By
Rohit Mehta
09P164
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
By
Rohit Mehta
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Certificate of Approval
The following Summer Internship Report titled Competition Analysis of Canara HSBC
OBC Life Insurance Company is hereby approved as a certified study in management
carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite
for the award of Post-Graduate Diploma in Business Management for which it has been
submitted. It is understood that by this approval the undersigned do not necessarily endorse or
approve any statement made, opinion expressed or conclusion drawn therein but approve the
Summer Internship Report only for the purpose it is submitted.
Organizational Guide
Signature…………………………………….
Designation: ARSM
Email: kanwar.sraon@canarahsbclife.in
Rohit
Mehta
09P164
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Acknowledgements
I would like to take this opportunity to thank my mentors Mr. Kanwar Vir Singh Sraon
and Mr. Pranav Kothari for their continuous motivation and guidance throughout the
duration of this project. Without their expert advice this would not have been possible.
I am also indebted to my college and Professors for their guidance in my studies, which
has enabled me to bring this project to completion.
I would also like to acknowledge the following experts for their time and support:
Rohit Mehta
09P164
Management Development Institute,
Gurgaon
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Executive Summary
Canara HSBC Oriental Bank of Commerce Life Insurance Company commenced
business on 16th June 2008. The Joint venture has access to 4400 branches across India.
The share holding pattern is Canara Bank with 51% equity, HSBC Insurance (Asia
Pacific) Holdings Ltd 26% and Oriental Bank of Commerce 23%.
Stay Smart and Saral Beema Plus are two of the ULIP based individual life insurance
plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance Company. A
ULIP based insurance product is the one with components of both insurance and
investment. Unit Linked Insurance Plan (ULIP) provides for life insurance where the
policy value at any time varies according to the value of the underlying assets at the time.
The investment is denoted as units and is represented by the value that it has attained
called as Net Asset Value (NAV).
- To analyse the competitor products relevant to Stay Smart and Saral Beema Plus
policies provided by Canara HSBC Life with respect to product features and returns
to customers.
- To understand how the competitors are making their sales, their selling strategies and
other relevant marketing parameters and to find out areas of improvement for Canara
HSBC Life.
- To try to identify the customer expectations and ways to fulfilling them.
Five competitors have been identified for the purpose of study. These are:
1. ICICI Prudential Life Insurance Company
2. SBI Life
3. Citibank
4. Standard Charted
5. HDFC Standard Life
The major form of selling of insurance products adapted by Canara HSBC Oriental Bank
of Commerce Life Insurance Company is that of Bancassurance. The project was divided
into sub-topics for approach. Initially, the concept of Bancassurance was studied and how
it works. After the study, main areas related to the project were identified. These included
the study of 7P’s of marketing. However, not all 7P’s were relevant to the project and
some could not be studied. In addition to the 7P’s, a SWOT analysis of Canara HSBC
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Oriental Bank of Commerce Life Insurance Company was done. Also, strengths and
weaknesses of competitors were identified and mentioned.
Finally, the project was concluded with an exploratory research on consumer preferences.
Various factors had been identified in the insurance policies which were important to
consumers by previously done research. These factors were compared on a weighted
scale of 1-5 to identify the degree of importance of these factors. Also, various banks
were compared by consumers on a rating scale. The sampling method being used was
convenience sampling. An online survey was made using Google spreadsheet and the link
was forwarded for response.
There were various limitations to the project and survey. Primary limitation was of time.
Also, certain competitors were hesitant in giving information. Hence, the limitation of not
being able to interview many employees is also present. Finally, the response to the
survey is predominantly from students pursuing post-graduation and from people of the
age group 20-25 years. Hence the conclusions derived would be based on this future
customer base.
The following conclusions and suggestions are being drawn from the project:
a. Changes in the website of Canara HSBC Oriental Bank of Commerce Life Insurance
Company were suggested based on the observations of competitor’s websites.
b. Certain suggestions were made for additions to the workplace i.e. HSBC branch in
Jaipur.
c. Relationship between the target market segment and organization structure was
observed
d. Comparisons were made of the product and prices under study
e. SWOT analysis enabled in finding scope of improvements
f. No. of products and company advertisements had little or no effect on peoples
decision to buy insurance policy
g. People reference and brand name are important factors in selling insurance
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
TABLE OF CONTENT
1. Introduction .................................................................................................................11
a. Company profile.....................................................................................................11
b. Products..................................................................................................................12
c. Fund options...........................................................................................................13
d. Problem at Hand.....................................................................................................15
e. Methodology..........................................................................................................16
2. Literature Review.........................................................................................................17
a. Financial System....................................................................................................17
b. Why Bancassurance...............................................................................................19
c. Advantages of Bancassurance................................................................................20
d. Why Bancassurance with Life Insurance...............................................................22
e. Bancassurance models............................................................................................23
f. Bancassurance working..........................................................................................24
g. Indian Scenario.......................................................................................................26
h. Relevance of Bancassurance in Indian Financial Sector........................................29
i. SWOT analysis.......................................................................................................31
j. Issues in Bancassurance.........................................................................................32
3. Product Analysis..........................................................................................................33
4. Price Analysis...............................................................................................................37
5. Promotion.....................................................................................................................44
a. Advertisements.......................................................................................................45
b. Website...................................................................................................................46
c. Branch Marketing...................................................................................................47
6. Hierarchy......................................................................................................................51
7. Customer Segmentation...............................................................................................56
8. SWOT Analysis............................................................................................................61
9. Exploratory Research...................................................................................................64
10. Conclusions and Recommendations.............................................................................66
11. References....................................................................................................................67
12. Appendix......................................................................................................................68
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LIST OF FIGURES
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LIST OF TABLES
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LIST OF APPENDICES
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INTRODUCTION
1. Company Profile
Canara HSBC Oriental Bank of Commerce Life Insurance Company commenced
business on 16th June 2008. The Joint venture has access to 4400 branches across India.
The share holding pattern is Canara Bank with 51% equity, HSBC Insurance (Asia
Pacific) Holdings Ltd 26% and Oriental Bank of Commerce 23%.
Canara HSBC Oriental Bank of Commerce Life Insurance Company has joined the big
league of life insurance players by breaking through Rs 100 crore of new business in a
month.
The company garnered Rs 171.1 crore in March, closing fiscal 2009-10 with Rs 861.3
crore in gross written premiums, recording a growth of 189 per cent over FY 2008-09.
The company’s business has stood at Rs 1,160 crore since launch in June 2008. The
company has underwritten 1, 35,585 policies since inception.
It is indeed encouraging to see the company on a strong growth trajectory in such a short
span. Their achievement is the result of the commitment of their shareholders and
employees in positioning the company as a strong private life insurance player in a
tumultuous yet competitive 2009.
Operating a pure bank assurance model, Canara HSBC Oriental Bank of Commerce
Life Insurance Company has exclusive access to the customer bases of both the public
sector banks, Canara Bank and Oriental Bank of Commerce, and of HSBC in the country.
This comprises more than 48 million customers and a pan-India network of over 4,400
branches. Currently, the company's products are available through around 900 branches
of the three banks.
This further testifies the scale of untapped potential among the large customer base of
Canara Bank, Oriental Bank of Commerce and HSBC. They are confident that their
strong distribution model, research-based products and customer centric initiatives will
enable them to achieve their goal of taking life insurance to a large section of the society
and help them evolve as one of the top insurance players in the market.”
The bank assurance model has enabled the company in reaching out to customers from
the rural areas and even exceeded the regulatory minimum required level of sales for
FY 2009-10.
Canara HSBC Oriental Bank of Commerce Life Insurance Company's assets under
management stood at Rs 1,170 crore as on March 31, 2010. In FY 2009-10, the
company through its prudent investment strategy demonstrated consistent fund
performance, exceeding benchmarks across all funds.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Products
Canara HSBC Oriental Bank of Commerce Life Insurance Company has product
offerings in individual segment as well as group segment.
Canara HSBC
Life
Individual Group
Products Products
Group Loan
Stay Smart Retire smart Saral Beema Pure Term Group Term
Protection
Plan Plan Plus Plan Plan
Plan
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
This Plan will give you loyalty additions to help your money grow fast.
No Medical Tests: Gain express insurance by certifying the ’Declaration of Good
Health’ without any medical questions or tests
Simple Structure: Fixed benefits and options to maintain ease of understanding
and purchase of this Life Insurance cum Investment policy.
Increasing Cover: Enhanced death benefit to your family by way of Sum Assured
plus Fund Value
Limited Premium Payment: Pay premiums for only 7 years while you enjoy life
cover up to 15 years.
This plan protects the person from financial uncertainties and secures their future.
Flexible Premium Paying Options – The plan provides you Regular and Single
Premium Paying options
Rebate on premium rates for female lives
Save tax while investing under section 80C and get tax-free benefits under section
10 (10 D) under the Income Tax Act, 1961
a. Equity II Fund:
- Risks: Market Risks; suited for investors with a long-term investment horizon with the
appetite for risk to capital over short-term periods.
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b. Growth II Fund:
- Structure: 50-90% in Equities, 10-50% in Debt Securities and 0-40% in Money Market
Instruments.
- Risks: These funds are subject to risks of debt as well as equity instruments to the
extent of allocation to the respective asset categories.
c. Balance II Fund:
- Structure: 30-70% in Equities, 30-70% in Debt Securities and 0-40% in Money Market
Instruments.
- Risks: These funds are subject to risks of debt as well as equity instruments to the
extent of allocation to the respective asset categories.
d. Debt Fund:
- Fund Philosophy: To earn regular income by investing in high quality Debt securities.
This Fund will primarily invest in a portfolio of high quality bonds and other fixed and
floating rate securities issued by the Government, Government agencies and corporate
issuers. To maintain liquidity the fund will invest in cash and money market instruments.
- Risks: Price Risk or Interest Rate Risk, Liquidity or Marketability risk, Credit Risk or
Default risk, Reinvestment Risk.
e. Liquidity fund:
- Fund Philosophy: To generate reasonable returns commensurate with low risk and a
high degree of liquidity. This Fund will primarily invest in portfolio constituted of money
market and high quality debt securities.
- Risks: Risk of Debt, price risk is low on account of shorter maturity of the underlying
debt investments.
2. Problem at hand
Stay Smart and Saral Beema Plus are the most sold insurance policies from Canara
HSBC Oriental Bank of Commerce Life Insurance Company. Being a proactive
company, it wishes to learn from its competitors the strategies adapted by them in selling
insurance policies. Canara HSBC Oriental Bank of Commerce Life Insurance Company
relies on Bancassurance channel in making its sales. Thus in identifying its competitors,
sales of insurance policies by Bancassurance channel is being considered. The identified
competitors are:
1. ICICI Prudential Life Insurance Company
2. SBI Life
3. Citibank
4. Standard Charted
5. HDFC Standard Life
Problem Formulation
Initially, a study of the concept of Bancassurance was done. This was done primarily
from online sources like reports, govt. Websites, company websites etc. On the basis of
this background work, future targets were set for analysis. The following were the targets
for study:
a. To identify and analyse the products of competitors for study
b. To compare these products on the basis of costs to customers
c. To identify how marketing of insurance products is done in bank branches
d. To compare the company websites for benchmarking
e. To analyse the company advertisements
f. To observe the employees at branch offices and compare them
g. To understand the branch hierarchy and how work is divided
h. To understand the customer segmentation of the competitors
i. To do a SWOT analysis of all the companies
j. To identify the customer preferences regarding insurance policies
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Methodology
The project was carried out in a number of steps. Initially, a research was done on the
number of products being offered by the competitors. This was done primarily through
the company websites. Also, insurance comparison sites were referred for identifying the
suitable products for comparison. The identified products were then compared.
Comparison was done by listing the policy features in a table and comparing the
differences in the policies.
The price component of policies was compared similarly. Various expenses charged in
the policies were listed in a table and compared for their features.
The promotion aspect of the project was subdivided into components. Promotion was
divided into promotion at branch offices, online promotion, and promotion via mass
media like television advertisements. For promotion at branches, field trips were
conducted and observations were made regarding the layout in the branches, how
marketing of products is being done at the branches etc.
For online promotion, various competitor strategies were observed in comparing the
products online. These strategies were evaluated and suggestions were made.
Websites of all the competitors were evaluated with Canara HSBC Oriental Bank of
Commerce Life Insurance Company’s website. Features in the websites were listed and
comparisons were made. Relevant additions to the website are suggested.
Television Advertisements of all the concerned companies were observed to determine
the differentiation factors.
Field visits were made and interviews (both structured and unstructured) were conducted
with company employees of the competitors. Through these interviews, Organization
Structure (hierarchy) and Customer Segmentation were determined.
SWOT analysis was done on Canara HSBC Oriental Bank of Commerce Life Insurance
Company and strengths and weaknesses of the competitors were noted down.
An exploratory survey was conducted to determine the customer preferences related to
life insurance policies. This survey was carried on previously done research on insurance
preferences. The sampling method used was convenient sampling. Most of the
respondents were students and predominantly male of the age group 20-25. Also, attempt
was made to judge the effectiveness of various ad campaigns by the companies.
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LITERATURE REVIEW
Banking as a business around the globe has evolved due to integration of global financial
markets, development of new technologies, universalization of banking operations and
diversification in non-banking activities. As the result, the boundaries that have kept
various financial services separate from each other have vanished. This coming together
of different financial services has led to synergies in operations and development of new
concepts. One of these is Bancassurance. Bancassurance simply means selling of
insurance policies by banks.
FINANCIAL SYSTEM
The financial system consists of variety of institutions, markets and instruments that are
related in the manner shown in the figure above, it provides the principal means by which
savings are transformed into investment. Given its role in the allocation of resources, the
efficient functioning of the financial system is of critical importance to a modern
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economy. Financial manager negotiate loans from financial institutions, raises resources
in financial marked and invests surplus funds in financial market. In very significant way
he manages the interface between the form and its financial environment.
Distribution Channels
Bancassurance
Simply put, in case of Bancassurance, the corporate agent is the bank and business is
sought through the existing bank customers.
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WHY BANCASSURANCE
The main reasons why banks have decided to enter the insurance industry area are the
following:
The realization that joint bank and insurance products can be better for the customer
as they provide more complete solutions than traditional standalone banking or
insurance products.
Banks are experiencing the increased mobility of their customers, who to a great
extent tend to have accounts with more than one bank. Therefore there is a strong need
for customer loyalty to an organization to be enhanced.
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Client relationship management has become a key strategy. To build and maintain
client relationships, banks and insurers are forming partnerships to provide their clients
with a wide range of bank and insurance products from one source.
ADVANTAGES OF BANCASSURANCE:
To the Bankers:
In a situation of constant asset base the bank can increases Return on Assets (ROA)
by increasing their income, by selling insurance products through their own channels.
It can cover operating expenses and make operating expenses profitable by leveraging
their distribution and processing capabilities.
By acting as a one stop shop for all financial services, they can improve
overall customer satisfaction resulting in higher customer retention levels
Banks enjoy significant brand awareness within their geographical region providing
for a lower per lead cost when advertising through print, radio and television. The
advantage of a bank over traditional distributors is the lower cost per sales lead made
possible by their sizeable loyal customer base.
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To the customers:
Comprehensive financial advisory services under one roof. i.e., insurance services
along with other financial services such as banking, mutual funds, personal loans etc.
To the insurers:
Insurers can exploit the banks' wide network of branches for distribution of
products. The penetration of banks' branches into the rural areas can be utilized to sell
products in those areas.
Since banks have already established relationship with customers, conversion ratio of
leads to sales is likely to be high. Further service aspect can also be tackled easily.
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The main reason may be the complementary nature of life insurance and
banking products: bank employees are already familiar with financial products
and quickly adapt to selling insurance-based savings or pension products.
On the other hand, the non-life market requires special management and selling
skills, which are not necessarily prevalent in Bancassurance. In addition, such
competencies require significant investment in training and motivation, and
therefore additional costs.
Bank advisers can use their knowledge of their customers’ finances to target
their advice towards specific needs. This is a major advantage in life insurance
and less important in personal injury insurance.
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BANCASSURANCE MODELS
Strategic Alliance: Under a strategic alliance, there is a tie-up between a bank and an
insurance company. The bank only markets the products of the insurance company.
Except for marketing the products, no other insurance functions are carried out by the
bank.
Full Integration: This arrangement entails a full integration of banking and insurance
services. The bank sells the insurance products under its brand acting as a provider of
financial solutions matching customer needs. Bank controls sales and insurer service
levels including approach to claims. Under such an arrangement the Bank has an
additional core activity almost similar to that of an insurance company.
Mixed Models: Under this approach, the marketing is done by the insurer's staff and the
bank is responsible for generating leads only. In other words, the database of the bank is
sold to the insurance company. The approach requires very little technical investment.
The early Bancassurance distribution arrangements in India are taking off under two
categories:
Most of the Bancassurance operations in India fall into the first model, which in a way is
quite a prudent decision. In terms of the present regulatory framework, one bank can tie-
up with only one life and one non-life insurer, while insurers have the choice to tie-up
with any number of banks.
BIM differs from 'Classic' or Traditional Insurance Model (TIM) in that TIM
insurance companies tend to have larger insurance sales teams and generally work with
brokers and third party agents.
An additional approach, the Hybrid Insurance Model (HIM), is a mix between BIM and
TIM. HIM insurance companies may have a sales force, may use brokers and agents and
may have a partnership with a bank.
BIM is extremely popular in European countries such as Spain, France and Austria.
The usage of the term picked up as banks and insurance companies merged and banks
sought to provide insurance, especially in markets that have been liberalised recently. It is
a controversial idea, and many feel it gives banks too great a control over the financial
industry or creates too much competition with existing insurers.
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Executive
officer
Regional
manager
Territory
Marketing
Manager Insurance
Officer company
Corporate
Banks branch sales
managers manager
Corporate
Assistant agent
general manager
Banks manager
Insurance
General advisory
Manager
Executive
assistant
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WORKING OF BANCASSURANCE
Insurance Company
Insurance advisor – they are people who have to get customers from the bank and also
look to the marketing officers whether they perform their duty well and then report it to
CAM.
CAM – there are three IA’s under him. He has to say IA about his work and also guide
him how to do work. He has to look to his problem and achieve certain targets from him.
CSM – there are two CAM under him. He has to solve the problem faced by CAM he
also sees that targets are achieved by him. He is basically intermediary between agents
and company.
TM – there are various CSM under him. He keeps the group discussion to share each
other personal review. He also sets targets for them.
RM - he has to collect all the record from the TM. Check the performance and pass it to
CEO.
CEO – CEO then comes to know the position of the company and the level of working
condition of company.
Banks
M.O. – he is appointed by the insurance company to sell the policies to the banks
customers. He has to shape the bank manager to which customer to select and what policy
to sell them. He has five branch managers under him. He has to solve their problems if
required.
Branch manager – branch manager has to look after the details of the customer and
select the customer and approach them to buy the policy and then report it to AGM.
AGM – AGM solves the problem of branch manager and sends the report to GM.
GM – there are various AGM who gives report to GM. He has to do the records
systematically and pass it to EA.
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INDIAN SCENARIO
With effect from October 29, 2002, banks have also been allowed to undertake referral
business through their network of branches. However, before entering into insurance
business, banks are required to obtain prior approval of the Insurance Regulatory and
Development Authority (IRDA) and Reserve Bank of India.
It has now been decided that banks need not obtain prior approval of the RBI for
engaging in insurance agency business or referral arrangement without any risk
participation, subject to the following conditions:
a. The bank should comply with the IRDA regulations for acting as ‘composite
corporate agent’ or referral arrangement with insurance companies.
b. The bank should not adopt any restrictive practice of forcing its customers to go
in only for a particular insurance company in respect of assets financed by the bank.
The customers should be allowed to exercise their own choice.
c. The bank desirous of entering into referral arrangement, besides complying with
IRDA regulations, should also enter into an agreement with the insurance company
concerned for allowing use of its premises and making use of the existing
infrastructure of the bank. The agreement should be for a period not exceeding
three years at the first instance and the bank should have the discretion to
renegotiate the terms depending on its satisfaction with the service or replace it by
another agreement after the initial period. Thereafter, the bank will be free to sign a
longer term contract with the approval of its Board in the case of a private sector bank
and with the approval of Government of India in respect of a public sector bank.
e. The risks, if any, involved in insurance agency/referral arrangement should not get
transferred to the business of the bank.
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The data below is for the time period from 2003-2008. It shows the compounded annual
growth rate of premiums as well as insurance policies for both life and non-life policies.
The above data shows that in case of non-life insurance policies, sales have been more
but the premium paid has not increased proportionately.
In case of life-insurance, sales have increased and also the premium paid has increased
more than proportionately. This implies that life-insurance policies with greater
premiums are being bought more often.
2500000
2000000
1500000
Life insurance
1000000 Non-Life Inssurance
500000
0
2003 2004 2005 2006 2007 2008
The above chart is an illustration of the table presented above showing growth of life and
non-life insurance policies in India. This implies that the growth in life-insurance
policies has been tremendous since insurance sector was liberalized.
The table below shows the Penetration of insurance sector in various countries over a
4year period. Insurance penetration is measured as the ratio of Premium to GDP in USD.
From the table we can see that insurance penetration in India increased by more than 1/3rd
in 2005-06, but has since then decreased at a very slow pace. This level is still higher
compared to other developing countries. However, it is comparatively less with
developed countries; indication India has a lot of scope for insurance penetration, with
effective marketing and distribution channels.
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From the table of insurance density, we can see that the total insurance density in India
has almost doubled in 2008 from what it had been in 2005. Insurance density is measured
as ratio of premium (in USD) to total population. This growth though great is still
significantly less when compared to the value of insurance density in developed countries
like UK and Australia.
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The following factors have been identified to support the concept of Bancassurance in
Indian context:-
b. Banks are the key pillars of India’s financial system. Public have immense faith in
banks.
c. Share of bank deposits in the total financial assets of households has been steadily
rising.
d. Indian Banks have immense reach to households. There are 65700 branches of
commercial banks, each branch serving an average of 15,000 people.
e. Banks enjoy considerable goodwill and access in the rural regions. There are 32600
branches in rural India (about 50% of total), and 14400 semi-urban branches, where
insurance growth has been most buoyant.196 exclusive Regional Rural Banks in deep
hinterland.
g. Banks world over have realized that offering value-added services such as
insurance, helps in meeting client expectations. Competition in the Personal
Financial Services area is getting tough in India. That Banks can retain customer
loyalty by offering them a vastly expanded and more sophisticated range of products,
is a popular notion. Insurance distribution can also help the bank to increase the fee-
based earnings to a large extent.
i. Banks can put their energies into the small-commission customers’ that insurance
agents would tend to avoid. Banks’ entry in distribution can help to enlarge the
insurance customer base rapidly. This helps to popularize insurance as an
important financial protection product.
k. Banks have an important role to play in the pension sector when deregulated. Low
cost of collecting pension contributions is the key element in the success of
developing the pension sector. Money transfer costs in Indian banking are low by
international standards. Portability of pension accounts is a vital requirement which
banks can fulfil, in a credible framework.
The above table is computed for 3 years, showing the percentage of contribution towards
the sales of insurance policies by various distribution channels. The two sectors – private
and public have been shown separately. From the above table, LIC is predominantly
based on individual agents for selling.
Private life insurance providers are also relying a lot on individual agents, but the
proportion of agents utilized is considerably less. They are also significantly relying on
corporate agents including banks and their contribution is increasing over time.
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SWOT ANALYSIS
Strengths:
Weakness:
Opportunities:
Data mining: Banks have a huge customer database which has to be properly
leveraged. Target segments should be identified and tapped.
Wide distribution networks established by banks provide a great opportunity to
sell insurance products through banks.
Another potential area of growth of Bancassurance is exploiting the corporate
customers and tying up for insurance of the employees of corporate clients
Threats:
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ISSUES IN BANCASSURANCE
Bank must go for life and general insurance simultaneously in order to obtain
scale economies as well as synergy.
Initially, a joint approach (banker and insurer) to sales and after sales services
could be adopted.
A review of the tie-up arrangements with insurance companies from time to
time is essential.
The trained manpower should be used exclusively for Bancassurance.
Due considerations be given in performance appraisal for specified persons.
There seems to be lack of clarity between insurer and banks in regard to several
operational activities including for instance, marketing.
Under Bancassurance channel, though banks are distribution agents, the need for
evolving a distinct ‘business model’ needs no emphasis in Indian context.
Another area of concern is that of customer service and satisfaction.
Current regulations do not allow banks to sell insurance products of more than
one insurance company (one insurance company for life and another for non-life).
The insurance regulator has constituted a committee to re-look into the regulatory
framework for Bancassurance intermediation model and also examine the issues
in permitting banks to have multiple tie-ups.
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PRODUCT ANALYSIS
Two products from Canara HSBC Life have been analysed in this project. These are
among the best selling products from the bank. The corresponding products from the
competitors have been identified based on the analysis of their features. Also, online
policy comparison sites have been used to identify the relevant products for comparison.
The corresponding products identified from the competitors for analysis are:
Endowment plans provide life insurance cover for a specified period. The important
aspect is that on maturity i.e. if the insured survives the term of the insurance, he/she
receives the sum assured at the end of the term.
A variation of the Endowment plan is the Endowment plan with Profit or Unit Linked
Endowment plan with Profit.
In such plans, in the event of death of the insured during the term of the policy, the
nominee receives the sum assured plus the bonus/participating profit/guaranteed
additions, if any. The bonus or profit is paid for the number of years that the insured
survives in the policy term. In case of unit-linked plans, the nominee receives the value of
the investments or the sum assured, whichever is higher.
If the insured survives the term of the policy, she/he receives the sum assured plus
bonus/participating profit/guaranteed additions, if any, for the entire term of the policy or
the value of the investments.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Product Canara HSbC ICICI Pru SBI Life – Unit Birla Sunlife Bajaj Allianz Life – HDFC - SL
Features - Saral Life – ACE Plus III – Titanium New Unit Gain Endowment
Beema Plus Pension Plus Plan Protection Plus II Champion
Suvidha
Premium Min: Rs6000 Min: Min: Rs24000 Min: Min: 15 years Min:
Terms annually Rs18000 p.a. (regular); Rs25000 p.a. policy- Rs15000 Rs15000
per Rs60000 p.a. if annually annual, Rs7500 annual,
Max: annum (single) OR Rs30000 half-yearly, Rs4000 Rs8000 Half-
Rs100000 p.a. quarterly, Rs1500 yearly
Annually Max: no limit otherwise monthly
Max:
20,25 years policy- Rs2,00,000
Rs12500 annual,
Rs6500 half-yearly,
Rs 3500 Quarterly,
Rs 1200 monthly
Max: no Limit
Premium 7 years 10 years
paying term
Policy Term 15 years 10 to 30 Min: 8years 10 years 15 years, 20 years Min: 10
years (regular), and 25 years years
5years (single)
Max: 50years Max: 20
years
10 years, 15-
20 years
Modes of Annual, Yearly, Annual, Semi- Annual, Annual, Semi- Annual, Half-
premium Semi-annual, half- annual, Semi-annual, annual, Quarterly, yearly
payment Quarterly, yearly, Quarterly, Quarterly, Monthly
Monthly monthly Monthly, Monthly
Single
Minimum/ Fixed: 5 5*annual Min: RS25,000 5*annual 5*annual policy 5*annual
Maximum times of Premium Max: policy Premium policy
sum assured annual with a Rs20,00,000 Premium Premium OR
premium minimum Rs10,00,000
Premium
of Rs100K
Min/Max 18-45 years 0/65 Min:18 years 8 to 70 years 0-60 years; 18-50 18 to 50
entry age years years in case of years
Max: Additional Rider
67(regular Benefits
Premium);
70(single
Premium)
Min/Max Max: 60 18/75 40/75 Years 18/75 years 65 in Max: 65
maturity age years years case of Additional
Rider Benefits
Page 34 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Product Canara HSbC ICICI Pru Life SBI Life – Unit Birla Sunlife Bajaj Allianz HDFC -
Features - Stay Smart – Assure Plus III SP (whole – Dream Life – Wealth Protection
Plan Wealth life) Retirement Gain Plan
Plan
Premium Rs25000 p.a. Rs12000 p.a. Regular: Min: Rs5,000 0-60 years: Depends on
Terms onwards Rs24000p.a. Rs25000; 61- life cover
Single: 65years: and optional
Rs60000p.a. Rs50,000 benefits
Premium 10 years to Single pay, Regular: 10-
paying term 99-age at short pay- 30 yrs
entry 5,10,15,20 Single: 5-15
years, yrs
guaranteed
savings date
Policy Term Till 99 years Whole life Min: Whole life Whole life 10-30 years;
of age single premium 5-30years
>= 5 years (Additional
limited terms – Benefit
(term varies) Options)
Max:
limited term – 30
years
whole life – (90-
entry age)
Modes of Annual, Annual, Annual, Semi- Annual, Annual, Semi- Annual,
premium Semi-annual, Semi-annual, annual, Quarterly, Semi-annual, annual, Semi-annual,
payment Quarterly, Monthly Monthly, single Quarterly, Quarterly, Quarterly,
Monthly Monthly, Monthly, Monthly,
single single single
Minimum/ Min: Min: Min: Min: Min: Depends on
Maximum 5*annual 5*annual RP – 5*AP Rs2,00,000 1.1*Single the policy
sum assured policy policy SP – 1.25*SP for a Premium document
Premium Premium; to Max: premium of Max: 5*single
Max: based a min. of SP – 1.25*AP 8,000 Premium
on Rs1,00,000 RP -
underwriting Max: as per Age <=45
limits Maximum 20*AP;
Sum Assured Age 46-65
Multiples 5*AP
Min/Max 31days to 65 0 to 55 years 0 to 65 years 18 to 60 0-65years (18- 18-55 years
entry age years years 50 in case of
Additional
Rider Benefits)
Min/Max Max: 99 - Limited term: 70 - Whole life, life 65 years
maturity age years yrs cover ceases
whole life: 90 yrs at 75 years
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Observations:
Saral Beema
- Premium paying term is competitive in case of Saral Beema plus. Hence, a large
customer base can be tapped on this basis.
Page 36 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
PRICE ANALYSIS
Insurance being a financial product as such has its value in the returns it provides to the
customer. As such, it is an agreement between an individual and the insurance company
whereby the individual agrees to pay a specific premium for some negotiated return.
Hence, in case of insurance packing is what the insurance product is. Packing in case of
insurance then becomes a part of its Price and other Product features covered in the
mentioned two categories.
In the price component of insurance, the selected policies will be evaluated on the basis
of the investment made after the deduction of charges by the insurance companies. Also
the various charges by the companies will be mentioned for a policy of 1 lakh.
The tables below have listed various charges in the policy as mentioned in the policy
brochures. These tables help in comparison of policy charges.
Mortality Charges - These are charges for the cost of insurance coverage and depend on
number of factors such as age, amount of coverage, state of health etc.
Fund Management Fees - Fees levied for management of the fund and is deducted
before arriving at the NAV.
Administration Charges - This is the charge for administration of the plan and is levied
by cancellation of units.
Fund Switching Charge - Usually a limited number of fund switches are allowed each
year without charge, with subsequent switches, subject to a charge.
Service Tax Deductions - Service tax is deducted from the risk portion of the premium.
Page 37 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Product Canara HSbC ICICI Pru SBI Life – Unit Birla Sunlife Bajaj HDFC - SL
- Saral Life – ACE Plus III – Titanium Allianz Life Endowment
Price Beema Plus Pension Plus Plan – New Unit Champion
Gain Suvidha
Protection
Plus II
Premium 35%-1st yr, Regular: Regular: 10% 10% 1st yr, Mentioned 10%-1st
allocation 1%- 2nd to no - 1st yr, 5% - 5% below year,
charges 5th year and premium 2nd to 5th year thereafter, 1% - 2nd
nil after that allocation and nil after 2% top up year
Will be charge that premium onwards
deducted Top up Single
upfront on premium premium – Top up:
premium. charge of 2.25% of 2.5% 1&2
1% premium years,
amount 2% - 3 year
Top-up
premium –
2% of top-up
amount
Policy Rs18/month Rs Regular: 0.24%p.m. 1-5 years: 0.95 % of
administrat for 2009-10, 60/month Rs60/month on first 8%p.a. of original
ion charges will Single: Rs25,000 of annualized annualized
increase by Rs50/month annual premium; premium/
5%p.a. deducted policy 6 and month in
from units. premium in above the first 5
all policy 4.6%p.a. years
years +
0.4%p.m. of inflation at
annual the rate of
policy 5%p.a.
premium in
first 3
policy years
Fund Mentioned Mentioned Mentioned Mentioned 1.25% p.a.
Manageme below below below below charged
nt Charges daily
Surrender Mentioned Mentioned Mentioned
Charges below below Below
Partial Rs 250 from Rs 250 for
withdrawal the fifth and the 7th and
charges subsequent subsequent
withdrawal requests in
amounts in the same
the same year
policy year.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Page 39 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Age 30 40 50 60
Male 2.05 3.76 9.68 24.03
Female 2.03 2.90 7.05 18.65
a. Ace:
1. Fund Management charge - 0.75% Money market fund, 1.25% Return guaranteed
fund, 1.35%p.a. Others.
Mortality Charge – deducted on monthly basis on life cover
Age 10 20 30 40 50 60
Male (Rs) 0.77 1.33 1.46 2.48 5.91 14.21
Female (Rs) 0.72 1.26 1.46 2.12 4.85 11.83
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
SBI Life
These charges may be increased within the maximum limit allowed with prior
notice to policy holder after IRDA approval.
2. Surrender Charges – Will be recovered from the fund value as percentage of fund
value.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
2. Surrender charges – no surrender value for regular premium rider benefits. For
single premium riders, the surrender value is given as below:
In case of decrease in Rider Sum Assured due to change in SAMF a part of Single Premium
is returned as per the following formula:
{(Original Sum Assured – New Sum Assured)/Original Sum Assured}× Single Premium
(exclusive of Service Tax) × 75% × Outstanding term to Maturity / Total Term
2. Mortality charges –
Age 25 35 45 55 65
Male (Rs) 1.284 1.387 2.287 5.340 13.197
Female (Rs) 1.328 1.535 2.882 7.105 17.459
3. Surrender charges -
Page 42 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
3. Mortality Charges –
Age 20 30 40 50
Rs 1.57 1.74 2.82 6.53
Observations:
- Premium allocation charges are higher than competitors for 1st Year.
- Surrender charges are very high for less than 1 year and zero after 4th year. Competitors
have reasonably low surrender charges initially, but the reduction in charges is also less
compared to Canara HSBC Oriental Bank of Commerce Life Insurance Company.
Page 43 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
PROMOTION
The analysis of promotional activities done by the companies has been divided into three
segments;
Website – This section consists of the analysis of the company’s website and its
components relative to the competitors. The website designs have not been explained.
Only necessary changes have been mentioned in the target website. Also, online
promotions by the competitors has been analysed in this section.
Branch Marketing – This section consists of marketing done at the branches being
analysed. This also covers the Place and People aspect of the 7Ps of marketing. Most of
the major bank branches are located close to each other with the city head office of some
banks being in walking distance of each other. Apart from these, another very important
aspect of promotion is the Relationship Managers or any other employees in direct
contact to the customers. The impression formed by these employees is a major
component of the impression formed of the company to the customers. As a limitation of
this report, the influence of RMs of various companies on the customers could not be
analysed. The branch marketing of the various banks have been treated bank wise and
suggestions for Canara HSBC Oriental Bank of Commerce Life Insurance Company have
been mentioned thereafter.
Page 44 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
ADVERTISEMENTS
Quotes
- Canara HSBC Oriental Bank of Commerce Life Insurance Company:
Insuring Your Emotions
- ICICI Prudential Life Insurance Company:
Suraksha Jindagi Ke Har Kadam Pe
Jeetey Raho
- SBI Life:
Jindagi Hai Jeeney Ke Liye
Taaki Rishton Ke Beech Kabhi Dooriyan Na Aaye
Taaki Pyaar Ke Beech Paison Ki Kami Na Aaye
- Birla Sun Life:
Aapke Sapney, Hamari Vachan-Badhta
- Bajaj Allianz:
Jiyo Befikar
The Power on your Side
- HDFC Standard Life
Sar Utha Ke Jiyo
In case of competitors, ICICI bank and HDFC Standard Life have been able to have
retention in the masses with their catchy slogans/motto like Sar utha ke Jiyo and Jeetey
Raho.
Similarly, Bajaj Allianz and SBI have attempted at catchy slogans like Jiyo Befikar and
Jindagi Hai Jeeney Ke Liye. What is common among these slogans is that they try to
project the states which are held high by masses like self respect, health, carefree/
freedom etc. and they communicate these feelings in the language of the masses.
Also, most of the popular advertisements have a situation being shown where people
converse and a logic explaining the importance of insurance is being presented. Canara
HSBC Oriental Bank of Commerce Life Insurance Company’s advertisements are
different from other popular advertisements in this sense. These advertisements don’t
have much of a dialogue. Nor do they have a catchy comment in Hindi or other regional
languages. They do try to project valued states/feelings, but are not focussed on just one.
An advertisement may have more than one state being projected and that takes the focus
away from them. However, the process of linking a bank with an insurance company
with a quote - is a proud partner of Canara HSBC Oriental Bank of Commerce Life
Insurance Company is a good practice.
Page 45 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
WEBSITE
Suggestions
These suggestions are formed by observing the websites of various competitors. These
changes are not necessary but they nevertheless add value to the website if there. The
changes and additions are:
- Learning Centre: most of the competitor websites have a section where basic
knowledge of insurance and how it works is being suggested. It includes basic
information of risks and returns, how to analyse investment options, financial need
analysis, risk profiles, portfolio diversification, how to plan your finances, how to choose
your investment etc. a small quiz may be included as well.
- Customer Accounts: among the online services option, the bank provides facilities to
pay premium online. The various suggestions regarding online services are:
a. Fund details: through this link, the total fund of the user, where they are invested, what
are their values etc. can be seen.
b. Customer Information: this link may provide for option to change or update the
customer information like address, telephone no., e-mail id etc. This may help customer
avoid the visit to bank for such purposes and confirmation of change may be done
through telephone.
c. Alternate services: this portal will be used to promote various options available to the
customer and also various services identified for the customer. Also, any schemes
targeted for the customers may be directly advertised to them through this portal.
d. Fund switching option: through this portal, a request for fund switching among the
various options provided by banks may made. The request may be then taken up for
consideration.
- Buy Online: HDFC bank provides an option to buy insurance online. This they have
provided with a discount of 40%. Similar options may be provided to existing customers
for buying insurance for their family members.
- Short term information: news related to insurance (like news of plane crash) etc. and related
facilities may be communicated here. This takes place in ICICI banks website where condolence
is provided to the families of plane crash victims and a simplified claims process link is provided
to the people. This serves two purposes, one it makes an emotional connect to the customers.
Secondly, it also helps to direct the claims traffic in a specific direction.
- Tools and Calculations: this section will provide for various services like calculating the
premium for a given condition, or other financial tools related to insurance, used to evaluate the
polices.
- NRI Services: insurance companies such as SBI and ICICI Prudential life provide for NRI
services as a separate section on their webpage.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
BRANCH MARKETING
Visits were made to the bank branches to observe the layout, methods of marketing of
products at branches, people and any other observations which may enable in improving
the marketing at Canara HSBC Oriental Bank of Commerce Life Insurance Company.
The observations have been listed company wise for reference.
Place
The theme at the branch office is that of red and white. There are red chairs and grey
tables with grey or white walls. Sofas are also in the theme of red apart from the marble
flooring, there is a red carpet in the help desk area and rooms like meeting room etc. This
carpet looks good but is faded at places. Inside the building, on the ground floor, there are
three helpdesk for any account related issues. There are four tellers with a supervisor.
Also there is separate room for the service manager or line manager. Also there is a
receptionist, conference room and a financial planner. At, the entry of the building, there
is an ATM room, which is bigger and more comfortable than other banks. Survey
cameras are present at the tellers and one is present at the left hand side of the entrance
where the sofas are kept. There is a strange jazz music which plays in the background.
Also, a children’s playhouse between tellers and reception desk 4 is being maintained.
At the third helpdesk, there is a stand with four pockets for brochure etc. Also, a
magazine stand is kept next to the sofas. Two televisions are kept, one at the tellers and
another one next to the machine showing the coupon numbers for visitors. Stock news
and other related news is being shown in them. In the basement, there are brochures on
schemes valid from 1st Aug to 31st Dec 2009. Also, the visitors lounge has books on
Mumbai.
People
People at the branch are hospitable and very participative. They approach you for
assisting, in case you need help. As you enter, there is a receptionist to greet you. There is
mouth freshener being provided to the visitors. The dress code is closed neck formals for
men and salwar kameez for women.
Place
Branch marketing by ICICI comprised of making an optimum use of space. From people
to layout, things were in a harmony and spoke of a cultural integrity. The theme of the
office was orange and white. The head office of Jaipur is a building dedicated solely to
ICICI bank. The basement section of the bank is for cash deposits and withdrawal with
the tellers and related staff. On the ground floor, there are 27 counters. The first five are
for the privilege banking. After the first entrance in the building, ATM machines are
placed. After the second entrance, there are 3*5 rows
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
on either side for the customers. Privilege banking section is towards the left. Next to it is
the Branch Manager for services. In the front are counters from 6 to 11. Counters 12 to 27
are on the right. These are for the other purposes like visits by foreign clients or financial
planning of customers etc. The theme of the office is that of white and orange. There are
two pillars at the entrance of the office with posters of loans, NRI services etc. next to the
token no. display is an LCD television which always displays advertisements of ICICI
bank in some services or another.
People
Like the office, the dress code of ICICI employees had a theme to it. The men were in
closed neck formals, with dark blue pants, white shirts with thin black stripes and dark
saffron tie. All women were in dark blue kurtis with saffron cuffs and saffron chunnies.
Any ICICI employee could be easily spotted because of the dress code.
SBI Life
Place
Compared to other branch offices, there were no ATM machines at SBI branch office. It
is located at a deserted house. At the entrance, of the office, there is an old chart/poster of
house loan, with an offer scheme which ends on 30th Sep 2009. Just after entrance, there
is a room with three sofas on the sides and a table to match. This room is filled with
various advertisements of services by SBI. Also there are poster stands with
advertisements present in the room. Though it does not seem deliberate, but the
advertisements in this room grab attention as you move on to the main branch. There are
advertisements of insurance, NRI services and other services too. Inside the main office,
only functions of tellers and clerks is being done. To the left is the tellers section with
provisions for home loans and cards. Right in front is the BM’s office. Next to BM’s
office is the counter for award staff.
Overall, though unintended, the products are effectively marketed in the room where
there is only a place for resting/relaxing.
People
Employees at the branch seemed to be participating in branch activities with enthusiasm.
Their attitude however seemed to be casual and friendly. They did not behave
professionally. The men were dressed in open neck formals with no colour code. They
took the liberty of wearing slippers for shoes. The women did not seem to follow any
dress code. They wore anything from kurta pyjama to jeans and tee-shirt. The power
distance in the office did not seem much important either. Award staff would directly go
to the Branch Managers office for an informal chat. Overall, the atmosphere seemed be to
organic and informal.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Citibank
Place
From the visit to the branch office, no specific observations of marketing of insurance
products could be made. The branch office is located at a major crossing. An ATM is
located outside the branch. At entrance, there were two guards for checking. To the right
are help desk counters for the personal relationship managers. Directly to the front, after
you enter the branch is the tellers section with two tellers and a supervisor. There is
seating arrangement to the left of the entrance. The branch office has indoor plants and
there is a stand for pamphlets and magazines. The office has been in place for the past ten
years. Next to the four help desk counters is a meeting room which is well furnished.
Besides this, there is a room for BM and in between the tellers and BM office there is a
passage for the offices of RM’s. The overall impression of the branch did not suggest a
well managed office. The branch seemed short of space and cramped. There did not seem
to be much effective marketing of Citibank and related products.
People
Employees were well dressed and well behaved. They were not very elegant in their way
of talking but were nevertheless friendly and helpful. Men were dressed in closed neck
formals and women in salwar kameez. Employees were participative in their work.
Standard Charted
Place
Standard Charted has only one branch office in Jaipur, at MI road. The office is located
near a market place. There are two similar offices located adjacent to each other. They
work as one, have the same layout, only the offices are separated by a stairway to the
upper floor. Standard Charted is in a referral tie-up with Bajaj Allianz. The office is
comfortably big and has a lot of free space. To the extreme left of the branch at the
entrance is the tellers section with four tellers and a supervisor. Next to it is a television
showing news update. There is a stairway leading to first floor where most of the RM’s
with the BM work. Right in the front of the office are two counters for the RM. These are
more furnished and well designed as compared to other branches. Behind these counters
are the offices for four Excel RM. The entrance is at the corner and there is seating
arrangement at the front and to the left of the entrance. The advertisements are put on the
walls in form of boards.
People
Like Citibank, people were well behaved and helpful. They had sufficient information
even about the products they were not involved in. The dress code was closed neck
formals for men and salwar kameez for women. However, casuals were allowed on
Fridays with men wearing jeans and tee-shirts with collars and similar for women. People
at Standard Charted are in the habit of asking visitors for water or tea.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Place
Like ICICI bank, HDFC has 27 counters for various activities. However, though well
managed, there is lack of space in the office and seems a bit cluttered. The office seems to
be made in a traditional hotel with folk designs on the wall. There are several counters in
a separate room for services like loans, insurance etc. privilege customers have a separate
section which is separated from general customers. The advertisements were done
through brochure stand at the entrance, near the privilege section and at the waiting
benches. Also, there were service advertisement posters on the wall too.
People
Employees in HDFC would approach the waiting customers and offer to help even
outside the general token system. This was because their roles were diluted to some
extent and employees were multitasking. They were polite and courteous. The dress code
was closed neck formals for men and salwar kameez for women.
Suggestions
The following suggestions are being made after observing the ongoing marketing
practices in the competitive banks:
• Televisions, instead of showing stock news may be used to market financial services
by the bank. This concept is prevalent in ICICI Bank branches.
• Pillars inside the branch office may be endowed with posters of services and schemes
currently being offered by banks.
• Visitors may be offered water, tea or cola. Though it is not expected, but certain
visitors, who come for discussing their financials or for buying insurance policies,
where they are expected to stay for some time with the bank representatives, may be
offered such refreshment. If not a sale, they may lead to referrals.
• Along with mouth freshener, éclairs or some other sweets may be offered. This gives
an impression of variety in the bank to the customer.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
HIERARCHY
The hierarchy is divided into two segments: Grade Hierarchy and Designation
Hierarchy. The Grade Hierarchy Varies from Junior to CEO and the Designation
Hierarchy is related to the fields like sales, operations, services etc.
Branch Head
ICICI bank has large no. of employees and hence the degree of formalization is high.
This means that the environment in the bank is very formal and also that the roles are well
defined. Such structures are present in organizations where the processes are well
defined. Hence, roles can be divided to a large extent. It is generally in well established,
large organizations.
Page 51 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
SBI Life
SBI life has different types of hierarchies based on the branch size. For small branches
hierarchy is divided based on functional areas like marketing, operations. For large
branches, the segmentation is first on the basis of customer segments and then on the
basis of functional areas.
Branch
Manager
CRO (customer
Operations
relationship
Manager
officer)
new accounts
Award staff Award staffs and marketing
team
Operations
MOD (agri)
CRO
AGM
Operations
MOD (HNI)
CRO
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Citibank
The hierarchy in Citibank branches is a flat one. Every branch has a branch manager and
every other employee reports directly to him. This is an organic structure where the
degree of formalization is low. This means that the various departments interact with each
other to a greater extent on an informal basis. This also enables better sharing of ideas
and uncommon situations can be better solved.
Acquisitions
Team (ASM)
Service Team
(Service
RM's
Head;
Service RM)
Branch
Manager
Since the reporting structure is relatively flat, there is less distortion in information flow
for an employee reports directly to the branch manager.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Standard Charted
From the branch level, the Branch Manager reports to the Area Director/RSM (Regional
sales Manager). The RSM has to reports to NSM (National Sales Manager) or Director.
NSM in turn is required to report to Head/GM Sales. GM Sales may be based out of
India. CEO is the highest in the hierarchy and above GM Sales.
GM
BM RSM NSM CEO
Sales
BM
CSE CSE
BCOT Model: apart from this hierarchy, there is a BCOT Model abbreviated for,
Branch Catchment Optimising Team. This team has a City Head who reports to the
BM. There are various Tele-calling ARMs (Assistance Regional Managers) under the
City Head. The main objective of this team is to identify whether a client identified by the
finance team as a probable insurance buyer is willing to buy the insurance services. This
apart, this team also pitches in for the probable customers in the HNI segment.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Branch Manager supervises over Branch Operations Manager, Backup Branch Manager
and Relationship Banking Head. A Backup Branch Manager is equivalent of a services
manager in her role as a Personal Banker Authoriser. Relationship Banking Head
similarly is the equivalent of Sales Manager.
BM
Relationship
BOM BBM
Banking Head
Personal
operations
RM RM Banker
team
Authoriser
Current
Personal
Tellers Account
Bankers
Managers
Like ICICI bank, HDFC bank has high degree of formalization. The employee strength
is large. HDFC bank has 27 counters like ICICI bank in its branch office. It is a
workplace with well defined roles.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
CUSTOMER SEGMENTATION
Customer segmentation of various banks has been compiled after unstructured interviews
with the bank employees. These interviews were conducted during the field trip to these
branches. Customer segmentation is useful in identifying the target market of the banks.
This is so because if a bank has large no of customer segments in the higher income
group, it is trying to differentiate its customers in that segment. Similarly, a bank with
large segments in lower income group is trying to differentiate in mass markets. The
market in which a bank is trying is differentiate is the target market of that bank.
Customers are segmented on the basis of the relationships they generate. These are
determined by the net worth of their accounts.
customers
segment based on
account value checked
quarterly
Premium
Advanced
Mass 25K Proposition
>1Lakh
>25Lakhs
Canara HSBC Oriental Bank of Commerce Life Insurance Company has only three
segments in its customer segmentation. It is not differentiation in either less than 1Lakh
segment or more than 5Lakh. However, it treats its customer from 5-25Lakhs similar to
its customers from 1-5Lakhs. Hence it is differentiating on the upper segment to some
extent.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
customers
These customers are given privileges based on the value of the account they hold.
Platinum and HNI accounts come under privilege accounts. These customers have
separate counters and hence don’t have to wait for the tokens etc. Also, the duration of
account, no. of transactions and participation and interest shown by the customers in the
bank activities also determine the customers’ worth. Hence a Platinum customer may be
provided services like an HNI customer if felt necessary.
This segmentation is passed onto the insurance selling team and most of the insurance
sales (almost 99%) are done through relations only with a present client. Other ways of
selling are through references and branch walk-ins.
ICICI bank is primarily focussed on the segment below 5Lakh. This means that its
primary focus is the mass market.
SBI Life
SBI Bank has classified customers into two categories, general or mass market and HNI
clients. The tab for HNI clients has been kept at INR 5 Lakhs. This indicates that SBI has
no specific focus of a particular set of customers in either the HNI segment or the mass
market.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Citibank
Citibank primarily caters to HNI Clients. They have segmented the customers into 3
groups based on the bank balances averaged on a quarterly basis.
G3 Relationships
Gold relationships
Blue Relationships
Citibank is more focussed on the HNI customers for its business. Hence, even when it
sells less policies, it still sells them at a large premium.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Standard Charted
customers
Priority
Excel >5Lakhs GMM <5Lakhs
>20Lakhs
Standard charted has its focus primarily on priority customers as it garners most of its
business from them.
A personal financial manager is allotted for the GMM (general mass market) segment.
For the Excel segment, an Excel Relationship Manager is allotted and similarly, the
Priority segment has Priority Relationship Managers. Each priority client has a Priority
RM allotted to him.
Like Citibank, Standard Charted is primarily focussed on HNI customers for its
business.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Customers
Of these four segments, mass/general segment which holds an account of less than 1
Lakhs is only eligible for general services. Imperia customers are the HNI accounts and
hence get the maximum attention.
Personal Bankers are allotted to the Classic customers. This classification is however
not sacrosanct. A Classic customer may be treated as a Preferred customer and a
preferred as an Imperia Customer based on the banking habits of the client, future
expectations etc. A Relationship Manager is allotted to Every Preferred customer.
HDFC bank seems inclined on both mass and HNI customers. It however has defined
mass market as below 1Lakh account value. Hence, it is more focussed on HNI
customers.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
SWOT
SWOT analysis lists the various strengths and weaknesses for a company. It also, lists
down the opportunities and threats for the company under study. This helps analyse the
competitiveness of the company. The market standing of a company hence identified
enables us to plan future strategies for it.
Strengths Weakness
- Management adapted from HSBC(World's - Insufficient marketing: on online
largest (based on a composite score, Forbes) insurance comparison sites, in the
and most profitable banking corporation) branches.
- Security: with two of India’s largest - Brand Recall: No popular quote
nationalised banks and HSBC as the partners. or comment as a brand recall.
- Customers: Diversified approach in terms of - Products: products portfolio is not
customer base, with 48 million customers. very diversified with fewer
- Network: Branch network with 4400 across products on offer compared to
India. competitors.
- Operations: immediate death claims. - Accessibility: only one hub in
Insurance solutions to rural, 4.6 million entire Rajasthan.
customers. - Selling Channel: only sells
- Finance: fastest Indian Life Insurance products through banc assurance
Company to cross 500Crore and 1000Crore in channel.
weighted premium income till date. It also - Online brochure: online
has the highest average premium in the brochures are difficult to analyze
industry for individual business since launch. and as such inconvenient to
read(see SBI Brochures)
Opportunities Threats
- Economy: Increase in average income of - Alternates: Introduction of some
Indian household alternate means of security and
- Attitude: People being more willing towards investment, taking away customers
insurance - Govt.: Change in govt. policies
- Technology: Better IT systems to integrate towards insurance
the branches - Competitors: New product
- Tie ups with companies for insuring their launches by competitors
employees - Market: may become price
- Demographic: major part of Indian sensitive. Also, economic
population is going to be in the earning age slowdown may reduce business.
group, hence number of clients in future are - Sustainability of the rural market.
expected to increase. - Non-Stability of the alliances.
- Market: insurance sector has liberalised
recently and as such is expected to grow.
- Rural: rural sector can provide a lot of
customers
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
Strengths Weakness
- Brand: ICICI has earned a strong - Bad sale: Customers have reported
brand name in banking in a very short cases of bad sale where the RMs did
span of time. not explain the risks and other factors
- Market Share: Very wide customer to them regarding the policies.
segment, leading to a lot of - Overexpansion of the workforce.
customers. Sometimes, the processes get
- Diversified Portfolio: Large no. of hampered.
insurance products - Most of the policies are having high
- Salary Account: most companies premiums.
have their salary account with ICICI
bank. This helps them having a larger
client base to approach for insurance.
- Marketing: effective marketing with
high impact on customers. Their
online advertisement is very
profound.
- Online branding: ICICI has a strong
presence online through presence on
insurance related sites and sites
comparing other financial services.
SBI Life
Strengths Weakness
- Image: Govt. Sector banks are being - Ambition: Less business being
looked up by customers in general. catered by these branches( this year’s
These banks are not considered very annual target is of 50 Lakhs worth
aggressive. policy for a branch in C-scheme)
- Govt. Backing: govt. Sector banks - Image: Govt. Sector still is being
are supposed to be more risk free and considered inefficient in general
stable. Hence people tend to rely - Attitude: People on branch are very
more on them during recessions. casual in their attitude
Page 62 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Citibank
Strengths Weakness
- Global network: its global network - Tarnished name: its brand has
operates in around 100 countries and has been tarnished due to
proved to be useful during slumps. investigations into its banking
- Backing of Citigroup: Citibank can practices, particularly in its
approach ventures and business investment banking subsidiary,
opportunities with considerably less Salmon Smith Barney.
trepidation than independent companies. - Online operations are geared
- Innovative product offering: Citibank towards US clients: Though a
products are developed considering the global brand, it has a poor online
markets they are serving. presence in most of the countries.
- Partnerships: the bank has continually - Branding Problem: in the past
developed partnerships in various Citi f/i failed due to poor branding.
countries to increase its reach to newer
customers.
Standard Charted
Strengths Weakness
- Heritage: strong presence in India, - Mass: they do not cater to the mass
for more than 150 years. market.
- Brand: has a word wide presence. Is - Advertisements: advertising is not
a global brand. aggressive.
- Tie up: Bajaj is a well known brand - Branches: their branch network is
name in India and Standard Charted poor. There are not many Standard
caters to HNI clients. Hence the charted branches.
amount of business it generated for
Bajaj Allianz is significant.
Strengths Weakness
- Image: domestic image of HDFC supported - Costs: heavy management and
by prudential’s international image is strength administrative costs.
to the company. - Low: customer confidence on
- Strong: capital reserve base, network of private players during
intermediaries and sales persons. recessions.
- Innovation: the company has innovatively - High degree of formalization:
introduced products to market at times. It also HDFC has a vertical
has a large no. of products on offer. hierarchical reporting structure
- Human resource: HDFC claims of having a with many designations and
large pool of technically skilled manpower cadres.
with in-depth knowledge of the market. - Poor retention percentage of
- Customer satisfaction: HDFC is known for tied up agents.
a high level of customer satisfaction.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
EXPLORATORY RESERCH
The results of exploratory research are not usually useful for decision-making by
themselves, but they can provide significant insight into a given situation. Although the
results of qualitative research can give some indication as to the "why", "how" and
"when" something occurs, it cannot tell us "how often" or "how many."
This survey had questions on factors influencing buying behavior of consumers. These
factors were obtained from previously done research on insurance. Also, questions
relating to brand recall of the banks under study were included in the survey. A
comparison of various banks was also made by the respondents.
The sampling technique adapted was that of convenient sampling. The survey had a total
of 97 responses. Of these 80 were male, with 58 from Delhi and NCR, 10 from Rajasthan
and remaining from the rest of India. Of the total no. of respondents, only 2 were married
and with kids, 54 were students. 16 people from the survey were above the age group 25.
Hence, the respondents can be assumed to be primarily graduate and post graduate
students.
With the sample and sample size obtained, conclusions about the populations in general
cannot be made. Hence, the results cannot be used to generalize the entire population.
Results may however be used for designing further market research in the field of
insurance.
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
- Protection to the family in case of unfortunate events is the most important reason for
buying insurance
- Jeetey raho by ICICI and Sar utha ke Jiyo by HDFC have a recall in Customers
- Insuring your emotions had some brand recall, but the power on your side by Bajaj
Allianz was also misunderstood as that of Canara HSBC Life to the same extent
- SBI was rated the best bank among these, followed by ICICI and HDFC
- Factors such as min/max sum assured, tax benefits, policy years, expenses charged,
options in case of death are important
Page 65 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Conclusions
Insurance as a product once bought; continues for years. Hence a customer stays with the
company for years unless he feels cheated. A company’s strength thus lies in persistency
and keeping up with market trends. Following these two will give the company a good
advantage over competitors. This means that if the company is able to provide the
customers with a satisfactory experience, they will be able to retain them after the
insurance gets over. Also, a satisfied customer will get others to join as well through word
of mouth marketing.
Apart from this, a good marketing is needed as insurance is a product which the
customers feel necessary but also are unwilling to get involved in. Hence, a good
retention in customers mind may be the only difference in selling a policy when the
products are similar. In case of insurance, the greater the no. of customers, the lesser the
risks and more the profits.
An insurance policy has many features that customers perceive as important. Also, most
people are not clear about their requirements till they apply for insurance. Hence, selling
of insurance would primarily consist of getting the customer to approach the bank for
insurance. If the product is competitive, sale would happen in most cases.
Recommendations
Additional features may be made available on the company’s website for customer
convenience as suggested in the report.
Page 66 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
REFERENCES
http://en.wikipedia.org/wiki/Unit_Linked_Insurance_Plan
http://www.apnainsurance.com/life-insurance-india/Endowment-insurance-plans.html
http://www.docstoc.com
http://en.wikipedia.org/wiki/Bancassurance
www.wikipedia.com , http://en.wikipedia.org/wiki/Exploratory_research
www.books.iupindia.org
www.indiabschools.com
www.rbi.org.in , www.irdaindia.org
www.ecgc.in
http://www.birlasunlife.com/
http://www.iciciprulife.com/public/About-us/About-Us.htm
http://www.sbilife.co.in/sbilife/content/home
http://www.standardchartered.co.in/personal/insurance-investments/en/insurance-
investment-landing.html
http://canarahsbclife.com/
http://www.online.citibank.co.in/products-services/insurance/life-insurance/life-
insurance-home.htm?eOfferCode=LFTNVINS
http://www.royalsundaram.in/aboutus.aspx
http://www.lifeinscouncil.org/
http://en.wikipedia.org/wiki/ICICI_Prudential
http://www.mouthshut.com/product-reviews/ICICI_Prudential_Life_Insurance-
925036146.html
http://www.iloveindia.com/finance/insurance/life-insurance/unit-linked-insurance-
plans.html
Page 67 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
As part of the project various life insurance policies for the competitors have to be analysed:
Canara HSBC
Life
Individual Group
Products Products
Group Loan
Stay Smart Retire smart Saral Beema Pure Term Group Term
Protection
Plan Plan Plus Plan Plan
Plan
1. Individual Product
a. Stay Smart Plan
b. Retire smart Plan
c. Saral Beema Plus
d. Pure Term Plan
2. Group Product
a. Group Loan Protection Plan
b. Group Term Plan
Page 68 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
ICICI Bank
SBI
1. Individual Products
a. Unit Linked Products
I. Unit Plus III
II. Smart ULIP (Series II)
III. MAHA ANAND II
IV. Horizon III
V. Unit Plus II Child
VI. Unit Plus Elite II
b. Pension Products
I. Unit Plus III Pension
II. Horizon III Pension
III. Immediate Annuity
IV. Life Long Pension Plus
c. Pure Protection Plus
I. Swadhan
II. Shield
d. Protection Cum Saving
I. Scholar II
II. Shubh Nivesh
e. Money Back Scheme
I. Money Back
II. Sanjeevan Supreme
2. Group Products
a. Group Employee Benefit Products
I. Retirement Solution
1. Cap Assure Gratuity
2. Cap Assure Superannuation
3. Cap Assure Leave Encashment
4. Dhanrashi
5. Swarna Jeevan
6. Swarna Ganga
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
7. Kalyan ULIP
8. Cap Assure
II. Group Protection Plans
1. Sampoorn Suraksha
2. Credit Guard
3. Suraksha Plus
III. Specialized Term Insurance
1. SBI Life Shield used as keyman
b. Group Term with RPO – Swadhan(Group)
c. Group Loan Protection Products
I. Dhanraksha Plus SP
II. Dhanraksha Plus LPPT
d. Group Savings Protection Products – Nidhi Raksha RP
e. Group Micro Insurance
I. Grameen shakti
II. Grameen Super Suraksha
3. Health Products – Group Criti 9
Citibank:
Wealth with
Protection
Protection
Solution
Individual
Health and
Wellness
Riders
NRI
Page 71 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
1. Individual Solutions:
a. Wealth with protection
1. Platinum Premier Plan
2. Dream Endowment Plan
3. Titanium Plus Plan
4. Saral Wealth Plan
5. Money Back Plus plan
6. Guaranteed Bachat Plan
7. Bachat Endowment Plan
b. Protection solutions
1. Term Plan
2. Premium Back Term
3. High Net Worth Term
c. Children’s future solutions
1. Dream Child Plan
2. Saral Children’s Plan
d. Health and wellness solutions
1. Saral Health Plan
2. Health Plan
3. Universal Health Plan
e. Retirement solutions
1. Immediate Income Plan
2. Freedom 58
3. Dream Retirement Plan
4. Secure 58 Plan
f. Riders
2. Group Solutions
a. Protection solutions
b. Retirement solutions
3. Rural Insurance
a. Bima Dhan Sanchay
b. Bima Suraksha Super
c. Bima Kavach Yojana
4. NRI Solutions - these are also, individual solutions for NRI’s
Page 72 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Standard Charted
1. Unit Linked
a. Regular premium
I. New Family Gain II
II. New Unit Gain II
III. Family Assure II
IV. Century Plus III
V. Unit Gain Protection Plus II
VI. Smart Investment Plan II
VII. Assured Gain
b. Single Premium
I. Wealth Gain
II. Shield Plus
2. Pension
a. Annuity
I. Pension Guarantee
b. Retirement
I. Future Income Generator
II. Swarna Vishranti
III. Retirement Advantage RP
IV. Retirement Advantage SP
V. Future Secure II
3. Traditional
a. Endowment
I. InvestGain
II. SaveCare Economy SP
III. Life Time Care
IV. Super Saver
V. Investment Plus
b. Money Back
I. Cash Gain
4. Term Plans
a. Protector
b. Term Care
c. New Risk Care
5. Women Insurance
a. House Wives
6. Health
a. Care first
b. Health Care
c. Family Carefirst
7. Children Plan
a. Child Gain
b. Young Care II
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Canara HSBC Oriental Bank of Commerce Life Insurance Company
8. Just Launched
a. Group Seva Plan
b. Group Secure Life
c. Invest Plus Premier
9. Group
a. Non Employer Employee
I. Credit Shield
II. Group Term Life
III. Group Suraksha
IV. Sarve Shakti Suraksha
V. Group Loan Protector
VI. Group Income Protection
VII. Group UnitGain
b. Employer Employee
I. Group Term Life
II. New Group Gratuity Care
III. New Group Superannuity Care
IV. Group save Plus
V. Group Term Life in lieu of EDLI
VI. Group Leave Encashment Scheme
VII. Group annuity
VIII. Group Superannuity Gold
IX. Group Gratuity Gold
10. Micro Insurance
a. Alp Nivesh Yojana
b. Jana Vikas Yojana
c. Saral Suraksha Yojana
11. Additional Rider Benefit
a. Unit Linked
I. Additional Rider Benefits
II. UL Waiver of Premium Benefit
III. UL Family Income Benefit
IV. Unit Linked Term Rider
b. Non Unit Linked
I. Additional Rider Benefits
II. UL Accelerated Critical Illness Rider
HDFC Bank:
1. Individual Solutions
a. Protection plans
I. Term Assure Plan
II. Loan cover Term Assure Plan
III. Home Loan Protection Plan
b. Children’s Plan
c. Retirement Plan
e. Health Plans
I. Critical Care Plan
II. SurgiCare Plan
f. Rural Products
I. HDFC Gramin Bima Kalyan Yojana
Page 75 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Page 76 of 78
Canara HSBC Oriental Bank of Commerce Life Insurance Company
Name*:
Gender*:
Age*:
Contact No.:
State*:
Occupation*(salaried, business, retired, others):
Marital status*(Single, Married):
If married, no of Children:
Annual Income(<3Lakhs, 3-5Lakhs, 5-10Lakhs, >10 Lakhs):
Rate the following factors on a scale of 1-5 with 1-Strongly disagree, 3-Neutral, 5- Strongly
Agree
Company related
Brand Name:
Company advertisement:
Company performance:
Market
Current Market situation:
Future market Expectation:
Expected interest rate:
Policy
Premium options:
No. of Products:
Policy years:
Min/Max sum assured:
Tax benefits:
Options in case of death:
Expenses charged:
Investment options in policy:
Others
Person selling insurance:
People References:
Brand Recall
Guess the whose advertisements have the following quotes (some companies have more than
one quote) [Canara HSBC Life, HDFC Life, Birla sun life, Bajaj Allianz, SBI, ICICI Pru Life]
http://spreadsheets.google.com/viewform?formkey=dG5RLTZYNG1XYklleW0yZXAxMDN3Q3c6MQ
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