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 Concept of Insurance

Insurance is a contract by which one can protect oneself against

specific losses by paying a premium over a period. On one hand,
human life is subject to various risks-risk of death or disability due to
natural or accidental causes. Humans are also prone to diseases, the
treatment of which may involve huge expenditure. On the other hand,
property owned by man is exposed to various hazards, natural and
When human life is lost or a person is disabled
permanently or temporarily, there is a loss of income to the
household. The family is put to hardship. Sometimes survival itself is
at stake for the dependents.
When it comes to property, loss or damage to
property results in either whole or partial loss in income to the person
or entity.
Risk has the element of unpredictability.
Death/disability or loss/damage could occur at anytime. Losses can

be mitigated through insurance. Insurance is a commodity which
offers protection against various contingencies.
Insurance products available for life and non-life
are many. In non-life, apart from personal covers such as accident
covers and health insurance, there are products covering liabilities
under a particular law and or common law. The various products are
designed to cater to different needs of an individual or industry such
as fire insurance policy on multi-storied building, householder’s
An insurance contract promises to make good to
the insured a certain sum in consideration for a payment in the form
of premium from the insured.
Human life cannot be valued. Hence, the sum
assured is by way of a ‘benefit’ in the case of life insurance. Life
insurance products provide a definite amount of money to the
dependants of the insured in case the life insured dies during his
active income earning period or becomes disabled on account of an
accident causing reduction/complete loss in his income earnings. An
individual can also protect his old age when he ceases to earn and
has no other means of income by purchasing an annuity product.

A personal accident covers is also for protection.

In the event of death or disability, permanent or temporary, of the
insured, it provides for compensation which is either the whole or a
percentage of the Capital Sum Insured depending on the kind of loss.

In the case of Health Insurance, the policy seeks
to cover expenses towards treatment of diseases and /or injury up to
the sum opted by the insured.
In respect of insurance relating to property,
there are many products available. Property may be covered against
fire and perils of nature including flood, earthquake etc. Machinery
may be insured for breakdown. Goods in transit can be insured under
a marine cargo insurance cover. Insurance covers are also available
for ships and other vessels. A motor insurance policy covers third
party damage as well as damage to the vehicle.
Insurance of property is based on the principle
of indemnity. The idea is to bring the insured to the same financial
position as he/she was before the loss occurred. It safeguards the
investment in the property. Where there is no insurance, losses can
mar a project or an industry. General Insurance offers stability to the
economy and to the society.
Insurance offers security and so peace of mind to the individual. The
concept of insurance is that the losses of a few are made food by the
contribution from many. It is based on the law of large numbers. It
stemmed from the need of man to find a solution for mitigation of
losses. It also reflects the nature of man to find a solution collectively.
It is important for all to understand the
various products that life and general insurance companies offer
before they make a choice as to the product they want to buy.
As per regulations, insurers have to give the
various features of the products at the point of sale. The insured

should also go through the various terms and conditions of the
products and understand what they bought and met their insurance

 Concept of Life insurance

Life insurance is a contract by which one can protect oneself against
specific losses by paying a premium over a period of time. Since each
one of us, during our lives are faced with numerous risks- falling
health, financial losses, accidents and even fatalities, our instinct
drives us to cover those losses risks. Though an insurance cover
cannot protect against the emotional losses arising out of these risks,
it softens the economic crisis that usually accompanies these losses.
Life Insurance gains much more value if an
individual is in a nuclear family. Unlike in the traditional joint family
system, in a nuclear family, support from the extended family cannot
be counted upon. So it is vital that an individual has an insurance cover
as the protective shield against unfortunate losses. Everyday when any
one of us opens the daily morning newspaper we find a number of
news stories reporting a number of accidents. This leaves us
wondering that what will happen if this tragedy happened to us.

A person may just be relieved of this fear if he/she has insurance.

Life insurance cannot return the person who has died but still it can
provide his/her family with monetary assistance, once that person is
not with them. This makes life insurance vary important in today’s
turbulent times.

 Necessity of Insurance:-

Life is a series of milestones that follow one another relentlessly-like

planning child’s education, their marriage, investing in and protecting
one’s assets, retirement plans etc. to mane just a few. Often on
milestone defines the next. And, therefore, all of them demand
careful financial planning much ahead of time. So, that we are not
stranded midway to our goals. Or worse- our loved ones are not able
to live the dreams we dreamt for them. Life insurance plays a role in
helping to plan our life .the need of life insurance is as follow:
• Temporary needs and threats:

The original purpose of the life insurance

remains an important element, namely providing for
replacement of income on death etc. like the case of the
breadwinner dying an early death.

• Regular Savings:-
Providing for ones family and oneself as a
medium to long term exercise has become a more relevant
exercise in recent times as people seek financial independence
from their family.
• Investments:-

The building up of savings while
safeguarding it from the ravages of inflations also a part of
insurance. As while regular product investment products are
traditionally lump sum investments were the individual makes
one-time payment.
• Retirement:-
Provision for ones later years becomes
increasingly necessary especially in the changing cultural and
social environments. One can buy a suitable insurance policy,
which will provide periodical payments in ones old age.


 History of Insurance in India

The business of life insurance in India in its existing

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

Some of the important milestones in the lifer insurance

business in India are:

Year Important milestones

1912 The Indian Life Assurance Companies

Act enacted as the First statute to

regulate life insurance business.

1928 The Indian Insurance Companies d Act

enacted top enable the government to

collect statistical information about both

life and general insurance business.

1938 Legislation amendment for protecting the

interests of the insurance business.

1956 Rs. 5 crore from government of India 245 Indian and foreign insurers and

provident societies taken over by the

central government and nationalized. LIC

formed by an Act of parliament , viz., LIC

Act, 1956, with a capital contribution of

Reforms of Insurance Sector:

In 1993, Malhotra Committee, headed by former finance secretary

and RBI Governor R.N.Malhotra, was formed to evaluate the Indian
Insurance Industry and recommended its future direction. The
Malhotra committee was set up with the objective of complementing
the reforms initiated in the financial sector. The committee came up
with the following major provisions:-

 Private companies with a minimum paid up capital of 1bn should

be allowed to enter the industry.
 Foreign companies may be allowed to enter the industry in
collaboration with the domestic companies.
 Only one state level life insurance company is allowed to
operate in each state.
 Government stake in the companies to be brought down to 50%.
 Then insurance act should be changed.
 An Insurance Regulatory body should be set up.
 Mandatory investments of LIC life fund in government securities
to be reduced from 75% to 50%.
 GIC and other subsidiaries are not allowed to hold more than 5%
in any comp-any.
 LIC should pay interest on delays beyond 30 days.
 Insurance3 Companies must be encouraged to set up unit linked



The IRDA since its corporation as a

statutory body in April 2000 gas fastidiously stuck to its schedule of
framing regulations and registering the private sector insurance
companies. Reforms in the insurance sector initiated with the
passage of the IRDA Bill Parliament in December 1999.IRDA has put
inn a framework of globally compatible regulations. In the private
sector 15 life insurance and 15 non-life insurance companies have
been registered. The approval of institutions for imparting training to
agents has also ensured that the insurance companies would have a
trained workforce of insurance agents in place to sell their products.
The other decisions taken simultaneously to provide the supporting
systems to the insurance sector and in particular the life insurance
companied was the launch of the IRDA’s online service fir issue and
renewal of licenses to agents.


Poised at a phenomenal growth of 500%, the Indian insurance

industry is expected to reach US$ 60 billion in the next four years.
This is attributed mainly to the soaring demand in semi-urban and

rural areas. While there are as many as 27 direct insurance players,
more await their foray into the county.
India is turning out to be a crucial market, with premium
from India accounting for almost 25% of Asia and Middle East’s gross
written premium for royal & sun alliance. The group expects the
Indian market to double again in the next five years substantially
increasing the region’s share in world insurance.
Allianz, New York, Prudential, standard life, AIG, Aviva,
Axa, Metlife and ING are all multinational insurance companies that
have joint ventures in the country. Yet another foreign insurance
player entered the country when Religare, a Ranbaxy group company
providing financial services, joining hands with the Dutch insurer


The insurance sector was opened up for private

participation in the year 1999. The reasons that prompted the
government to bring in reform in the insurance sector are well
known. While the Public Sector Insurance

Companies made enormous contribution in the spread of

awareness about insurance, and expanded the market, it was
recognized that their reach was still limited, the range of products
offered restricted and the service to the customer inadequate. It

was also felt that the rapid economic growth witnessed in the 90s
cannot be sustained without a thriving insurance sector.
It was also recognized that India has a vast potential that
is waiting to be tapped and this could be achieved when sufficient
competition is generated and it is exposed to the developments in
the rest of the world. The insurance sector was, therefore, opened
up for private sector participation with provision for limited foreign
equity exposure. We have now four years experience of the public
and private sector together operation in the market.
Indian insurance business, which remained under
developed with low levels of insurance penetration and insurance
density has shown signs of improvement. The insurance
penetration i.e. premia as percentage of GDP has increased from
2.32%in 2000 to 2.88% in 2003. The insurance density i.e. premia
per capita has increased from USD 9.90 in 2003. The overall world
rankings in terms of total premium volumes have improved from
23rd in 2000 to 19th in 2003. The world ranking in terms of premium
volumes has also improved from 20th in 2000 to 18th in 2003. The
share in world in world market has increased from 0.50% to 0.81%.

The total premium collected by the insurers both life and non-life in
the years – 1997-98, 2000-01 and 2003-04 in crores.


30000 NON-LIFE

1997-98 2000-01 2003-04

The diagrams represents that there is 83% increase in the last three

years over the base year 2000-01. There was also an increase of 66%

from 1997-98 to 2000-01 after the opening up of the sector. The

market share of the private players has also to be seen in the context

of this enlarged market. This is also an evidence to show that the rate

of growth of public sector undertakings had not shown any decline

after the entry of private players.

There is also an increase in non-life insurance rankings in term

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

were purchasing products as they alone are available in the market.
This choice has empowered the customers and this is a positive
In the case of General Insurance also, the public
sector has responded to the challenge by entering into the corporate
agency relationships with providers of goods and services. The scope
for innovation being limited in the tariff market, the private general
insurance companies seem to be concentrating on provision of total
risk management services to their corporate clients. This has enabled
them to make in roads into the profitable corporate accounts of state
insurers. In addition the private sector has concentrated on providing
a host of service to their clients like point of sale issuance of policies,
cashless settlement in the case of motor repairs, and SMS alerts on
motor claims status. The accent is on providing high-class service to
the customers and earning goodwill which would in due course help
access large corporate accounts. The general insurers have to come
out with innovative products in the personal lines if they are to
expand business. I have no doubt that this would happen and the
IRDA would be happy to facilitate it by removing any regulatory or
tariff related obstacles.
In addition to the growth of insurance market the
other area where there is significant beneficial change with the entry
of the private insurance companies is in the area of insurance
intermediation. Till two years
ago, the only mode of distribution or life insurance products was
through agents. We have today alternate channels like banc
assurance, brokers,

Corporate agents and direct marketing through internet. Though it is
too early to predict, banc assurance has the potential to emerge as a
significant distribution mechanism. Banks have not only data from
which they can identify potential clients, but have also extensive
reach and provide a point of contact for the insured. The bank branch
unlike an agent cannot be elusive after the sale of the product and
has to respond to the needs of the insured. If there is proper
disclosure at the time of sale of policy and efficient post sale service,
there will be significant increase in the use of this model by the
insurers to enlarge their business.
The insurance broker offers the most efficient
distribution system through which clients purchase commercial
insurance. As the non-life insurance market opens gradually, the
value of the insurance broker’s role will be better understood. There
will be increasing opportunities to serve the needs of midsize
companies and small enterprises by delivering the specific services
these clients need and in the way they want them delivered.
This implies that there is enough business for a large
number of brokers for the present and an early start would give them
adequate time and opportunity to equip themselves with necessary
skills to provide professional services when the market is finally
detariffed. Corporate Agency is another area, which has been
expanding rapidly. This is a new institution and we have no
experience of the functioning of this new class of intermediary, as
such an institution is not preventing in insurance markets in the
world. While this model has the potential to reach a large section of
the population in a short time, there are concerns about the mode of

sale of the policies. Insurance products are becoming complicated
and unless the agent is conversant with benefits and conditions
attached to the policy, there is a distinct possibility if the sale being
affected without full disclosure. While this may not be international
repercussions could have far-reaching consequences. The insurers
will have to be extremely careful in dealing with corporate agents and
keep a vigilant eye on the way the sales are affected. The IRDA would
be issuing some guidelines in the manner of selection of corporate
agents, the manner in which their activities should be monitored and
the precautions to be taken to ensure that there is complete
disclosure to the clients of policy implications In spite of the
proliferation of the intermediary channels, the traditional agent
continues to play a dominant role in the sale of insurance policies.
The regulations provide for minimum qualifications, specified training
programme followed by a pass in the test conducted by the insurance
institute of India for becoming an agent. The insurers have been
aggressively recruiting candidates as agents and after getting them
trained sending them for the examination. In view of the large
numbers the Institute is finding it difficult to exercise the required
controls for conducting the examination. We have come across some
irregularities in the conduct of both training and the examination. I
have no doubt that the insurers are interested in recruiting for their
agency force a person with good academic qualification and with
impeccable credentials and conduct. While from the Regulatory side
we shall take action necessary to ensure the fair and proper conduct
of training and examination, I would appeal to the CEO’s through this

forum to send the message down to their HR managers that they
should exercise due diligence in the recruitment of agents.
A significant feature in the post reforms era is the
ability of the agency force to assess the requirements of risk cover for
their prospect and suggest the policies that suit their individual
requirements it may be recalled that one of the criticisms against the
public sector insurers is that they concentrated on side of policies
without looking into the needs of the customers. As a result many of
the individuals remained underinsured. The average size of the life
insurance policy before the opening up of the sector was around Rs.
50,000/-. This has now risen to about Rs. 80,000/-. The policies sold
by the private insurers are in the range of Rs. 1.1 lakh to Rs. 1.2 lakh,
way above the industry average.
The limited coverage in the rural areas and the
available sections of the society continues to be a source of concern
for the regulatory body. While the private insurers are adhering to the
targets stipulated in the Regulations, there is need for a greater
involvement of the management at various levels so that the product
that is finally delivered serves the needs of those targeted group. We
have streamlined the definition of “RURAL AREAS” to bring it on par
with the classification followed by the Census Department to avoid
confusion on what constitutes a “rural area”. In the case of coverage
of the socially disadvantaged sections, the IRDA has come out with a
draft micro insurance regulation to facilitate easy coverage and
provide quality service to the insured.
As we look at these four years, one can reasonably
be proud of the strides made by the industry. We are witnessing a

demographic change in the country and the younger generation
which is exposed to the outside world demands products and services
which are at par with what is available in the

advanced countries. This is the biggest challenge. I have no doubt

that the Indian insurance companies would face this challenge and
provide services on par with services provided in the advanced
countries. The regulatory regime would be happy to facilitate this
process whenever its intervention is required.

 Insurance is a $10 billion (premiums) industry in India: Grew by
25% in 2004-05 over the previous year.
 In life insurance, the total premium collected in FY 2004-05 was
$5.8 billion for 26.2 million policies: Growth of 36% over 2003-
 Non-life insurance – Motor, marine, fire and health insurance are

the key segments.

 For Non-life insurance, the premium collected in FY 2004-05 was

$4.2 billion: Growth of about 12.8% over 2003-04.

 INDIAN Insurance market was opened to private & foreign
investment in 1999-2000.

 Major international players like AIG, Aviva, Metlife, New York,
Prudential, Allianz, Sun Life, Standard Life and Lombard are

 Present with minority stakes in joint ventures with Indian

companies for both life and non-life segments.
 Life insurance market is still dominated by Life Insurance
Corporation (LIC) – a public sector company which has a
71.56% share of the market in April, 2007.
 In Non-life insurance, private sector companies (almost all are
joint ventures with foreign insurers) account for 20% of the
market and have grown at 60% per annum.


There are presently 16 players in the Insurance
sector. The country’s largest life insurer, LIC, new premium grow 57
per cent to Rs. 2,134 crore in April by selling 15,89,684 policies
against Rs. 1,355 crore a year ago. It had a market share of 71.56%
in April.
The 15 private players together saw their business grow 32% to
Rs. 848 crore with a market share of 28.44 %. ICICI Prudential topped
the private player’s chart with its premium income rising 84.5% to Rs.
271 crore and had 9.08% share of the market. Bajaj Allianz, which
saw 15% decline in business, collected Rs. 124 crore with a market
share of 4.16%.



LIC 2134.00
ICIC Prudential 271.00
Bajaj Allianz 124.00
SBI Life 90.00
HDFC Standard 70.00
Max New York Life 69.00
Tata AIG 48.00
Aviva 39.00
Reliance Life 33.00
Birla Sunlife 28.00
Kotak Mahindra Old Mutual 26.00
ING Vysya 22.00
Met Life 19.00
Shriram Life 4.50
Sahara Life 1.70
Bharti Axa Life 0.72


Liberalization of this sector has helped bring about several
positive developments as:
• The markets size has expanded.
• New products are entering the market.
• Innovative channels of distribution are being used.
Customer servicing has improved tremendously. The
insurance market is likely to grow at a rate of 22-27 %,
giving enough room to all the players to grow. Of course
ultimate success will be determined by the servicing and
customer satisfaction.

However, consumer awareness level is still off the
mark. According to the recently conducted FICCI survey on
the Present State of Indian Insurance Industry, the
awareness levels regarding insurance are still in the realm of
medium to low. This clearly indicates the onerous task that
companies have in creating awareness about “need to
insure” and also tremendous potential they have in
expanding the markets by getting more customers in their
fold by increasing awareness levels.
Despite several positive developments and entry of
several large private players in the market, there are certain
areas, which need to be delivered in order to reap full
potential of privatization. In fact, the companies should start
looking at the B&C population segments, as the metro and
large urban market will saturate in 3-5 years time. The
success of the companies will be determined by the insurer’s
ability to innovate and distribute simple products for B&C
population segments.
The 26% Foreign Equity in insurance Joint
Ventures continues to be an issue of concern and needs
to be reviewed. I am sure government in due course
will certainly look at it. Also, in light of recent talk on
benchmarking FDI limits for all sectors at 74%, would
this have any implication on insurance sector as well?
The issue of rebating has been bothering the regulator
as well as the players. This needs be looked at seriously

to ensure regulated and sustained growth of the
Insurance market. Taxation issue on the life side
continues to bother the private insurance companies.
Desertification is another critical element of insurance
reforms. This sooner or later will become a reality, as
tariff and liberalization do not go hand in hand.
Worldwide, markets have gradually moved to
Desertification. It is, therefore, important to chalk out a
roadmap, prepare all the stakeholders of its likely
impact, and make the process less painful.
Health Insurance has a great potential in the
country but remains highly underdeveloped in India.
According to some estimates, only 3% of India’s population
is covered under some form of voluntary health insurance


• FDI up to 26% is permitted under the

automatic route subject to obtaining a license
from the Insurance Regulatory and Development
Authority (IRDA).
• Plans to increase FDI up to 49%.
• IRDA is the regulator for the Insurance


• Indian Insurance Market is expected to be

around $25 billion by 2010.
Expected CAGR of over 20% p.a.


• Largely untapped market: about 0.6% of the

global market for 17% of the world’s population.
• Nearly 80% of the Indian population is
without Life, Health and Non-life insurance.
• Insurance penetration is low at 2.9% as
compared to the world average of over 8%.
• Non-life penetration is even lower than 1% in
• Per capita life insurance premium in India in
2004 was $16 as compared to the world average
of $292.
• Strong economic growth with increase in
affluence and rising risk awareness leading to
rapid growth in the insurance sector.
• Many more international players including
AXA have announced plans to enter India.

• Investment opportunities exit in both life and
non-life segments.
• Total estimated investment opportunities of
$4-5 billion.

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



Bajaj Allianz life Insurance co. is a joint venture between

Allianz SE and Bajaj Auto India ltd.

I. World’s largest Insurance company by Revenue-RS 5, 20, 353


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

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

COS AUM of rest, 95, 94, 200 cr.

IV. 11th largest corporation in the world.

V. 50% of global business from life insurance. Close to 60

million lives insured globally.

VI. Established in 1890 , 110 years insurance more than 70

countries , 173,750 employees world wide, insurance to
almost half of the fortune 500COS.


I. One of largest 2& 3 wheeler manufacturer in the world.

II. 2 million + vehicles on the roads across the globe.

III. Managing funds over RS 5329 cr.

IV. Bajaj Auto finance one of the largest auto finance COS in

V. RS 6340 corers turnover & profits after tax of 767cr in




 To be the best Life Insurance Company in India to buy

from, work for and invest in.

 To be the first choice for customers, and provide job
satisfaction to the employees and create shareholder
value. The organization strives to excel in its products and
services, providing total customer satisfaction


 To be in the Top 3 new life insurance companies in India

by new business and in force business by 2004

 To have PAN India presence.

 To provide highest quality service by ensuring:-

 Highest customer retention in industry (target 90% first

 Every customer will be contacted by the company at least

once per year

 Company respond to customers /agents within 48 hours

 Embrace technology to optimize efficiencies



IN FY. in F Y.(RS in

2001-2002(6 mths) 21376 7

2002-2003 115965 69

2003-2004 186443 180

2004-2005 288189 857

2005-2006 781685 2717

2006-2007 2079217 4270


It has achieved iAAA rating, by ICRA Limited and has the highest
claims- paying ability and a stable position in the market. In a
2006 survey, Business World has rated it among the Most
Respected Companies, putting it at No.2 position in Insurance
sector Bajaj Allianz Life Insurance is the leading private sector
life insurer and has offices in over 900 towns across the country.
In FY 2006-07 Bajaj Allianz Life Insurance issued over 2 million
policies (highest in Private Sector) and collected over Rs 5300
crores in premiums

» No.1 Pvt Life Insurer in Retail Business in 2005-06.

» Whopping growth of 216% for the FY 2005-06.

» Have sold over 15,00,000 policies to the satisfied customers

» Is backed by a network of 750 offices spanning the country.

since th Bajaj Allianz made a Rs. 167 crore profit before taxes.
After generating an amount of Rs. 105 crores, it became the
first of its kind to cross the mark of Rs.100 crores in profit after

On 31st March 2008, Bajaj Allianz General Insurance collected
a premium income worth Rs. 2578 crore. This marked a growth
by 43 % for the company e last year.

In the first three months of 2008-09, Bajaj Allianz collected

Rs.733.53 crores as gross premium against Rs.573.73 core last
year recording a 28% growth.


Kamlesh Goyal

Anil singh Malay ECJ Rajesh Niraj Sashi G B Laddha V Philip

Chief Ghosh Augusine Viswand- Kumar Krishnan Investment Head
actuary& Head Head han Head Investment consultant customer
Head agency strategic CFO alternate officer service &
product sales initiative business new
develop initiative

Harish Nambiar Sameer Bakshi

Jaydeep AVP legal

Sanjay AS JK Safi Ishta.M. Shabhir Yogesh MS Manish
chaure jain narayana Bhagat geroge Chief S. Head Company
Gupta sectary
Siddhu Dwivedi
Head Head Bancass Head Head informat internal Head Head Head
HR mkt. -urance corporate operation -ion audit business traditio direct
business officer Procure. nal Mkt.
31 busines
Board Members:-

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


Rahul Bajaj : Chairman

Kamesh Goyal : Alternate Director & Chief

Executive Officer -
Ranjit Gupta : Director

Rajesh Viswanathan : Chief Financial Officer

Anil Singh : Appointed Actuary

Sameer Bakshi : Company Secretary

Channel Partners

1) Standard chartered.

2) Syndicate Bank.

3) Placement sales and services ltd.

4) Team life care co (India) ltd.

5) GE Money.

6) ECPL co pvt. Ltd.

7) The cosmos cooper




Market linked insurance plans invest the premium in to the
equity, debt and cash markets by the way of allocating units,
which like any other mutual fund have a NAV and the
customer is free to switch between one fund class to another
depending on the risk factor he wishes to be in. ULIPs offer a
better return than the traditional endowment plans and offer
a great deal of flexibility along with great returns making
them the finest product offering. We at Bajaj Allianz Life
Insurance have developed a number of ULIP products which
range from single premium to a regular premium option
along with investment funds ranging from index funds to
mid-cap funds and debt market linked funds

Regular Premium

 New UnitGain Super

 UnitGain Plus Gold

 UnitGain Plus Gold

 UnitGain Plus Gold

 YoungCare PlusNew

 FamilyGain-R

 YoungCare

Single Premium

 New UnitGain Premier SP

 New UnitGain Plus SP


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


 Pension Guarantee


 Future Income Generator

 New UnitGain Easy Pension Plus RP

 Swarna vishranti

 New UnitGain Easy Pension Plus SP Future Secure

Saving Plans, which offer bonuses, are excellent long term
saving instruments with complete safety. Our products offer
additional benefits which include 4 times life cover at little
extra costs, limited premium payment terms and compounded
reversionary bonuses making it a very good long term


 InvestGain

 SaveCare Economy SP

 Life Time Care

 Super Saver

Money Back

 CashGain

The sole objective of Term plans is to serve the protection
needs of the customers and by doing so, safeguard one’s
family from the financial implications of unfortunate
circumstances that one cannot foresee.
These plans are pure risk cover plans with or without maturity
benefit. These pure risk plans cover your life at a nominal cost
and you may want to take this plan to cover your outstanding
debts like a mortgage, a home loan etc

 Protector

 Term care

 New risk care

Today’s lady is an inspiration to her family.
She takes important decisions in every household and at work.
To cater to women's special needs we offer innovative women
specific plans which provide investment benefits, savings,
retirement solutions and medical insurance. Our special plans
help mothers plan for their children's education, save for the
future and take care of all medical emergencies in the family.

Our Regular investment and savings plan, offer:

1. Investments along with critical illness benefits
which provide good returns, long term saving and
protection incase of a medical emergency
2. Investment plans with accidental coverage
3. Children's education planning
4. Specialized retirement income plans for
homemakers to provide a secure and financial

 House Wives

 Working Women


At Bajaj Allianz Life Insurance we offer unique hospitalisation-

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

 Care first

 Health care

 Family care

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

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

Bajaj Allianz Child Gain

Funds for critical stages in your child’s life like

 Graduation

 Post Graduation

 Marriage

 Start a business


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

 Family fortune

 Fortune plus

 Capital Shield

 Century Plus

One of the best ways for employers to retain their employees is
to show them that their organization cares not only for them
but also their families. At Bajaj Allianz Life Insurance we offer
customized insurance plans, which safeguard your employees’
interests and show your commitment to your employees.

Bajaj Allianz Life Insurance Group Plans offer

• Financial stability to employees
• Ease of operations and fund management

 Credit Shield

 Group Term Life(Non Employer Employee)

 Group Suraksha

 Swayam Shakti Suraksha

 Group Loan Protector

 Group Income Protection

 Group Term Life(Employer Employee

 Group Annuity

 Group Save Plus

 New Group Superannuation

 Group Term Life in lieu of EDLI

 Group Leave Encashment Scheme


Their Micro Insurance products

 Alp Nivesh Yojana

 Jana Vikas Yojana

 Saral Suraksha Yojana


During my specified training at Bajaj Allianz Life Insurance, my
job profile was “Effectiveness of Training given to
Advisors”. Training refers to the process if learning a
sequence of programmed behaviour. It is a short-term process
utilizing a systematic and organized procedure by which non-
managerial personnel learn technical knowledge and skills for a
definite purpose.
During the training period, we are the trainees in the

company, receiving training from the unit managers. The type

of training we are receiving is “on the job-training”, i.e.

training after the appointment as financial advisor.

Once the person is recruited, he undergoes 50 hours of

training given by the institutes outside the company which are

recognized by IRDA followed by an exam by IRDA (Insurance

Regulatory Development Authority). If the person is able to

pass the exam, he/she becomes the Advisor for that company

and has to bring business for them. These Advisors are also

called IFAs (Independent Financial Advisors). After becoming

IFA, the advisors have to undergo training for 4-5 days through

which selling skills and product knowledge is imparted by the

company and this training is provided to them by the company

and inside the company premises.


An agent is one who acts on behalf of others. An “Agent”

is a person employed to do any act for another or represent
another in dealing with a third person. In the insurance
industry, the term ‘agent’ is applied to a person engaged by
the insurer to procure new business. IFAs are qualified
professionals who can provide invaluable help to the customer
in identifying the product that suits his personal requirements.


As per provisions of Section 184 of the Indian Contract Act,

between 'the principal' and 'the third person', any person may
become an agent. If a minor is employed as an agent, the
principal would be bound by his acts. But the minor himself will
not be liable to his principal.


To identify prospective customers by providing them the

complete information about the products offered, providing
tailor-made solutions to cater their individual needs, conduct

regular reviews to keep customers on track, achieve targets
and also providing them better services which is most
important in life insurance because unlike other savings which
is most important in life insurance because unlike other savings
or investment plans, life insurance is a long term commitment.


• Confidence

• Self Motivation

• Persuasion

• Urge to be financially independent

• Relationship skills

• Recognition programs

• Foreign trips and seminars

• Club membership


Training is the process of imparting the knowledge and skill

to the new as well of to the existing employees. It helps in
improving the performance of the employees of the company.
Technique of training:

The technique of training adopted by the company is “ON

THE JOB TRAINING”. The company is following the technique

of on the job as it helps the company and the advisor both:

• Reducing cost as no additional personnel of

facilities are required by the company because
unit managers and training manager provides the
• The trainees (advisors) learn the rules and
regulations of the company.
• It is most appropriate for teaching the knowledge
and skills as they are acquired in a relatively
short period, says some days.
• The advisors are also encouraged as they are
getting the training after their appointment as
the advisors in the company.
The company is following the technique of
“JOB INSTRUCTION TRAINING” (JIT) as the advisors requires
skilled trainers, extensive job analysis, training schedules and
prior assessment of trainee’s job knowledge. The programme
involves listing all necessary steps in the job, each in proper

sequence. These steps show what to do, how to do, why to do
etc. It is four step process starting with
a. Preparation of trainees for instruction.
b. Presentation of the instructions, giving
essential information in a clear manner.
c. Encouraging the questions and allowing the

trainee to work along and the trainer follows

up regularly.

d. Having the trainee try out the job to show

that he/she has understood the instructions
The company also provides practical training. Theoretical

training is interspersed with practical appointment settings with

potential customers, giving advisors a feel of how their

business will work from the very first day.


Training provided to the advisor is provided in two

parts, i.e., before the attainment of license and after the

attainment of license but both are the” on the job training”.

Training before attainment of license:-

Training given to the advisor is on the job training. After

the recruitment of the advisor, who possess the age of majority
(above 18 years) and is not abide by the Indian law for carrying
any type pf business or lawful activity, has to undergo 50
hours training which is provided to fulfill the following need:-
 To increase or to impart the knowledge of insurance, its

working, products, different insurance companies in the


 To guide them how to attract the customers.

 To help the company to increase the efficiency of the

agents by guiding them how to do insurance related


 To enable them to pass the examination taken by IRDA

before giving the license to the agents for operating as
financial advisors.
 To build confidence in them by ensuring them that they

will become good agents.

Training after the attainment of license:-

After the attainment of the license from IRDA, the agents

become IFAs and can work independently for the company.
Moreover, an agent can also work for the company without
license by fulfilling certain formalities like filling of a form etc.
but the attainment of license creates confidence in the agent,
company and the customer. The training after the acquirement
of license is provided to the advisors inside the company
premises as it is provided either by the unit managers, to who’s
team the agent belong or by the training manager. Although
the company cannot pass the license to the agent and doesn’t
permit the agent to carry the business as long as he/she takes
part in this training activity. Presently this training programme
is conducted by the training manager Mr. Sharma This training
programme is being carried out for the following purposes:-
 To make the agent aware of the company, its profile,

its success, its portfolio.

 To motivate the agents before starting up of their work

by telling them that they belong to a prestigious

organization which helps in satisfying the esteem and

security needs along with the physical needs of the


 To enable them to stand in front of the customer with

full confidence, courage and full information.

 To make the agents aware of the history, structure,

achievement etc. of the company (introducing the

company to the agents).

 To provide the knowledge about the company

products. To know how the company is better than its


Training to old advisors:-

The existing advisors are also provided with the training

programme from time to time when:-

 New product has been launched by the company.

 The unit manager notices down fall in the progress or

the working of the agent.

 The manager thinks the agent needs more training for

his/her effective working.

 The manager thinks more training will help the

advisors to achieve his/her targets effectively.

 The manager thinks that the training will help the

advisor in its growth and development.


The company also follows the steps for performing the

training programme. The following steps are followed by the

1. Discovering or identifying training needs:-

The first step in the training programme is the

identification of the need of training. Our company also
identifies the need of the training as new advisors need for
knowing their work, its performance, duties, company’s
background and expectations of the company from them.
Existing advisors need training for improving their skills,
increasing their knowledge and their confidence.
2. Getting ready for the job:-
After the identification of the needs of the training
programme, the nest step is to decide to whom to give training
as the need of training to different advisors differs (existing
advisor require different training than a new advisor).
3. Preparation of the learner:-

The next step is the preparation of the learner (the person
who has to receive the training). It involves steps like:

I. Putting the learner into ease (making him comfortable

and friendly and removing his nervousness).
II. Stating of the importance and ingredients of the job
and its relationship to work flow (telling him what he
has to do and what position he acquires in the
III. Explaining what will be taught to him in the
IV. Creation of interest and encouraging queries and
questions from the advisors to know what he already
knows about his work.
V. Explanation of the whole job and relating it to some
job which the advisor already knows (relating selling
of products to selling of refrigerator).
VI. Familiarizing the advisor with the products rewards

4. Presentation of the operation and knowledge:-

The next step is the trainer shows the operations
(what to do, how to do, how to speak and how to attract the

customers). The trainer teaches them to be patient, generous,
polite, well-dressed, courteous etc. with the customers.

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

Supporting material for training:-
a) Lectures (followed by reading assignments), conferences,
seminars, staff-meetings.
b) Role playing
c) Problem solving sessions.
d) Use of hand books, manuals etc.
e) Books, slides, movie projectors, filmstrips, tape recorders

Principles of training followed by the company:

 Properly planning in a logical sequence of the

programme so that each step builds upon the
previous one and the probability of success
 Identification of components of tasks of final desired
performance, assuring that each component is fully
achieved and arranging the total learning situation in
a sequence.
 The job performance is related to the rewards and
explains how Clarification of the foals of the training
and explanation of how the training will improve

his/her performance and there by boost his/her
 Proper feedback to the trainees as people work even
faster when they are told about their achievements.
 Simplification of complex problem and discovery of
new alternative solutions to create an atmosphere of

 Training programme adopted by the company is

adapted to the training speeds of the separate
 The company followed the principle of avoidance of
distraction as distraction makes the learning process
ineffective. The company provides the training to the
advisors in a separate
 Classroom/room which is in the office but where only
trainers and trainees are allowed.

Training Evaluation refers to the analysis of training
programme to see that whether the advisors have gained
something from the training. The main objective of training
evaluation is to determine the ability of the advisors in the
training programme to perform jobs, for which they are trained,
the specific nature of training deficiencies, whether the

trainees required any additional on the job training and the
extent of training not needed for the participants to meet job
requirements. The company followed the following principles
for the evaluation of training programme:-

I. Evaluation specialist must be clear about the goals and

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

Code of conduct:-

The IRDA necessitated the training programme for

the financial advisors to improve their skills and imparting in

the knowledge of about the company, its products and about

the rules and regulations of the insurance industry and of the

company to which they belong.


The following training initiatives are taken by the



Independent of their work experience, the foundation

program will perfect the advisors knowledge about the

Insurance Industry; equip them with the excellent selling skills

along with the

comprehensive knowledge about the products.

 INSTANT RECOGNITION:- Advisors achievements in the

first three months of business will be acknowledge with the

company’s SPRINT and RACE awards. These are the trophies

accompanied by the certificate and point rewards to the

advisors for getting off to a flying start.


month of field experience, this programme will give them the

practical insights on objections handling and generate ideas

to get new customers and of premium policies.

• What has been the training technique for the year


 The training is on the job training and more specifically it

is job instruction training.

• Why do you prefer this job instructing training?

 In this method of training the trainee learns fast through

practice and observation.

• Do you find any development in the advisors after

undergoing training process?

 Yes, the undergoing training process helps in developing

the skills of the financial advisors.

• Do you think you need to increase the

timings of the training process?

 Yes, training period’s timings need to be increased

although advisors are being imparted with skills yet all the

advisors are not fully trained i.e. Due to lack of time

attention to each advisor separately is not possible.

• Do you find any improvement in

the organization climate after training?

 Of course, the climate of the organization improves as

when the advisors are well trained and have full

knowledge, they act and thinks like professionals which in

turn create the working atmosphere.

• What will be

the next plan for training?

 The next plan for training regarding same i.e. on the job

but we want to bring a slight change in the training

programme. Advisors before starting their job will be

attached with the unit managers or the old successful


• Why you have adopted such type of training?

 We have adopted this type of training as the top

authorities feel this method suitable. Not only the top

authorities feel this method right, we also agree with them

as this method is helping us and advisors.

• If you have to adopt a new method, which method

will you adopt and why?

 If we have to adopt a new method that method will be the

method of internship i.e. during the training period

advisors will be paid with some amount of money. So that

they will with more dedication

• Is the company satisfied with the period of


 No, the company wants to increase the time period as this

time period is not sufficient for all the advisors.

• Which skills company wants to impart in the


 The company wants to impart skills like confidence, self

confidence, tactfulness while handling the customers,

courtesy, honesty towards the customers and towards the

company, dedication towards the work, concentration etc.

• Do you think you are successful in imparting

these skills?

 Yes, we are successful in imparting these skills but we are

not completely successful as different customer shows

different behaviour and advisors also possess different

behaviour and attitudes.

• How is BAJAJ ALLIANZ better than other companies

like LIC?

 The products offered by BAJAJ ALLIANZ are better than LIC

and it also offers incentives and higher commissions than


• How you decide that the existing advisors

need training?

 Whenever the performance of the advisors is not up to the

expectations of the company and at the time when new

products are being launched by the company.

• Do you have problem solving

sessions even after the training programme is


 Yes, of course, there are problem solving sessions carried

out by either the trainer or sales manager. Apart from

that, there is one weekly meeting of the advisors with the

unit managers and monthly meetings with the sales



Name of the training centers

Period of course

Designation and area of postings

1. How far knowledge training inputs are given in job


a) fully related

b) not at all related

2. How far training inputs have helped in performing the

areas in which we are working?

3. What topics you suggest are to be included in training

programme based on your experience after the training?



1. Working of advisors after attending the course:

a) acquisition of knowledge

b) acquisition of skills

2. Whether the course is relevant to present requirements?

3. Any suggestion for imparting the course?

4. Any suggestion regarding imparting of more skills to the

existing employees?

5. Any suggestion regarding timings and course period of the

training course?

6. What should be done to solve the problems faced by the

advisors in more effective manner?

7. Will something additional be done apart from the existing

method of solving the problems of advisors?


1. Bajaj Allianz is a joint venture of ALLIANZ SE (worid’s

largest insurance company) and Bajaj Auto (2nd or 3rd

largest two wheeler company

2. Bajaj Allianz is one of the largest private player in the

insurance business.

3. It has its distribution channel spread through major cities

to cater greater population.

4. Bajaj Allianz offer its product at a low premium in

comparison to ICIC Prudential.

5. Although the company has a big structure yet it is able to

avoid delay in decision making and solving the problems

of advisors during training and after training and the

problems of customers..

6. Effective doubt clearing sessions are being carried out to

help advisors.

7. Constructive feedback concerning progress in training and

implementation of new acquired abilities.

8. Advisors are provided with personal assistance when he

encounters learning obstacles.

9. No delays in handling grievances of the customers and

problems of advisors and other employees working in the


10. A fixed salaries is given to its advisors.


1. High targets are being set for advisors and sale managers.

2. Low product awareness among public and advisors.

3. Low manual training sessions..

4. Target high income group only.

5. The benefits of training are not cleared to all the advisors.

6. No proper plan for training.

7. Limited counseling and consulting services to the rest of

the organization.

8. Same method of training to all types of financial advisors.

1. Weak perception of private players in the minds of the Indian
people due to frequent financial scams.

2. Large number of insurance players.

3. Existing wrong business, practices of companies like – LIC

first premium is paid by their agents where – as IRDA
suggests that even forms to be filled by the client

1. Huge market is literally untapped. Out of estimated 320
millions insurable markets only 20% of the population is


1. It should be ensured that at least 99% of the attendance

should be there at training period as

Only 40% used to attend

50% attend often

10% attend very often.

2. More space will be provided as the space is less and the

advisors are more.

3. Customer queries regarding ULIPs should be handled

carefully by the financial advisor.

4. Tough competition has been given by the LIC Co. Ltd. To

contain this competition we have to leverage our

competence by showing as an efficient player in the

market and who works on performance and transparency

in working.

5. Government personnel can be sold products like insurance

cum pension plans, child policies and long term

investment plans.

6. Proper differentiation between ULIPs and traditional plans

and their benefits should be told to the advisors.

7. Awareness of products through publicity, hoarding, road


8. Adoption of new and improved methods for attracting the


9. To appoint advisors and get them trained for attracting

the rural market as the perceptions, needs, beliefs etc. of

the rural population are different from urban population.

10. Provide motivational schemes to the trainees

(advisors), so that they can work with confidence and


11. Provide the students with the sufficient formal training,

so that they can carry out their task with ease.

12. Specialised training should be provided to employees

who have public training.

Difficulties faced:

The following are the difficulties faced by me are:-

I. From the organization point of view:-

Not enough training was provided: as the rules set by the

company are not very flexible. Not only this, the sales

manger, unit manger, training personnel is ready to bring a

slight change in the programme as this programme is kept

private only for the persons who are going to be associated

by the company and not to the outsiders. Sometimes, the

trainer got irritated after he was being asked any type of


II. From the manager’s point of view:-

The managers don’t have sufficient time to answer the

queries. They don’t want reveal all the facts except those

which increases the goodwill of the company and goodwill

of them. Apart from that, only trainers, managers, advisors

and company employees are allowed to go the place where

training programmes is carried out.


While working on the project, the following limitations are


1. The qualifications, education and understanding

capabilities of the advisors, managers.

2. Lack of expertise being a trainee.

3. Lack of time and resources as compared to the

research organizations that take up such studies.






 & other related sites

 Product Handbook for Effective Sales published

by the company.