Summer training report submitted towards the partial

fulfillment of post graduate degree in Master In Business Administration.

“analysis of marketing strategies of max newyork

life”

1
 TABLE OF CONTENTS

Chapter PARTICULARS Page no.

no.
1. Executive Summary 6-7

2. Research Methodology
 Problem definition 9
 Objective 10
 Scope and significance of the Study 11-12

 Sample Design 12-14

 Limitations 15

3. Critical Review of Literature 17

4. Industry Profile 19-35

 Company Profile
 Swot Analysis 36-43
 Major players 44-45
46-55

5. Data Collection 56

6. Findings & Analysis

Comparison of ulip products 58-90

2
 91-98

7. Conclusion and Recommendations 100-103

8. Bibliography 104

9. Annexure 105-111

10. Case Study 112-120

EXECUTIVE SUMMARY

3
In today’s corporate and competitive world, I find that insurance sector has the
maximum growth and potential as compared to the other sectors. Insurance has the
maximum growth rate of 70-80% while as FMCG sector has maximum 12-15% of
growth rate. This growth potential attracts me to enter in this sector and MAX
NEW YORK LIFE INSURANCE has given me the opportunity to work and gain
insightful experience in this highly competitive and growing sector.

• The success story of good market share of different organizations depends

upon the availability of the product and services near to the customer, which
can be distributed very well through most suited distribution channel. In
Insurance sector, distribution channel predominantly includes agents of the
company, also commonly known as Agency Distribution model.

• Agents or Agent Advisors are the best way for an Insurance company sector
to distribute its products. It also entails convenience to customers through
which product may be augmented in terms of doorstep services. Further the
product may become a potential product when services are reliable, fast &
trustworthy.

• Insurance agency can be defined as a group of insurance agents or advisor.

These agents or advisors create a distribution channel to sell the different
insurance products. These advisors are the strongest distribution channel for
an insurance agency. An advisor or agent works as a third party or
intermediate between insurance company and customers. All the advisors in

4
 an agency work as a team. Main work of insurance advisor or agent is to
promote and sell different insurance products of company.

• A person who governs a group of insurance advisors is known as agency

manager. Success of an agency manager depends on the success of their
advisors. Agency manager is like a creature of two wings. He has to recruit,
train and control advisors as well as to give sales to the insurance company

• Different agencies of different insurance companies are having some

strategies to survive in the market. Their strategies may be in the form of:

• How they target their customers.

• How they make their advisors active.
• How they make their operational and sales department effective.
• How they promote their employees.
• How they handle the conflict in agency.

Hence, in order to survive and grow or to gain a competitive advantage , it is

important to get the knowledge of different marketing strategies of the competitors
and the consumer preferences and awareness.

5
RESEARCH METHODOLOGY

 PROBLEM DEFINITION
 Objective
 Scope of study
 Limitations

6
 RESEARCH METHODOLOGY

“ANALYSIS OF MARKETING STRATEGIES OF MAX NEWYORK

LIFE.”
PROBLEMS DEFINITION

• Lack of confidence among the consumers on private players making it

difficult for the company to establish itself.
• Lack of brand awareness of different policies amongst the people.
• Existence of other private players and competitors in the market
• Concern on the wide range of products that its competitors offer.
• Concern on the aspect of ULIP policy on account of higher risk quotient
• Concern on the strategies that its competitors adopt to counter competition.
• Concern on the preferences of customers regarding different policies.
• To determine whether the company make profits from its new policy-
LIFELINE healthy Family’.
• To determine customer awareness and responses towards the company’s new
product.

OBJECTIVE

7
 Main objective of the project is to find out the strategies of Max Newyork Life
and evaluate them as well as to know the awareness and preferences of people
about the various policies. Project is about to penetrate the competitors of Max
New York Life Insurance. Conclusion of this project can give an idea of strategies
of different companies which may be helpful to the company. Now days all the
insurance companies in India are trying to establish themselves in the competitive
market. They are introducing innovative marketing strategies to survive in the
market. Many other private companies are looking to enter in the Indian insurance
market, so it is very essential to a company to innovate their marketing strategies in
terms of :
• Recruiting their advisors
• To make their advisors active
• Well educated and capable employee in the agency
• Marketing of their products
• Deployment of their products
• Targeting the right and potential customers
• Differentiating from other companies
• Future plan of the company

This study is conducted to find out the marketing strategies of different

insurance companies which are the competitors of Max New York Life Insurance
and to enhance the awareness of the people about its new product, to determine
whether the company’s new product will be able to gain the market

8
share and to determine what steps and changes should be made to make their
product superior than its competitors. This will help to determine their exact target
audiences.
This research requires the interview of the people in general and branch managers
of different insurance companies and find out how their branches are working in
terms of above mentioned factors.

SCOPE OF THE STUDY

A big boom has been witnessed in Insurance Industry in recent times. A large
number of new players have entered the market and are trying to gain market share
in this rapidly improving market.
The study deals with analysis of different competitive strategies adopted by the
competitors in order to sell Insurance policies. The study then goes on to evaluate
and analyze the findings so as to present a clear picture of trends in the Insurance
sector.
This provide the scope for understandings the consumer preferences as well as
their problems and retaining present customers while adding new ones.

SIGNIFICANcE FOR THE RESEARCHER

To facilitate and provide useful information for the further study or probe and also
provide recommendations for Agency Standards.

SAMPLING METHODOLOGY
Research is totally based on primary data. Secondary data is used only for the
reference. Research has been done by primary data collection, and primary data has

9
been collected by meeting with the branch and agency manager of MAX NEW
YORK LIFE.

Sampling Technique:
Data collection has been done by giving structured questionnaire. Research
has been done after scanning the branch managers or agency manager. This study
will be based on judgment sampling and this research is skewed to organization
level. This is an exploratory type of research. And this research needs further study
also Research is a kind of pilot study. For the second part, random and convenience
sampling is done, which is also an exploratory research of advisors.

Sample size:
Sample size has been taken by judgment sampling. Judgment sampling is a
process in which the selection of a unit, from the population is based on the pre
judgment.

LIMITATIONS OF THE RESEARCH

• Time limitation-it is not possible to study whole thing I covered some special
aspect as well as some topics
• Companies did not disclose their secret data and strategies.
• Possibility of Error in data collection.

10
• Possibility of Error in analysis of data due to small sample size.
• The study suffers from all the disadvantages of secondary research.
• The questionnaire mostly had multiple choice questions therefore many
respondents did not gave a proper thought before answering the question.
• In a rapidly changing industry, the external changes are vital to be considered in
order to assimilate the findings.
• Getting accurate response form the respondents is difficult.

11
 CRITICAL REVIEW
OF
LITERATURE
REVIEW OF LITERATURE

REVIEW OF LITERATURE

Indian life-insurance market is the target market of all the companies who either
want to extend or diversify their business. To tap the Indian market there has been
tie-ups between the major Indian companies with other International insurance
companies to start up their business. The global insurance industry is growing at

12
rapid pace. Most of the markets are undergoing globalization. So it is clear that the
face of life insurance in India is changing, but with the changes come a host of
challenges. Therefore, a continuous study of internal and external environment is
necessary.

Max New York Life introduced ‘LIFELINE Healthy Family’ a health insurance
plan, the most comprehensive long term insurance coverage for hospitalization,
surgeries and critical illness for the entire family under single policy. With the
launch of ‘Health Family’on 1st june 09, Max New York Life also became the first
and the only company to offer benefits for congenital disorder.

In this section, I shall examine recent or historical research studies, industry

reports, magazines,press releases and information available on internet that will
serve as the basis for the study. This will help to get the secondary data. This
secondary data study will help to recognize the expected benefits of the study.A
research is being conducted to know the strategies of competitors and to know the
consumer behaviour plus awareness. This provide the scope for understandings the
consumer preferences as well as their problems and retaining present customers
while adding new ones.

The company is focusing to improve efficiency and quality in the services

provided to the customers as compared to its competitors, hence case studies will
be referred to get the information as to how these companies survived and how
were they successful in such a market scenario.

13
 INTRODUCTION
 Introduction of the
Industry.

 Introduction of the
Company.

 SWOT ANALYSIS.
14
 INDIAN INSURANCE INDUSTRY

The story of insurance is probably as old as the story of mankind. The same
instinct that prompts modern businessmen today to secure themselves against loss
and disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is largely
a development of the recent past, particularly after the industrial era – past few
centuries – yet its beginnings date back almost 6000 years.

15
 Life Insurance

In 1818 the British established the first insurance company in India in Calcutta, the
Oriental Life Insurance Company. First attempts at regulation of the industry were
made with the introduction of the Indian Life Assurance Companies Act in 1912. A
number of amendments to this Act were made until the Insurance Act was drawn
up in 1938. Noteworthy features in the Act were the power given to the
Government to collect statistical information about the insured and the high level
of protection the Act gave to the public through regulation and control. When the
Act was changed in 1950, this meant far reaching changes in the industry. The
extra requirements included a statutory requirement of a certain level of equity
capital, a ceiling on share holdings in such companies to prevent dominant control
(to protect the public from any adversarial policies from one single party), stricter
control on investments and, generally, much tighter control. In 1956, the market
contained 154 Indian and 16 foreign life insurance companies. Business was
heavily concentrated in urban areas and targeted the higher echelons of society.
“Unethical practices adopted by some of the players against the interests of the
consumers” then led the Indian government to nationalize the industry. In
September 1956, nationalization was completed, merging all these companies into
the so-called Life Insurance Corporation (LIC). It was felt that “nationalization has
lent the industry fairness, solidity, growth and reach.

16
Life insurance is a contract under which the insurer (Insurance Company) in
Consideration of a premium paid undertakes to pay a fixed sum of money on the
death of the insured or on the expiry of a specified period of time,Whichever is
earlier. In case of life insurance, the payment for life insurance policy is certain.
The Event insured against is sure to happen only the time of its happening is not
known. So life insurance is known as ‘Life Assurance’.
Some of the important milestones in the life
insurance business in India are:
1912: The Indian Life Assurance Companies Act enacted as the first statute to
regulate the life insurance business.
1928: The Indian Insurance Companies Act enacted to enable the government to
collect statistical information about both life and non-life insurance businesses.
1938: Earlier legislation consolidated and amended to by the Insurance Act with
the objective of protecting the interests of the insuring public.
1956: The market contained 154 Indian and 16 foreign life insurance companies.

General Insurance

The General insurance business in India started with the establishment of Triton
Insurance Company Limited in 1850 at Calcutta. In 1907, the first company, The
Mercantile Insurance Ltd. was set up to transact all classes of general insurance
business. General Insurance Council, a wing of the Insurance Association of India
in 1957, framed a code of conduct for ensuring fair conduct and sound business
practices. In 1968 the Insurance Act was amended to regulate investments and to

17
set minimum solvency margins. In the same year the Tariff Advisory Committee
was also set up. In 1972, The General Insurance Business (Nationalization) Act
was passed to nationalize the general insurance business in India with effect from
1st January 1973. For these 107 insurers was amalgamated and grouped into four
company’s viz., the National Insurance Company Ltd., the New India
Assurance Company Ltd., the Oriental Insurance Company Ltd., and the
United India Insurance Company Ltd. General Insurance Corporation of
India was incorporated as a company.

Some of the important milestones in the general

insurance business in India are:
1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact
all classes of general insurance business.
1957: General Insurance Council, a wing of the Insurance Association of India,
frames a code of conduct for ensuring fair conduct and sound business practices.
1968: The Insurance Act amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee set up.
1972: The General Insurance Business (Nationalization) Act, 1972 nationalize the
general insurance business in India with effect from 1st January 1973. 107 insurers
amalgamated and grouped into four companies viz. the National Insurance
Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd. and the United India Insurance Company Ltd. GIC
incorporated as a company.

18
 MAJOR POLICY CHANGES

Insurance sector has been opened up for competition from Indian private insurance
companies with the enactment of Insurance Regulatory and Development
Authority Act, 1999 (IRDA Act). As per the provisions of IRDA Act, 1999,
Insurance Regulatory and Development Authority (IRDA) was established on 19th
April 2000 to protect the interests of holder of insurance policy and to regulate,
promote and ensure orderly growth of the insurance industry.

IRDA Act 1999 paved the way for the entry of private players into the insurance
market which was hitherto the exclusive privilege of public sector insurance
companies/ corporations. Under the new dispensation Indian insurance companies
in private sector were permitted to operate in India with the following conditions:

Company is formed and registered under the Companies Act, 1956;

The aggregate holdings of equity shares by a foreign company, either by itself or
through its subsidiary companies or its nominees, do not exceed 26%, paid up
equity capital of such Indian insurance company.

The minimum paid up equity capital for life or general insurance business is
Rs.100crores. The minimum paid up equity capital for carrying on reinsurance
business has been prescribed as Rs.200 crores.

The Authority has notified 27 Regulations on various issues which include

Registration of Insurers, Regulation on insurance agents, Solvency Margin, Re-

19
insurance, Obligation of Insurers to Rural and Social sector, Investment and
Accounting Procedure, Protection of policy holders' interest etc. Applications were
invited by the Authority with effect from 15th August, 2000 for issue of the
Certificate of Registration to both life and non-life insurers. The Authority has its
Head Quarter at Hyderabad.

Changing perception of Indian

customers:
Indian Insurance consumers are like Indian Voters, they are soft but when time is
right and ripe, they demand and seek necessary changes. De-tariff of many
Insurance Products are the reflection of changing aspirations and growing demand
of Indian consumers.
For historical years, Indian consumers were at receiving end. Insurance Product
was underwritten and was practically forced onto consumers on a “Take-it-As-it-
basis”. All that got changed with passage of IRDA act in 1999. New insurance
companies have come into existence leading to open competition and hence better
products for customers.

20
Indian customers have become very sensitive to Coverage / Premium as well as the
Products (read Risk Solution), that is given to them. There are not ready to accept
any product, no matter even if that is coming from the market leader, should that
product is not serving the purpose. A case in point is ULIP Product / Group Life
and Credit Life in Life Insurance segment and Travel / Family Floater Health and
Liability Insurance in the Non-life segment are new age Avatar. The new products
are constantly being demanded by Indian consumers, which is putting huge
pressures on Insurance companies.
Now Indian customers are aware of insurance industry and insurance products
provided by companies. They have become more sensitive. They would not accept
any type of insurance product unless it fulfills their requirements and needs. In
historic day’s customers looking at insurance products as a life cover which can
provide security against any unacceptable events, but now customers look at
insurance products as an investment as well as life cover.

Investment of Indian household savings (as a % in different

sector)
BANK DEPOSITS 39%
CORP. BANKS 2%
SHARES AND DEBENTURES 1%

MUTUAL FUNDS 2%
NBFC’S 3%
GOVT. BONDS 13%
INSURANCE 13%
PF/ RETIRE FUNDS 21%
CURRENCY 6%

21
Changing face of Indian insurance
industry:

Indian life-insurance market is the target market of all the companies who
either want to extend or diversify their business. To tap the Indian market there has
been tie-ups between the major Indian companies with other International
insurance companies to start up their business. The government of India has set up
rules that no foreign insurance company can set up their business individually here
and they have to tie up with an Indian company and this foreign insurance
company can have an investment of only 24% of the total start-up investment. .
Previously there was a monopoly business for Life Insurance Corporation of India
(L.I.C.) who was the only life-insurance company for the people till 2000. L.I.C.
still holds 71.4% of the market share in 2008. But after the introduction of private
life insurance companies there is a great competition in Indian market now. Today
life-insurance is not only limited up to just life risk cover and maturity period
bonuses but changed to greater return from the investments.

Today, the Indian life insurance industry has a dozen private players, each of which
are making strides in raising awareness levels, introducing innovative products and
increasing the penetration of life insurance in the vastly underinsured country.
Several of private insurers have introduced attractive products to meet the needs of
their target customers and in line with their business objectives.

22
 The success of their effort is that they have captured over 28% of premium
income in five years.the future and the opportunities in this industry will surely be
exciting. So it is clear that the face of life insurance in India is changing, but with
the changes come a host of challenges and it is only the credible players with a
long term vision and a robust business strategy that will survive. Whatever the
developments

Possibilities for insurance companies in India:

• Further deregulation of the market.
• Greater concern for the customers.
• Newer products and services.
• Competition and quality consciousness.
• Cost effective operations.
• Restructuring of the public sector.
• Consolidation of domestic insurance markets.
• Technology driven shift in product design.
• Actual operations and distribution.
• Convergence of financial services

Influence on Indian insurance industry:

23
• In this era of globalization, insurance companies face a dynamic global
environment. Dramatic changes are taking place owing to the
internationalization of activities, appearance of new risk, new types of covers to
match with new risk situations, and unconventional and innovative ideas on
customer services. Low growth rates in developed markets, changing customers
needs, and the uncertain economic conditions in the developing world are
exerting pressure on insurer’s resources and testing their ability to survive. Now
the existing insurers are facing difficulties from non-traditional competitors
those are entering the retail market with new approaches and through new
channels.
• India has a rapidly growing middle class and this section can afford to buy
insurance products. This shows the attraction that the Indian market holds for
foreign insurers who have been putting pressure on developing countries as well
as on India to open up its market.

Life insurance penetration as a % of GDP

United kingdom 8.9%

Japan 8.3%
Korea 7.3%
United states 4.1%
Malaysia 3.6%
India 4.0%
China 1.8%
Brazil 1.3%

24
Among the public sector insurers, New India had the largest market share at 19.97
per cent in 2009-10, lower than its market share of 20.14 per cent in the previous
year.

Various types of life insurance policies:-

• Endowment policies: This type of policy covers risk for a specified period,
and at the end of the maturity sum assured is paid back to policyholder with
the bonuses during the term of the policy.

• Money back policies: This type of policy is for periodic payments of partial
survival benefits during the term of the policy as long as the policy holder is
alive.

• Group insurance: This type of insurance offers life insurance protection

under group policies to various groups such as employers-employees,
professionals, co-operatives etc it also provides insurance coverage for
people in certain approved occupations at the lowest possible premium cost.

25
• Term life insurance policies: This type of insurance covers risk only
during the selected term period. If the policy holder survives the term, risk
cover comes to an end. These types of policies are for those people
• who are unable to pay larger premium required for endowment and whole
life policies. No surrender, loan or paid up values are in such policies.

• Whole life insurance policies: This type of policy runs as long as the
policyholder is alive and is covered for the entire life of the policyholder. In
this policy the insured amount and the bonus is payable only to nominee on
the death of policy holder.

• Joint life insurance policies: These policies are similar to endowment

policies in maturity benefits and risk cover, but joint life policies cover two
lives simultaneously such as married couples. Sum assured is payable on the
first death and again on the death of survival during the term of the policy.

• Pension plan: a pension plan or annuity is an investment over a certain

number of years but does not provide any life insurance cover. It offers a
guaranteed income either for a life or certain period.

• Unit linked insurance plan: ULIP is a kind of insurance plan which

provides life cover as well as return on premium paid over a certain period
of time. The investment is denoted as units and represented by the value
called as net asset value (NAV).

26
 COMPANY PROFILE
Max New York Life Insurance Company Ltd. is a joint venture between
New York Life, a Fortune 100 company and Max India Limited, one of India's
leading multi-business corporations. Max New York Life Insurance started its
commercial operations in India in 2001. The company has positioned itself on the
quality platform. In line with its vision to be the most admired life insurance
company in India, it has developed a strong corporate governance model based on
the core values of excellence, honesty, knowledge, caring, integrity and teamwork.
The strategy is to establish itself as a trusted life insurance specialist through a
quality approach to business.
The company has around 133 offices all over the country.
Max New York Life offers a variety of flexible products covering both life and
health insurance including 8 riders that can be customized to over 800
combinations which enable the customers to choose the policy that suits their
needs. Max New York Life also offers 6 products and 7 riders in group insurance
business. The company has a plan for every need, designed as to meet your long

27
term financial goals & aspirations. They help you fulfilling your dreams &
commitments.
In line with its values of financial responsibility, Max New York Life has adopted
prudent financial practices to ensure safety of policyholder's funds. The Company's
paid up capital is Rs. 907.4 crore, which is more than the norm laid down by
IRDA.
Max New York Life has identified individual agents as its primary channel of
distribution. The Company places a lot of emphasis on its selection process, which
comprises four stages - screening, psychometric test, career seminar and final
interview. The agent advisors are trained in-house to ensure optimal control on
quality of training.
Max New York Life invests significantly in its training programme and each agent
is trained for 152 hours as opposed to the mandatory 100 hours stipulated by the
IRDA before beginning to sell in the marketplace. Training is a continuous process
for agents at Max New York Life and ensures development

of skills and knowledge through a structured programme spread over 500 hours in
two years. This focus on continuous quality training has resulted in the company
having amongst the highest agent pass rate in IRDA examinations and the agents
have the highest productivity among private life insurers.
337 agent advisors have qualified for the Million Dollar Round Table (MDRT)
membership in 2007. MDRT is an exclusive congregation of the world’s top
selling insurance agents and is internationally recognized as the standard of
Excellence.

28
Having set a best in class agency distribution model in place, the company is
spearheading a major thrust into additional distribution channels to further grow its
business.
The company is using a five-pronged strategy to pursue alternative channels of
distribution. These include the franchisee model, rural business, direct sales force
involving group insurance and telemarketing opportunities, bancassurance and
corporate alliances.

Max India
VISION
To become the most admired life insurance Company of India.

MISSION
• Become one of the top quartile life insurance companies in India
• Be a national player
• Be the brand of first choice
• Be the employer of choice
• Become principal of choice for agents

VALUES

Knowledge:
Knowledge leads to expertise; and our expertise is in helping people protect
themselves. Perfectly combining global expertise with local knowledge, we are

29
India's life insurance specialist. Max New York Life believes that for knowledge
to be of value it must be focused, current, tested and shared.

Caring:
Max New York Life is redefining the life insurance paradigm by focusing
on customers first. The service process is responsive, personalized, humane and
empathetic. Every individual who represents the company is for us our brand
champion.

Honesty:
Honesty is the heart of the life insurance business. It is all about trust.
Transparency, integrity and dependability form the cornerstones of the Max New
York Life experience. The company ensures that everyone who represents
the brand carries a promise: we care — in word as well as deed.

Excellence:
Excellence at Max New York Life implies the ability to perform at a consistently
high level. Focused on the value of continuous improvement in people, processes
and the organization, the company strives for the highest standards of quality in
every aspect of its business.

30
Operational work of insurance agency
Every industry has an operational department which supports the market division.

Front office partners (independent agents)

Develop insurance products Distribute product
CUSTOMERS Plan and manage company BUSINESS PARTNERS
Fulfill and service product Claims
Back office provider Regulatory institutions

In the reference to the Max NeyYork Life insurance, development of insurance

products, distribution, planning services products and claims are taken care by the
head office. Back office providers are those persons who take care of the
operational part of the organization and front office providers are the people who
brings sell to the organization. Back office has its own hierarchy which is
connected to head office, and every policy has to be processed to head office. Unit
for the operations is known as processing centre, and processing centre within the

31
city is known as mini processing centre. Proposal forms come through front office
and the verification of the proposal is done by manually which is known as
scrutiny. The entry of a proposal is done in a sequential order starting with
scrutiny, inwards, proposal wise inwards, cashier entry, cashier entry approval,
data entry and finally outwards. After finishing all these operations policy issues
from the head office of the state.

ACHEIVEMENTS
Max New York Life is the first life insurance company in India to be awarded the
IS0 9001:2000 certifications.
Max New York Life was among the top 25 companies to work with in India,
according to 2003 Business World magazine, "Great Workplaces in India", Max
New York Life was ranked at the 20th position. This survey is the local version of
the "Great Places to Work" survey carried out every year in 22 countries.
Been among top five most respected private life insurance companies in India
according to a 2004 and 2006 Business World survey.
Have truly built an enviable sales force. With 345 agents becoming members of the
MDRT in 2006, Max New York Life has moved up to 21st rank in MDRT
globallist.
Max New York Life introduced ‘LIFELINE Healthy Family’ a health insurance
plan, the most comprehensive long term insurance coverage for hospitalization,
surgeries and critical illness for the entire family under single policy.

32
With the launch of ‘Health Family’on 1st june 09, Max New York Life also became
the first and the only company to offer benefits for congenital disorder.
- Highest number of Hospitalisation Days and Daily Cash limits
- Highest number of critical illness covered
- Health insurance coverage for the longest duration – 10 years
- No upper limit on the family size
- Yearly increases on surgical benefits, even after claims
- Guaranteed renewability till the age of 75 years

Capital structure

Max New York Life Insurance would invest Rs 700 crore in this fiscal for Expan-
ding its business in fy 2010.
"We plan to infuse Rs 600-700 crore in Max New York Life Insurance in 2009-
10," Max India Chairman Analjit Singh. (Economic times)

The company intends to raise Rs 500 crore in next six months through private
placement. The company would raise Rs 500 crore from equity in the medium term
depending on the FDI policy stance of the government with regard to the insurance
sector.

During 2008-09, Max New York Life made a capital infusion of Rs 750 crore.
The paid-up capital of the company stood at Rs 1,782 crore at the end March 2009
against Rs 1032 crore at the end of financial year 2007-08.

33
With the Insurance Laws (Amendment) Bill awaiting Parliamentary approval, Max
India, Analjit Singh’s flagship company, has started discussions on divesting 23
per cent out of its 74 per cent shareholding in Max New York Life Insurance to its
foreign partner.
The Bill is expected to raise the foreign direct investment (FDI) limit in insurance
joint ventures from 26 to 49 per cent. Max India may mop up around Rs 3,000
crore from this divestment.

Products

Protection Plans Children Plans

• Five Yr Renewable
Convertible Plan
• Level Term Policy
Investment Plans
• Life Maker Premium
• Life Maker Gold
• Life Maker Platinum
• Life Invest
Retirement Plans
• SMART Invest Pension
• Easy Life Retirement (Par)
Plan
Strategic Products Plans
& • Children's Endowment to 18
(Par) Plan
• Children's Endowment to 24
(Par) Plan
• SMART Steps
• SMART Steps Plus
Health Plans
• Lifeline Medicash
• Lifeline Wellness Plus
• Lifeline Medicash Plus
• Lifeline Safety Net
Savings Plans
• Whole Life Participating

34
• Bancassurance • Life Gain Plus 25
1. Capital Builder Plan Participating Plan
• Partnership Distribution • 20 year Endowment (Par)
1. Max Mangal Plan
2. Capital Builder • Life Pay Money Back Plan
3. Max Vriksha Group Plans
4. Max New York Life Unit • Group Credit Life
Builder • Unit Linked Group
Superannuation Plan
• Group Gratuity cum Term
Assurance
• Group Term Life
• Unit Linked Group Gratuity
Plan

35
 SWOT ANALYSIS
Business firms undertake SWOT analysis to understand the external and internal
environment. SWOT, which is the acronym for Strength, Weakness, Opportunities
and Threats, is also known as WOT-UP Analysis. Through such an analysis
strength and weakness existing within an organization can be matched with the
opportunities and threats operating the environment so that an effective strategy
can be formulated. An effective organization strategy, therefore, is one that is
capitalized on the opportunities and through the use of strengths and neutralizes the
threats maximizing the impact of weakness.

Strengths:
• Well Reputed Insurance Company
• Expanding into New Location
• Well-Covered Market in Delhi
• Competitive Products
• a wide distribution network across India
• Appraisal techniques are used.
• offers a suite of flexible products
• Consistency in Quality.

36
Weaknesses:
• Service delivery / Logistics perception is weak
• Negative Environment
• Top management takes large amount of time to approve high value policies.
Opportunities:
• It can offer a complete relationship
• Advantage of large network over other insurance companies
• Opportunity to pitch in for National and International convenience
• MNC’s focusing on Low Cost Outsourcing opportunity.
• Max India is in discussion with New York Life Insurance to appoint two
investment bankers to arrive at a fair market value of the insurance business.
• The company may explore the possibility of listing in India. Although New
Life is a mutual company (not listed on the stock exchanges), Max India
have held discussions on this issue with suggestion of listing on the
bourses,” economic times
• With the launch of ‘Health Family’ on 1st june 09, it became the first and the
only company to offer benefits for congenital disorder.

Threats:
• People looking for change (?)
• The competition in market is very high.
• The competition among the agents is very high.
• Innovative schemes from other players

37
 • anomalies conducted by Agent Advisors whilst selling Insurance policies

Major private players.

ICICI prudential: ICICI prudential insurance is a joint venture of ICICI bank
and prudential plc a leading financial service group in the UK. ICICI Prudential
was the first life insurer in India to receive a National Insurer Financial Strength
rating of AAA from Fitch ratings. ICICI prudential is working on the base of five
core values-
• Integrity
• Customer first
• Boundary less
• Ownership
• Passion

HDFC standard life insurance: HDFC Standard Life Insurance Company Ltd. is
one of India's leading private insurance companies. It is a joint venture of Housing
Development Finance Corporation Limited, India's leading housing finance
institution and a Group Company of the Standard Life in UK.

38
MetLife insurance: MetLife India Insurance Company Limited is an affiliate
of MetLife, Inc. and was incorporated as a joint venture between MetLife
International Holdings, Inc.and The Jammu and Kashmir Bank, M. Pallonji and
Co. Private Limited and other private investors. MetLife is one of the fastest
growing life insurance companies in the country.

Comparison of ULIP products of

different insurance Companies

Max New York Life Insurance

fund options- growth fund, balanced fund, conservative fund, secure fund.

39
allocation to equities- 20 – 70% in growth fund, 10 – 40% in balanced fund, 0 –
15% in conservative fund, 0% in secure fund.
minimum premium- 15,000.
min/max age at entry- 12 – 60 years.
sum assured- minimum sum assured 100,000 rs.
fund management charges- .90% - 1.25% of net assets in the fund.
fixed monthly expenses- 50 rs.
charges on top ups- nil.
switching charges- above 2 switching per year 500 rs. Per switching

40
ICICI Prudential
Fund options- growth fund, balanced fund, income fund, and preserver.
allocation to equities- upto 100% in growth fund, upto 40% in balanced fund,

nil in income fund, 50% in preserver.

minimum premium- 20,000.
min/max age at entry- upto 65 years.
sum assured- annual premium*term/2.
fund management charges- 1.5% in growth fund, 1.0% in balanced fund, .75% in
income and preserver fund.
fixed monthly expenses- 60rs.
partial withdrawals- above one partial withdrawal 100 rs. charge per withdrawal.
charges on top ups- 1%.
switching charges- above 4 switches in a year 100 rs. Per switching.

HDFC Standard Life Insurance

fund options- growth fund, balanced fund, defensive fund, secure fund, liquid
fund.
allocation to equities- 100% in growth fund, 30-60% in balanced fund, 15-30% in
defensive fund, 0% in secure and liquid fund.
minimum premium- 10,000.
min/max age at entry- 18- 65 years.
sum assured- annual premium*term/2, to 40 times the regular premium amount.
fund management charges- .80%.
fixed monthly expenses- 20 rs.

41
partial withdrawals allowed- above 6 partial withdrawals 250 rs. per withdrawal.
charges on top ups- 2.5% for initial 2 years, after 1%.
switching charges- 24 free switching and then 100 rs. per switching.

Insurer Marketview Product focus Distribution Others

strategy

42
ICICI Market Pension and Significantly Significant
Prudential growth at healthy diversified capital
60%CAGR products likely with 40% requirement
in medium to grow given from non for maintain
term, target aging agency force, share in a
to maintain population and expanding high growth
share at 30% increasing life reach to non market, both
in private expectancy. metro areas. partners
segment. Product willing to
awareness is contribute,
slightly behind
LIC despite a
significant
time
disadvantage;
health could
comprise 3 –
5% of product
mix in 5 years.
HDFC Expect high Focus on Prefer own Breakeven
Standard life double digit regular offices versus not
insurance market premium franchisees, necessarily in
growth over products and higher focus next 18
next few higher on training months, it
years, steady persistency agents rather would

43
 state not levels, group than hard sell, require
expected focus given rural focus capital even
flexibility in required but if FDI were
equity obstacles raised to
investment, include lack 49%.
competitive of bank
versus mutual infrastructure.
funds for
longer tenure
products given
lower amc
charges
Bajaj Current Most products More focus Growth and
Allianz life industry homogeneous on smaller market share
insurance growth across players, towns, oriented
sustainable not much price greater strategy,
for next 7 – differentiation, emphasis on detarrifing
10 years, ULIPsales agency force would hit
target 10% unlikely to be expansion. non life
market share affected by segment
in next 5 recent adversely.
years regulations,
not much
threat from
mutual funds.

44
Birla sun life Target to be Currently only Agent It believes
insurance top in 5 unit linked productivity some
years products sold is an issue marginal
but group given their players could
linked part time br bought
products are nature, target out.
focus area for is 130
development. branches all
over India,
also will
leverage on
group’s
products
distribution
strengths.

CONCLUSION

AND

RECOMMENDATIONS.
45
 Conclusion

The research in this field has thrown up some interesting trends which can be seen
in the above analysis. A general impression that was gathered during Data Analysis
is-
• Insurance companies are recruiting their advisors mainly through personal
reference, through advertisement, and through walk in interviews. None of

46
 the company is recruiting their advisors through placement agencies. But
some companies have started recruiting their advisors through placement
agencies as a trial basis.

• Those advisors who are recruited through personal references need more
training session and company has to put effort to make them active. Most of
the companies are giving training session to advisors to make them active.
Only one or two companies are providing higher channel position and
increasing incentives to make them active.

• Most of the insurance companies have started recruiting agency manager and
high posted people from professional colleges to improve efficiency of the
insurance company.

• Insurance companies have forgotten their traditional products. Companies

are totally concentrating on selling ULIP products. Now insurance
companies are selling their products as an investment product not as life
insurance products.

47
• Insurance companies are deploying their products mostly based on customer
needs and demands. Insurance companies are not doing enough market
researches to know the potential of the market.

• Most of the insurance companies are differentiating themselves from the

competitors by providing better service quality. Some companies are
differentiating themselves providing better pricing of the product.

• Branch managers of most of the companies think that providing better

service quality is the best tool to compete in the market. Better service
quality may be in the form-
• Issuing policy in time.
• Providing claims in time.
• Making customers aware about their status of policy

• Most of the people are not aware about all the policies and don’t have faith
on private players. Most of them prefer to take policies for their future
savings and security rather than wealth creation and are generally married.

48
 Recommendations

• MNYL should start recruiting advisors through placement agencies. By

practicing this, it will get more capable advisors who can work efficiently.
Inactive advisors kind of thing would not happen.

• The general awareness levels among Agent Advisors with regards to policy
and procedure requires improvement

• MNYL should also promote the term and endowment insurance products
including ULIP products. Because these are basic insurance products.
Promote products as life insurance products not an as investment products.

• MNYL should focus towards rural segment also which has a great scope of
growth.To increase awareness in rural market, MNYL should do some
activities in villages and small towns. This can be done by putting kiosk in
fairs and festival melas organizing in villages.
• MNYL can sell their products through charitable institutions.

49
• MNYL should sell their products through head of the villages or through
panchayat in villages. People in villages believe on the head and panchayat
so selling insurance will be easier in villages.

• MNYL can introduce some special policies for the farmers to tap the rural
market, and pricing for these kinds of products should be less so farmers can
easily afford to take policies.

• As MNYL is coming in general insurance so it can introduced products like

cattle insurance and water pump insurance. It will also help to promote
the products of Max New York Life insurance.

• Advisors need to be well aware of plans provided by other private players,

not only of plans provided by LIC. So that they can provide valuable
information to customers, to switch them towards us instead of targeting
only LIC only while discussion with customers.

• MNYL should focus its concern on the aspect of ULIP policy on account of
higher risk quotient as well as high premium policies.

50
• MNYL should increase its number of branches and also enhance its network
of agents so that it can compete with others and establish itself as a trusted
life insurance specialist through a quality approach to business.

• MNYL should focus on its promotional activities in order to build trust and
increase the awareness among the customers about various policies which
will help them to decide which is the most appropriate policy for them.

• MNYL should focus on young professionals within an age group of 25-40

years and should come up with the policies which could attract them as per
their needs.

51
 BIBLIOGRAPHY

Books Magazines News Internet

papers
Insurance in India Business The Hindu IRDA website
world
Insurance distribution Magazines Business Google search
(ICFAI Publications) on Line
investment
Insurance industry Asia Economic Websites of different insurance
(ICFAI Publications) Insurance Times companies
post
InsuranceIndustry-  www.maxnewyorklife.com
by.UJAWAHARLAL IRDA  www.irdaindia.org
journal  www.thehindubusinessline.com
 www.wikepedia.org
C.R.kothari,2007,  www.kotaklifeinsurance.com
Research  www.birlasunlife.com
Methodology(Second  www.iciciprulife.com
revised edition),New  www.bajajallianz.com
age international ltd,  www.hdfclifeinsurance.com
New Delhi.  www.wikipedia.com
 www.investopedia.com
S. shahjahan-  www.scribd.com
research

52
methodology and  www.indianinsuranceresearch.c
report preparation. om

Case study

New York Life’s E-Business: Online Agent

Appointment

In 2001, New York Life Insurance’s Web site, which was intended for
communication, education, and service, was not meeting its customers’ or agents’
needs. Customers were trying to use the Web site to connect with agents, yet
agents were not receiving quality leads.

53
New York Life crafted a new e Business strategy that focused entirely on its agent
sales force to “sell the agent appointment,” generating quality leads at reasonable
costs.

Situation: New York Life’s web site wasn’t helping customers or agents.
As the oldest and largest US mutual life insurer, New York Life Insurance has been
the envy of its competitors for the past decade. The company ranked No. 1 in
customer loyalty for five consecutive years and won several e Business awards. It
has been found that New York Life customers are very loyal and more likely to
buy future products, versus policyholders from other life insurers.
Despite these, the company’s e Business strategy was not effectively serving
customers or supporting the company’s lifeblood —agents who form its primary
distribution channel. New York Life’s site was originally used for customer
communication, education, and service. However, analysis of Web site behavioral
data revealed a problem: New York Life’s e Business strategy was broken because
the Web site did not:
Meet customers’ needs: Customers and prospects wanted to use the Web site to
schedule a sales appointment with an agent, but the Web site was not built to
generate leads. Content was geared toward education and service rather than
connecting customers with agents.

Support agents’ sales efforts: It has been found that insurers rank prospecting as
the most important service an agent provides, but many firms question their agents’
prospecting skills. Many agents regard prospecting as a less desirable aspect of

54
their job. Contrary to the clichéd image of the persistent insurance agent, many
agents take the first “no” from a customer as final and throw the lead away.

New York Life’s Customers Are More Likely To Buy Again, Versus Competitors’
Customers.
Among US consumers who consider each firm their primary insurer, the
percentage who is likely to:
Fig.1 NY Life Prudential The Hartford MetLife
Purchase a future product 74% 51% 65% 57%
from this firm
Switch their primary insurer 5% 2% 5% 6%

Solution:
New York Life’s new e business strategy: selling the agent appointment.
The insurer’s new e Business strategy uses the Web to “sell the agent
appointment”.
New York Life does not sell products online. Instead, it lets customers connect
with agents while filling the agents’ sales pipeline with qualified leads. Through
this New York Life’s new e Business strategy: Life insurance shoppers prefer the
Web and agent (in-person) channels for product research. “If an agent can get the
appointment, then he or she will sell.

New York Life’s e Business transformation is a success story filled with best
practices. They include aligning e Business strategy with overall corporate

55
strategy, improving lead conversion with a blend of search and display advertising,
promoting the value of e Business internally, and using measurement and analytics
to fuel lead-generation performance.

Figure 2 New York Life Insurance’s No. 1 Site Goal: Selling The Agent
Appointment.

56
New York Life Insurance’s Site Allows Research through the two most Popular
Channels.

57
Percentage of life insurance researchers who used each channel:
Branch/in-person 45%
Internet 42%
Mail 23%
Phone 20%

Best Practice: Improve Lead Conversion with A Blend Of Search And Display
Advertising.
Targeted online marketing improves sales conversion and retention downstream.
New York Life implements a variety of search and display advertising tactics to
improve lead conversion. New York Life has:
· Found the right blend of search: New York Life experiments regularly with
looking for the right balance of search engine optimization (SEO) and search
engine marketing (SEM). The majority of New York Life’s SEM is pay-per-click
advertising programs conducted through Google, although it complements that
with programs through Yahoo! and MSN.
· Collected the bare essentials from customers: New York Life tested several
lead-generation forms, and conversion metrics proved that less was more. The firm
captures the customer’s name, address, phone number, and birth date as well as the
best time to call to generate a lead. The firm doesn’t collect the customer’s email
address and asks for the birth date only optionally. “There’s real value in being
pristinely clear to prospects that you will be talking, not emailing, with a real live
insurance agent.” Customers can enter their email address and sign up for a
newsletter, but it is secondary in the lead-generation form.

58
Figure 4 Consumers Enter Minimal Personal Data, Leading To Higher
Conversion.

59
Best Practice: Use Measurement And Analytics To Fuel Lead-Generation
Performance.

Many mature e Businesses fall short in measurement and metrics. While many e
Business executives routinely measure online customer retention or profitability,
less than half of them measure online customer acquisition costs. New York Life
focuses on acquisition costs and data-driven analytics to demonstrate the power of
the e Business channel. Internal comparisons of lead-generation metrics show the e
Business channel outperforming traditional advertising and other channels like
direct mail.
· Develop a scorecard. New York Life’s e Business team develops an annual
scorecard goal with key success imperatives and performance metrics. The
scorecard is recalculated annually based on expenses. The scorecard goal is shared
within the team and with other stakeholders. It
reinforces the value of e Business to senior management and other parts of the
business such as the agents.
· Analyze search performance. New York Life closely monitors SEO
performance by measuring the percentage of traffic to newyorklife.com and
satellite Web sites. The firm also measures the percentage of sales lead conversions
generated from organic search engine results. This allows the firm to optimize
spending across various campaigns and Web sites. Currently, 33% of new qualified
leads come from newyorklife.com and its satellite sites. Another 67% of leads are
generated from external price-per-click and price-per-lead campaigns. “In 2008,
through November, organic search engine clicks increased by 18.3%, and sales
lead conversions from those clicks increased by 23.6%,”

60
61
Result: New York Life Achieves Success.
New York Life’s e Business strategy to “sell the agent appointment” is a clear
winner. Some of the results include:

· Lead quantities are growing: Newyorklife.com produces sales leads for agents.
The firm also initiated a portfolio of SEM experiments in January 2008, producing
11 leads per day that month and ending the year at 450 leads per day. The site is
also the destination of job seekers and generates thousands of agent recruiting
leads. “In 2008, there was approximately 115,000 total sales and agent recruiting
leads, compared with 76,000 in 2007”. New York Life’s goal is to produce 200,000
combined leads in 2009. The company continues to focus on lead quality and
quantity and may increase production if the economy improves in 2009.
· Cost per lead is shrinking: The average cost per lead in early 2008 was $121
per lead. By year’s end, the e Business team lowered the average cost to $21 per
lead. New York Life improved its costs per lead dramatically by bidding for better
positions on search engine results pages. The company also invested advertising
dollars in branding pay-per-click campaigns around the financial crisis. To
generate more leads in 2009, raising the average cost per lead, but will keep it less
than $37 per lead.
· New York Life is growing: E Business is playing a growing part in the overall
success of the company. New York Life’s most recent annual report shows an
increase in total individual life insurance of $198 billon from 2003 to 2008. The
firm also shows strong growth in operating earnings, the company’s metric for
evaluating profitability from ongoing operations, with an increase in operating
earnings from $836 million in 2003 to a record $1.3 billion in 2007.

62
63
Emerging Opportunities.

· Social networking for agent recruitment: New York Life is developing a

partnership with LinkedIn to build an official New York Life site for agents and
managers. “Already, 60% of managers have a LinkedIn presence that they use to
recruit new agents, and about 25% of active agents have a LinkedIn presence to
generate sales leads. Use of other social networks, Facebook in particular, is much
less and more purely personal and social in nature.”
· Globalization through personal agent networks: New York Life is looking
into how agents can create social networks of their own. The firm’s Global
Connections proposal of connecting domestic Asian-Indian agents with their
counterparts in Max New York Life in India is a likely test case.
· Evaluation of comparison sites: The firm is investigating price comparison
Web sites and evaluating online quoting functionality. Goal is to develop a “greater
degree of transparency in respect to the cost of some of core products.” Another
strong possibility is local lead generation with a leading life insurance comparison
site.

The lesson learned:

New York Life’s e Business continues to grow and support its agents. The firm
proved that the Web cannot merely coexist but must thrive alongside a traditional
insurance agent sales force. E Business managers across any industry should
follow New York Life’s best practices in crafting an e Business strategy that aligns

64
with overall corporate strategy. They should also continue promoting the value of e
Business to all stakeholders with support from data-driven analytics.

65