1

CHAPTER I INTRODUCTION
The main objective of the study was to analyze Marketing Strategy employed by ICICI Lombards Bancassurance Home for its phenomenal growth in Trichy & Tanjore within two financial quarters. The study was conducted for ICICI Lombards Bancassurance Home. The sample under study consists of Bancassurance Homes Sales Administration wing, who formulates strategy and Foot On Street members, who implement the strategy. The insurance sector in India had come to a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries. The respondents expressed definite opinion about formulated strategies by the sales administration wing and the implementers (SOs, Advisors, etc...) of the strategy. Based on the analysis of the data collected the employed strategies have been founded out. From the study it is found that the strategies adopted by the sales administration wing were the major reason behind the phenomenal growth of Lombards Bancassurance Home in Trichy & Tanjore. There are some strong areas by ICICI like their brand image, fast processing of policies, single window processing for -Sell

(Cross sell) , EMI support, better consideration for customers , are some of them. Based on the findings certain recommendations are given to Bancassurance Home so as to create a more positive perception about ICICI Lombards Bancassurance Home and its products in the mind of prospective customers as well as to improve the service provided for customers.

RESEARCH PROBLEM
ICICI Lombard General Insurance Company Limited. (ICICI Lombard) is a 74:26 venture between ICICI Bank, India's largest private sector bank and Lombard, one of the oldest Property and Casualty Insurance Companies in Canada. Trichy & Tanjore were a negative market for ICICI and ICICI Lombards Bancassurance Home had a phenomenal growth in Trichy & Tanjore within two financial quarters. Possibility of differentiation for bancassurance products is pretty low around factors like insurance coverage, premium, since all major players are on an equal footing and the major battle for market share is fought on bancassurance sector. So to keep the edge on better performance, they need to know the strategies employed by sales administration wing so that the company can utilize it into a tailor made one for other weaker markets. Future

sales strategy will be invariably woven around service improvisation strategies.

OBJECTIVES
The main objective of the study is To analyze Marketing Strategy employed by ICICI Lombard for its phenomenal growth in Trichy & Tanjore. The sub-objectives are:

To find out driving factors instrumental in growth and market presence. To evaluate effectiveness of strategy at its implementation level.

SIGNIFICANCE OF THE STUDY

Bancassurance is a new concept in India and ICICI Lombard is the first company adopted this strategy with a tie-up of ICIC Bank. The objective of all the marketing efforts should be to maximize the customer satisfaction. Strategy adoption will have prime importance in insurance industry because insurance sector is directly controlled by IRDA (The Insurance Regulatory can and bring Development Authority). The right strategy

business and wrong will end up with loss, but in insurance it should be formulated within the frame proposed by IRDA. In this situation achieving penetration, especially areas like Trichy & Tanjore are very difficult. In this context the sales administration should play a crucial role considering many

factors like communication and maintaining relationship with all levels i.e. upward superiors to downward end customers. Since it is directed towards the satisfaction of the customer needs and in this context customer is the centre of attraction for which the marketing is carried out. Like wise in the case of Lombards Bancassurance Home, were the study on the subject like finding out the strategy behind the growth, holds a paramount significance. By a detailed study of the subject the management can know more about the strategies which can give results, opinion of sales officers category who actually deals with customers more vividly and it can help the management in alternation of the policies to some extent. These studies helpful in bringing the company and the staffs, other associated divisions closer and bring about a better communication network. The findings and suggestions put forward by this report can help the management in taking crucial decisions and help them to get a clear idea of their strengths and weakness and the found strategies can be converted to tailor made solution for similar weaker regions.

RESEARCH METHODOLOGY
It was a conceptual structure within which research conducted. It contributes the blue print or the collection measurement and analysis of data. The design helps the researcher to organize his ideas in a form their by it will be

possible for his look for flows and inadequacies. Researcher in the study has used descriptive design. Descriptive research studies aimed at obtaining relevant information concerning the current status of the phenomena for valid generalization.

SAMPLING DESIGN
The sample under study consists of Bancassurance Homes sales administration wing, who formulates strategy and Foot on Street members which includes Sales officers, Advisors, Cross-sell, Councilors from agencies, who implement the strategy.

SELECTION AND SIZE OF SAMPLE:

Convenience sampling was used for selecting the respondents. A total of 50 respondents from sales, which comprise the persons deals with ICICI Lombards Loan Shield and 3 respondents from the sales administration wing (ICICI Lombards Bancassurance Home) which comprises of two Unit Sales Managers of Trichy & Tanjore and Sales Manager constitute the sample.

DATA SOURCE:
Both primary and secondary data was collected for the completion of this study.

(a) Primary data:

Primary data was collected through interview schedules and questionnaires, which were administered to the respondents

in person. These data included responses to various factors considered for assessing marketing strategy employed and effectiveness of implementation.

(b) Secondary data:

Secondary data was needed for the successful completion of the report. Data regarding the penetration level and the total number of Loan Shield files from June to November are collected from ICICI Lombards Bancassurance Homes office, Trichy & Tanjore. The data related to history and profile of the organization was obtained from websites. Textbooks were referred for other necessary information.

MODE OF STUDY:
The study conducted was descriptive. The interview method as well as survey method was used for this study. Data collection was through interview schedules and questionnaires, which were filled through direct conversation with the respondents both face-to-face and over telephone. There were opportunities to record all relevant information and opinions, which respondents expressed during the course of conversation. Thus, valuable insights into different views and perceptions of the customers could be gained.

PERIOD OF STUDY:
The period of study was one month, starting from 1612-2005 to 15-01-2006.

PILOT STUDY:
Researcher conducted a pilot study to find out and assess the scope for a scientific investigation on the topic. Researcher discussed the research topic with the faculty members beyond researcher discussed the topic with his guide and ICICI Lombards Bancassurance Home management team from very beginning. Pilot study was very useful and benefited to form research problem. Pilot study helped to fix the universe of the study and to select the sampling design and the preparation of final interview schedule and questionnaire.

TOOLS FOR ANALYSIS:

Penetration Level

In this project the penetration level is calculated from total number of Home Loans with First and Full Disbursement divided by total number of Loan Shield attached to it and multiplied with 100. The penetration level is calculated to understand the movement of a product in the market. Eg: penetration level calculation of November is calculated by the following way.

Penetration Level Calculation

Month Total number of Home Loan Files with First and Full disbursement from all channels. Total number of Home Loan Files with Loan Shield.

100 r Source: Secondary data Table: 4A.1 Total number of Home Loan Files with First and Full disbursement from

Novembe

57

Penetration Level =
100 Total number of Home Loan Files with Loan Shield.

Penetration Level = 100 57 100 = 57 %. Penetration Level = 57% Rating

Rating is done for understand the areas where opportunity for improvement. For this the attributes are chosen like Policy Login, Follow-up of Sales Officers, Policy Processing, Timely disbursement, Policy Claim/grievance settlement. The rates are given on a scale of 1-5. Preference order Rate I 5 II 4 III 3 IV 2 V 1

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Pie charts and bar diagrams were used to represent the results.

DATA ANALYSIS AND INTERPRETATIONS:

Based on the significant variables in this study datas where converted into table for further statistical analysis. Tabulation datas where presented by using diagrams.

LIMITATIONS OF THE STUDY

The sampling method adopted for the study was convenience sampling, a form of non-probability sampling method. Therefore all inherent limitations of convenient sampling might have crept in the study.

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The focus of survey, which is limited to Trichy & Tanjore

spokes, means that generalizations regarding founded strategies may not be possible. The sample size used in this study may be too inadequate for the study.
The duration of study was short in nature, hindering a

wide and deep investigation. The probability of bias in respondents response cannot be neglected totally. Despite of these limitations, a sincere attempt has been made to collect and analyze the data collected and present the results as accurately as possible.

CHAPTER II INDUSTRY PROFILE

BACKGROUND:

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The insurance sector in India has come a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.

NATURE OF THE INDUSTRY

The insurance industry provides protection against financial losses resulting from a variety of perils. By purchasing insurance policies, individuals and businesses can receive reimbursement for losses due to car accidents, theft of property, and fire and storm damage; medical expenses; and loss of income due to disability or death. The insurance industry consists mainly of insurance carriers (or insurers) In general, and insurance agencies are and large brokerages. insurance carriers

companies that provide insurance and assume the risks covered by the policy. Insurance agencies and brokerages sell insurance policies for the carriers. While some of these establishments are directly affiliated with a particular insurer and sell only that carriers policies, many are independent and are thus free to market the policies of a variety of insurance carriers. In addition to supporting these two primary components, that the insurance other industry includes establishments provide insurance-related

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services,

such

as

claims

adjustment

or

third-party

administration of insurance and pension funds. Insurance carriers assume the risk associated with annuities and insurance policies and assign premiums to be paid for the policies. In the policy, the carrier states the length and conditions of the agreement, exactly which losses it will provide compensation for, and how much will be awarded. The premium charged for the policy is based primarily on the amount to be awarded in case of loss, as well as the likelihood that the insurance carrier will actually have to pay. In order to be able to compensate policyholders for their losses, insurance companies invest the money they receive in premiums, building up a portfolio of financial assets and income-producing real estate which can then be used to pay off any future claims that may be brought. There are two basic types of insurance carriers: direct and reinsurance. Direct carriers are responsible for the initial underwriting of insurance policies and annuities, while reinsurance carriers assume all or part of the risk associated with the existing insurance policies originally underwritten by other insurance carriers. Direct insurance carriers offer a variety of insurance policies. General insurance provides financial protection to beneficiariesusually spouses and dependent children upon the death of the insured. Disability insurance supplies a

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preset income to an insured person who is unable to work due to injury or illness, and health insurance pays the expenses resulting from accidents and illness. An annuity (a contract or a group of contracts that furnishes a periodic income at regular intervals for a specified period) provides a steady income during retirement for the remainder of ones life. Property-casualty insurance protects against loss or damage to property resulting from hazards such as fire, theft, and natural disasters. Liability insurance shields policyholders from financial responsibility for injuries to others or for damage to other peoples property. Most policies, such as automobile and homeowners insurance, combine both property-casualty and liability coverage. Companies that underwrite this kind of insurance are called property-casualty carriers. Some insurance policies cover groups of people, ranging from a few to thousands of individuals. These policies usually are issued to employers for the benefit of their employees or to unions, professional associations, or other membership organizations for the benefit of their members. Among the most common policies of this nature are group life and health plans. Insurance carriers also underwrite a variety of specialized types of insurance, such as real-estate title insurance, employee surety and fidelity bonding, and medical malpractice insurance.

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Insurance carriers have discovered that the Internet can be a powerful tool for reaching potential and existing customers. Most carriers use the Internet simply to post company information, such as sales brochures and product information, financial statements, and a list of local agents. However, an increasing number of carriers are starting to expand their Web sites to enable customers to access online account and billing information, and a few carriers even allow claims to be submitted online. Some carriers also provide insurance quotes online based on the information submitted by customers on their Internet sites. In the future, carriers will allow customers to purchase policies through the Internet without ever speaking to a live agent. In addition to individual carrier-sponsored Internet sites, several lead-generating sites have emerged. These sites allow potential customers to input information about their insurance policy needs. For a fee, the sites forward customer information to a number of insurance companies, which review the information and, if they decide to take on the policy, contact the customer with an offer. This practice gives consumers the freedom to accept the best rate. The insurance industry also includes a number of independent organizations that provide a wide array of insurance-related services to carriers and their clients. One such service is the processing of claims forms for medical

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practitioners. Other services include loss prevention and risk management. Also, insurance companies sometimes hire independent claims adjusters to investigate accidents and claims for property damage and to assign a currency estimate to the claim. Other organizations in the industry are formed by groups of insurance companies, to perform functions that would result in a duplication of effort if each company carried them out individually. For example, service organizations are supported by insurance companies to provide loss statistics, which the companies use to set their rates.

BASIC CLASSIFICATION OF INSURANCE Insurance

Life Insurance A written contract between Insurance the insured (you) and the insurer (LIC) that provides for the payment of the insured sum on the date of the maturity of the contract or on the unfortunate death of the Non-Life or General 1. Property 2. Casualty 3. Health

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Insurance is a financial agreement entered by two people to protect one against a certain risk. The contract that binds the two parties to certain obligations is known as Policy. The one who buys the insurance is known as policyholder or insured while the party that sells insurance is known as the insurer. From the time the insured signs the policy he/she has an obligation to pay a certain amount of money known as premium.

A BRIEF HISTORY OF THE LIFE INSURANCE SECTOR

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. 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: 245 Indian and foreign insurers and provident societies taken over by the central government and

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nationalised. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

THE GENERAL INSURANCE SECTOR

A BRIEF HISTORY: The Indian insurance industry is segmented into two distinct markets: the life insurance market and the non-life, or general, insurance market. The General insurance business in India can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are:

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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 nationalized the general insurance business in India. January 1973: 107 insurers amalgamated and grouped into four companies in public sector. 1. Oriental Insurance Company Limited. 2. New India Assurance Company Limited. 3. National Insurance Company Limited and. 4. United India Insurance Company Limited.

FEATURES OF INDIAN GENERAL INSURANCE MARKET Low market penetration. Ever-growing middle class component in population.

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Growth

of

consumer

movement

with

an

increasing

demand for better insurance products. Inadequate application of information technology for business. Adequate fillip from the Government in the form of tax incentives to the insured, etc. India is one of the least insured countries but the potential for further growth is phenomenal.
Rates of claim settlement were earlier in India the highest

in the world, 70 per cent in general insurance, compared to around 40 percent internationally. Non-life premium has a 0.71 per cent share of GDP. General Insurers (Private Companies) have earned around Rs.1000-cr income. Half of the current demand for comes from the corporate segment. BENEFITS OF GENERAL INSURANCE Insurance is the instrument of Security, saving and peace of mind. It provides several benefits by paying a small amount of premium to an insurance company. Safeguards ones assets. Peace of mind-in case of financial loss. Encourage saving. Tax rebate. Protection from the claim made by creditors.

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Security against a personal loan, housing loan or other types of loan. ROLE OF GENERAL INSURANCE IN GROWTH OF ECONOMY The General Insurance Industry has an enviable track record among public sector units. It has a consistent profit and dividend paying record accompanied by a steady growth in its financial resources. Through investments in the Government Industry has sector and sociallyoriented to sectors the the contributed immensely nation's

development. The industry is recognized as one of the largest financial Institutions in the country. The ventures initiated by the industry in the areas of Mutual Fund, Housing Finance has done exceedingly well in recent years. To protect the country's foreign exchange reserves, the reinsurance arrangement are so organized that maximum retention is made possible within the country while at the same time protecting interests of the policy holders. The GICS inwards reinsurance wing, called the SWIFT, maximizes the foreign exchange balance by acting as an international insurer accepting risks from all over the globe. INDIA VS. GLOBAL MARKET India's insurance penetration is low at 1.95 per cent and ranks 51 in the world. In premium collection the record is better, at 23rd position. The ratio of premium collected to gross domestic product is a mere 0.58 per cent. Compared

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with an average of 7.1 per cent in most industrialized countries. India is still at a very nascent stage with an $8-9 (Rs.400-450) per capita expenditure on insurance, out of which $2 to $2.5(Rs.100-150) will be on general insurance. This was primarily because in India non-life insurance is not considered important and people perceive it as an unnecessary expenditure. Non-life insurance premium at a percentage of GDP is estimated at 2.70 for Japan, 2.55 for South Korea, 1.89 for Malaysia, 1.62 for Singapore, 1.38 for Taiwan, 1.23 for Thailand, 0.86 for the Philippines, 0.68 for China, 0.66 for Indonesia, and 0.51 for Pakistan.

Regions/Count ry

USD (billions)

Percentage %

North America 689.2 32.7 Latin America 653.0 31.0 Europe 32.9 1.6 Asia 647.1 30.7 India 3.0 0.15 World 2,105.8 100.0 Source: Secondary data (Published in May 2004. India Infoline Ltd 2003-4.)

THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA)

In India Insurance is a federal subject. The primary legislation that deals with insurance business in India is: IRDA

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On the recommendation of Malhotra Committee, an Insurance Regulatory Development Act (IRDA) passed by Indian Parliament in 1993. Its main aim was to activate an insurance regulatory apparatus essential for proper monitoring and control of the Insurance industry. Due to this Act several Indian private companies have entered into the insurance market, and some companies have joined with foreign partners. In economic reform process, the Insurance Companies has given boost to the socio-economic development process. The huge amount of funds that are at the disposal of Insurance Companies are directed as desired avenues like housing, safe drinking water, electricity, primary education and infrastructure. Above all the policyholders gets better pricing of products from competitive insurance companies. Liberalization The opening up of Insurance sector was a part of the ongoing liberalization in the financial sector of India. The domain of State-run insurance companies was thrown open to private enterprise on December 7, 1999, with the introduction of the Insurance Regulatory and Development Authority (IRDA) Bill. The opening up of the sector gave way to the world known names in the industry to enter the Indian market through tie-ups with the eminent business houses.

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What was once a quiet business is becoming one of the hottest businesses today. Post liberalization The changing face of financial sector and the entry of several companies in the field of non-life Insurance segment are one of the key results of these liberalization efforts. Insurance business by way of generating premium income adds significantly to the GDP. Despite the fact that the market is vast in India for the Insurance business, the coverage is far less compared with the international standards. Estimates show that a meager 35-40 million, out of a population of 950 million, have come so far under the umbrella of the insurance industry. The potential market is so huge that it can grow by 15 to 17 percent per annum. With the entry of private players, the Indian Insurance Market may finally be able to make deeper penetration in to newer segments and expand the market size manifold. The quality of service will also improve and there will be wide range of product catering to the needs of different customers. The pace for claims settlement is also expected to improve due to increased competition. The general insurance market in India is likely to be risky in the initial stages, but this will improve in the next three to five years Therefore, it may be advantageous to be a second-round entrant. In the general insurance market the need to build

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trust over time is less important than in the life market because the risk assessment systems and data that are the key to success in the general insurance market are significantly underdeveloped in India even today

MARKET PLAYERS
Presently there are 12 general insurance companies with 4 public sector companies and 8 private insurers. Although the public sector companies still dominate the general insurance business, the private players are slowly gaining a foothold. A brief description of various players is given below: 1. ICICI Lombard General Insurance ICICI Lombard General Insurance Company Limited (ICICI Lombard) is a 74:26 venture between ICICI Bank Limited, India's largest private sector bank and Lombard Canada Limited, one of the oldest property and casualty insurance companies in Canada. ICICI Lombard commenced business in September 2001 and is today operational in 40 cities across India. 2. TATA AIG Insurance Company Ltd IT is a joint venture between the Tata group; India's most trusted industrial house and American International Group, Inc. (AIG), the leading U.S. based international insurance and financial service organization. 3. Bajaj Allianz

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Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise, stability and strength. The venture Bajaj Auto holds 74 per cent of the paid up equity capital of Rs 110 crore, while the remaining 26 per cent is held by Allianz. 4. new 5. HDFC Chubb General Insurance HDFC holds 74 percent and Chubb 26 percent in the joint venture company, HDFC Chubb General Insurance Ltd, was initially capitalized at Rs.100 crore. Reliance General Insurance Company Limited Reliance Industries has around Rs.300 Crores into its insurance venture through its financial arm Reliance Capital Ltd.It is the first Indian private company without any foreign insurance tie-up. 6. Royal Sundaram Royal Sundaram, a joint venture between Sundaram Finance of Chennai, India and Royal & SunAlliance of UK, is built upon values of truth, trust, teamwork, people commitment and professionalism. 7. Limited Cholamandalam MS General Insurance Company Limited (Chola-MS) is a joint venture of the Murugappa Group & Mitsui Sumitomo. Chola-MS commenced Cholamandalam MS General Insurance Company

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operations in October 2002 and has issued more than 1.4 lakh policies in its first calendar year of operations. 8. GIC and Four subsidiaries Prior to 1973, general insurance was urban-centric, catering mainly to the needs of organized trade and Industry. One hundred and seven insurers including branches of foreign companies operating the country were amalgamated. These were grouped into four companies, viz. the National Insurance Company Ltd., the Oriental Insurance Company Ltd., the New India Assurance Company Ltd., and the United India Insurance Company. The Government of India subscribed to the capital of GIC. GIC, in turn, subscribed to the capital of the four companies. All the four companies are government companies registered under the Companies Act. GIC is into the reinsurance business whereas its subsidiaries are into the insurance of Non Life products.

BANCASSURANCE THE NEW CONCEPT IN INSURANCE INDUSTRY

Bancassurance symbolizes the convergence of banking and insurance. Bancassurance started in Japan, in which banking and insurance sales services are integrated in much the same way as in the individual financial markets of Europe and the United States Incidentally. The term

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bancassurance was coined in France by combining "bank" and "insurance.'" Although bancassurance started with handling limited products. the sales of insurance moved forward smoothly because of factors such as the strengthened sales of housing loans as core products under the banks' retail strategies at the time and that the product is easy to understand. Bancassurance in its simplest form is the distribution of insurance products through a bank's distribution channels. In concrete terms Bancassurance, which is also known as Allfinanz - describes a package of financial services that can fulfill both banking and insurance needs at the same time. It takes various forms in various countries depending upon the demography and economic and legislative climate of that country. Demographic profile of the country decides the kind of products Bancassurance shall be dealing in with, economic situation will determine the trend in terms of turnover, market share, etc., whereas legislative climate will decide the periphery within which the Bancassurance has to operate. The motives behind Bancassurance also vary. For banks it is a means of product diversification and a source of additional fee as income. a tool Insurance for companies their see Bancassurance increasing market

penetration and premium turnover. The customer sees

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Bancassurance as a bonanza in terms of reduced price, high quality product and delivery at doorsteps. Actually, everybody is a winner here. Why should banks enter insurance? There are several reasons why banks should seriously consider Bancassurance, the most important of which is increased return on assets (ROA). One of the best ways to increase ROA, assuming a constant asset base, is through fee income. Banks that build fee income can cover more of their operating expenses, and one way to build fee income is through the sale and of insurance products. Banks that effectively cross-sell financial products can leverage their distribution processing capabilities for profitable operating expense ratios. By leveraging their strengths and finding ways to overcome their weaknesses, banks could change the face of insurance distribution. Sale of personal line insurance products through banks meets an important set of consumer needs. Most large retail banks engender a great deal of trust in broad segments of consumers, which they can leverage in selling them personal line insurance products. In addition, a banks branch network allows the face to face contact that is so important in the sale of personal insurance. Another advantage banks have over traditional insurance distributors is the lower cost per sales lead made

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possible by their sizable, loyal customer base. Banks also enjoy significant brand awareness within their geographic regions, again providing for a lower per-lead cost when advertising through print, radio and/or television. Banks that make the most of these advantages are able to penetrate their customer base and markets for above-average market share. Other bank strengths are their marketing and processing capabilities. Banks have extensive experience in marketing to both existing customers (for retention and cross selling) and They non-customers also have (for acquisition to and awareness). access multiple

communications channels, such as statement inserts, direct mail, ATMs, telemarketing, etc. Banks' proficiency in using technology has resulted in improvements in transaction processing and customer service. By successfully their mining their and customer 'distribution databases, systems leveraging reputation

(branch, phone, and mail) to make appointments, and utilizing 'sales techniques and products tailored to the middle market, European banks have more than doubled the conversion rates of insurance leads into sales and have increased sales productivity to a ratio which is more than enough to make Bancassurance a highly profitable proposition.

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Benefits to insurers Insurers have much to gain from marketing through banks. Personal-lines carriers have found it difficult to grow using traditional agency systems because price competition has driven down margins and increased the compensation demands of successful agents. Over the last decade, life agents have sold fewer and larger policies to a more upscale client base. Middle-income consumers, who comprise the bulk of bank customers, get little attention from most life agents. By capitalizing on bank relationships, insurers will recapture much of this under served market. Most insurers that have tried to penetrate middleincome markets through alternative channels such as direct mail have not done well. Clearly, a change in approach is necessary. As with any initiative, success requires a clear understanding of what must be done, how it will be done and by whom. The place to begin is to segment the strengths that the bank and insurer bring to the business opportunity. Collaboration is the key In their natural and traditional roles and with their current skills, neither banks nor insurance companies could effectively mount a Bancassurance start-up alone. Collaboration is the key to making this new channel work. Banks bring a variety of capabilities to the table. Most obviously, they own proprietary databases that can be

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tapped for middle-market warm leads. In addition, they can leverage their name recognition and reputation at both local and regional levels. Strong players also excel at managing multiple experience distribution in channels, areas in cross-selling critical to banking successful developing products, and using direct mail. However, most banks lack several Bancassurance strategies: particular,

insurance products, selling through face-to-face "push" channels underwriting, and managing long-tail insurance products. Where banks usually fall short, a strong insurer will excel. Most have substantial product and underwriting experience, strong "push" channel capabilities, and investment management expertise. On the other hand, they tend to lack experience or ability in the areas where banks prevail. They have little or no background in managing lowcost distribution channels; they often lack local and regional name recognition and reputation; and they seldom possess access to or experience with the middle market.

BANCASSURANCE IN INDIA - A SWOT ANALYSIS

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Even though, banks and insurance companies in India are yet to exchange their wedding rings, Bancassurance as a means of distribution of insurance products is already in force in some form or the other. Banks are selling Personal Accident and Baggage Insurance directly to their Credit Card members as a value addition to their products. Banks also participate in the distribution of mortgage linked insurance products like fire, motor or cattle insurance to their customers. Banks can straightaway leverage their existing capabilities in terms of database and face to face contact to market insurance products to generate some income for themselves which hitherto was not thought of. Once Bancassurance is embraced in India with full force, a lot will be at stake. Huge capital investment will be required to create infrastructure particularly in IT and telecommunications, a call center will have to be created, top professionals of both industries will have to be hired, an R & D cell will need to be created to generate new ideas and products. It is therefore essential to have a SWOT analysis done in the context of Bancassurance experiment in India. Strengths In a country of 1 Billion people, sky is the limit for personal lines insurance products. There is a vast untapped potential waiting to be mined particularly for general insurance products. There are more than 900 Million lives

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waiting to be given a life cover (total number of individual life policies sold in 1998-99 was just 91.73 Million). There are about 200 Million households waiting to be approached for a householder's insurance policy. Millions of people travelling in and out of India can be tapped for Overseas Mediclaim and Travel Insurance policies. After discounting the population below poverty line the middle market segment is the second largest in the world after China. The insurance companies worldwide are eyeing on this, why not we preempt this move by doing it ourselves? Our other strength lies in a huge pool of skilled professionals whether it is banks or insurance companies who may be easily relocated for any Bancassurance venture. LIC and GIC both have a good range of personal line products already lined up, therefore R & D efforts to create new products will be minimal in the beginning. Additionally, GIC with 4200 operating offices and LIC with 2048 branch offices are almost already omnipresent, which is so essential for the development of any Bancassurance project. Weaknesses The IT culture is unfortunately missing completely in all of the future collaborators i.e. banks, GIC & LIC. A late awakening seems to have dawned upon but it is a case of too late and too little. Elementary IT requirement like networking (LAN) is not in place even in the headquarters of

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these institutions, when the need today is of Wide Area Network (WAN) and Vast Area Network (VAN). Internet connection is not available even to the managers of operating offices. The middle class population that we are eyeing at are today overburdened, first by inflationary pressures on their pockets and then by the tax net. Where is the money left to think of insurance ? Fortunately, LIC schemes get IT exemptions but personal line products from GIC (mediclaim already has this benefit) like householder, travel, etc. also need to be given tax exemption to further the cause of insurance and to increase domestic revenue for the country. Another drawback is the inflexibility of the products i.e. it can not be tailor made to the requirements of the customer. For a Bancassurance venture to succeed it is extremely essential to have in-built flexibility so as to make the product attractive to the customer. Opportunities Banks' database is enormous even though the goodwill may not be the same as in case of their European counterparts. This database has to be dissected variously and various homogeneous groups are to be churned out in order to position the Bancassurance products. With a good IT infrastructure, this can really do wonders.

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Other developing economies like Malaysia, Thailand and Singapore have already taken a leap in this direction and they are not doing badly. There is already an atmosphere created in the country for liberalisation and there appears to be a political consensus also on the subject. Therefore, RBI or IRA should have no hesitation in allowing the marriage of the two to take place. This can take the form of merger or acquisition or setting up a joint venture or creating a subsidiary by either party or just the working collaboration between banks and insurance companies. Threats Success of a Bancassurance venture requires change in approach, thinking and work culture on the part of everybody involved. Our work force at every level are so well entrenched in their classical way of working that there is a definite threat of resistance to any change that Bancassurance may set in. Any relocation to a new company or subsidiary or change from one work to a different kind of work will be resented with vehemence. Another possible threat may come from non-response from the target customers. This happened in USA in 1980s after the enactment of Garn - St Germaine Act. A rush of joint ventures took place between banks and insurance companies and all these failed due to the non-response from the target customers. US banks have now again (since late

37

1990s) turned their attention to insurance mainly general insurance. The investors in the capital may turn their face off in case the rate of return on capital falls short of the existing rate of return on capital. Since banks and insurance companies have major portion of their income coming from the investments, the return from Bancassurance must at least match those returns. Also if the unholy alliances are allowed to take place there will be fierce competition in the market resulting in lower prices and the Bancassurance venture may never break-even. Looking Around Hardly 20% of all US banks were selling insurance in 1998 against almost 70% to 90% in many W. European countries. Market penetration of Bancassurance in new life businesses in Europe ranges between 30% in U.K. to nearly 70% in France. Almost 100% banks in France are selling insurance products. In 1991 Nationale Nederlanden of Netherlands merged with Post Bank, the banking subsidiary of the post office to create the ING Group - a new dimension to the Bancassurance i.e. harnessing the databank of the post office as well. CNP, the largest independent insurance company in France has developed its product distribution through post offices. The merger of Winterthur, the largest Swiss insurance company with Credit Suisse and Citibank

38

with Travellers Group have resulted in some of the largest financial conglomerates in the world. Despite the phenomenal success of Bancassurance in Europe, property and casualty products have not made much inroads. In Spain, Belgium, Germany and France where more than 50% of all new life premium is generated by Bancassurance, only about 6% P & C business comes from banks in Spain, 5% in Belgium, 4% in France and Italy. A recent study by Boston Consulting Group and Bank Administration Institute in USA claims that if banks made a major commitment to insurance and a more narrowly targeted commitment to investors, within 5 years they could increase retail revenues by nearly 50%. It further states that Banks could capture 10% to 15% of the total U.S. insurance and investment market by selling products to 20% of their existing customers. Banks' existing infrastructure enables them to operate at expense levels that are 30% to 50% lower than those of traditional insurers. Bancassurance's bank-branch based sales system sells 3 to 5 times as many insurance policies as a conventional as a conventional insurance sales and distribution force. By simplifying Bancassurance products each back office bank employee can quintuple managing policies compared to traditional insurers.

39

Lessons we should take a leaf from the experienced players and develop Bancassurance only gradually. As happened in France, Italy, Germany and Canada - banks were allowed first only to distribute the insurance products for a fee. This itself amounted to substantial income for banks since they were not carrying the risks and product development was also left to insurance companies. This seems fair since each player should contribute towards something in which he excels; banks in mass distribution and insurance companies in risk management. After stabilization, the roles may be expanded in opposite directions. We need to develop innovative products and services. CIBC in Canada relieves the customer of having to report and resolve auto claims. The bank assumes responsibility for the process, even phoning the police for the customer at the time of the accident. Another example is provided by Banco Bilbao Vizcaya of Spain who offers a term life policy with simple premium payments and a clear contract that is designed to be sold, issued and signed at the point of sale within 15 minutes. Banks and insurance companies in India wishing to pursue high aspiration insurance strategies would do well to learn from European bancassurers, who have decades of experience managing insurance subsidiaries. Some of them Lloyds TSB in the UK, Credit Agricole in France and Spain's

40

Banco Bilbao Vizcaya - are delivering outstanding results. These bank have profitably sold insurance products to more than a fourth of their customers while generating more than 20% on sales. Credit Agricole, the second largest life insurer in France, with $11 billion of premium in force, employs only 170 people in its insurance subsidiary. It is able to limit overhead by harnessing the bank's existing resources and capabilities. Obstacles and success factors Even insurers and banks that seem ideally suited for a Bancassurance partnership can run into problems during implementation. The most common obstacles to success are poor manpower management, lack of a sales culture within the bank, no involvement by the branch to manager, integrate to insufficient channel product promotions, failure

marketing plans, marginal database expertise, poor sales linkages, inadequate incentives, resistance change, negative attitudes toward insurance and unwieldy marketing strategy. Conversely, Bancassurance ventures that succeed tend to have certain things in common. Factors that appear to be critical to success include strategies consistent with the bank's vision, knowledge of target customers' needs, defined sales process for introducing insurance services, simple yet complete product offerings, strong service delivery

41

mechanism, quality administration, synchronized planning across all business extensive lines and and subsidiaries, complete sales integration of insurance with other bank products and services, high-quality training, management tracking system for reporting on agents' time and results Finally The Banks, creation insurance of Bancassurance and operations traditional has a material impact on the financial services industry at large. companies fund management houses are converging towards a model of global retail financial institution offering a wide array of products. It leads to the creation of 'one-stop shop' where a customer can apply for mortgages, pensions, savings and insurance products. Discovery comes from looking at the same thing as everyone else but seeing something different. Banks' desire to increase fee income has them looking at insurance. Insurance carriers and banks can become part of the vision through strategic partnerships. Now is the time to position your company for the new millennium of insurance product distribution. of bank referrals and relevant and flexible database systems.

42

Marketing and Distribution Channels in Bancassurance

One of the most significant changes in the financial services sector over the past few years has been the growth and development of bancassurance. Banking institutions and insurance companies have found bancassurance to be an attractive and profitable complement to their existing activities. The successes operations demonstrated particularly in by various have bancassurance Europe

triggered an avalanche of mergers and acquisitions across continents and efforts are on to replicate the early success of bancassurance in other parts of the world as well. Distribution is the key issue in bancassurance and is closely linked to the regulatory climate of the country. Over the years, regulatory barriers between banking and insurance have diminished and has created a climate increasingly friendly to bancassurance. The passage of Gramm-Leach Bliley Act of 1999 in US and IRDA Bill in India in 2000 have stimulated the growth of bancassurance by allowing use of multiple distribution channels by banks and insurance companies. Bancassurance experience in Europe as well as in other select countries offers valuable guidance for those interested in insurance distribution through the banking channel in developing markets. Many banks and insurers are looking

43

with

great

interest

at

building

new

revenue

through

bancassurance - including large, traditional companies that wouldn't have considered such an approach about a decade ago. Of particular interest, many believe, is the potential for bancassurance in developing economies such as those of Latin America and Southeast Asia.

Distribution channels in Bancassurance Traditionally, insurance products have been promoted and sold principally through agency systems in most countries. With new developments in consumers behaviors, evolution of technology and deregulation, new distribution channels have been developed successfully and rapidly in recent years. Bancassurers make use of various distribution channels: Career Agents Special Advisers Salaried Agents Bank Employees / Platform Banking Corporate Agencies and Brokerage Firms Direct Response Internet e-Brokerage Outside Lead Generating Techniques

44

The main characteristics of each of these channels are: Career Agents: Career Agents are full-time commissioned sales personnel holding an agency contract. They are generally considered to be independent contractors. Consequently an insurance company can exercise control only over the activities of the agent which are specified in his contract. Despite this limitation on control, career agents with suitable training, supervision and motivation can be highly productive and cost effective. Moreover their level of customer service is usually very high due to the renewal commissions, policy persistency bonuses, or other customer service-related awards paid to them. Many bancassurers, however avoid this channel, believing that agents might oversell out of their interest in quantity and not quality. Such problems with career agents usually arise, not due to the nature of this channel, but rather due to the use of improperly designed remuneration and/or incentive packages. Special Advisers: Special Advisers are highly trained employees usually belonging to the insurance partner, who distribute insurance products to the bank's corporate clients. Banks refer complex insurance requirements to these advisors. The Clients mostly include affluent population who require personalised and high quality service. Usually Special

45

advisors are paid on a salary basis and they receive incentive compensation based on their sales. Salaried Agents: Having Salaried Agents has the advantages of them being fully under the control and supervision of bancassurers. These agents share the mission and objectives of the bancassurers. Salaried Agents in bancassurance are similar to their counterparts in traditional insurance companies and have the same characteristics as career agents. The only difference in terms of their remuneration is that they are paid on a salary basis and career agents receive incentive compensation based on their sales. Some bancassurers, concerned at the bad publicity which they have received as a result of their career agents concentrating heavily on sales at the expense of customer service, have changed their sales forces to salaried agent status. Platform Bankers (Cross-Sell): Cross selling involves selling of different products and services from your portfolio to your customers. It refers to sales activities that identify and suggest related items to a prospect or customer, when an initial item is purchased. It is a known fact that getting a new customer is more difficult than selling to the existing ones. It thus makes sense to encourage more business from your present client list. This is where cross selling plays a vital role. While making a sale to a customer, propose other

46

products linking them to his needs. Platform Bankers are bank employees who spot the leads in the banks and gently suggest the customer to walk over and speak with appropriate representative within the bank. The platform banker may be a teller or a personal loan assistant and the representative being referred to may be a tarined bank employee or a representative from the partner insurance company. Platform Bankers can usually sell simple products. However, the time which they can devote to insurance sales is limited, e.g. due to limited opening hours and to the need to perform other banking duties. A further restriction on the effectiveness of bank employees in generating insurance business is that they have a limited target market, i.e. those customers who actually visit the branch during the opening hours. In many set-ups, the bank employees are assisted by the bank's financial advisers. In both cases, the bank employee establishes the contact to the client and usually sells the simple product whilst the more affluent clients are attended by the financial advisers of the bank which are in a position to sell the more complex products. The financial advisers either sell in the branch but some banks have also established mobile sales forces.

47

If bank employees only act as "passive" insurance sales staff (or do not actively generate leads), then the bancassurer's potential can be severely impeded. However, if bank employees are used as "active" centres of influence to refer warm leads to salaried agents, career agents or special advisers, production volumes can be very high and profitable to bancassurers. Set-up / Acquisition of agencies or brokerage firms: In the US, quite a number of banks cooperate with independent agencies or brokerage firms whilst in Japan or South Korea banks have founded corporate agencies. The advantage of such arrangements is the availability of specialists needed for complex insurance matters and -in the case of brokerage firms - the opportunity for the bank clients to receive offers not only from one insurance company but from a variety of companies. In addition, these sales channels are more conceived to serve the affluent bank client. Direct Response: In this channel no salesperson visits the customer to induce a sale and no face-to-face contact between purchases consumer products and seller occurs. the The consumer by directly from bancassurer

responding to the company's advertisement, mailing or telephone offers. This channel can be used for simple packaged products which can be easily understood by the consumer without explanation.

48

Internet: Internet banking is already securely established as an effective and profitable basis for conducting banking operations. The reasonable expectation is that personal banking services will increasingly be delivered by Internet banking. Bancassurers can also feel confident that Internet banking will also prove an efficient vehicle for cross selling of insurance savings and protection products. It seems likely that a growing proportion of the affluent population, everyone's target market, will find banks with household name brands and proven skills in e-business a very acceptable source of non-banking products. There is now the Internet, which looms large as an effective source of information for financial product sales. Banks are well advised to make their new websites as interactive as possible, providing more than mere standard bank data and current rates. Functions requiring user input (check ordering, what-if calculations, credit and account applications) should be immediately added with links to the insurer. Such an arrangement can also provide a vehicle for insurance sales, service and leads. E-Brokerage: Banks can open or acquire an e-Brokerage arm and sell insurance products from multiple insurers. The changed legislative climate across the world should help migration of bancassurance in this direction. The advantage of this medium is scale of operation, strong brands, easy

49

distribution capabilities.

and

excellent

synergy

with

the

internet

Outside Lead Generating Techniques: One last method for developing bancassurance eyes involves "outside" lead generating techniques, such as seminars, direct mail and statement inserts. Seminars in particular can be very effective because in a non-threatening atmosphere the insurance counselor can make a presentation to a small group of business people (such as the local chamber of commerce), field questions on the topic, then collect business cards. Adding this technique to his/her lead generation repertoire, an insurance counselor often cannot help but be successful. To make the overall sales effort pay anticipated benefits, insurers need to also help their bank partners determine what the hot buttons will be for attracting the attention of the reader of both direct and e-mail. Great opportunities await bancassurance partners today and, in most cases, success or failure depends on precisely how the process is developed and managed inside each financial institution. This includes the large regional bank and the small one-unit community bank. Key Value Drivers Which distribution model to use is a tactical decision secondary to more basic strategic concerns. Bancassurance

50

strategies should be driven by markets and channels, encompass a broad range of tactics and practices, and leverage the competencies of the bank and the insurer. They should identify and build upon a discrete set of value drivers, those factors of such fundamental importance that to ignore any one of them could be fatal to the success of the project. The following four value drivers should be considered in a bancassurance strategy: Brand equity. Distribution. Tehnology. Culture.

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CHAPTER II COMPANY PROFILE

HISTORY
ICICI BANK ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the World Bank, the Government of India and representatives of Indian industry. The principal objective was to create a development financial institution for providing medium-term and longterm project financing to Indian businesses. In the 1990s,

52

ICICI transformed its business from a development financial institution offering only project finance to a diversified financial services group offering a wide variety of products and services, both directly and through a number of subsidiaries and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first bank or financial institution from non-Japan Asia to be listed on the NYSE. AT PRESENT Indias 2nd largest bank; assets of US$ 22.1 bn Rated higher than sovereign by Moodys Market leader in retail finance; 4.7 mn customers Technology leader among Indian banks Present across the spectrum of financial services Establishing international footprint

Subsidiaries in life insurance (ICICI Prudential), general insurance (ICICI Lmbard), investment banking and venture capital that are market leaders in their respective segments. Focus on Technology-Led Banking and Multiple Channel Access

53

LOMBARD Lombard can trace its history back as far as 1861, when a group of entrepreneurial businessmen in Rotherham recognized the profit potential in hiring wagons to railway companies and mine proprietors. They set up the North Central Wagon and Finance Company, quoting annual hire purchase (HP) rates varying from 9 to 14 for the letting of wagons to railway companies, collieries and quarries. The company prospered, surviving the depression of the 1860s with hardly a detectable check to its growth, although the chairman reported in August 1862 that 'the war in America continues with unabated ferocity, with every nation in the world feeling the effects'. The directors successfully pursued their aim to conduct the business of North Central with 'special reference to safety, combined with profit'. Profits for 1861 were 637.

54

And, in 1865, wagons to a total cost of 105,000 had been let on HP. Even in the crisis year of 1866, when Bank Rate was changed 14 times, reaching ten per cent for three consecutive months, North Central was able to report increased profits. The directors were, however, moved to complain about 'the panic that has prevailed in the moneyed circles and the high rate of interest exacted by the Bank of England'. By the turn of the century, North Central had nearly 25,000 wagons on hire. It was also heavily involved in the business of repair and maintenance of railway wagons, something which continued until 1918 when an agreement was reached amongst some of the main railway wagon builders to pool resources and Wagon Repairs Limited was formed, taking over North Central's repairing assets in exchange for shares. The diamond symbol used in the corporate logo depicts a lump of coal, reflecting North Central's early links with the mining industry. After the First World War, the directors of North Central, seeing the potential in road transport, turned their attention to the financing of motor vehicles. In 1928 North Central came into contact with a man who was far ahead of his time in financial thinking, particularly with regard to acquisitions. With financial

55

assistance from The Pru, Sir Connop made a successful offer to the shareholders of North Central and he and the Prudential became the owners of the whole of the ordinary Share Capital. 1928 With Sir Connop at the helm, North Central made a number of acquisitions, which included Southern Counties Cars Finance and Consumer Credit Corporation. In 1958 the whole of the ordinary share capital of North Central was acquired by its bankers National Provincial Bank, with whom the company had had unbroken relations for ninety-seven years. Meanwhile, in 1947, a businessman by the name of Eric Lombard Knight purchased a small finance company and, together with his wife Peggy, Mr Norman Osborne and Henry Alfrey, began the development of Lombard Banking. became known as Lombank. In 1959 Lombank bought a controlling interest in Tricity Finance, a company which offered retail credit facilities for household, leisure and other consumer goods. It was then decided to move the head office to a new office block in Purley Way, Croydon. By 1968, just 21 years after it came into existence with net assets of 111,000 and a staff of eight, Lombard Banking Group had net tangible assets in excess of 15m, gross The company expanded rapidly, acquiring a company, which

56

assets of more than 165m and held deposits of over 90m. Its 'financial empire' stretched as far as Australia, New Zealand and Canada and staff numbered in excess of 1,400. When, in 1969, National Provincial Bank and Westminster Bank merged to form National Westminster Bank, one of the first strategic moves of the new bank was to acquire Lombard Banking, which merged with North Central shortly afterwards and Lombard North Central (LNC) was born. Austin Rover Finance was formed in 1977, the first joint venture between a motor manufacturer and finance house, and cemented the close relationship between Lombard and Rover Group which came to an end over twenty years later. It was the forerunner for a string of successful dealer pointof-sale relationships with leading manufacturers including Peugeot, Citroen, Jaguar, Nissan and Alfa Romeo. Also in 1977 Farming and Agricultural Finance was launched. In the 1980's Lombard Tricity Finance became a wholly owned subsidiary of the group and Lombard acquired a 50 per cent shareholding in Lex Vehicle Leasing. In 1983 British Car Contracts was set up offering specialist contract hire facilities to the business user. By 1985, the company's book had grown by 200 per cent and through its sponsorship of the RAC Rally (1978 -

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1992), Lombard had made its mark as the supporter of Britain's leading motor sport event. In the late eighties Lombard was marching into Europe. With off-shore operations, a business in Cyprus and plans for expansion which encompassed all areas of the group, Lombard North Central was rightly hailed as Europe's premier finance company. In 1991, the company restructured into three sectors; motor, business and personal. In 1995, Lombard re-entered the big ticket leasing market with the creation of Lombard Corporate Finance. Foreseeing the changes which were happening in the consumer finance market, Lombard launched one of the early 'direct' loan services offering customers a fast and easy way to finance their goods via the telephone, 24 hours a day. Lombard Direct was a run-away success, far exceeding expectations. 1998, Lombard made an impressive debut into the rolling stock market with a successful bid to finance the purchase of 78 trains worth 395m for Virgin Rail. This is largest deal Lombard has ever transacted and is a poignant link back to our roots and the financing of those early railway wagons. At the end of 1998 Lombard Motor, Lombard Tricity and Lombard Business Equipment Leasing were sold to First

58

National. This allowed the remaining businesses to specialize in distinct market segments: Lombard in business to business asset finance and services, Lombard Direct in direct personal finance and Lombard Banking Services in deposit taking and banking services for overseas clients. The new millennium brought more change and opportunities for Lombard when National Westminster Bank was acquired by The Royal Bank of Scotland. RoyScot Trust and Royal Bank Leasing have now been brought together with Lombard to form a new force in asset finance. It is from here that Lombard steps forward into the new century, much changed from the wagon finance company but still with the same emphasis on entrepreneurial approach and success. One can't help wondering what those gentlemen who met at the Prince of Wales Hotel in Rotherham in January 1861 or Eric Lombard Knight and his fellow Lombank 'pioneers' would now think of the company they created. We are sure that it would be with a sense of pride but, since they were all men of vision and foresight, they surely wouldn't be surprised.

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ICICI LOMBARD GENERAL INSURANCE COMPANY LIMITED ICICI Lombard is General Company 74:26 joint Insurance Limited

venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank; while Fairfax Financial Holdings is a diversified financial corporate engaged in general insurance, reinsurance, management management. Lombard Canada Ltd, a group company of Fairfax Financial Holdings Limited, is one of Canada's oldest property and casualty insurers. ICICI Lombard General Insurance Company received regulatory approvals to commence general insurance business in August 2001. Why ICICI Lombard? India 's number one private general insurance company

insurance and

claims

investment

First general insurance company in India to be ISO 9001:2000 certified.

Simple and fast documentation Lightning fast claims settlement Instant online policy issuance

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Comprehensive product line Highest security level offered through 128-bit encryption in case of online data exchange. First company to provide digitally signed documents through an online interface. Achieved financial breakeven in first full year of operations Achieved underwriting breakeven in second year of operations

ICICI Lombard is a FIVE S - Level 1 certified company

(Five S: The five Ss are Seiri (sorting out), Seiton (Systematic Arrangement), Seiso (Spic-n-Span), Seiketsu (Standardize) and Shitsuke (Self-Discipline). Five S is based on the underlying principle of creating ownership for every object in the organization, so that nothing is neglected.)

VISION
To bring innovative insurance solutions to customers.

VALUES
a.

Managing Risk The ability to identify, quantify and manage

risk is intrinsic to success in the business of insurance. approach ICICI Lombards the need risk to management provide cost balances

effective solutions to our customers while delivering optimal shareholder returns. Success on both fronts is reflected in the numbers: while the number of

61

policies sold increased by 2.5 times in fiscal 2004, profits grew almost ten- fold during the year. A strong capital base gives an insurer the ability to service large claims in the event of a catastrophe. This is a key determinant of growth as it provides comfort to customers in a business that is largely driven by trust. Our reinsurance program is formulated in line with the guidelines laid down by the Insurance Regulatory Authority of India (IRDA), which aims at optimum retention of premium within the country and adequate risk coverage and diversification. Our choice of reinsurance partners is in turn determined by their strong reputation, high credit rating and the alignment of their strengths with our risk management objectives. Staying ahead in managing risk through: A dedicated risk management the risk team that by constantly monitors exposure

customer, product and region. An indigenously developed Risk Accumulation System that facilitates online tracking of various risks down to the pin code level in any geographical location. Thus, our risk management program seeks to blend the objectives of customer satisfaction and

62

investor return while operating within the statutory norms. b. IT & Infrastructure ICICI Lombard has effectively used Information Technology to meet growing customer needs while improving operational efficiency and profitability. The companys IT strategy, architecture and successful deployment form the backbone of its business. Staying ahead in IT infrastructure through: Online Manager: A web-based interface that allows a customer to buy, endorse and renew policy online. Claims intimation and status tracking also forms part of the interface. Using SMS technology to deliver timely alerts and reminders to keep customers informed of various transactions. Using intranet effectively to enhance employee productivity and simplify human resource functions. A state-of-the art data center with robust connectivity and support. Highest security level offered through 128-bit encryption in case of online data exchange. The only company to provide digitally signed documents through the online interface. c. Distribution Reach

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ICICI Lombard General Insurance Companys endeavor is to become Indias preferred provider of the entire array of financial products and services. The company has built a robust franchise network in association with its joint venture partners to expand coverage. The company presently has 103 offices across India manned by over 1,200 employees. It believes in targeting customers

through multi-channel route including direct sales, agents, brokers, bancassurance, alternate channels and the Internet. Thus, the customers have number of channels to choose from. d. Human Resource ICICI Lombard believes in a progressive human resource philosophy that turns human capital into a key source of competitive advantage. The capability and motivation level of employees is a key determinant in success of any service-oriented organization. Our employee strength is over 1,200. We have people from diverse backgrounds viz. general etc. e. Partnerships Effective partnerships and alliances form an integral part of the companys strategy. ICICI Lombard believes that a leveraged distribution insurance, banking, financial services, consumer goods, telecom, automotive engineering

64

model via partnerships and alliances will be a key driver of its growth in future. Partnership driven alliances model allows the company to cash-in on the partners customer network so that the customer gets a packaged offering of products.

Staying ahead in partnership through Bancassurance tie-ups: ICICI Bank ABN Amro Bank Rural Distribution tie-ups f. Product Innovation Product innovation is the key to business growth. ICICI Lombard believes in challenging existing product assumptions and targeting new product-market segments. This has helped the company in customer acquisition and retention as well as in increasing category penetration. The company has launched a slew of products and has emerged as a major player in the corporate and retail segment driven by a well-balanced portfolio. Staying ahead in product innovation through:-

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During

the

year with

2004:

The

company

in

coordination

the World

Bank launched

Weather Insurance. The companys Overseas Travel Insurance is the only product in the market that offers premium calculation on a Pay-per-day basis as against paying premium on a slab-wise basis. A unique Senior Citizen Overseas Travel Insurance Plan to cover senior citizens up to the age of 85 years was launched by the company during the year 2004. It is the only policy of its kind in the market.

Loan Care a first of its kind product to be launched in India protecting the lender from borrower default on account of death, permanent disability, loss of job and loss pay due to critical illness.

g.

Customer Service Insurance is a service-specific industry. Customer service is one of the key areas of focus for ICICI Lombard. The company has built high levels of customer loyalty and advocacy in relatively short period of time. Staying ahead in customer service through Dedicated relationship managers for both sales and customer service.

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Insurance portfolio analysis and risk advisory services Cashless claims service through a pan India network of garages and hospitals

247 call center

Branch offices in 103 cities Online centers to service better Bancassurance branch network

PHILOSOPHY
Claim Settlement Lightning-fast claim settlement is one of the key areas of focus for ICICI Lombard. Our dedicated relationship managers, wide spread network across India and presence of 24 7 call centers assure our customers that we are always on call, day or night. Our tie-up with Cunningham Lindsey, the worlds second largest loss adjustors with its network in 80 locations across India, ensures a surveyor on site in less than 24 hours. The company strongly believes that the best insurance company is not the one with the most premiums earned, but the one that settles your claim at a lightning speed. It is ICICI Lombards endeavor to streamline processes in order to settle your claim at a lightning speed. Company has simplified claim procedures to help

67

you file a hassle-free claim. Companys claims philosophy promotes and ensures a mutual understanding with our customers and offers an unwritten promise to honour the commitments we make. ICICI Lombards tie-up with Cunningham Lindsey, the worlds second largest loss adjustors with its network in 80 locations across India, ensures a surveyor on site in less than 24 hours. Rural Initiative ICICI Lombard believes in striking the right balance between the commercial and socio-economic aspects of the insurance business. In its endeavour to offer tailormade products to meet the requirement of the rural population, explore business opportunities in the related segments and build a competitive edge through strong distribution network and product innovation, ICICI Lombard uses intermediaries like ICICI Banks kiosks, direct selling agents, state-level tie-ups, ITCs e-choupals, NGOs and other micro- finance institutions (MFIs). The rural segment offers immense business opportunities for insurers since it constitutes 50% of the GDP. Growing per capita and disposable income and rising financial awareness among rural masses has opened up new avenues for insurers in this segment. Corporate Business

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ICICI Lombard via its CSG segment aims to tap large corporates with high premium potential. The company has emerged as a major player in the corporate segment with a well-balanced portfolio. that It has made forays into specialized products require complex product

development and strong underwriting skills. In addition, a strong distribution has enabled it to reach out to over 3,000 corporates. It also offers single point contact through dedicated relationship managers for both sales and customer service. Bancassurance The company has set up a dedicated SBU to cater to bancassurance business managed by dedicated teams for each bank partner across all locations to ensure highest levels of service to the channel and their customers and to provide complete support and value addition to the bank partners. Our bancassurance philosophy emphasizes on complete respect for the partners brand and business model with a clear understanding that the partner owns the customer. The company has tied up with few partners like ABN Amro Bank, ICICI Bank, UTI Bank etc, to ensure complete support and continuous value addition to the partner. The business philosophy behind the bancassurance initiative is to leverage distribution synergies with partners. The

69

channel offers unmatched product suite customized for bank channels and customers. Retail ICICI Lombard aims to tap retail segment through multi-product and multi-channel approach to marketing. The company believes that retail segment has immense potential and will drive the companys growth in future. It has presence in all retail categories - travel, health, home and motor. It has launched a number of innovative products and features in each category like `Pay-per-day in Overseas Travel Insurance and floater cover for individual Health Insurance. The key to success in this area is effective market segmentation and targeted product offerings that meet customer needs. e-channel ICICI Lombards e-channel initiative has embraced technology with open arms. The effective use of technology platforms has enabled customers to view all their insurance transactions through the web on a real time basis. ICICI Lombards e-channel mainly focuses on targeting customers through Internet, intranet (of large corporates and manufacturing companies) and other national level distribution networks. The focus is on targeting customers through the online medium. The model is to develop an integrated and customized product

70

platform with key partners - ICICI Direct, ICICI Bank, preferred partners moneycontrol.com and indiatimes.com and other websites.

CHANNELS
ICICI Lombard follows multi-channel approach to tap customers. Depending on the effectiveness, the following channels are used for sales, service and other allied activities. The main objective of these channels is: To create value beyond the product. To convert customer to clients. To spread awareness about the company and its products. Major Channels 1. Advisors 2. Bancassurance 3. Insurance Online 4. Branches 5. Telesales

Bancassurance Philosophy of ICICI Lombard

Bancassurance: Bancassurance is the distribution of insurance products through a banks network. This channel has been successfully deployed internationally to distribute insurance products. In India, the concept caught on post insurance industrys privatization in December 1999. There are basically four models of bancassurance viz.:

71

Distribution alliance between an insurance company and a bank; Joint venture between a bank and an insurance company; Merger between a bank and an insurer Bank builds and sells its own insurance products. Most of the bancassurance operations fall in the first model. Every insurance company plans to grow quickly to reduce start-up costs and break even. Banks with their huge network and a large customer base provide insurers with an opportunity to increase their market penetration and premium income. This channel allows an insurer to effectively tap the rural sector. Selling insurance through traditional methods in rural area is an expensive proposition. A tie up with a bank allows an insurance company to access large customer base at a low cost. Through this channel, an insurance company can cash in on the existing pool of skilled professionals at a low cost. Of late, banks have witnessed a decline in margins in their core lending business. This in turn has adversely impacted their income. Thus, bancassurance helps them to augment their income.

72

Bancassurance provides an opportunity to the bank staff to harness their sales skills and adapt to the changing business environment. Though a relatively new concept, bancassurance has been a phenomenal success. From just being lending organizations, banks today have diversified and offer various financial services across the board. Bancassurance is beneficial to both the insurance company and the bank.

Philosophy:
The company has set up a dedicated SBU to cater to bancassurance business managed by dedicated teams for each bank partner across all locations to ensure highest levels of service to the channel and their customers and to provide complete support and value addition to the bank partners. ICICI Lombard bancassurance philosophy emphasizes on complete respect for the partners brand and business model with a clear understanding that the partner owns the customer. ICICI Lombard has tied up with partners like ABN Amro Bank, ICICI Bank and Centurion Bank, to ensure complete support and continuous value addition to the partner. The business philosophy behind the bancassurance initiative is to leverage distribution synergies with partners. The channel

73

offers

unmatched

product

suite

customized

for

bank

channels and customers. ICICI Lombard is the only company with a dedicated bancassurance distribution channel. Our key bancassurance partners include ICICI Bank, ABN Amro Bank and Centurion Bank. We completely respect the partners brand and business model and believe that the customer is owned by the partner.

ICICI Bank: ICICI Bank has a network of about 470 branches and extension counters and over 1,800 ATMs. It offers a wide spectrum of banking products and financial services to corporate and retail customers through a variety of delivery channels.

ABN Amro: ABN Amro Bank (India) has 81 year long experience in the Indian business scenario. It ranks among the top 10 banks in the world in size and strength. As an international bank, it has more than 3,500 branches in over 70 nations across the globe.

Centurion Bank: Centurion Bank has an extensive network of branches across India. Each branch has access to Centurion services personal Banks to and technologies The covers to Bank of offer will ICICI unparalled distribute customers. business

74

Lombard through its branches, direct sales teams and marketing offices across India.

PRODUCT PORTFOLIO OF ICICI LOMBARD

Health Insurance ICICI Lombard brings to you health policies that cover your entire family under one umbrella, thereby enabling you to pay only one premium and covering each member to the full extent of the sum insured. Save maximum tax under our 10K Tax Saving Plan. Health Plans:
10 K Tax Saver Plan: - A fixed premium plan

enabling

highest

tax

saving

u/s

80D

with

comprehensive health benefits.

Family Floater Plan: - A single policy that secures

the hospitalization expenses of your family.

entire

Home Insurance Insure your home and its contents against natural calamities like fire, earthquake, flood, gas cylinder explosion, fire due to electric short circuit as well as man-made disaster like burglary. Home Plans:

75

Gold Plan: - The Gold plan covers much more

than just your home. It offers family protection, covers loss of cash, public liability, temporary resettlement, alternative accommodation and baggage insurance. Other add-ons offered are loan repayment for home and car and cover for terrorism.

Silver Plan: - The Silver plan covers the

structure of your home and its contents from natural and man-made calamities like fire, flood, storm and burglary. The add-ons offered include expenses of rent for alternative accommodation and terrorism. Motor Insurance A comprehensive policy for your vehicle covering unfortunate accidents, third party liability, injuries and damages. We are the first general insurance company in India to bag the ISO 9001:2000 certification for settlement of motor claims. Motor Plans:

Car Insurance: - A comprehensive policy

that not only covers you against third party but also against accidents, damage, injury and much more.

76

Two Wheeler Insurance: - A composite that protects you against

policies

unfortunate accidents, third party liability, injuries and damages.

Travel Insurance ICICI Lombard brings to you travel insurance policies where you pay on a per day basis and not according to the conventional slab rates. With a variety of options to choose from, now select a product that suits your needs the best. Travel Plans:

Individual Overseas Plan: - All overseas travel

policies charge premium on a slab basis. Which means if you are on a 16 day trip, you end up paying for 21 days, as the slab is 14 to 21 days. But with us you pay per day.

Student Medical Plan: - A comprehensive

cover, which insures you against unfortunate incidents or unexpected expenses abroad and provides timely assistance and support when you need it the most.

Domestic Travel Plan: - Domestic Travel

policy takes care of you and your valued assets left at home. A policy that lets you enjoy your trip leaving your worries with us. NRIs

77

No matter which part of the world you are in, you can now secure your family and assets in India online. Right from choosing the product to making a claim - it is all done in a few clicks of the mouse. We ensure that the geographical distance does not hinder the security of your loved ones. NRI Plans:

Parents'

Health

Insurance:-

Securing

the

health of your parents and family back home

Overseas Travel Insurance:- Securing the Home Insurance:- No more worries about Car Insurance:- The most comprehensive Two Wheeler Insurance:- Avail of lightning Student Medical Insurance:- Securing your

overseas trip your loved ones would undertake your valuable asset in India policy for your four-wheeler fast claim settlement loved one's academic sojourn abroad

ICICI GROUP

78

THE ICICI GROUP IN INDIA

ICICI BANK and the subsidiaries ICICI Securities, ICICI Venture, ICICI Lombard, ICICI Prudential

ICICI Securities Indias Leading Investment Bank: ICICI Securities Limited is Indias leading full-service investment bank with leadership position in all segments of its operations - Corporate Finance, Fixed Income and Equities. It is a subsidiary of ICICI Bank, the largest private sector bank in India and operates out of Mumbai with offices in New Delhi, Chennai, Calcutta and New York, London and Singapore. ICICI Securities today is India's leading Investment Bank and one of the most significant players in the Indian capital markets. ICICI Venture: ICICI Venture is the largest and one of the most successful private equity and venture capital management companies in India with aggregate funds under management in excess of USD 650 mn. ICICI Venture is a subsidiary of ICICI Bank, the largest private sector financial services group in India with assets of over USD 30.0 bn (Sep. 2004) and market capitalization of about USD 5.3 bn (Feb 2005).

79

ICICI

Prudential: powerhouse

ICICI and

Prudential Prudential

Life plc,

Insurance a leading

Company is a joint venture between ICICI Bank, a premier financial international financial services group headquartered in the United Kingdom. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). ICICI Prudential's equity base stands at Rs. 11.85 billion with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. In the financial year ended March 31, 2005, the company garnered Rs 1584 crore of new business premium for a total sum assured of Rs 13,780 crore and wrote nearly 615,000 policies. The company has a network of about 56,000 advisors; as well as 7 bancassurance and 150 corporate agent tie-ups. For the past four years, ICICI Prudential has retained its position as the No. 1 private life insurer in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life. ICICI Lombard: ICICI Lombard General Insurance Company Limited is a 74:26 joint venture between ICICI Bank Limited and the US-based $ 26 billion Fairfax Financial Holdings Limited. ICICI Bank is India's second largest bank; while Fairfax Financial Holdings in is a diversified financial corporate engaged general

80

insurance, reinsurance, insurance claims management and investment management.

CHAPTER IV DATA ANALYSIS

Part: A Penetration Level of Loan Shield from June 2005- November 2005
Total No. of Total No. Home Loans with Penetrat of Loan First & Full ion % Shield Disbursement
141 116 108 99 106 9 11 26 25 24 57 6.38 9.48 24.07 25.25 22.64 57

Month
June July August Septemb er October Novembe

100 r Source: Secondary data Table: 4A.1

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Penetration Level of Loan Shield from June 2005- November 2005

60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% June July August September October November 6.38% 9.48% 24.07% 25.25% 22.64% 57%

Figure: 4A.1

Inference:
It is obvious from the data that there is a significant rise in the sales of loan Shield from June 2005 to November 2005 as more and more Home Loans where disbursed with Loan Shield cover . By the end of November more than 50% of penetration level has been achieved and this is a clear indication of the high volume growth in the surveyed market.

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Part: B Awareness of Loan Shield Features

Attribute
Yes No Total Source: Primary data Table: 4B.1

No. of Responses
50 0 50

Percentag e%
100 0 100

Awareness of All Features Loan Shield

83

120% 100% 80% 60% 40% 20% 0% Yes 0.00% No 100%

Figure: 4B.1

Inference:
Out of 50 respondents all are aware of the features of Loan Shield.

Training Provided By the Company

Attribute
Yes No Total Source: Primary data Table: 4B.2

No. of Responses
48 2 50

Percentage %
96 4 100

Training Provided By the Company

84

4%

Yes No

96%

Figure: 4B.2

Inference:
Majority of the respondents got training from the company and an insignificant percentage doesnt got training.

Average Number of Customers Meeting per day

Attribute
1 to 4 5 to 9 10 to 14 15 or more

No. of Responses
18 23 6 3

Percentage %
36 46 12 6

85

Total Source: Primary data Table: 4B.3

50

100

Average Number of Customers Meeting per day

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1 to 4 5 to 9 10 to 14 15 or more 12% 6% 36% 46%

Figure: 4B.3

Inference:
A large number of respondents are meeting 5 to 9 customers per day, followed by 1to 4, 10 to 14 and a narrow percentage customers. of respondents are meeting 15 or more

The Average Customer Conversion Rate per day

86

No. of Attribute
0 to 2 3 to 5 6 to 8 9 or more Total

Percentage %
86 10 4 0 100

Responses
43 5 2 0 50

Source: Primary data Table: 4B.4

The Average Customer Conversion Rate per day

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 86%

10%

4%

0%

0 to 2

3 to 5

6 to 8

9 or more

Figure: 4B.4

Inference:
When it comes to the case of customer conversion rate most of the respondents lays in 0 to 2.

87

Response from the Customer Regarding the Product Loan Shield

Attribute Positive Somewhat Positive Not Sure Somewhat Negative Negative Impact Total Source: Primary data Table: 4B.5 No. of Responses 20 23 4 2 1 50 Percentage % 40 46 8 4 2 100

Response from the Customer Regarding the Product Loan Shield

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 46% 40%

8%

4% Somewhat Negative

2% Negative Impact

Positive

Somewhat Positive

Not Sure

88

Inference:

4B.5

Figure:

A combined majority of the respondents given the opinion that, they are getting a positive response from customers.

Tackling customers with negative response towards Loan Shield

Attribute
Convincing the need of Insurance Easiness of taking Policy Dual Coverage of the product EMI Support Total Source: Primary data Table: 4B.6

No. of Responses
10 5 15 20 50

Percentag e%
20 10 30 40 100

Tackling customers with negative response towards Loan Shield

45% 40% 40% 35% 30% 30% 25% 20% 20% 15% 10% 10% 5% 0% Convincing the Easiness of taking Dual Coverage of EMI Support Need of Insurance Policy The product

89

Figure: 4B.6

Inference:
The response shows that convincing the EMI support of the product is the major factor by which negative customers are being converted; the very next is highlighting the dual coverage of the product and convincing need of insurance.

Helpfulness of the Marketing Strategy Put Forward By the Management in Achieving the Monthly Target
Attribute
Great extent Moderate extent Slight extent Not much Not at all Total Source: Primary data Table: 4B.7 60%
50% Helpfulness of the Marketing Strategy Put 50% 40% Forward 30% 20% 10% 0% Great extent Moderate extent Slight extent 10% 40%

No. of Responses
20 25 5 0 0 50

Percentage %
40 50 10 0 0 100

By the Management in Achieving the Monthly Target

90

Figure: 4B.7

Inference:
The response shows that the marketing strategy by the management helped them to a moderate extent, followed by great extent and an insignificant percentage given the opinion that it helped them to a slight extent.

Motivating Factors for Better Performance

Attribute
Incentives Salary Hikes Appreciation Letters Special Trainings Reference for higher posts Total Source: Primary data Table: 4B.8

No. of Responses
15 7 5 8 15 50

Percentage %
30 14 10 16 30 100

Motivating Factors for Better Performance

91

35% 30% 25% 20% 15% 10% 5% 0%

30%

30%

14% 10%

16%

Incentives Salary Hikes

Appreciation Letters

Special Reference for Trainings Higher posts

Figure: 4B.8

Inference:
An equal majority of customers given the opinion that Incentives and Reference for higher posts are the major motivating factor for them, followed by Special trainings, Salary hikes and Appreciation Letters are the other motivating factors for them.

Adequate Support from Superiors

Attribute
Yes No Total

No. of Responses
37 13 50

Percentage %
74 26 100

Source: Primary data 4B.9

Table:

92

Adequate Support from Superiors

26% Yes No 74%

Figure: 4B.9

Inference:
Out of 50 respondents a large number of them expressed their opinion that they are getting adequate support form superiors.

Response That Best Describes Superiors Timeliness, in Response to Requests and Inquiries
Attribute No. of Responses Percentage %

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Very Timely Somewhat Timely Not Sure Somewhat Slow Very Slow Total Source: Primary data 4B.10

21 14 5 8 2 50

42 28 10 16 4 100 Table:

Response That Best Describes Superiors Timeliness, in Response to Requests and Inquiries
45% 42% 40% 35% 30% 25% 20% 15% 10% 5% 0% Very Timely

28% 16% 10% 4% Somewhat Timely Not Sure Somewhat Slow Very Slow

Figure: 4B.10

Inference:
A combined majority of respondents responds that they are getting response from superiors Very timely followed by Somewhat Slow, Not sure and an insignificant percentage says that the response is very slow.

94

Sales Penetration of ICICI Lombards Loan Shield in November 2005

Attribute
24% or less 25% - 49% 50% - 74% 75% or more Total Source: Primary data 4B.11

No. of Respon ses

0 0 48 2 50

Percentage %
0 0 96 4 100 Table:

Sales Penetration of ICICI Lombards Loan Shield in November 2005

120% 100% 80% 60% 40% 20% 0% 0% 24% or less 0% 25% - 49% 50% - 74% 0% 75% or more 100%

Figure: 4B.11

Inference:
The total number of respondents given the opinion that, the sales penetration in November is in between 50-74%.

95

Privilege of Status Checking of Policy Process Extended to the Customer and its impact on Business
Attribute
Yes No Total Source: Primary data Table: 4B.12

No. of Responses
38 12 50

Percentage %
76 24 100

Privilege of Status Checking of Policy Process Extended to the Customer and its impact on Business

24% Yes No 76%

Figure: 4B.12

Inference:

96

A large number of respondents believe that the privilege of status checking of policy process will help in increasing sales and a significant percentage of respondents are not believe in the above.

Advantages Loan Shield Has from Its Competitors Products

Attribute
Easiness of taking policy Dual Coverage of the product EMI Support Critical Illness Cover Total Source: Primary data 4B.13

No. of Responses
14 12 23 1 50

Percentage %
28 24 46 2 100 Table:

Advantages Loan Shield Have from Its Competitors Products

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 46%

28%

24%

2% Easiness of Taking policy Dual Coverage of the product EMI Support Critical Illness Cover

97

Figure: 4B.13

Inference:
Most of the respondents given the opinion that EMI Support is the major advantage Loan Shield have from its competitors products, followed by the Easiness of taking policy, Dual coverage of the product and an insignificant percentage of Critical Illness.

Intensity of Future Planning by ICICI Lombards Home Insurance Section

Attribute
Great extent Moderate extent Slight extent Not much Not at all Total

No. of Responses
2 1 0 0 0 3

Percentage %
66.67 33.33 0 0 0 100

Source: Primary Data 4B.14

Table:

Intensity of Future Planning by ICICI Lombards Home Insurance Section

98

70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00

66.67 %

33.33 %

Great extent

Moderate extent

Figure: 4B.14

Inference:
Majority of the respondents given the opinion that they are planning business to a Great extent for the future.

Confidence Level in gaining market share in the Future

Attribute
Confident Somewhat confident Not sure Somewhat doubtful Doubtful Total Source: Primary Data 4B.15

No. of Responses
2 1 0 0 0 3

Percentage %
66.67 33.33 0 0 0 100 Table:

Confidence Level about gaining market share in the Future

99

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Confident Somewhat Confident 33.33% 66.67%

Figure: 4B.15

Inference:
Most of them are confident that the company will gain market share in the future.

Sales Penetration of ICICI Lombards Loan Shield in November

Attribute
24% or less 25% - 49% 50% - 74% 75% or more Total Source: Primary data 4B.16

No. of Responses
0 0 3 0 3

Percentage %
0 0 100 0 100 Table:

100

Sales Penetration of ICICI Lombards Loan Shield in November

120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 24% or less 25% - 49% 50% - 74% 75% or more

Figure: 4B.16

Inference:
The sales administration wing is regularly tracking the business, and they given the opinion that sales penetration in November is in between 50-74%.

Importance of Giving Privilege of Status Checking of Policy Processing Extent to Customers

Attribute
Very Important Important Somewhat Important Not Sure Unimportant Total

No. of Responses
1 2 0 0 0 3

Percentage %
33.33 66.67 0 0 0 100

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Importance of Giving Privilege of Status Checking of Policy Processing Extent to Customers

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Very Important Important 33.33% 66.67%

Figure: 4B.17

Inference:
A combined percentage of response showing that it is important to give privilege of status checking of policy processing should be extended to customers.

Regular Monitoring of Subordinates is Required in Terms of Productivity

Attribute
Great extent Moderate extent Slight extent Not much

No. of Responses
2 1 0 0

Percentage %
66.67 33.33 0 0

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Not at all Total Source: Primary data Table: 4B.18

0 3

0 100

Regular Monitoring of Subordinates is Required in Terms of Productivity

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Great extent Moderate extent 33.33% 66.67%

Figure: 4B.18

Inference:
Most of the respondents given the opinion that, regular monitoring productivity. of subordinates is required in terms of

Major Channel through which Business is carried out

Attribute No. of Responses Percentage %

103

-Sell I Channel Aditya A.N.M R.R.R. Total Source: Primary data 4B.19

2 0 1 0 0 3

66.67 0 33.33 0 0 100 Table:

Major Channel through which Business is carried out

80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% X-Sell Aditya 33.33% 66.67%

Figure: 4B.19

Inference:
Majority of the respondents given the opinion that X-Sell (Cross sell) is the major channel for their business followed by Agency Aditya.

104

Importance of Maintaining Relationship with Home- Finance Division

Attribute Very Important Important Somewhat Important Not Sure Unimportant Total Source: Primary data 4B.20 No. of Responses 2 1 0 0 0 3 Percentage % 66.67 33.33 0 0 0 100 Table:

Importance of Maintaining Relationship with Home- Finance Division

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Very Important Important 33.33% 66.67%

Figure: 4B.20

Inference:

105

The combined percentage of response shows that maintaining relationship with Home Finance Division is very important.

Importance of Communication in Business both Upward & Downward

Attribute
Very Important Important Somewhat Important Not Sure Unimportant Total Source: Primary data 4B.21

No. of Responses
2 1 0 0 0 3

Percentage %
66.67 33.33 0 0 0 100 Table:

Importance of Communication in Business both Upward & Downward

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Very Important Important 33.33% 66.67%

106

Figure: 4B.21

Inference:
The majority states that communication is very important and followed by important.

Experience in ICIC Lombards Sales Administrative wing

Attribute No. of Responses
0 0 1 1 1 3

Percentage %
0 0 33.33 33.33 33.33 100 Table:

1-6 months 6-12 months 1 year 6 months 2 years More than 2 years Total Source: Primary data 4B.22

Experience in ICIC Lombards Sales Administrative wing

107

35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%

33.33%

33.33%

33.33%

1 year 6 months

2 years

More than 2 years

Figure: 4B.22

Inference:
The sales administration wing includes an equal proportion of experienced people starting from 1-6 years experience, 2 years followed by More than two years.

Business Volume Accounted For ICICI Lombard by Loan Shield in November

Attribute
1-4 Lakhs 5-9 Lakhs 10-14 Lakhs 14 Lakh or more 1-4 Lakhs Total Source: Primary data Table: 4B.23

No. of Responses
0 0 3 0 0 3

Percentage %
0 0 100 0 0 100

108

Business Volume Accounted For ICICI Lombard by Loan Shield in November

120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% 1-4 Lakhs 5-9 Lakhs 10-14 Lakhs 14 Lakh or More

Figure: 4B.23

Inference:
The business volume accounted for ICICI Lombard by Loan Shield is between 10-14 Lakhs.

ICICI Lombards Product Line Presently Supported by Sales Administration

Attribute
Health Insurance Home Insurance Motor Insurance Travel Insurance NRI Insurance

No. of Responses
0 3 0 0 0

Percentage %
0 100 0 0 0

109

Total Source: Primary data 4B.24

100 Table:

ICICI Lombards Product Line Presently Supported by Sales Administration

120.00% 100.00% 80.00% 60.00% 40.00% 20.00% 0.00% Health Insurance Home Insurance Motor Insurance Travel Insurance NRI Insurance

Figure: 4B.24

Inference:
The respondents are purely supporting Home Insurance products.

Level of Advantage Loan Shield Have from Other Competitors

Attribute
Strong advantage

No. of Responses
2

Percentage %
66.67

110

Slight advantage About the same Slight disadvantage Strong disadvantage Total Source: Primary data 4B.25

1 0 0 0 3

33.33 0 0 0 100 Table:

Level of Advantage Loan Shield Have from Other Competitors

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Strong advantage Slight advantage 33.33% 66.67%

Figure: 4B.25

Inference:
The majority of the respondents given the response that Loan Shield have strong advantage over other competitors.

Products That Have Stronger Competitive Position to Loan Shield

Attribute No. of Percentage

111

Respon ses
Home Assure-ICICI Prudential Loan Safe-Centurion Bank Home Insure-HDFC Chubb Kotak Loan Protection Plan (KLPP) New Corp Jeevan Griha Raksha Corporation bank Total Source: Primary data 4B.26 2 1 0 0 0 3

%
66.67 33.33 0 0 0 100 Table:

Products That Have Stronger Competitive Position to Loan Shield

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 66.67%

33.33%

0.00%

0.00%

0.00%

Home Assure Loan Safe- Home Insure- Kotak Loan New Corp Protection Jeevan Griha Centurion HDFC Chubb ICICI Prudential Bank Plan (KLPP) Raksha Corporation Bank

Figure: 4B.26

Inference:

112

When it comes to the case pf competitive products the major competitor is ICIC Prudential followed by Loan Safe from Centurion Bank.

Intense of Impact That Crated By the Actions of Senior Sales and Marketing Management on Business
Attribute
Positive Impact Somewhat Positive Impact Not sure Somewhat Negative Impact Negative Impact Total Source: Primary data Table: 4B.27

No. of Responses
1 2 0 0 0 3

Percentage %
33.33 66.67 0 0 0 100

Intense of Impact That Crated By the Actions of Senior Sales and Marketing Management on Business

113

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Positive Impact 33.33%

66.67%

Somewhat Positive Impact

Figure: 4B.27

Inference:
The combined percentage shows that the actions of senior sales and marketing management created a positive impact on business.

Lombard Managements Timeliness in Response to Requests and Inquiries

Attribute
Very Timely Somewhat Timely Not Sure Somewhat Slow Very Slow Total Source: Primary data 4B.28

No. of Responses
2 1 0 0 0 3

Percentage %
66.67 33.33 0 0 0 100 Table:

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Lombard Managements Timeliness in Response to Requests and Inquiries

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Very Timely Somewhat Timely 33.33% 66.67%

Figure: 4B.28

Inference:
The response shows that the Lombards management was very timely in response to requests and inquires, followed by somewhat timely.

Satisfaction Based on Lombards Senior Management Support

Attribute
Very Timely Somewhat Timely Not Sure Somewhat Slow Very Slow Total

No. of Respon ses

2 1 0 0 0 3

Percentage %
66.67 33.33 0 0 0 100

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Source: Primary data 4B.29

Table:

Satisfaction Based on Lombards Senior Management Support

35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Completely Satisfied Satisfied Somewhat Satisfied 33.33% 33.33% 33.33%

Figure: 4B.29

Inference:
The response from the respondents lays in between completely satisfied to somewhat satisfied.

The Administrative Areas Where Opportunity for Improvement Lays

Attributes
Ranking * Polic Follo y w-up Login of SOs Policy Process ing Timely Disburse ment Claim/ Grievan ce Settlem ent

116

II

III

No. Respons e Points No. Respons e Points No. Respons e Points

2 10 1 4 0 0 0 0 0 0 14

0 0 1 4 1 3 1 2 0 0 9

1 5 1 4 1 3 0 0 0 0 12

0 0 0 0 0 0 2 4 1 0 5

0 0 0 0 1 3 0 0 2 2 5

No. Respons IV e Points No. Respons e V Points Total

Source: Primary data Table: 4B.30

*For

the purpose of ranking the following points are given for five options in

the following order. 5, 4, 3, 2, 1

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The Administrative Areas Where Opportunity for Improvement Lays

16 14 12 10 8 6 4 2 0 14 12 9 5 5

Policy Login

Follow-up of Sales Officers

Policy Claim/ Grievance Timely Policy Disbursement Settlement Processing

Inference:

Figure: 4B.30

Most of the respondents preferred Policy Login as an area for improvement, followed by Policy Processing then Follow-up of Sales Officers.

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FACTORS CONSIDERED TO FIND OUT THE ADOPTED STRATEGY & EVALUATING ITS IMPLIMENTATION.
1. Intensity of Future Planning by ICICI Lombards Home Insurance Section It examines how advanced is ICICI Lombard Bancassurance Home on their future plans. 2. Sales Penetration of ICICI Lombards Loan Shield in November 2005 It examines whether the respondents from both strategy implementation and formulation are well aware of the present position of the product which enjoys in the market. 3. Importance of Giving Privilege of Status Checking of Policy Processing Extent to Customers It 4. examines whether they are maintaining transparency throughout the process. Regular Monitoring of Subordinates is Required in Terms of Productivity It examines whether the subordinates are achieving their sales target along with consistency in performance. 5. Major Channel through which Business is carried out This examines which channel is generating higher business volume to the company 6. Importance of maintaining relationship with Home- Finance Division

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In this the importance of maintaining relationship with Home Finance and its impact on business are examined. 7. Importance of Communication in Business Communication is considered as one of the key success factor in business. This examines effectiveness and importance of communication in both ways upward & downward. 8. Experience in ICIC Lombards Sales Administrative wing It indicates how equipped are the respondents with experience in the Sales Administration Wing. 9. Business Volume Accounted For ICICI Lombard by Loan Shield in November. This examines how much volume of business has been generated from Loan Shield in November. 10. ICICI Lombards Product Line Presently Supported by Sales administration In this the product line supported by the wing is examined 11. Products That Have Stronger Competitive Position to Loan Shield This examines the near competitors of Loan Shield in the market. 12. Intense of Impact That Crated By the Actions of Senior Sales and Marketing Management on Business. In this the effectiveness of the strategies and supplementary actions of the senior management has been examined.

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13. Lombard Managements Timeliness in Response to Requests and Inquiries This examines whether the strategy regarding communication adopted by the management really worked or not. 14. The Administrative Areas Where Opportunity for Improvement Lays In this the area for further improvement so that the sales can be increased is examined. 15. Adequate Support from Superiors This examines whether the sales people are getting enough support from senior management from all possible ways.

CHAPTER V CONCLUSION
CHAPTER SUMMARY
The whole project consists of five chapters together with appendices and bibliography. Chapter one is Introduction, which includes brief industry profile, brief company profile, research problem, objectives, significance or importance of study, research methodology and limitation of the study. Chapter two is detailed industry profile i.e. details about Automobile industry, industry analysis by Porters five forces.

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Chapter three is detailed company profile i.e. details of the company. It includes details about ICICI LOMBARD, history, vision, values and product portfolio. Chapter four is data analysis, which includes percentage, diagrams and inferences along with the customer satisfaction index analysis. Chapter five is conclusion, which includes chapter summary, findings, conclusion, suggestions and recommendation

FINDINGS
Strategy Analysis From the study, the calculated penetration level shows that ICICI Lombard Bancassurance Home is having a phenomenal growth in Trichy & Tanjore.

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The penetration level of the month November is found to be 57 %. The sales volume generated from the product Loan Shield is found to be in between 10 14 Lakhs.

The study reveals that -Sell (Cross Sell) is an effective channel in bancassurance, since majority of the business are coming from -Sell.

It is found that maintaining a good communication network with Superiors, Subordinates and customers, is one of the strategies that the Sales Administration wing employed.

It is been revealed from the study that a combined majority of sales people are getting information from superiors Very timely.

From the study it is revealed that, firm relationship with the Home Finance Division is a key success strategy employed by the management of the company, since the business is fully depends upon the support of Home Finance Division. It is been revealed from the study that sales people especially sales officers are using the same strategy of maintaining relationship with Home Finance is helping them in getting data from Home Finance.

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From

the

study

it

is

found

that

employing

Transparency as a strategy in this particular industry plays a crucial role, since it leads to trustworthiness.

It is been found that privilege of status checking of policy process extend to customers are helping the company to increase sales.

Regular

monitoring

of

subordinates

in

terms

of

productivity is found to be the next successful strategy adopted by ICIC Lombard Bancassurance home. target. It is found that the strategies employed by ICICI Lombard bancassurance Homes administrative wing are the major reason for this growth. Key Success Factors behind Strategy & Implementation
The study shows that sales persons are well ware of the features of Loan Shield, on which the study is focused. It is been found from the study that the majority of sales persons are getting training from the company regarding the product features. The majority of responses from the customers to the product are lying in between positive and somewhat

The

strategies

that

are

employed

by

the

management are helping sales persons to achieve their

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positive in the case of their attitude towards the product Loan Shield. It is been revealed from the study that on an average sales people are meeting 5 to 9 customers per day followed by a category of people are meeting 1to 4 customers a day.

The average customer conversion rate per day is found to be in between 0 to 2.

The study shows that the negatively responded customers are tackled by highlighting the EMI support of the product followed by dual coverage of the product. The point highlighting the need of insurance is found to be 20%. It is found from the study that the administrative wing is well advanced in planning their future business. The majority of the response shows that ICICI Lombard is very confident about gaining market share in the future. The study reveals that the sales administrative wing consists of a good proposition the case of experience; they are experienced in this wing starting from 1year and 6 months to more than 2 years. From the study it is revealed that the sales administration considered for the study is purely supporting Home Insurance products.

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The response shows that Loan Shield has a strong advantage over its competitors. (First mover to the Bancassurance in India) The study shows that ICICI prudential is a strong competitor for ICICI Lombard. The study reveals the fact that the opportunity for improvement mainly lies in the area of File login, followed by Policy processing and follow-up of sales officers.

Complimentary Factors
The particular study shows that major motivating factor for the sales person includes an equal response to both incentives and reference for higher posts(lateral entry to company pay-roll), followed by special trainings from the company and salary hikes. The study shows that the major advantage the Loan Shield have from its competitor is EMI support followed by easiness of taking policy and dual coverage.

General Findings
Cultural Issues in Distribution The managers of banks and of insurance companies can come from quite different work-cultures. There may be differences in the way of thinking and business approaches of bankers and managers of insurance companies. These differences create a communication and implementation

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problem in bancassurance operations. Banks are traditionally demand-driven organizations with a reactive selling philosophy. Insurance organizations are usually need-driven and have an aggressive selling philosophy. It has been observed that this friction at the level of bank employees and insurance salespeople arises from differing philosophies towards selling, the jealousies of bank employees regarding remuneration of insurance sales staff and fears of "cannibalization" of deposits, e.g. the bank employee fears that the salesperson encourages withdrawal of bank deposits, putting the bank employee's job in greater jeopardy. As a result the team spirit is negatively influenced and, since this is a crucial factor for the success of any operation, it has to be confronted.

CONCLUSION

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The project was undertaken for the ICICI LOMBARD Bancassurance Home, A Division of Indias No.1 private General Insurance Company ICICI LOMBARD to study on strategy employed by ICICI Lombard Bancassurance Home for its phenomenal growth. The main objective of the study was to analyze Marketing Strategy employed by ICICI Lombard for its phenomenal growth in Trichy & Tanjore. Certain recommendations were given to improve the sales, service and level of customer satisfaction of Loan Shield holders. It is hoped that the interpretations, suggestions and ideas and findings of this study would support the company in an efficient and better way.

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SUGGESTIONS AND RECOMMENDATIONS

As per the study, the achieved penetration level is more than 50% with the implementation of found strategies, the region under study was a large area covering Trichy District & spokes and Tanjore includes Nagapattanam, Velangkanni, and Thirunelveli etc. So the company should recruit more efficient man power in the area of sales persons to convert maximum business, so that the company can keep lead in the industry.

In the present scenario there is a lot of competition from other players and they are offering the same with lot of advantages, especially ICICI Prudential, a company from the same family coming as rival. So to keep going the company should have some window dressing and product feature increase is needed. The basic problem arises with customers is the time period of insurance coverage.

At present there are a lot of competitors like, Home Assure-ICICI Prudential, Loan Safe-Centurion Bank, Home Insure-HDFC Chubb, Kotak Loan Protection Plan (KLPP), New Corp Jeevan Griha Raksha

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Corporation bank etc are offering similar product features and packages. So there is a chance for changing the insurance policy from ICICI Lombard to others. To avoid such shifting the company should try to reduce premium or dole out some value added services to customer flexi pay, covering period extension for those who correctly pays premium etc. are some of them in order to hold the customers. In Trichy considering as a centre point for reporting of business from both Trichy and Tanjore, they need an independent full-fledged office in Trichy for its further growth in the region and it should be very near to the Home Finance Cell so that the communication and information transfer can be improved.

Bancassurance is one of the modern concepts in insurance industry, so to maximize benefits, the workcultural differences between the banking and the insurance industries must be understood, respected and lived with in order for the bancassurance venture to succeed. The development of a single culture is another possible solution but this requires a very strong commitment from the top management. This

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commitment must be continuously conveyed to all bank employees and insurance agents. One way of achieving this is to develop a "statement of mission" for the new organization and to get the staff to commit to fulfilling this statement. This can help to ensure that there is a common path for the bank and the insurer.

Apart from these suggestions I would like put some general suggestions to the company which will help them to success. Customers are always search for alternatives. If they think that there is alternative which satisfy his/her need then he/she will shift. Practicing some newly emerged concept like Total Relationship Marketing will help to prevent such shifting. According to this concept the firm should give prior importance to the needs of the customer. That means listening the needs and complaints of the customer and on the basis of this make necessary changes in the operations of the firm. If such a practice is there the customer will be loyal to the firm and they will become the ambassadors also. This era considers customer as a king there is a new practice like "Involvement Marketing" are emerging now a days of .Involvement customers, Marketing persons means are involvement who

interested in the firm in future and the company it

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self making a communication network so as to implement the decisions which are beneficial for all the parties and it leads high quality products at lower costs. So it is necessary to be friendly with customers or having a communication network between the firm and customers.
These practices are very much helpful to improve the customer satisfaction and for the company for their existence and success in future.

APPENDIX-I
Questionnaire I

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A Study on Growth Strategy Unleashed by ICIC Lombards Bancassurance Home to Grab Market Presence.
Name: Designation:

Please rate your response with each of the following: Place a tick mark [] wherever applicable
1. To what extent do you plan to give ICICI Lombard greater emphasis in your business over the next few years? Great extent[ ] Moderate extent [ ] Slight extent [ ] Not much [ ] Not at all [ ] 2. Overall, how confident are you that ICICI Lombard will gain additional market share in the product industry in the coming year? Confident [ ] Somewhat confident [ ] Not sure [ ] Somewhat doubtful [ ] Doubtful [ ] 3. What is the range of your regions sales penetration of ICICI Lombards Loan Shield last month? 24% or less [ ] 25% - 49% [ ] 50% - 74% [ ] 75% or more [ ] 4. How much important is giving privilege of status checking of a Policy processing extent to customers? Very Important [ ] Important [ ] Somewhat Important [ ] Not Sure [ ] Unimportant [ ] 5. To what extent do you believe that regular monitoring of subordinates is required in terms of productivity? Great extent[ ] Moderate extent [ ] Slight extent

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[ ] Not much [ ] Not at all [ ] 6. Which are the major channels through which business is being carried out?

- Sell [ ]
[ ] RRR [ ]

I Channe [ ]

A.N.M

[ ]

Aditya

7. Taking into consideration of the

-sell prospects what

importance should be attached for maintaining the relationship with Home Finance? Very Important [ ] Important [ ] Somewhat Important [ ] Unimportant [ ] 8. How important is communication, both upward and downward in your business? Very Important [ ] Important [ ] Somewhat Important [ ] Unimportant [ ] 9. What are the motivating factors the company uses for motivating your subordinates?

10. How long have you been in ICIC Lombards Administrative wing? 1-6 months [ ] 6-12 months [ ] 1 year 6 months [ ] 2 years [ ] More than 2 years [ ] 11. How much of business volume is accounted for ICICI Lombards Loan Shield last month from Trichy & Tanjore? 1-4 Lakhs [ ] 5-9 Lakhs [ ] 10-14 Lakhs [ ]

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14 Lakh or more [ ] 12. Which of the following Lombards product lines do you fully support at this time? Health Insurance [ ] Home Insurance [ ] Motor Insurance [ ] Travel Insurance [ ] NRI Insurance [ ] 13. How advantageous is Loan Shield compared to other competitors, in selling situations? Strong advantage[ ] Slight advantage [ ] About the same [ ] Slight disadvantage [ ] Strong disadvantage [ ] 14. Which product line do you see as offering a stronger competitive position to Loan Shield? Home Assure-ICICI Prudential [ ] Loan Safe-Centurion Bank [ ] Home Insure-HDFC Chubb [ ] Kotak Loan Protection Plan (KLPP) [ ] New Corp Jeevan Griha Raksha Corporation bank [ ] 15. Overall, have actions taken by the companys senior sales and marketing management over the past year had any impact on your business? Positive impact [ ] Somewhat positive impact [ ] Not sure [ ] Somewhat negative impact [ ] Negative impact [ ] 16. On average, which of the following best describes Lombard managements timeliness in response to your requests and inquiries? Very timely [ ] Somewhat timely [ ] Not Sure [ ] Somewhat slow [ ] Very slow [ ] 17. How do you rate ICICI Lombard on the basis of senior

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management support? Completely Satisfied [ ] Satisfied [ ] Some what satisfied [ ] Dissatisfied [ ] Completely dissatisfied [ ] 18. Which of the following administrative areas would you say presents the greatest opportunity for improvement? Rate it on a Scale of 0-5 Policy Login [ ] Follow-up of Sales Officers [ ] Policy Processing [ ] Timely disbursement [ ] Policy Claim/grievance settlement [ ] 19. Please specify the marketing and sales programs adopted to propagate Loan Shield?

20. What suggestions do you have for ICICI Lombards senior management which would help you improve the success of ICICI Lombards business in the forth coming year?

Questionnaire II

A Study on Effectiveness of Strategy Implementation, Conducted Among Sales Persons.

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Name:

Designation

Please rate your response with the sales department on each of the following: Place a tick mark [] wherever applicable
1. Are you aware of all the features of Loan Shield?

Yes [ ] No [ ] 2. If yes, whether the company had provided any training? Yes [ ] No [ ] 3. On an average, how many customers do you meet per day? 1-4 [ ] 5-9 [ ] 10-14 [ ] 15-19 [ ] 4. What is the average conversion rate per day? 0 to 2 [ ] 3 to 5 [ ] 6 to 8 [ ] 9 or More [ ] 5. What is the response you get from the customer regarding the product Loan Shield? Positive [ ] Somewhat positive [ ] Not sure [ ] Somewhat negative [ ] Negative [ ] 6. How do you tackle customers with negative response towards Loan Shield? Convincing the need of Insurance [ ] Easiness of taking policy [ ] Dual Coverage of the product [ ] EMI Support [ ] 7. To what extent does the marketing strategy put forward by the management help you in achieving your monthly target? Great extent[ ] Moderate extent [ ] Slight extent [ ] Not much [ ] Not at all [ ]

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8. What are the factors which motivates you to put forward a better performance? Incentives Letters [ ] Special Trainings [ ] [ ] 9. What are the strategies that you are adopting for getting data from ICICI Home Finance? Reference for higher posts [ ] Salary hikes [ ] Appreciation

10. Yes

Do you think that you are getting adequate [ ] No [ ] in response to your requests and Somewhat timely [ ] Not Sure

support from superiors?

11. If yes, which of the following best describes your

superiors timeliness inquiries? Very timely [ ] [ ] Somewhat slow 12. What is your

[ ] Very slow [ ] regions sales penetration for the

product Loan Shield in November? 24% or less [ ] 25% - 49% [ ] 50% 74% [ ] 75% or more [ ] 13. Does the privilege of status checking of the policy process extended to the customer helps in increasing sales?

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Yes [ ] No [ ] 14. What are the advantages Loan Shield has from its competitors products? Easiness of taking policy [ ] Dual Coverage of the product [ ] EMI Support [ ] Critical Illness Cover [ ] 15. What suggestions do you have for ICICI Lombards senior management which would increase business in the forth coming year?

APPENDIX-II
ICIC LOMBARD BOARD STRUCTURE
BOARD MEMBERS Mr K V Kamath Mr R Athappan Mr B V Bhargava Mr Dileep Choksi Mr James F Dowd Ms Lalita D Gupte Ms Kalpana Morparia Mr S Mukherji : Chairman : Director : Director : Director : Director : Director : Director : Director

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Mr Chandran Ratnaswami Mr H N Sinor : Director

: Director

Mr Sandeep Bakhshi: Managing Director & CEO

BOARD COMMITTE Audit Committee Mr S Mukherji Mr Dileep Choksi Mr James F Dowd Investment Committee Mr Chandran Ratnaswami Ms Kalpana Morparia Mr S Gopalakrishnan : Chairman : Director : Head Investments : Chairman : Director : Director

Mr Sandeep Bakhshi: Managing Director & CEO

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Mr Rakesh Jain Mr Liyaquat Khan

: Head-Finance & Accounts : Appointed Actuary : Chairperson

Board Governance Committee Ms Kalpana Morparia Mr H N Senior, Director Mr Chandran Ratnaswami, Director

APPENDIX-III
PRODUCT FEATURES OF LOAN SHIELD

Complete Protection for Your Home and Home Loan!

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Coverage Covers Principal Outstanding or EMI due for a specified period. Cover for Maximum period of 5 years Covers outstanding principal balance in the event of: Death on account of misfortune Accidental Permanent Total Disability resulting in inability to continue gainful employment Covers EMI Payments (for salaried persons only) in the event of: Critical Illness (CI) Hospitalization Loss of Income on account of Critical Illness Includes hospitalization and post-hospitalization domiciliary care Aggregate claims paid: Up to 12 EMI Covers successive hospitalizations under the policy up to the policy aggregate of 12 EMI Covers EMI Payments (for salaried persons only) in the event of: Loss of Job Termination, retrenchment, dismissal due to unforeseen circumstances VRS if preceded by company shutting a division and minimum 20 person opting for VRS Aggregate claims paid: Up to 3 EMI Property Cover for 5 years

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Gives protection in the event of any loss due to fire and earthquake Protects home loan liability Financial security in the event of distress Coverage is for the reinstatement cost of construction of the house (Built up area of the house X Cost of construction per sq. foot) Critical Illness cover Cancer Myocardial Infarction Stroke Coronary Artery Bypass Surgery End stage Renal Failure Major Organ Transplant Paralysis End stage Liver disease Heart valve Replacement Coverage Exclusions Death from intentional self-injury, suicide or attempted suicide Pre existing Condition Any Critical Illness discovered within 90 days of inception of the policy Unemployment arising within 90 days of the policy inception

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Unemployment arising out of circumstances known to the insured Resignation, VRS, super-annuation or early retirement Eligibility conditions Age at entry: 20 to 50 years Minimum Loan Tenure: 60 months

Maximum Amount covered: Rs 1 crore.

Health Declaration CI cover not available for pre existing illnesses as declared in the application form For self employed persons: Death, disability and free property cover available Property cover for completed constructions only Property cover available for a year only for commercial loans Loan Shield Pricing
Loan Period Age Groups 20-30 31-35 36-40 41-45 46-50

5-7 1.73% 1.96% 2.38% 3.31% 4.88%

8-10 2.10% 2.43% 2.92% 4.04% 6.17%

11-15 2.33% 2.70% 3.28% 4.55% 7.06%

16-20 2.47% 2.86% 3.50% 4.86% 7.61%

21-25 2.54% 2.94% 3.62% 5.02% 7.89%

26-30 2.58% 2.99% 3.68% 5.12% 8.05%

Premium as a % of the loan amount 10% discount on the premium for self employed persons

LOAN SHIELD PROCESSING

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At sanction stage (BCM): Fill the intent-to-buy form along with HFC app form
Compute premium with the help of the computation

chart.
Mark the file as a Loan Shield Case confirming the

interest of the customer for Loan Shield.

ICICI Bank sanctions the premium loan along with the home loan in the sanction letter to customer.

At disbursement stage (CAM): At the time of the first disbursal, fill in the Loan Shield application form along with the DRF.

Confirming the application for Loan Shield.

Ensure the health declaration is filled in confirming

that applicant is medically fit and does not suffer from CIs.
In case of pre-existing CI tick the relevant box the

same would be excluded from cover. Check premium computation using the table If any discrepancy exists, revert to BCM If the customer refuses to opt for Loan Shield at the disbursal stage Refer the case back to the BCM with a written customer request for opting out. Collect the cheque from the customer at the time of first disbursal-in the name of ICICI Lombard Tear away of the application form to be given back to customer Cheque and app form to be submitted along with other loan documents at the HFC branches

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Cheque Bounce cases IL to write to customer requesting for a demand draft 4 attempts made to contact customer If no response received, the Loan Shield case is cancelled Customer wanting to opt for Loan Shield at disbursement Application form and cheque collected from customer No premium funding by I Bank

POLICY STRUCTURE Policy issued in the name of Bank Borrower insured under the policy on payment of premium Optional cover at the option of borrower IL issues confirmation of cover certificate Customer can contact IL if the certificate not received within 6 weeks Claim servicing solely the responsibility of IL Claim will be paid only to the Bank-Bank is the whole and sole beneficiary CLAIMS PROCESS In case of claim, customer calls up the ICICI Lombard call center ICICI Lombard will send the customer the claim form

146

Customer

sends

completed

claims

form

and

other

supporting documents ICICI Lombard settles claims directly to the Bank within 21 days of receipt of all completed documents Claims Documents: Death Claim form Doctors Report/Hospital Report Death certificate Accidental Death(additional documents) Police report Post mortem Report Accidental PTD (additional documents) Doctors disability report Investigation Reports Laboratory test X-rays and reports essential for confirmation of the injury Police report Loss of Job Claim Form Employer certificate Certificate from Bank on amounts due and date of payment Notice from bank to customer requiring payment

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Critical Illness Doctors certificate Employers certificate intimating loss of pay Notice from bank to customer requiring payment Property Insurance Claim form Occupancy certificate Fire Brigade Report Repair Bills Surveyors report FIR

BIBLIOGRAPHY
Print Resources:
1. 2.

MARKETING MANAGEMENT : RESEARCH METHODOLOGY : :

PHILIP KOTLER C.R.KOTHARY RAJENDRA

3. MARKETING RESEARCH

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NARGUNDKAR 4. CONSUMER BEHAVIOUR : LEON G. SCHIFFMAN LESLIE L.KANUK

Electronic Resources:
1. 2. sp
3.

http://www.icicilombard.com http://www.iciciknowledgepark.com/icicikp/index.a http://www.icicibank.com http://www.irdaindia.org http://www.investopedia.com/investopedia/pre_pri http://www.dibc.co.uk/bancassurance.html http://www.insuremagic.com/Content/Articles/Life/ http://www.fractalanalytics.com/fractal_analytics_c http://www.socialinitiatives.org http://www.asiainsurancereview.com http://www.marketresearch.com

4. 5. 6. 7. 8. 9. 10.
11.

ntable.aspx?a=/features/industryhandbook/insurance.asp

bancassurance.asp ross_sell.htm