance companies for
providing alternative financing options so that they too may seek better quality healthcare. The
opportunity remains huge for insurance providers entering into the Indian healthcare market
since 75% of expenditure on healthcare in India is still being met by ‘out-of-pocket’ consumers.
Even though less than 8% of the Indian population today has health insurance coverage, this
industry is expected to face tremendous growth over the next few years as a result of several
private players that have entered into the market. Health insurance coverage among urban,
middle- and upper-class Indians, however, is significantly higher and stands at approximately
50%
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Commission on Macroeconomic and Health insurance in India (WHO India)
b) During 1994, 4.4% of the insured persons made a claim, of which only 75% of claims
were settled. The claims ratio was 45%. However, of late, the claims ratio is growing at a
fast rate, allegedly because of collusion between the patients, insurance agents and
hospitals
Statement of Problem
Current market scenario & potential vis-à-vis channel mix for non-motor retail products of
Future Generali.
Health is the most important factor for any person’s life. How fit a person is being determined by
his/her lifestyle. Today our country is getting under the danger of various types of diseases which
are occurring just because the lifestyle of people is not proper.
The majority of the rural India is not having proper sanitation facilities; which cause dangerous
diseases.
A big population of the urban India is facing various diseases just because of a tough daily
working routine.
So the role of an insurance company becomes very important in this situation. A common person
cannot easily avail the facility of a good hospital if he/she wants to cure for a dangerous or
deadly disease, but if the same person has a health insurance cover, the insurance company will
pay for his/her medical expenses.
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To understand the market properly the insurance companies need to study what exactly are the
expectations of public regarding health insurance.
They need to study the market by studying the activities and strategies of rival insurance
companies and regulations of the government.
They also need to check how the role of distribution channels affects in bringing business for any
insurance company.
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RESEARCH METHODOLOGY
PRIMARY RESEARCH
Primary research included observations and interviews. The method adopted for the research was
Exploratory Research followed by the descriptive research as the main aim was to get an insight
of the problems faced by hospitals as well as the below poverty line people.
SECONDARY RESEARCH
Secondary research included the details provided by the company regarding the current health
insurance plans and market strength. It also included policy wordings of various other general
insurance companies. Data regarding current situation and scope of health insurance in India was
also collected from various journals available on the internet
DATA ANALYSIS
The data provided and collected was processed, classified and fitted into charts and tables to
make findings more meaningful. On the basis of these data, relevant conclusions and inferences
were drawn and the results were interpreted objectively.
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Analysis and Results
The 1st part of the analysis reflects the results of a survey done on the common public, the survey
was done to study the understanding of the common public regarding health insurance industry.
Out of the total sample surveyed how many respondents were insured?
During the survey, 210 responses were collected, and the result is as follows
80
Delhi
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Ghaziabad
34
greater noida
2
Gurgaon
76
Noida
Sahibabad 4
210
Grand Total
80 people said they were covered under some sort of health cover, which made nearly 38 % of
the overall respondents.
130 people said NO they were not covered under health insurance.
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Location of the surveys which were conducted-
The following figure will provide the detail of the bifurcation regarding the different locations
used during the survey
The data was collected in urban areas like Noida, greater noida, Ghaziabad, Gurgaon, and New
Delhi. Major locations for survey in Delhi were Laxmi nagar, South extension, Old delhi, lajpat
nagar etc
Delhi contributed for maximum of the respondents with nearly 38% of overall response.
36% of the data was collected from areas of noida, which included, sector-18 of noida,
atta, sector 33, sector 63.
Greater noida contributed for about 16% data.
Ghaziabad also provided for about 7% of the overall data collected.
Since the project aims at understanding the scope of health insurance business in Delhi-NCR, so
the effort was primarily put to make sure that data is collected from the major locations of Delhi-
NCR. Locations were chosen with great care, as the research needed to make sure that the results
reflect the true picture of Delhi-NCR.
As we can see the majority of the response came from a public of a very young age.
When the survey was conducted the basic problems faced were as follows:
Now the question arises why people were behaving in such manner?
It may be a case that people are not very enthusiastic regarding insurance. Or it may be because
people do not want to discuss money related matters in a survey kind of thing. They might feel
insecure discussing their personal matters. Many people felt that it might be attempt o sell
insurance to them and thus avoided being interviewed.
But it’s not like doing the survey was only a hard job, it also gave out some positive viewpoints
attached with it
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Many people were ready to share data and were also very keen to understand why exactly this
survey was being conducted, on whose behalf it was being conducted. Many people tried to
understand importance of health insurance in case they were a bit unaware about it. Thus we can
say that this survey had a positive picture to it as well.
Now if we take a look at the current market share of health insurance business by various
companies we get the following figure ( data source IRDA, updated till march 2011)
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If the current market scenario is to be believed then we can very well see that right now , health
insurance is capture of government supported or better say PSU companies. The exact reason
behind all this is very tough to assume. But the other factors which are for sure contributing to
the success of PSUs may be as follows:
More faith in the mind of people since they are older in the business
Since these companies are government backed , thus their success rate is higher
They gained the majority of market before the market was opened for private players and
thus they are still enjoying it
Lack of efforts from many private players except for a few companies.
Market sharing of various companies in health insurance industry (as per the survey
conducted on the public)
As we can see ICICI Lombard is having the maximum market share. It is controlling nearly 25 %
of the market (as per the survey conducted). And the 2nd company in the list is Cholamandalam
MS.
It is also clear from the given pie chart that future generali is not at all in the frame and thus it
becomes very clear that the company needs to revamp its market strategies to make an impact
and crack some good market share in the health insurance sector.
Again, it needs to be mentioned that the survey was conducted in urban areas, and as the table 2
was also suggesting that the majority of Indian population lives in rural areas, so the major
opportunities for insurance companies lies in rural areas.
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Description of various channels used for distribution-
The insurance industry runs on the shoulders of various types of intermediaries or distribution
channels which bring the business for the companies by contacting the prospective clients and
providing them with an insurance policy on behalf of the companies. Distribution channel is the
life blood of insurance business. Insurance distribution is strewn with opportunities and
challenges
The health insurance industry majorly has the following types of distribution
channels/intermediaries-
1) Agency
2) Brokers
3) Bancassurance
4) Direct purchasing
Agency Channel- For decades, agency was the only distribution channel for insurance in India.
Even today almost 80% of business is carried through agency channel. This channel has got the
following merits –
Through agency, personal contact and relationship can be established with the customer.
Agents usually enjoy personal credibility with customers.
Agents provide various presales and post sales services to customers.
It involves no capital investment
This channel’s awareness and acceptability is maximum among people
Cross selling is possible through this channel
Due to personal contact, it can provide valuable feedback about the need and expectations
of consumers.
Broker’s channel- The selling of insurance policies in India was majorly done by agents only
till recently. But the recent developments have seen growth of the brokers’ channel in distribution
of insurance policies. Brokers might be a person or a company which acts as an intermediary
between the insurance company and the client. It represents the clients rather than the insurance
company. This is the major point of difference between the agent and the broker. A broker
represents or acts on behalf of the insurance industry whereas the broker represents the clients.
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Requirements of Capital for a broker—it shall have a minimum amount of capital as
mentioned below:
Acts on behalf of the clients and provides him with the best options available amongst
various insurance companies
Since a person or company needs to have a big financial capital to become a broker thus
it becomes a better option in terms of services
These are capable of converting group insurance prospective clients into permanent
clients
Brokers use modern day technology in their day to day work
Bancassurance channel- it is offering a seamless service of banking, life & non-life products.
India, being the one of the most populous country in the world with a huge potential for
insurance companies, has an envious chain of bank branches as the lifeline of its financial
system. Banks try to persuade its customers to purchase the policies of the insurance company
with which it has made a tie up.
This channel has following merits-
Banks have a wide network all over the nation and thus this channel can become the
backbone of insurance industry
Banks make a personal attachment with its customers thus the customers also believe in
the insurance company whose product they are being offered by the bank.
It is easier for the insurance company to launch and make an impact regarding any
particular product if it uses the channel of banks.
Direct- This is a medium which is becoming popular now day by day. People tend to go directly
to the company and purchase a product they need, in fact now they don’t even go to the
company’s offices; they simply buy the product online.
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Why don’t people have a health insurance cover?
When this question was asked to people various people gave different kind of answers. Some of
them are as follows:
Now if we look at the above stated reasons we can surely feel that basically it leads towards lack
of awareness in the common public regarding importance of health insurance. They do not feel
that it is of any use to them. The provide excuses like they already have a life insurance cover,
they are very young and do not require any kind of insurance. Many people also clearly stated
that they are unaware about health insurance. Some of them felt that health insurance is of no use
to them.
When we thoroughly study the reasons stated, we can trace out the basic reason which led to
these provided excuses by the public is the “lack of awareness regarding the importance of health
insurance”. Not only they think that health insurance is of no use to them, they even consider ass
a waste of money. This makes us think not only people are unaware about the importance of
health insurance but many of them are against it.
Some of the respondents stated that their income was too low and thus they cannot think of
buying any health insurance product for them of their family. This point again raises the issue
that people are not aware about various kinds of health insurance products available in the
market. Since health insurance products are designed for different kind of families with varying
income groups, so it cannot be an excuse that since income is low one cannot afford health cover
through insurance.
Basically it is the lack of awareness which is prohibiting the people from buying health insurance
policies. Thus the target of insurance companies and the government should be to make them
aware about its importance and make them understand how it is going to help them in future.
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When people who were not having health insurance covered, were asked the question “if
they will buy an insurance product in future”?
48% of the above respondents said - “no they will not buy a health insurance in future”.
And they did not feel its need. They provided reasons like its waste of money, they have no idea
about these stuffs so can’t invest money in it, some also said that they were very fit and were not
having any diseases so they were not willing to invest in health insurance in future as well.
45% of the respondents said that Yes they will buy a health insurance policy in future very
soon.
Many of the respondents were of the view that earlier they had a health insurance cover but they
did not renew it , neither will they go for a new policy in future and the reason they stated for it
was that when they had the policy they could not get benefited by it i.e they were not
hospitalized and thus the money that they invested as a premium for the health policy was not
utilized. So they were of the view that it’s better to invest money in some kind of security or
share market, as it will give them a sure shot profit for the amount invested.
The public is more concerned by the profit attached with the insurance policy rather than the real
requirement of it. Thus it becomes very clear that even if someone is buying a health insurance
policy then it is not necessary that he/she is buying because he feels he should buy it for his/her
individual/ family’s safety but because he wants to earn or save money through it.
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So a big question arises on the approach or mindset of the public when the topic of health
insurance and its needs is taken up. For a healthy and fit society a proper health insurance facility
to each citizen is a must, and for making this thing develop in a society like India where the
approach of the public regarding insurance is very weird, it becomes the duty of the government
and the insurance companies to make people aware about the importance of health insurance.
When people who were having a health insurance cover were asked “what type of cover
they have taken”?
As we can see that the above chart clearly states that the majority of public who were insured
were covered under group policies.
About 30% public were insured under individual sum insured basis plans
About 50%of the people said that they had insurance cover for their healthcare needs were
covered under group policies
The reasons behind such big response in favor of group plicies can be that those people are
working in some kind of organization or company who has provided them health cover. Another
reason can be that people who replied were covered under some kind of health insurance policy
which was taken by the organization or institute whose part they were.
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The fact that about 50%of health insurance is of group policy also makes one think that people
by themselves are not much aware about health insurance, it’s just that their
organization/company is providing them cover thus they are insured.
Now if we see the chart again, we will find that about 30%of the public who said they had
insurance cover for their health needs were insured under individual plans. Thus it becomes
evident that individual plans are the most sought plans after group insurance schemes. The
individual plans were majorly taken by public whose age group was between 35-45. This also
indicates that once a person gets older he/she becomes more aware regarding his/her insurance
needs. Also the individual plans getting a share of 30% indicate that people are more attracted
towards individual plans rather than family floater plans.
With a share of about 20% family floater plans also marked its space in the products available in
the market. Family floater plans are basically purchased by people who are concerned about
insuring whole of the family within a single policy.
It’s also purchased by people who live in joint family system and wish to cover every member of
their family by a health insurance plan so that in future whenever there is a requirement of
healthcare needs, they do not face any kind of problems and the insurance company takes care of
their needs. Also the premium is a factor, if a person takes an individual plan he pays premium
which covers only him, but if a person takes a family plan, it charges a bit higher premium but in
reward it covers every member of the family thus saving the pocket of the person on time of
crisis or need. This is the reason why a person goes for a health cover which is meant for his/her
family.
Although there are other types of plans available in the market, but none of the respondents had
any kind of idea regarding them. This again made a point that people are not aware regarding
health insurance sector. People were willing and also discussed only about the above mentioned
3 plans i.e group policies, individual and family floater plans.
One can clearly understand the current market scenario which is prevalent at the moment in the
health insurance sector. When one sees the above chart and sees that the group policies are the
most sold policies in the market, it becomes clear that individuals are not much aware about the
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health insurance sector and its importance. Even if one can see 50% of the market captured by
group policies, it does not mean that every individual who is working in some organization is
covered with health insurance. The group polices also form a very very small section of the
working population. Thus we cannot say that group policies are doing a very big contribution. It
is just that other health policies are doing even poorer than the group policies, thus one gets an
impression that group plans are doing good.
When people were asked that “via which channel have they purchased the policy”?
As we can see that as expected by common sense as well Agents form the most successful
channel via which people purchase policy in fact health policies to be precise. They constitute
about 40% of the overall channels. It means that a major section of the society still goes to agents
whenever they need to purchase a policy.
Agents provide services on a very personal basis, which is also a reason why they are the most
successful channel for selling insurance. Although agents have been the face of the frame for a
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long period of time now, but we can see that many people have got their policies from other type
of channels also. About 13% people have got their insurance cover from the way of the company
or organization in which they are working. So we can say now organizations are also becoming a
link between the insurance companies and a person. Since the person is working in an
organization thus it is the duty of that organization to take care of the health needs of its
employees and his/her family.
One positive picture is the 26%of people saying they have got insurance cover via their college
or institute in which they are working. Since noida and greater noida is a location where many
students live (as the location is full of colleges), when they were interviewed regarding their
insurance providing channel, they said they had got cover from their college. Although they had
no idea about the channel via which the college had purchased the policy. Still if we see it overall
we can say that colleges providing health insurance to its students is a good sign.
We can see that a small percentage is also buying health insurance business through brokers.
Although this might be because it was a personal interview survey, so individuals generally do
not go for purchasing their policies through brokers. Brokers generally make business by
cracking deals in the corporate sector. So if we go for a detailed survey we might find that
brokers are bringing business for institutes and corporate offices that are willing to buy insurance
policies for their employees/students. Since brokers is a big part of insurance world today, we
cannot undermine their contribution in bringing business and thus we should consider the
majority of the companies/colleges part of insurance business being brought by brokers only.
If we have a look at the chart we can see that about 13% of the respondents had purchased their
insurance policy directly from the company. Now this is an interesting figure. About 13 %
people going for a direct purchase. It shows that this 13%of the lot are a bit more understanding
about the insurance business that is why they decided to purchase the policy themselves rather
than going through some channel or intermediaries.
This is also indicative of the changes coming in the society nowadays. People are becoming self
cautious regarding important matters like insurance and health coverage. People are buying
insurance policies either going directly into company offices or by purchasing through internet
and making an online payment thus avoiding the part of office going completely.
Although the survey provides a look about how people are buying insurance these days, but it is
a matter of thinking about how much scope each of the intermediaries/channels have for them.
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Truly speaking, the insurance sector is so huge that there is more than enough scope for every
channel to not only survive but also prosper their business easily. They just need to understand
and focus on their target customers.
It becomes a bit challenging for every channel if the space and target customer base for
competition is very small, but if the target customer base becomes enormous then their would be
ample opportunity for every channel to develop and enjoy big business and profits.
After talking about the existence and survival strategies for so many channels in the insurance
sector, it also becomes interesting to know how many of the people who have purchased
insurance policy are happy with the services provided by the channel or intermediary via which
they have purchased the policy.
Let us look at the following data which gives us an idea about the response of people when they
were asked if they were satisfied with the current services of the channel via which they
purchased the policy or they wanted to change the channel via which they had purchased the
policy.
When people were asked that “If given an option will they change the channel via which
they are purchasing the policy”?
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Now, as we can see in the previous given pie chart, about 71% of the respondents said they did
not want to change the channel via which they had purchased the policy. It also meant that they
were satisfied with the current services given by the channels.
This 71% figure is also more important because it is not asking for the initial service, but for a
renewal or continuation in service. So it becomes sure that these channels had been able to
generate a faith in the minds of people and thus were able to get their supportive votes again.
People who had purchased any type of personal accident or health insurance policy provided the
following points as important when it came to decision making moment related with the
channels.
The following points come in the mind of the public when they try to make a decision
whether to change the channel or not.
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Understanding the requirements of the customers
Making the customer properly understand the benefits provided by the policy
Inform the customer about the different products available in the market
Suggest the customer about the best policy in the given lot
Try to persuade the customer in some innovative way which makes him feel that the
intermediary cares about the customer needs more than the company
Whenever there is a claim he should be there with the customer , so that he does not feels
lonely while having the tussle with the insurance company
At the time of renewal the intermediary person should intimate the customer about the
policy getting close to the renewal date, so that the customer does not feels any kind of
problems later on
If there is a better product available than the older one, then the intermediary person
should suggest the customer about it.
So we can see that the public has many kind of expectations from the channel via which
they are purchasing a policy. One can’t be sure if they are fully satisfied with the services
provided by the channel but still there must be some points in the minds of the people which
made them go for the services of the same channel again.
In the chart given in the previous page, we also saw that about 29% of the people were ready to
change the channel via which they had purchased the policy; it also meant that they were not
satisfied with the services provided by the current channel.
When these people were asked what were the reasons which made them think about
changing the channel via which they had purchased the policy, thy stated the following
reasons:
Poor service
The intermediary person did not understand the requirement of the customer properly
Constant clash between the intermediaries and the customers
Lack of communication
Lack of understanding
Inability to explain about new products
But one point which also arises here is that many times, people tend to change the company via
which they had purchased the policy and in order to do so, they also change the channel via
which they had purchased the policy. They blame the company and it is the intermediary which
suffers along with it.
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When people were asked “if they would like to renew their policy from their current
company”?
As we can see that only 14% of the people wanted to change the company via which they
had purchased the health policy. So it is a bit difficult to connect the dots between the
relationship of a bad insurance policy and changing the channel via which the policy was
purchased.
29% of the public wanted to change their channel of purchasing the policy. It indicates
that people are satisfied with the company’s policy, it’s the channel which is causing them
problem, that is the reason why they want to change the channel.
We can see that about 86% people were ready to renew their policy from their current
company only. This indicates that majority of the public is satisfied with the product that
they were having. One reason behind this figure is also the added benefits which start
joining the health insurance policy in the later years. Since there are many extra features
like cumulative bonus etc which add up into a policy in the later years, so every person
who has a bit if understanding of the insurance business goes for a continuation in the
policy rather than abandoning it completely.
Also many times it is the faith generated by the company which works in the favor of the
companies, as they enjoy a continuation in the services. The company provides discounts
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and other kind of advantages to the customers at the end of a year or we can say at the
time of the renewal of the policy.
One major factor which causes the customer to continue the service from the same old
company is the simple fact that it is a bit cumbersome to purchase a new policy from a
different company. Once a person plans to purchase a policy from a different company
there are many kind of steps and procedures which he needs to cross through. He needs to
provide several documents required for the inception of the policy. The customer is
needed to go through a health checkup which takes a lot of time.
One common feature in Indians is that they have a “let it be the way it is” kind of attitude
to many things in life. They do not care much even if it is related with them in some way
or the other. The same happens many times to people and they do not change their
insurance company at the time of renewal of a policy just because they do not consider it
a much important thing or part of their life.
Sometimes negligence also forms the reason why people do not change the companies. At
the time of renewal of the policy the agent/ intermediary simply asks for a cheque or cash
payment from the customer, and the customer simply pays it to him, not even asking for
the reason of payment which basically shows the unawareness spread across.
Due to the above mentioned reasons the above chart shows such a high percentage of
people in favor of continuation of services from their current company.
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A survey was done basically to understand the point of view of the intermediaries regarding
health insurance business and approach of the public regarding this sector. Basically the survey
was done with agents and brokers in Delhi-NCR region.
Of the total survey 35 % respondents were brokers and 65% respondents were agents of
various agencies.
Only these two types of intermediaries were used for the survey because these two bring more
than 90%of the health insurance business in Delhi-NCR region (as per the survey done on
public).
Client identification:
The most important thing for any intermediary is to identify its clients. There are various
channels or leads which help these intermediaries to identify its clients. The following figure will
give a better picture regarding client identification:
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The above figure is a combined picture of the business bringing strategies of both agents
and brokers taken together.
We can see 25% of the business is brought by a combination of reference from existing
clients, insurance companies, and tele calling, as well as with the help of direct sales team
exclusively designed for this purpose only.
2nd combination is the combination of reference from existing clients and insurance
companies only. This also accounted for about 25%.
A combination of insurance companies and direct sales team was considered by 15% as
the most helpful thing in identification of clients.
10% thought that a combination of Reference from existing clients, Insurance companies,
Tele calling was best for brining clients.
The combination of Reference from existing clients, Insurance companies, Tele calling,
direct sales team, and online search for clients was considered by 5% of the overall
respondents as helpful in bringing clients.
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The above chart is a bit different from the chart on the previous page.
The most sought after combination is the Reference from existing clients, Insurance
companies, which accounted as the best combination by 38 % of agents.
And 23 % respondents considered the combination of Reference from existing clients,
Insurance companies, Direct sales team and the combination of Insurance companies,
Direct sales team only as the best way to identify clients.
So we can see the agents basically consider reference from existing clients and insurance
companies as the best way to procure new business.
This also proves that agents believe in more of a grounded kind of work environment.
They do not put in many efforts on new age methods like use of internet, tele calling and
creation of a direct sales team for identifying new clients. They still believe in old
techniques for bringing business.
This also makes it clear that if agents use other new age or modern techno savvy methods
for identification of new clients, they can increase their by leaps and bounds. These
methods will also help them in keeping a track of the clients overall.
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As we can see , a major part of the response came in favor of the combination of Reference from
existing clients, Insurance companies, Tele calling, Direct sales team. It was selected by 72% of
the brokers as the best combination to procure or identify new business. We can clearly see that
brokers also feel that reference from insurance companies and existing clients is a very good way
of generating business. But agents also feel that use of tele calling and creation of a direct sales
team is equally helpful these days.
14%of the brokers who responded felt that a combination of Reference from existing clients,
Insurance companies, Tele calling, Direct sales team, and online methods is helpful in bringing
business.
The above figure actually is very different from the picture given when the agents’ methods were
analyzed. Although both agents and brokers consider reference from existing clients and
insurance companies as their most important tool for gathering new business. But one point of
difference which the brokers are now making is the use of more and more new techno savvy
methods like internet advertisements, creation of database, tele-calling, client survey, creation of
sales team etc.
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Most profitable products in health insurance sector
It is a very interesting point to be discussed what are the most profit bringing products in the
health insurance business. There are many types of products available in the market but all are
not equally profitable for the intermediaries and the insurance companies. Let us look at what are
the products which the intermediaries consider to be the most profit generating one
Agents’ perspective:
Since the survey was done on an open ended basis for this question, responses of varied
wordings were collected.
Individual mediclaim business was considered to be the most profitable business by
agents.
Various agents considered individual health care as the best product available as far as
profits are considered. They named it by different types like individual health, individual,
individual plans, individual mediclaim etc.
Family floater plans was also considered by 9% agents to be a profit giving business.
Similarly 9% agents also considered criticare business as profit giving alongwith
individual policies.
The picture above shows that individual healthcare policies are the most sought after
policies as far as agents’ profits are considered.
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Brokers’ perspective:
The above figure gives out a very clear picture about what the brokers think regarding the most
profitable product as far as health insurance industry is considered.
43% feel that the individual sum insured basis products are the most profitable business.
Whereas 29% feel that group policies are a profit bringing product. Here we can see a
different approach from agents. Agents did not consider this product at all. This also
gives an indication that group mediclaim policies are sold by brokers most of the times.
A reason for this particular difference may also be because agents do not have much of
contacts in big corporate houses to bring business of such large scale and thus they did
not consider it as profit giving product.
14% respondents also voted for family floater products as the most profit giving product.
14%of the respondents also felt that the whole health insurance market is profitable and
thus giving it a thumbs up.
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Comparative analysis of products offered by various insurance companies-
Indivdual
Company cover Family floater Personal
name policies Policies Accident policies Group policies
Bajaj Individual Family Floater 1.Personal Guard, 1.Group Health
Health Guard Health Guard 2.Sankat Mochan Guard,
Alliaanz 2.Group personal
GIC accident,
3.Group critical
illness,
4.Workmen's
compensation
Reliance Reliance 1.Reliance Reliance Individual 1.Group medicalim,
Individual HealthWise Policy, - Personal Accident 2. Group personal
general Mediclaim Standard Policy accident
insurance Insurance Plan,2.Reliance
Policy HealthWise Policy
TATA AIG Individual N.A 1.Accident Guard, Tata AIG Group
Accident and 2.Income Guard, Personal Accident
GIC Sickness 3.Secured Income Insurance( P.A
Hospital Cash Plan, Cover)
4.Maharaksha
Personal Injury Plan
ICICI Health Family Floater Individual Personal N.A
Advantage Health Insurance Accident Insurance
Lombard Plus
GIC Insurance
IFFCO Individual Swasthya Kavach Group Personal Group Personal
Medishield (Family Health Accident Insurance Accident Insurance
TOKIO GIC Insurance Insurance) Policy policy(group only) policy(P.A. cover)
Policy
MAX BUPA HEART BEAT- Family first( for N.A
INDIVIDUAL( joint families),
silver , gold Family
and floater(nuclear Employee First
platinum) families) Health Insurance
Future Health N.A
FUTURE Suraksha – Future Health Future Accident
GENERALI Individual Suraksha Family Suraksha
Future Generali is providing one product each for individual cover, family floater and
personal accident insurance.
For the personal accident section, Future Generali is having a ssingle product, whereas
many other companies are providing more than one product, and thus it becomes clear
that they have designed different products for the personal accident market also covering
different situations.
If we take a look at the table we can see majority of companies are providing more than
one product especially designed for at least one of the segments i.e individual, family
cover or P.A cover.
Future Generali has no product in group medicalim policy section, whereas many other
companies are providing this cover and are getting advantage
One big opportunity lies in the Group health policies as the market is still very wide
open, and in a developing nation like India full of national and multinational companies,
an opportunity for gaining advantage in the group health insurance market is always there
Since it has been previously discussed that Group polcies are getting popular now with
big corporate houses and institutes providing cover to their employees and students
respectively. So this segment of the health insurance business is still untapped for Future
Generali.
If we add a table showing extra benefit policies offered by insurance companies in health
insurance market, we get the following picture-
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Company
Extra benefit policies
Bajaj Alliaanz 1.Health Ensure,
2. Extra Care,
3. Tax Gain Plan,
4. Star Package
5.Life Health Insurance,
6.Hospital Cash
7. Silver Health
8.Insta Insure
Reliance Reliance HealthWise Policy – Gold Plan&
N.A
FUTURE
companies design special product for the customers like tax saving, extra care,
parents health care etc.
Future Generali has no product in the special benefit segment.
Companies like Bajaj Allianz, Relaince, Tata AIG and ICICI Lombard are gaining
advantage in the market by providing these kinds of products.
It’s a part of the market which has got no proper definition to it, so every company
has got the opportunity to design a product in some unorthodox manner and place it
in the market and gain profits.
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For every new company this particular zone in the health insurance market is a
brilliant opportunity to succeed and establish itself, and thus Future Generali must
capitalize on this aspect.
When asked questions regarding views about personal accident insurance products the
following responses were noted –
Majority of the public i.e more than 90% of the public interviewed did not know anything
about personal accident insurance
Many of the respondents said that there is no product like this in the market as their agent
did not inform them about these ever.
There was a section of respondents who said that a personal accident insurance cover is
one taken while we are driving a motor vehicle, thus they were confused regarding a P.A
insurance cover and a motor insurance cover.
Many of those who understood a personal accident insurance cover said they did not need
this product as they will obviously be getting reimbursement after any motor accident
from the person who hits them.
Some people also were of the viewpoint that they cannot purchase an insurance policy for
everything in life.
People also felt that after purchasing a health insurance policy, a separate personal
accident cover is not needed.
There is heavy unawareness amongst the public regarding personal accident insurance
They think if someone is riding a vehicle, and they meet with accident with that
vehicle, the motor insurance will compensate them
They do not think personal accident insurance is needed in their life
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They never thought accidents might happen in their how houses and may cause
damage to the property as well as their family members
Agents are not performing the duty of informing the public regarding personal
accident insurance policies and its importance, in a proper manner
Conclusion-
As the product tries to cover the “Current market scenario & potential vis-à-vis channel mix for
non-motor retail products of Future Generali”, a detailed study was done on various aspects like:
market size,
market type,
various types of available products offered by competitors,
different type of distribution channels available,
public view point regarding the non motor retail insurance market
and various other points
The current status of health insurance and personal accident insurance market for Future
Generali is not very good, but as the company is a very good brand thus it has all the potential to
do well in this market. Since the company is just 3 years old in the Indian insurance market it
will take time to capture market share and capturing more than 1.2% of the market share in 3
years is a fair performance. Currently Future Generali is having only 3 products for the health
and personal accident insurance market whereas its competitors are having much more number
of products for the same. Future Generali is also not having a single product in the non-motor
retail insurance market which has some miscellaneous/special type of features.
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Apart from that while studying the response of public about their understanding of the health and
personal accident insurance market it was concluded that majority of pubic is unaware about
these types of products, they do not have information if these types of insurance policies do exist
in the market or not. Many of them feel that having a health insurance cover is not useful until
you are into your old age or you are having some dangerous diseases, many others feel that
health insurance cover on an individual basis is a waste of money, some of them felt that it is the
duty of the company in which they are working to provide them with a health insurance cover
and they by themselves will not buy one.
One interesting yet saddening fact which was noted when the survey was conducted was the lack
of unawareness in the minds of people. The general public tries to connect anything related with
insurance and LIC. When many of the respondents were asked if they have a health insurance
cover? They said YES, but when they were asked from which company they had purchased the
policy they said LIC. And just to check if it was really a health policy from LIC and not a life
insurance policy, when they were asked for policy details and how many years are they having
this policy their replies suggested they were talking about LIC’s life insurance policies. This
shows that the public thinks insurance is only one and that is Life insurance and LIC sells it.
They cannot differentiate between a health insurance, a life insurance, a personal accident
insurance, a ulip, a property insurance etc. And the number of these types of respondents was
very high. Initially the project had about 305 samples but out of those only 210 samples was
accepted as proper samples for analysis part, which means about 95 samples, was of those type
in which people said they are having health insurance cover from LIC for many years.
The intermediaries play a very important part in bringing business for any insurance company.
Since it is the intermediaries which ultimately contact the customers and maintain a regular
contact with them, thus if the intermediaries are able to satisfy the clients then the business for
any insurance company is sure to increase.
Unlike the market in the foreign nations, the Indian market is still very raw in terms of health
insurance products. People are least aware about launch of new products, in fact the majority of
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the public do not know more than 5-8 insurance companies. The potential customers of this
market are still very much dependent on the intermediaries for any particular policy. For example
if someone has to purchase a family floater health insurance plan , he will not be able to choose a
product by himself as he is not able to understand the policy details by himself and is always
dependent on his agent or broker or bank via which he/she has purchased the product.
Recommendations-
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References
Websites used:
http://www.irda.gov.in
http://www.futuregenerali.in
http://www.searo.who.int/
http://www.searo.who.int/linkfiles/social_health_insurance_an2.pdf
http://www.insurancepandit.com/
Books/Journal/magazine/Newspaper Referred:
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Appendix
QUESTIONNAIRES
To assess the Market Perception regarding Current market scenario & potential for non-
motor retail products.
Dear Respondent,
Name: ______________________________________
Age: _________ Contact: ______________________________________
Location: ____________________________
1. Do you have a personal accident/ health insurance policy ?
a) Yes
b) No
1.1 If No then why? _____________________________________________
1.2 Would you like to purchase a personal accident/ health insurance policy?
________________
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b) Floater sum insured basis/ family plan
c) Group health cover
d) Any other _________________________________
7. Prioritize the following factors on a scale of 1-5 about the influence which they
create when you think of purchasing a policy.[1 being the highest/best]
a) Your requirements ( )
b) Product specifications ( )
c) Influence by the channel ( )
d) Tax advantage ( )
e) Other factors ( )
8. What are the problems which you often face while purchasing a policy?
a) Slow response from the channel
b) Lack of proper explanation regarding the product features
c) Lack of communication
d) Any other (please mention)_______________________________________________
9. Did you face any kind of problem during the after sale services by the insurance
company?
a) Yes ( ____________________________________)
b) No
10. What changes do you want in your current health insurance plan?
________________________________________________________________________
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Questionnaire used for survey of Distribution channels
NAME: ___________________________________________________________
ADDRESS: __________________________________________________________
CONTACT NO: ________________________________________________________
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