Abstract:

Purpose: The purpose of the project is to understand the importance and effectiveness of the mall assurance strategy in marketing and sales of life insurance products and services. Methodology: Data is collected through distributing Questionnaires to the customers of Big Bazar situated in Malleswaram and Bansankari area of Bangalore. Findings: The company has increased its share capital by adopting this strategy of mall assurance. Presently it contributes 5% to 8% of its total business. This strategy of mall assurance has added a new angle in selling processes of insurance.

Chapter-I: Theoretical Framework

Introduction to Insurance
The insurance sector in India has come to a full circle from being an open competitive market to nationalization and back to a liberalized market again. Tracing the developments in the Indian insurance sector reveals the 360-degree turn witnessed over a period of almost two centuries. The insurance sector in India is growing at a speedy rate of 15-20% and together with banking services insurance services add about 7% to the countrys GDP. In the last completed financial year of 2011-2012 the insurance sector has shown a growth rate of 23%. Today Insurance Companies in India have grown manifold. The insurance sector in India has shown immense growth potential. Even today a giant share of Indian population nearly 80% is not under life insurance coverage, let alone health and non-life insurance policies. This clearly indicates the potential for insurance companies to grow their market in India. In simple terms it is a contract between the person who buys Insurance and an Insurance company who sold the Policy. By entering into contract the Insurance Company agrees to pay the Policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called Insurance Premiums. Insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. By paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event.

Definition of insurance:
In laymens term insurance can be defined as: A transfer of the risk of a loss, from insured (person taking insurance) to the insurer (the company) in exchange for a payment of certain sum of money (premium)." In financial sense insurance can be defined as: A social device providing financiasl compensation to the insured for the consequences of adversities and the payment is paid by the insurer from the accumulated contributions (premiums) of all the parties participating in the arrangement. The essence of insurance is collective bearing of all risks or pooling of risk.
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In legal sense insurance can be defined as: A contract under which the insurer (the company) in consideration of a certain sum of money paid (premium) by the insured (the person whose risk is insured) agrees to: Make good of the loss suffered by the insured against a specific risk. To pay a prefixed amount to the insured or his/her beneficiaries o the happening of a specific event.

Brief History of Insurance

In India insurance has a deep-rooted history. It can be found mentioned in the writings like Manusmrithi, Dharmasastra and Arthasastra. These writings talks about pooling of resources and re-distributed of them in times of calamities such as fire, floods, epidemics and famine and this can be considered as probable pre-cursor to modern day insurance. Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers contracts. 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 nationalized. Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

The General insurance business in India, on the other hand, 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:

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 with effect from 1st January 1973. 107 insurers amalgamated and grouped into four companys viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company.

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N. Malhotra was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector. The reforms were aimed at "creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. Thereafter many changes have taken place in the insurance sector. Insurance sector in India was liberalized in March 2000 with the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. There is a 26% equity cap for foreign partnersin an insurance company. There is a proposal to increase this limit to 49%. The opening up of the insurance sector has led to rapid growth of the sector. Presently, there are 16 life insurance companies and 15 non-life insurance companies in the market. The potential for growth of insurance industry in India is immense as nearly 80% of Indian population is without life insurance cover while health insurance and non-life insurance continues to be well below international standards. Furthermore, over the medium and long term, Indias insurance market will continue to experience major changes as its operating environment increasingly deregulates. On the one hand, a mix of new products, new delivery systems and a greater awareness of risk will generate growth. On the other hand, competition will remain intense as private sector insurers

and those about to enter India seek to win market share from the more established public sector entities.

Benefits of Insurance
1. Tax relief: Under section 88 of income tax act, a portion of premiums paid for life insurance policies are deducted from tax liability. Similarly, exemption is available for health insurance policy premiums. Money paid as claim including bonus under a life policy is exempted from payment of income tax. However annuities received under certain pension plans are taxable. 2. Encourages savings: An insurance scheme encourages thrift among individuals. It inculcates the habit of saving compulsory, unlike other saving instruments, wherein the saved money can be easily withdrawn. 3. The beneficiaries to an insurance claim amount are protected from the claims of creditors by affecting a valid assignment. 4. For a policy taken under the MWP act 1874, (married womens property act), a trust is created for wife and children as beneficiaries. 5. Life policies are accepted as a security for a loan. They can also be surrendered for meeting unexpected emergencies. 6. Based on the concept of sharing of losses, the society will benefit as catastrophic losses are spread globally.

Necessity of Insurance:
The question contains the answer within itself. After all, life is fraught with tensions and apprehensions regarding the future and what it holds for the individual. Despite all the planning and preparation one might make no one can accurately guarantee or predict how or when death might result and the circumstances that might ensue in its aftermath. We are not saying that life and existence are constantly fraught with danger and uncertainty. But then it is essential that you plan for the future. The changes for a fatality or an injury to occur to the average individual may not be particularly high but then no one can really afford to completely disregard his or her future and what it holds. People generally regard insurance as a scheme when and where you have to lose a lot to gain a little. Nevertheless, insurance is still the most reliable tool an individual can use to plan for his future.

Purpose and Need of Insurance:

Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, flood, breakdown, lightening, earthquake, etc. are perils. If such perils can cause damage to the assets, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or damages. The risk to owner of a building, because of the peril of earthquake, may be a few crores of rupees, depending on the cost of the building and the contents in it. The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about occurrence of an event, it cannot be insured against. In case of human being death is certain, but the time of death is uncertain. In case of a person who is terminally ill, the time of death is not uncertain, though not exactly known. He cannot be insured. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The peril can sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of risk on the owner of the asset and those who depend on that asset. It only compensates the losses-and that too, not fully. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of noneconomic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc.

Functions of Insurance
Insurance services through its various activities perform various functions in the economy which can be classified as follows. Primary Functions Secondary Functions Other Functions

Primary functions of insurance: Providing protection: The elementary purpose of insurance is to allow security against future risk, accidents and uncertainty. Insurance cannot arrest the risk from taking place,

but can for sure allow for the losses arising with the risk. Insurance is in reality a protective cover against economic loss, by apportioning the risk with others. Collective risk bearing: Insurance is an instrument to share the financial loss. It is a medium through which few losses are divided among larger number of people. All the insured add the premiums towards a fund and out of which the persons facing a specific risk is paid. Evaluating risk: Insurance fixes the likely volume of risk by assessing diverse factors that give rise to risk. Risk is the basis for ascertaining the premium rate as well. Provide Certainty: Insurance is a device, which assists in changing uncertainty to certainty. Secondary functions of insurance Preventing losses: Insurance warns individuals and businessmen to embrace appropriate device to prevent unfortunate aftermaths of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Covering larger risks with small capital: Insurance assuages the businessmen from security investments. This is done by paying small amount of premium against larger risks and dubiety. Helps in the development of larger industries: Insurance provides an opportunity to develop to those larger industries which have more risks in their setting up. Other functions of insurance Is a savings and investment tool Insurance is the best savings and investment option, restricting unnecessary expenses by the insured. Also to take the benefit of income tax exemptions, people take up insurance as a good investment option. Medium of earning foreign exchange Being an international business, any country can earn foreign exchange by way of issue of marine insurance policies and a different other ways. Risk Free trade Insurance boosts exports insurance, making foreign trade risk free with the help of different types of policies under marine insurance cover. Insurance provides indemnity, or reimbursement, in the event of an unanticipated loss or disaster. There are different types of insurance policies under the sun cover almost anything that one might think of. There are loads of companies who are providing such customized insurance policies.

Regulation of Insurance in India & IRDA

In India the regulation and development of the insurance industry is carried down by Insurance Regulatory and Development Authority of India (IRDA). IRDA was established by government of India through Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory authority, which has put in place regulations in line with global norms. IRDA has been framing regulations and registering the private sector insurance companies. It launched the IRDA online service for issue and renewal of licenses to agents. So far, there are 24 life insurance companies and 27 general insurance companies. Premium rates of most general insurance policies come under the purview of the government appointed Tariff Advisory Committee. Powers, Duties & Functions of IRDA The IRDA Act, 1999 lays down the duties, powers and functions of IRDA. The Authority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re-insurance business. The powers and functions of the Authority shall include: a) Issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registration; b) Protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender value of policy and other terms and conditions of contracts of insurance; c) Specifying requisite qualifications, code of conduct and practical training for intermediary or insurance intermediaries and agents; d) Specifying the code of conduct for surveyors and loss assessors; e) Promoting efficiency in the conduct of insurance business. f) Promoting and regulating professional organisations connected with the insurance and re-insurance business. g) Levying fees and other charges. h) Calling for information from, undertaking inspection of, conducting enquiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organisations connected with the insurance business.

i) Control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff Advisory Committee. j) Specifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediaries. k) Regulating investment of funds by insurance companies. l) Regulating maintenance of margin of solvency. m) Adjudication intermediaries. n) Supervising the functioning of the Tariff Advisory Committee. o) Specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organisations engaged in insurance and reinsurance business. p) Specifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sector. q) Exercising such other powers as may be prescribed. IRDAs Cell for redressal of grievances of Policyholders The IRDA has a cell that receives and looks into complaints from policyholdersLife and Non-life grievances are handled separately. The Cell plays a facilitative role by taking up such complaints with the respective insurers. Cases of delay/non-response: Cases of delay/non-response in matters relating to policies and claims are taken up with the insurers for speedy disposal. Claims/policy contracts in dispute: Complaints relating to these are analysed and insurers are advised to examine the same. If required, their attention is called to specific issues for examination/re-examination. However, if the insurer does not change its stand even after examination/re-examination, the complainant is informed of the same. The Authority does not carry out any adjudicaton. For this, the complainant would have to approach the appropriate judicial channel. of disputes between insurers and intermediaries or insurance

List of Insurance Companies in India IRDA has provided till today registration for 27 general insurance companies including the Export Credit Guarantee Corporation of India and Agriculture Insurance Corporation of India
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and 24 life insurance companies. In the registered companies 23 companies are private life insurance companies and 21 are private general insurance companies. General Insurance Corporation has been sanctioned as the "Indian reinsurer" for underwriting only reinsurance business. The following are the insurance companies performing function in India. Table 1: List of Insurance Companies operating in India registered with IRDA LIFE INSURERS Public Sector Life Insurance Corporation of India Ltd. Private Sector Bajaj Allianz Life Insurance Company Ltd. Birla Sun-Life Insurance Company Ltd. HDFC Standard Life Insurance Company Ltd. ICICI Prudential Life Insurance Company Ltd. ING Vysya Life Insurance Company Ltd. Max New York Life Insurance Company Ltd. MetLife Insurance Company Ltd. Kotak Mahindra Old Mutual Life Insurance Company Ltd. SBI Life Insurance Company Ltd. TATA AIG Life Insurance Company Ltd. Reliance Life Insurance Company Ltd. Aviva Life Insurance Company India Ltd. Sahara India Life Insurance Company Ltd. Shriram Life Insurance Company Ltd. Bharti AXA Life Insurance Company Ltd. Future Generali India Life Insurance Company Ltd. IDBI Federal Life Insurance Company Ltd. Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd. AEGON Religare Life Insurance Company Ltd. DLF Pramerica Life Insurance Company Ltd. Star Union Dai-ichi Life Insurance Company Ltd. www.canarahsbclife.com www.aegonreligare.com www.dlfpramericalife.com www.sudlife.in www.bajajallianz.com www.birlasunlife.com www.hdfclife.com www.iciciprulife.com www.inglife.co.in www.maxnewyorklife.com www.metlife.com www.insurance.kotak.com www.sbilife.co.in www.tata-aig.com www.reliancelife.com www.avivaindia.com www.saharalife.com www.shriramlife.com www.bharti-axalife.com www.futuregenerali.in www.idbifederal.com www.licindia.com Websites

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IndiaFirst Life Insurance Company Ltd. Edelweiss Tokio Life Insurance Company Ltd. GENERAL INSURERS Public Sector National Insurance Company Ltd. New India Assurance Company Ltd. Oriental Insurance Company Ltd. United India Insurance Company Ltd. Agriculture Insurance Company of India Ltd. Private Sector Bajaj Allianz General Insurance Company Ltd. ICICI Lombard General Insurance Company Ltd. IFFCO Tokio General Insurance Company Ltd. Reliance General Insurance Company Ltd. Royal Sundaram Alliance Insurance Company Ltd Tata AIG General Insurance Company Ltd. Cholamandalam MS General Insurance Company Ltd. HDFC ERGO General Insurance Company Ltd. Future Generali India Insurance Company Ltd. Universal Sompo General Insurance Company Ltd. Shriram General Insurance Company Ltd. Bharti AXA General Insurance Company Ltd. Raheja QBE General Insurance Company Ltd. SBI General Insurance Company Ltd. L&T General Insurance Company Ltd. Magma HDI General Insurance Company Ltd. Liberty Videocon General Insurance Company Ltd. Stand Alone Health Insurers Star Health and Allied Insurance Company Ltd. Max Bupa Health Insurance Company Ltd. Religare Health Insurance Company Ltd. Apollo Munich Health Insurance Company Ltd.
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www.indiafirstlife.com www.edelweisstokio.in

www.nationalinsuranceindia.com www.newindia.co.in www.orientalinsurance.org.in www.uiic.co.in www.aicofindia.com

www.bajajallianz.com www.icicilombard.com www.iffcotokio.co.in www.reliancegeneral.co.in www.royalsundaram.in www.tataaiginsurance.in www.cholainsurance.com www.hdfcergo.com www.futuregenerali.in www.universalsompo.com www.shriramgi.com www.bharti-axagi.co.in www.rahejaqbe.com www.sbigeneral.in www.ltinsurance.com www.magma-hdi.co.in

www.starhealth.in www.maxbupa.com www.religarehealth.com www.apollomunichinsurance.com

Export Credit Insurers Export Credit Guarantee Corporation of India Ltd. REINSURER General Insurance Corporation of India www.gicofindia.com www.ecgc.in

Insurance Business
Insurance business is classified into two classes: 1) Life insurance 2) Non-Life or General Insurance Life insurers transact life insurance business, general insurers transact the rest. No composites are permitted as per law. Life Insurance: Life insurance is a contract between two parties whereby one party agrees to pay to the other party, a certain amount of money as premium to make good the loss of life arising out of an uncertain event of death in which the insured has interest. Though Human life cannot be valued, a monetary sum could be determined which is based on loss of income in future years. Hence in life insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is by way of a benefit in the case of life insurance. Non-Life/General Insurance: General insurance is a contract between two parties whereby one party agrees to pay to the other party, a certain amount of money as premium to make good the loss of property arising out of an uncertain event of accident, natural calamity, theft etc. in which the insured has interest. As the property of a person is quantifiable and can be valued and losses can be calculated, a monetary sum could be determined to cover the losses. Hence in general insurance, the Sum Assured (or the amount guaranteed to be paid in the event of a loss) is a compensation to make good of the loss. Non-Life/General Insurance can be further classified into five different classes: 1. Marine Insurance: Marine insurance can be defined as a contract whereby the insurer undertakes to indemnify the insured in a manner and to the extent thereby
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agreed upon against marine losses or maritime perils. Marine insurance has two branches: Ocean Marine Insurance. Inland Marine Insurance.

Ocean marine insurance covers the perils of the sea whereas inland marine insurance is related to the inland risks on the land. The perils and losses covered under marine insurance are losses caused by seawater, stranding, cyclone, storm, lightning, fog, rough weather, collision with other ship, striking upon a sunken rock or icebergs, war, pirates and rovers, jettisons and barratry 2. Fire Insurance: It is the insurance which covers losses and damages to the property caused by fire. Fire insurance is a specialized form of insurance which is designed to cover the cost of replacement, reconstruction or repair beyond what is covered by the property insurance policy. Policies cover damage to the building itself, and may also cover damage to nearby structures, personal property and expenses associated with not being able to live in or use the property if it is damaged. The losses covered in fire insurance are losses due to fire caused by earthquake, lightning, invasion, act of foreign enemy, hostilities or war, civil strife, riots, mutiny, martial law, military rising or rebellion or insurrection, underground fire, explosion and implosion. Loss caused by burning of property by order of any public authority. Loss caused by loss by theft during or after the occurrence of fire. 3. Motor Vehicle Insurance: It covers risk towards the owner and vehicle from an accident but also covers the financial liability which may arise from the accident injuring a third party along with the damage to the. In the absence of insurance a person has to pay large amount of money to the other party as repair costs of their vehicle besides spending on own vehicle. If there is any hospitalization is there then the expenses go higher too. Thus, motor vehicle insurance becomes essential in todays world. 4. Health Insurance: It providing cover for financial losses associated with illness, injuries and hospitalisation and expenses incurred for the use of health related services. The extent of cover depends on the specifics of the policy and cover is provided as either direct payment or reimbursements for the expenses associated.

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5. Miscellaneous Insurance: The term miscellaneous insurance covers a large variety losses and damages arisen from various reasons and is designed to meet the peculiar requirements of the insured. Some of the miscellaneous insurance policies are: Fidelity Guarantee insurance: Insurance providing cover to the

employer against losses arising through fraud or embezzlement from employee. Earthquake Insurance: As the name itself suggests it is the insurance providing cover to the property against losses arisen due to earthquake. Flood Insurance: Insurance providing coverage against losses and damages arisen from floods. Burglary Insurance: Insurance providing coverage against losses and damages of household goods and properties and personal effects due to theft, robbery, larceny, housebreaking and such similar acts. Engineering Insurance: Insurance providing cover for damage to mechanical and electrical equipment or machinery. It also covers losses/damages suffered by contractors and civil engineering projects. Cattle Insurance: Insurance policies covering the losses arisen due to death of animals like bulls, cows, buffaloes and heifers. Permanent total disability of the animals is also covered under the policy for extra payment of premium. Crop Insurance: Insurance policy covering the losses of crop suffered by farmers due to natural disasters like drought, hail and floods or due to decline in prices of agricultural commodities.

Principles of Insurance
The insurance business is guided by set of guidelines for proper, smooth and transparent working. These guidelines help both the insured and insurer to form the insurance contract as well as to understand the basis of insurance. These guidelines are considered as the fundamental principles of insurance and are enumerated as follow: 1. Principle of Insurable Interest

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The person getting an insurance policy must have an insurable interest in the property or life insured. A person is said to have an insurable interest in the property if he is benefited by its existence and be prejudiced by its destruction. The presence of insurable interest is a legal requirement and without insurable interest the insurance contract is void. The object of this principle is to prevent insurance from becoming a gambling contract. The ownership of a property is not necessary for establishing insurable interest. A banker has an insurable interest in the property mortgaged to it against a loan. An employer can insure the lives of his employees because of his pecuniary interest in them. In the same way, a creditor can insure the life of his debtor. A person cannot insure the property of a third party, because he does not have an insurable interest in it. In case of fire insurance, insurable interest must exist both at the time of contract and at the time of loss. In marine insurance, however, insurable interest must exist at the time of loss. It may or may not exist at the time of contract. In case of life insurance, the persons taking up a policy should have insurable interest in the life of insured person at the time of taking up the policy. It is not necessary that he should have insurable interest at the time of maturity also. Suppose a person gets an insurance policy on the life of his wife. Later on the wife is divorced. The policy will not become void because the husband ceases to have an insurable interest. Insurable interest in different polices can be explained as follows: Life Insurance Following persons have insurable interest in life insurance contract: An employer in the life of an employee during the course of employment. A partner is the life of other partners in case of partnership. Husband in the life of his wife or vice-versa. A creditor in the life of his debtor to the limit of the amount of his debt. A son in the life of his father on whom he is dependent. A dependent to the extent of support he is getting. A surety in the life of his principal to the extent of his guarantee.

Fire and Marine Insurance Under these contracts, following persons have insurable interest;
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Mortgagee to the extent of amount of loan he has given. Owner of the property in his property. Wife and husband in each others property. An agent in the goods of his principal.

2. Principle of Utmost Good Faith This is the primary principle of insurance. According to this principle, the insurance contract must be signed by both parties (insurer and insured) in an absolute good faith or belief or trust. It is obligatory on the part of both the parties in the contract to must disclose all material facts for the benefit of each other. False information or non-disclosure of any important fact makes the contract avoidable at the discretion of the insurer. The amount of premium is fixed on the basis of all the facts supplied to the insurance company. If some facts are withheld, then the amount of premium will not be properly settled. The insurer should also disclose the facts of the policy to the proposer. So, utmost good faith on the part of both the parties is a must. 3. Principle of Indemnity The principle of indemnity is applicable to all types of insurance policies except life insurance. Indemnity means security, protection and compensation given against damage, loss or injury. The insurer promises to help the insured in restoring the position before loss. Whenever there is a loss of property, the loss is compensated. The compensation payable and the loss suffered should be measurable in term of money. The insured will be compensated only up to the amount of loss suffered by him. He/She will not earn profit from the contractor. The maximum amount of compensation will be up to the value of the policy which is fixed at the time of contract. The insured will be compensated only up to the amount of loss suffered by him/her. H/She will not earn profit from the contractor. The maximum amount of compensation will be up to the value of the policy. The value of the policy undertaken is fixed at the time of contract. The actual amount of loss suffered is compensated and the value of policy is only the maximum limit. 4. Principle of Subrogation

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The principle subrogation is corollary to the principle of indemnity. The principle of subrogation is applicable to all insurances other than the life insurance. According to it when the insured is compensated for the losses due to damage to his insured property, then the ownership right of such property shifts to the insurer. If the insured party gets a compensation for the loss suffered by him, he/she cannot claim the same amount of loss from any other party. The rights of claiming the loss are shifted to the insurer (Insurance Company), for example, a gets his house insured for Rs. 50,000 with an insurance company. The house is intentionally destroyed by B. A claims the loss from the insurance company. A cannot sue B for getting the compensation because he has already been compensated by the insurance company. Now, insurance company can sue B on behalf of A because of making good the loss suffered by A, the insurance company steps into the shoes of A. 5. Principle of Contribution Sometimes a property is insured with more than one company. The insured cannot claim more than total loss from all the companies put together. He cannot claim the same loss from different companies. In this case he will be benefited by the insurance which runs counter to the principle of indemnity. A person cannot be restored to a better position than before the loss occurred. The total loss suffered by the insured will be contributed by different companies in the ratio of the value of policies issued by them. So companies make a contribution to restore the previous position of the insured. For example, A has a property of one lakh rupees. He gets an insurance policy for Rs. 50,000 from R & C. and Rs. 50,000 from S & Co. Because of fire, property is destroyed to the extent of Rs. 40,000. A cannot claim a total sum of Rs. 40,000 from either of companies from both companies to the extent of Rs. 20,000 from each. In case he claims Rs. 40,000 from R & Co. then S & Co. will pay Rs. 20,000 to R & Co. So this is known as the principle of contribution. 8. Principle of Causa Proxima Principle of Proximate Cause means when a loss is caused by more than one causes, the proximate or the nearest or the closest cause should be taken into consideration to decide the liability of the insurer. This principle is found very useful when the loss occurred due to series of events. However, in case of life insurance, the principle of Proximate Cause does not apply. Whatever may be the reason of death the insurer is liable to pay the amount of insurance.

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7. Principle of Mitigation of Loss According to this principle insured must always try his level best to minimize the loss of his insured property, in case of sudden events like fire etc. The insured must take all necessary steps to control and reduce the losses and to save what is left. This principle makes the insured more careful in respect of this insured property.

Legislations Governing Insurance

The insurance sector in India has gone through a full 360 degree in phases of being unregulated to completely regulated and currently being partly deregulated. The insurance business is governed by various legislations and acts directly or indirectly which are required to define the boundaries as well as to regulate the insurance business. These acts and legislations are important for the smooth transaction of the insurance business and to protect both the insured and insurer. The various acts which govern the Insurance business are as follows: The Indian Contract Act, 1872: It is the law regulating and governing the formation, performance and termination of contracts and agency in India. As insurance is a contract between the insurer and insured as well as the insurer uses agency as a channel of business this act plays an important role in insurance business. The Insurance Act, 1938: It is the first legislation passed regulating and governing all forms of insurance and the insurance business in India providing strict control to state. The salient features of the act are Constituting a Department of Insurance to supervise and control insurance business. Compulsory registration of insurance companies & submission of annual financial returns. Provision for initial deposits to allow only serious players in the field. Compulsory investment of life fund to the extent of 55% in Government approved securities. Prohibiting rebating, restriction on payment of commission and licensing of agents were other important provisions to bring in a sort of professionalism in to this business.
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Periodical Valuation was made compulsory to assess financial viability of the insurance companies. Provision was made for policyholders director in the Board. Policy formats were standardized and premium tables were to be certified by an Actuary.

The Life Insurance Corporation Act, 1956: This act was passed to nationalise the life insurance business in India by transferring all such businesses to a corporation established for such purpose and to provide regulation and control of the business of the corporation. This act regulates all the life insurance business in India and lays the ground rules for the business. The General Insurance Business Act, 1972: This act was passed to make provision for the acquisition and transfer of shares of Indian insurance companies and undertakings of other existing insurers in order to serve better the needs of the economy by securing the development of general insurance business in the best interests of the community and to ensure that the operation of the economic system does not result in the concentration of wealth to the common detriment, for the regulation and control of such business and for matters connected. The Maritime Insurance Act, 1963: This act was brought to codify the law relating the marine insurance and to regulate and set guidelines for initiation, performance and termination of marine insurance contract and to describe the perils and kind of cargo as well as vessels to be covered. The Consumer Protection Act, 1986: This act is designed to protect the interests of consumers by providing easy, prompt and economical redressal to the consumers grievances and related matters. The Motor Vehicle Act, 1988: This act was enacted to safeguard the financial interests of people who get injured or killed or suffer damages due to negligence of motorist and/or other risks associated with usage of motor vehicle. According to this act it is mandatory for a motorist to insure against the risk of liability to the third parties.

General Insuance Products:

Non life Policies can be broadly classified into:
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Plans for Corporate/ Business Plans for Individuals Plans for Agriculturist

Insurance

Plans for Corporates

Agricultural Insurance Cattle & Crop

Plans for Individuals

Employee

Home Specialty Contingency Property Office Travel

Motor

Accident

Health

Corporate Policies
Specialty: These are the policies catered to meet special needs or needs of specific industries. Some of them are Aviation Insurance Marine Hull Insurance Freight Forwarders Insurance Port Liabilities Film Insurance, Credit Insurance, Event Insurance Jewelers Block Policy Bankers Indemnity Policy Shopkeepers Policy Marine Cargo Policy Multi Peril Policy for L.P.G. Dealers

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Employee policies Various policies available for employer to take care of employees or to meet legal obligations. Group Personal Accident Group critical illness Group Travel Workmen's Compensation Keyman Insurance Overseas Travel insurance

Policies for Office /manufacturing units: For protection of business, industrial units from contingencies
Fidelity Guarantee Insurance Policy Special Contingency Policy Plate Glass Insurance Neon Sign Insurance Fire Policy Burglary Policy Machinery Breakdown Policy Electronics Equipment Policy Consequential Loss Policy Contractors All Risk Policy Advanced Loss of Profit / Delay in Startup Policy Contractor Plant and Machinery Policy Mega Package Policies Marine cum Erection / Storage cum Erection Policy

Health Insurance: Group Personal Accident Policy Mediclaim Policy Overseas Mediclaim Insurance- Business &Holiday Overseas Mediclaim Insurance- Frequent Corporate travelers Overseas Mediclaim Insurance- Employment & Studies Personal Accident Policy 22

Policies for Individuals

Home Travel Motor Accident Health

Home Insurance: There are wide range of policies and packages available. They cover more than youre your home and its contents. Some of the perils covered are: Fire Explosion/Implosion Burglary Riot, Strike, Malicious Damage cover Damages due to Impact by rail / road vehicle or animal Bursting and / or overflowing of water tanks, apparatus and pipes Missile Testing operations Leakage from Automatic Sprinkler Installations Lightning Loss caused by Storm, Cyclone, Hurricane, Tornado, Flood and Inundation Destruction by subsidence of part of the site on which the property stands or landslide Bush Fire

Earthquakes and Terrorism are usually provided as add-ons due to the increase in frequency. The other perils included in some feature rich policies are: Rent for alternative accommodation Loan repayment for home/car Public liability Baggage Insurance Home Appliances cover Personal Accident Loss of cash in transit

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Travel Insurance: There are various policies which cover International travel, domestic train travel, students overseas travel, travel to specific countries. Auto Insurance Policies: They cover:

Repair / replacement of the parts of the vehicle Payment for the market value of the vehicle in case of a total loss, provided that the loss occurs due to an accident, theft, earthquake, flood, riot, strike and malicious acts.

It covers the legal liability of insured towards third party personal injury and property damage arising out of an accident involving the insured vehicle.

Health Insurance Policies: Health Insurance Policies may provide cover for: Expensive medical care including pre & post hospitalisation expenses. Provide a daily allowance for each day of hospitalization. Protection against the major life threatening illness like Cancer, Heart Attack, Paralysis, Kidney failure, Stroke, etc Accidental death Permanent disability Hospital confinement allowance

Other Insurance Policies Baggage Insurance Mobile Phone Insurance Executive Travel Insurance Directors and officers Liability insurance Professional Indemnity Insurance Portable Equipment Insurance

Agricultural Insurance: The insurance policies covering agricultural losses like crop loss or cattle loss. Cattle Insurance: Insurance policies covering the losses arisen due to death of animals like bulls, cows, buffaloes and heifers. Permanent total disability of the animals is also covered under the policy for extra payment of premium. The cover is provided for in case where death caused by:

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o Accident which may be result of fire, lightning, flood, inundation, storm, hurricane, earthquake, cyclone, tornado, tempest and famine o Diseases cropping up or contracted during the period of policy o Surgical operations o Strikes and riots Crop Insurance: Insurance policy covering the losses of crop suffered by farmers due to natural disasters like drought, hail and floods or due to decline in prices of agricultural commodities.

Marketing of Insurance
Marketing is so basic that it cannot be considered as a separate function. It is whole business seen from the point of view of its final result that is from the customer point of view business success is not determined by the producers but by the customers. The above statement clearly puts forth the importance and insensibility of marketing to the overall functioning of the organization. Marketing can be identified as a business function that identifies unsatisfied needs and wants, defines and measures their magnitude, determines which target markets the organization can best serve, decide as an appropriate product, services and programs to serve these markets and calls of everyone in the organization to Think and serve the customers. To achieve the desired objectives in marketing a set of marketing tool are utilized by marketers, marketing mix is the set of marketing tools that firm uses to pursue its marketing objectives in the target markets. Marketing mix consists of everything the form can be collected in to group of variables known as 4 p s as proposed by M.C.Carthy product, price, place, and promotion for a product in case of services additional 3 Ps are added people, process, physical evidence.

Marketing of Insurance in India Insurance is in a manner of speaking the last frontier in the financial sector to open. It is also a sector, which leads to benefits across the full spectrum, from the individual who now have wider choices, to the economy, which see increased savings, to the infrastructure sector, which can look forward to long term funding being available. In an under-insured economy,
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newer channels of distribution have to be utilized to intensify the reach of insurance both in urban and rural markets. This will create huge employment opportunities not only within insurance companies but also as agents and consultants of insurance companies.

Channels of Distribution of Insurance As insurance being a service there are various channels are used for its distribution and selling of the insurance products i.e. policies. Some of the channels used are:

1. Company ---------------------------------- Customer (Direct Marketing) 2. Company ------------- Agent ------------ Customer 3. Company ------------ Broker ------------ Customer 4. Company ----------- Third Party Administrator ----------- Customer 5. Company ------------ Banker ----------- Customer 6. Company ------------ Corporate Agent --------- Customer 7. Company ------------ Auto-tie Up ------------ Customer

Direct Marketing: Insurance Company will accept the insurance proposal from the persons approached to the branch offices or division offices directly. In branch office or at division office, frontline employee provide necessary services in fulfillment of policy issue process, such as serve application, accept filled application with necessary documents along cash or cheque against premium account. Now a days companies are also using internet to issue online policies as well as telesales to get the business directly. Third Party Administrator (TPA): Insurance Companies use another distribution channel known as third party administrator. The TPA is to maintain databases of policyholders and issue them identity cards with unique identification numbers and handle all the post policy issue including claim statements. In terms of infrastructure, the TPA run a 24 hour toll free number which can be accessed from anywhere in the country. They will have full time medical practitioners under their employment who will immediately take the decision on whether the ailment is covered under the policy. TPA license can be granted to any company registered under the Company Act 1956. IRDA licenses and regulates the TPAs, by way of rigid entry norms and supervision

Bancassurance: The provision of insurance and banking products and services through a common distribution channel or to a common client base is referred to as Bancassurance. The
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concept of Bancassurance was evolved in Europe in 1980s. In India the Bancassurance came into focus only after the privatization of insurance sector. Public have immense faith in banks and they reached to household and enjoy considerable goodwill and access in the rural areas. Hence, both the public and private sector insurance companies in India are using banks for the distribution of their products.

Corporate Agent: A corporate agent is an intermediary in the insurance distribution channel. The corporate financial institution gets the license from the IRDA to act as a corporate agent to any insurance company in India. A corporate agent may be specialized in any one of the insurance product or all of the insurance products such as motor, health, travel, household, marine, fire, burglary and personnel accident insurance. A corporate agent has backup support team of handling claims efficiently along with toll free claim service activation helpline.

Broker: An independent agent is the person who represents the buyer, rather than the insurance company, and tries to find the buyer the best policy by comparison shopping. A broker sells, solicits, or negotiates insurance for compensation. The broker and the brokerage is registered and regulated by the IRDA. There are about 300 brokerages are there in India registered by IRDA.

Auto-tie Up: It is tie up between the automobile dealers and the insurance companies; whenever the automobile dealer makes sales the insurance cover is provided along with it.

Agent/Agency: An Insurance Agent is a state-licensed professional who represents an insurance company in selling and servicing policies. Agent is the most prominent and oldest intermediary channel of insurance services. The agency and appointment of agent is done under Indian Contract act 1872. The agent has to register himself/herself with the IRDA and get license which is issued for 3 years. The insurance agent creates mutual trust between policy holders and the insurance company and renders continuous service to the policy holders. Insurance company recruits agents based on the norms and conditions of IRDA. The company provides induction training to the recruited agents through special training centers located in various parts of the country. The training objective of the company is to provide

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sufficient knowledge on various policies of the company before the agents venture into the market. The company offers commission to the agents on their business. Procedure to become an agent of the company The following are the required conditions to become an agent of the company based on IRDA guidelines The person should be of 18 years at least. The person must have a minimum qualification of 12th standard or equivalent in urban areas otherwise a pass in 10th standard or equivalent in rural areas. Practical training of 50 hours at an IRDA approved training centers and 75 hours of training in case of composite insurance agency Mall Assurance: The Mallassurance channel was introduced by Future Generali with the key objective of capitalizing on the over 2 crore unique footfalls the Future Group retail outlets across the country receive every year. Given todays trend where Malls have become leisure and entertainment destinations for entire families to shop, entertain and bond. Future Generali has also earned a very positive response from customers to this proposition that offers the convenience of choosing, buying and servicing a whole gamut of insurance solutions best suited to individual needs at the same place where they shop regularly for their home needs. Atul Mehta, Head Mallassurance, Future Generali, said, We have adapted our systems and processes to ensure customers can buy a policy at the store and get the insurance certificate issued within 5 minutes. The model weve adopted for Mallassurance is to Acquire (at the store), Maintain and Upsell (telesales & direct). Our average daily leads in this fiscal have increased from less than 200 to over 450 per day. The closure rate, through the Mallassurance leads, has gone up to almost 5% netting Rs. 16 crore for April-Oct 2010. On the claims side, the experience has been very good and the clams in Personal Accident Policies have been settled well under set TAT. What started with just 11 Pantaloon outlets in May 09 has today expanded to 165 stores in 53 cities and Future Generali is now focusing on expanding the Mallassurance network to cover more Future Group retail outlets across the country, with five more getting added by the end of November.

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Speaking on the occasion, Deepak Sood, MD & CEO, Future Generali India Life Insurance Co Ltd., said, There has been much talk about the more traditional insurance distribution channels like Agency and Bancassurance, but Mallassurance has remained a feature unique to Future Generali India. Since inception, we have continuously monitored and modified our strategy and offerings in line with our observations and customer feedback. Today customers at Big Bazaars and Pantaloon outlets buy insurance like any other product they purchase instore. This initiative has helped not just to bring sales from customers looking to buy insurance but also helping create and grow awareness about insurance as a category, helping bring in a new set of customers via cross-sell & up-sell opportunities. We are confident that the channel will continue to see significant growth in line with the growing footprint, customer base and intense customer goodwill enjoyed by Future Groups retail formats

The average ticket size for life products sold through Mallassurance is Rs 18,495 for Apr-Oct 2010, registering 20% increase, primarily due to an increased focus on pension products and ULIPs. Furthermore, the channel has already acquired 1500 unique customers from the stores for Future Generali Select Insurance Plan (FG-SIP) which it launched end September 2010. One of our key focus areas over the next few months will be HNI customers and we would focus to make the stores an Insurance Destination. More products in offing are OTC Home Insurance, Extended Warranty etc. Besides, the company would strive to make available renewal quote, claim intimation and query corner at the stores, added Mr. Sood.

On the General Insurance front, Future Generali has found Personal Accident policies attracting maximum interest levels from customers, given that no documentation is required, products are available for as low as Rs 199 and policies are instantly issued across the counter.

Over the past year, Future Generali has brought in some innovative changes in Service and Process levels to manage, supervise and maintain resources and relationships. The Plan is also to make maximum products available through all Future Group retail outlets across India. Future Generalis Life Insurance business earned overall premium of Rs 541 crores for FY 2010, while the General Insurance arm closed the year with premium earnings of Rs 386

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crores.

Market Share 2011 2012 of All Life Insurance Company :

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Review Of Literature: Mallassurance is a new channel of insurance distribution which involves selling insurance to shoppers frequenting malls. Kishore Biyanis Future Group is betting big on mallassurance.' In October 2007, the groups life and non-life insurance joint ventures with Italian insurer Assicurazioni Generali commenced operations, and began issuing their first policies in November 2007. Biyanis belief is that the mallassurance will pick up in a big way, given the stringent restrictions on customer privacy that prevent sellers from making unsolicited calls to those who have subscribed to a do not call register. Future Groups retail outlets witnessed 140 million footfalls past year and the group is expecting to see 200 million customers to walk into retail outlets this year. Buoyed by their success in acquiring customers for its co-branded credit card, the group is setting up Future Money a consumer credit and a financial supermarket format Speaking at the launch of Future Generalis operations, Mr Biyani said that Future Group is looking at increasing its presence from 48 cities to 85 cities during the current year. This would include tier II and tier III cities . Meanwhile, GN Bajpai, former chairman Life Insurance Corporation, has been appointed as chairman of Future Generali. Ooi Kim Chai, who had spearheaded Generalis joint venture into leadership position in China, will now be country head and CEO of the life insurance venture. Deepak Sood, former chief operating officer of Bajaj Allianz General Insurance, has taken over as CEO of the general insurance venture. Future Group has planned to raise its Future Money outlets from 74 to 400 in 18-24 months. Our entry into one of the worlds fastest growing markets sets a new milestone in Generalis history and achieves one of our main targets, given that the companys international expansion strategy envisages the strengthening of Generalis presence in Asia and Central and Eastern Europe (CEE). The Indian licence completes the recent authorisation to operate in non-life insurance in China and the doubling of our portfolio in the new CEE markets, Assicurazioni Generali chief executive officer Sergio Balbinot said. He added that the group wanted to enter India with a new generation partner who was focused on innovation and had an eye on how India would look in the future.
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Future Generali India Life Insurance Company and Future Generali India Insurance Company are 74:26 joint ventures between Future Group and Assicurazioni Generali, respectively. In a statement issued here, the partners said that the life company would deliver products through a multi-channel distribution approach. Apart from its presence through the retail network of Future Group, it will attract and retain distributors who would function as ambassadors in delivering maximum customer value. For distribution, the company would also tie up with banks. Future Generali India Insurance the non-life company will offer a bouquet of products to corporate and retail consumers. The company will offer products covering motor, health & accident package policies for homeowners, travel, fire, engineering and liability. The products would be designed to adopt various international features that are offered by the Generali Group, duly customised to meet Indian needs and regulations as and when permitted.

In November 2008, Future Generali, the insurance venture joint venture between the Future Group of India and Generali Group of Italy, announced the launch of a unique promotional initiative aimed at attracting new customers to its fold. Customers visiting any of the Future Group retail outlets nationwide from 25th November 2008 to 20th January 2009 can participate in a unique and simple contest by dropping their car insurance details in a drop box.

The contest results will be declared in February 2009 and the two lucky winners will receive a brand new Chevrolet Spark car each. Participants can submit their forms at retail outlets like Big Bazaar, Pantaloons, Food Bazaar, e-Zone, Home Town, Furniture Bazaar, KB Fair Price and Brand Factory. Customers visiting any of these outlets can also avail the free vehicle inspection facility to be offered for 4-wheeler owner at these retail outlets during the contest period Kishore Biyani - Chairman Future Group, speaking on the launch of the new promotional initiative, said, Future Generali is creating a new concept of financial distribution in India. The inimitable MallAssurance channel is our effort to reach out to retail customers directly where she/he shops and aid their buying decision as a family.
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The early signs of acceptance from the customers, reaffirms our confidence that the Indian retail customer is open to innovation. It also testifies the immense confidence and goodwill that both the Future Group & Generali enjoys with customers. This exciting promotion will increase awareness and interest in both the MallAssurance channel and Future Generali as a Total Insurance Solutions provider. The Brands launch campaign with the tag line Ek Shagun Zindagi Ke Naam is in line with our customer insight that all of us, in our happiest moments, always wish that the moment will last forever. Future Generali wants to be the brand that helps customers - stay blessed Future Generali in its first year of operation is making its presence felt all over the country and has been able to garner a first premium income of over Rs.100 crores from its Life and Non Life businesses. It aims to set up over 100 composite branch offices by the end of this financial year offering both Life and Non Life business where Advisors can sell both Life & Non Life Insurance solutions to their clients. This holistic Total Insurance Solutions model adopted by Future Generali is a significant differentiator from other insurance companies in the market today and also offers customers a one-stop-shop for all insurance needs.

Future Generali pioneered the concept of distributing insurance products through its MallAssurance channel besides other conventional sales channels to sell its insurance solutions. It has seen early positive acceptance from retail customers with over 2.75 lakh customers picking up policies across the counter at retail outlets.

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Chapter-II: Organisational Profile

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Industry Review: The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation Act, 1956 and General Insurance Business (Nationalisation) Act, 1972, Insurance Regulatory and Development Authority (IRDA) Act, 1999 and other related Acts. With such a large population and the untapped market area of this population Insurance happens to be a very big opportunity in India. Today it stands as a business growing at the rate of 15-20 per cent annually. Together with banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian populations are without Life insurance cover and the Health insurance. This is an indicator that growth potential for the insurance sector is immense in India. It was due to this immense growth that the regulations were introduced in the insurance sector and in continuation Malhotra Committee was constituted by the government in 1993 to examine the various aspects of the industry. The key element of the reform process was Participation of overseas insurance companies with 26% capital. Creating a more efficient and competitive financial system suitable for the requirements of the economy was the main idea behind this reform.

Since then the insurance industry has gone through many sea changes .The competition LIC started facing from these companies were threatening to the existence of LIC .since the liberalization of the industry the insurance industry has never looked back and today stand as the one of the most competitive and exploring industry in India. The entry of the private players and the increased use of the new distribution are in the limelight today. The use of new distribution techniques and the IT tools has increased the scope of the industry in the longer run.

History of Insurance Sector The business of life insurance in India in its existing form started in India in the year 181 with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important milestones in the life insurance business in India are given in the table 1.

Table 1: milestones in the life insurance business in India

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Year

Milestones in the life insurance business in India

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 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 business in India, on the other hand, 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 given in the table 2. Indian Insurance Market History Insurance has a long history in India. Life Insurance in its current form was introduced in 1818 when Oriental Life Insurance Company began its operations in India. General Insurance was however a comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata. History of Insurance in India can be broadly bifurcated into three eras: a) Pre Nationalisation b) Nationalisation and c) Post Nationalisation. Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was formed by consolidating the operations of various insurance companies. General Insurance followed suit and was nationalized in 1973. General Insurance Corporation of India was set up as the controlling
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body with New India, United India, National and Oriental as its subsidiaries. The process of opening up the insurance sector was initiated against the background of Economic Reform process which commenced from 1991. For this purpose Malhotra Committee was formed during this year who submitted their report in 1994 and Insurance Regulatory Development Act (IRDA) was passed in 1999. Resultantly Indian Insurance was opened for private companies and Private Insurance Company effectively started operations from 2001. Booming Insurance Market in India With an annual growth rate of 15-20% and the largest number of life insurance policies in force, the potential of the Indian insurance industry is huge. Total value of the Indian insurance market (2004-05) is estimated at Rs. 450 billion (US$10 billion). According to government sources, the insurance and banking services contribution to the country's gross domestic product (GDP) is 7% out of which the gross premium collection forms a significant part. The funds available with the state-owned Life Insurance Corporation (LIC) for investments are 8% of GDP. Till date, only 20% of the total insurable population of India is covered under various life insurance schemes, the penetration rates of health and other nonlife insurances in India is also well below the international level. These facts indicate the of immense growth potential of the insurance sector. The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took place with the ending of government monopoly and the passage of the Insurance Regulatory and Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing foreign players to enter the market with some limits on direct foreign ownership. Though, the existing rule says that a foreign partner can hold 26% equity in an insurance company, a proposal to increase this limit to 49% is pending with the government. Since opening up of the insurance sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21 private companies have been granted licenses. Innovative products, smart marketing, and aggressive distribution have enabled fledgling private insurance companies to sign up Indian customers faster than anyone expected. Indians, who had always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer. The life insurance industry in India grew by an impressive 36%, with premium income from new business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from private insurers. RNCOSs report, Indian Insurance Industry: New Avenues for Growth 2012, finds that the market share of

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the state behemoth, LIC, has clocked 21.87% growth in business at Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in 2004-05 from Rs. 24.29 billion in 2003-04. Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared to the previous one, its market share came down from 87.04 to 78.07%. The 14 private insurers increased their market share from about 13% to about 22% in a year's time. The figures for the first two months of the fiscal year 2005-06 also speak of the growing share of the private insurers. The share of LIC for this period has further come down to 75 percent, while the private players have grabbed over 24 percent. There are presently 12 general insurance companies with four public sector companies and eight private insurers. According to estimates, private insurance companies collectively have a 10% share of the non-life insurance market. Though the focus of this market research report is on the potential growth on the Indian Insurance Sector, it also talks about the market size, market segmentation, and key developments in the market after 1999. The report gives an instant overview of the Indian non-life insurance market, and covers fire, marine, and other non-life insurance. The data is supplied in both graphical and tabular format for ease of interpretation and analysis. This report also provides company profiles of the major private insurance companies. Life insurance firms eye 10-15% growth in 2012 Despite the proposals in the new Direct Taxes Code (DTC), which are expected to hit the industry, and flat growth in renewal premiums, life insurance companies are looking at growth of 10-15 per cent in the current financial year. The life insurance industry had recorded growth of eight per cent last year. Renewals were a challenge for us last year. Therefore, all companies would unanimously focus on renewal premiums, M N Rao, managing director and chief executive officer, SBI Life Insurance, said, while speaking at a Life Insurance Council meet here today. Life insurance companies say the difficult period, which followed announcement of new guidelines by the Insurance Regulatory and Development Authority (Irda) in September 2010, was now over. A balance between business from traditional and unit-linked policies is expected to emerge this year. On growth and profitability concerns of individual companies, various chief executives said the challenge of striking a balance between the two would continue for some companies, since each company had a different cycle. Explaining the general trends in the life insurance

38

business in 2010-11, M S Mathur, secretary general, Life Insurance Council, said the decline in the number of policies, the number of branches and employee count was largely on account of sweeping regulations that were introduced last year. Yet, the business premium grew 15 per cent and we see a further upside this year, he said. In 2010-11, 48 million new business policies were registered, compared with 53 million crore in the previous year. New business premium grew 14.5 per cent to Rs 1,25,800 crore from Rs 1,09,894 crore in the previous year. Renewal premiums remained almost flat at Rs 1,60,700 crore, compared with Rs 1,55,556 crore, while total premiums rose eight per cent to Rs 2,86,500 crore from Rs 2,65,450 crore, according to Irda figures. Sandeep Bakshi of ICICI Prudential Life Insurance said the industry had now settled to the new regime. Irda's restrictions on the cost of business had led to newer technology applications, including policies in demat form, which was a positive step, he said. The sector was fairly capitalised and there was no immediate compulsion for companies to raise funds through different instruments, though initial public offerings were considered by some for price discovery, he said. Business from traditional products rose 25 per cent after the new guidelines were announced in September. However, growth in unit-linked products, the mainstay of private life insurance companies, stood at 65-75 per cent, compared with 85 per cent in the previous year. But in the last two months such products are witnessing a comeback, and the overall ratio of unit-lined products to traditional products was expected to settle at 70:30, said M Suresh, managing director, Tata AIG Life Insurance Company. The Insurance Council said new DTC proposals were unattractive for customers, as well as the industry. With a maximum cap of Rs 50,000, as suggested in the new proposals, there is no window for life insurance premium. 'Strong case for insurance FDI cap hike' The Reserve Bank of India (RBI) has said there is a case for hiking FDI cap in insurance and some other sectors in view of India's growing integration with the global economy, if local economic and political scenario permits. RBI said the demands for raising the present FDI limits of 26 per cent in the insurance sector may be reviewed taking into account the changing demographic patterns as well as the role of insurance companies in supplying the required long term finance in the economy. Commenting on the need for a higher FDI limit in the insurance sector, Monish Shah, Senior Director of consultancy giant Deloitte in India, said that insurance is a high gestation, capital intensive business and the sector needs fresh
39

capital to fund its existing businesses and expansion. Increased capital will benefit the industry as a whole by increasing the insurance access and penetration in the country. "Increase in FDI in insurance from a strategic minority to a dominant minority is one of the reforms which is being eagerly awaited by several industry players; as despite the slowdown, Indian insurance sector remains attractive in the long term." Noting that life insurance industry is long-term in nature and requires years of capital infusion, MetLife India's Managing Director and Country Manager Rajesh Relan said: "Capital infusion through FDI will help grow the industry by increasing customer coverage with a range of innovate products that are clearly focused on today's uninsured. He further said that growth of insurance sector would also help in developing other sectors and providing capital to the government for long-term infrastructure projects. Budget 2012 Impact On Insurance Industry In India. "The increase in service tax will not impact us and also many other insurers. We net out the service tax - collected on the premium and paid on the services availed. For us the service tax paid is higher than what we collect from our policy holders," Vibha Padalkar, CFO at HDFC Standard Life Insurance Company Ltd "For a long time insurers had absorbed the service tax to be paid by their agents. However, many are now passing on the service tax burden on their agents either fully or partially," R. Krishnamurthy, managing director (Insurance and Financial Services) Watson Wyatt a consulting company "From a general insurance perspective there is very little the budget offers. For this sector, we were expecting more reforms especially on the enhancement of the 80D Income tax benefit with a lot more increment for senior citizens as well as removal of service tax for microinsurance, senior citizen policies and women centric policies,"Amarnath Ananthanarayanan, CEO & MD, Bharti AXA General Insurance "The life insurance industry will have to shell out Rs 800 crore from the hike in service tax. They would save Rs 40 crore from exemption of service tax on rural policies," said S B Mathur secretary general Life Insurance Council. However, the good news for the sector is that policies sold in the rural sector will be exempted from service tax, but the market is insignificant to make a substantial advantage.

40

According to Bhargav Dasgupta, MD, ICICI Lombard, the tax break of Rs 5,000 for preventive health check-ups will help in bringing a greater focus on preventive health care. Conclusion of Industry Sector Review: With a huge population base and large untapped market, insurance industry is a big opportunity area in India for national as well as foreign investors. India is the fifth largest life insurance market in the emerging insurance economies globally and is growing at 32-34% annually. This impressive growth in the market has been driven by liberalization, with new players significantly enhancing product awareness and promoting consumer education and information. The strong growth potential of the country has also made international players to look at the Indian insurance market. Moreover, saturation of insurance markets in many developed economies has made the Indian market more attractive for international insurance players.

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Company Profile
Future Generali is a joint venture between the India-based Future Group and the Italy-based Generali Group. Future Generali is present in India in both the Life and Non-Life businesses as Future Generali India Life Insurance Co. Ltd. and Future Generali India Insurance Co. Ltd.

FUTURE GROUP Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is one of Indias leading business houses with multiple businesses spanning across the consumption space. While retail forms the core business activity of Future Group, group subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, retail real estate development, retail media and logistics. Led by its flagship enterprise, Pantaloon Retail, the group operates over 12 million square feet of retail space in 71 cities and towns and 65 rural locations across India. Headquartered in Mumbai (Bombay), Pantaloon Retail employs around 30,000 people and is listed on the Indian stock exchanges. The company follows a multi-format retail strategy that captures almost the entire consumption basket of Indian customers. In the lifestyle segment, the group operates Pantaloons, a fashion retail chain and Central, a chain of seamless malls. In the value segment, its marquee brand, Big Bazaar is a hypermarket format that combines the look, touch and feel of Indian bazaars with the choice and convenience of modern retail. The groups specialty retail formats include sportswear retailer, Planet Sports, electronics retailer, eZone, home improvement chain, Home Town and rural retail chain, Aadhaar, among others. It also operates popular shopping portal, www.futurebazaar.com. Future Capital Holdings, the groups financial arm, provides investment advisory to assets worth over $1 billion that are being invested in consumer brands and companies, real estate, hotels and logistics. It also operates a consumer finance arm with branches in 150 locations. Other group companies include, Future Generali, the groups insurance venture in partnership with Italys Generali Group, Future Brands, a brand development and IPR company, Future Logistics, providing logistics and distribution solutions to group companies and business partners and Future Media, a retail media initiative. The groups presence in Leisure & Entertainment segment is led through, Mumbai-based listed company Galaxy Entertainment Limited. Galaxy leading leisure chains, Sports Bar and

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Bowling Co. and family entertainment centres, F123. Through its partner company, Blue Foods the group operates around 100 restaurants and food courts through brands like Bombay Blues, Spaghetti Kitchen, Noodle Bar, The Spoon, Copper Chimney and Gelato. Future Groups joint venture partners include, US-based stationery products retailers, Staples and Middle East-based Axiom Communications.Future Group believes in developing strong insights on Indian consumers and building businesses based on Indian ideas, as espoused in the groups core value of Indianness. The groups corporate credo is, Rewrite rules, Retain values.

THE GENERALI GROUP The Generali Group is a leading player in the global insurance and financial markets. Established in Trieste in 1831, today the Group is one of Europes largest insurance providers and the European biggest Life insurer. It is also one of the worlds top asset managers with assets totalling more than 400 billion. With an employed sales force of more than 100,000 people serving 70 million clients in 68 countries, the Group occupies a leadership position in Western Europe and an increasingly important place in Eastern Europe and Asia. The Group strategy aims to consolidate Generalis pre-eminence on its key markets and achieve a premier position on markets with high growth potential, establishing its leadership in profitability. Identity Card Since its establishment, the Generali Group has always held a reputation for its capital and financial strength. Its solidity derives from prudent investment management and a focus on achieving a correct match between risk and medium/long-term profitability. Generali Group is one of the leading insurance groups in Europe, with a 2009 total premium income of more than 70 billion. It is present in 68 countries It has 70 million clients worldwide It has 85,322 employees (15,956 in Italy) It has over 400 billion of assets under management High rating assigned by the international rating agencies: A.M. BEST: A+ STABLE
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Standard & Poors: AA- STABLE Fitch Ibca: AA- NEGATIVE Moodys: Aa3 STABLE

Vision Statement:
"Pledged to provide financial security to all people & enterprises through total insurance solutions"

Values:
Respect: for all our stakeholders- employees, customers, for all rules and regulations both internal and external. Indianess: We understand India in all its diversity and different facets and will use for our local understanding to respond to our specific markets, design our products and craft our processes. Nimbleness: A combination of speed and quality, and ability to overcome all obstacles which come in the way of the achievement of our vision. "Can Do": An attitude which demonstrates our passion, entrepreneurship, and positive thinking.

Board of Directors

Name of the Directors 1 2 3 4 5 6 7 8 9 Mr. G N Bajpai Mr. Sergio Balbinot Mr. Kishore Biyani Mr. Vijay Biyani Mr. Krishan Kant Rathi Mr. Roberto Gasso Dr. Kim Chai Ooi Dr. Devi Singh Dr. Rajan Saxena

Designation Chairman Director Director Director Director Director Director Additional Director Additional Director

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10

Mr. K.G. Krishnamoorthy Rao

Managing Director & Chief Executive Officer

Registered Office Address 001, Delta Plaza, Ground Floor, 414, Veer Savarkar Marg , Prabhadevi, Mumbai 400 025.

Auditors Singhi & Co FRN 3020 49E Chartered Accountants 101, Turf Estate, Dr E. Moses Road, Mahalaxmi, Mumbai 400011. G M Kapadia & Co FRN 104767W Chartered Accountants 36 B, Tamarind House, Tamarind Lane, Fort Mumbai 400001.

Bankers HDFC Bank Ltd, ICICI Bank Ltd, AXIS Bank Ltd. Financial Highlights The highlights of financial results of the Company for the financial years 2010-11 and 200910 are as under: For the year ended 31st March For the year ended 31st March Particulars Gross written premium Retrocession from Pool Net written Premium Net earned Premium Net Incurred Claims Net Commissions Management Expenses Underwriting Results Income from Investment 2011, (Amount Rs '000) 61,19,571 4,86,372 40,39,523 32,91,168 27,82,697 -1,33,281 19,36,801 -12,95,049 3,99,850
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2010, (Amount Rs '000) 38,59,291 3,21,437 24,64,736 18,74,752 16,93,931 -1,72,561 14,34,808 1,081,426) 1,84,386

Profit /Loss Before Tax Profit /Loss After Tax Number of Policies Issued Number of employees

-8,95,199 -8,95,199 6,81,940 982

-8,97,041 -8,97,041 5,54,117 805

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Chapter-III: Methodology

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Objectives: The objective of this report is to first investigate service quality structure for mall assurance and then relative importance of these service quality dimensions from customers perspective, so as to ensure optimal deployment of resources among these dimensions, and thereby best value to the customers. Further, the study tries to measure as to how well services are being delivered i.e. up-to what level performances are meeting the expectations and how effective is this innovative strategy of Future Generali. Scope: As Mall Assurance is a very innovative strategy followed by Future Generali , this report will address the effectiveness of this strategy and contribution of this strategy towards the growth of the company and along with customer awareness about this innovative strategy. Sampling and data collection: All the data are collected through primary source. Population: It includes customers who visited Big Bazar Mall situated in Bansankari and Malleswaram area in Bangalore. Sample Frame: Since the data was collected in malls so it included some exsisting customers of Future Generali and some new customers. Sample Size: The sample size taken for this report is 100. Sampling Elements: Individual respondents are the sampling elements. Sampling Technique: Random sampling technique has been used for collecting the data. Limitations of the Study: There was a time restriction of 45 days and collecting data from the customers was time taking. In addition to this certain customers gave wrong information and opinions about the mall assurance strategy. Besides this we were operating from Big Bazar where repetitions of customers are high. Though in Banglore there many Big Bazars and Pantaloons but company restricted us in two Big Bazar which are present in Malleswaram and Bansankari area.

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Chapter-IV: Data Analysis

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The income category.

Interpretation: The above shows the various income category of customers who visit Big Bazar. It shows that middle and upper middle class people visit the mall. This states that the target customers of Future Generali are these sets of people.

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Percentage of people having insurance policy.

do you have insurance policy Frequency Percent Valid Percent Cumulative Percent yes Valid no Total Missing Total System 77 23 100 4 104 74.0 22.1 96.2 3.8 100.0 77.0 23.0 100.0 77.0 100.0

Interpretation: From the following frequency analysis it has been observed that almost 90% of the people who visit mall have insurance policy.

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Type of insurance policy

Interpretation: From the above graph it can be seen that most of the customers have money back plans because money back plan gives life cover and tax benefit as well. Secondly many also stated that they dont know which type of policy they are holding. Almost 15-20% of customers have invested in ULIP and endowment plans. Hence , customers mostly prefer to invest in money back plans and from this we came to know preference for investment varies from one customer to other.

Parameters taken into considerations before purchasing insurance policy

Test Statistics Brand Name Chi-Square df Asymp. Sig. 4.000a 4 .406 33.900a 4 .300 returns tax benefits 75.000a 4 .0200 risk covers 40.400a 4 .000 36.700a 4 .0400 services

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Interpretation: The above is a chi- square analysis stating various rankings given by the customers about the parameters which they take into consideration before purchasing an insurance policy. Where services provided by the insurance company and brand name matters the most. While returns and tax benefits come in next level. Important factors before choosing an investment.

Test Statistics returns 4.160a 2 .125 flow of money Chi-Square df Asymp. Sig. 4.000b 1 .046 risk invovled 7.840b 1 .005

Interpretation: The above chi square analysis states that customers look for good returns , continuous flow of money and less risk.

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Customers awareness regarding mall assurance strategy

Interpretation: As most of the customers are regular customers of Big Bazar they are aware about the mall assurance strategy of Future Generali.

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Factors influencing the most while purchasing insurance policy through mall assurance Rotated Component Matrixa Component 1 safety promptnessof service accuracy of transaction ease of communication performance in past sceurity in transaction advertisements recommendations of friends .944 -.990 .780 .983 -.632 .775 .992 .983 .921 .626 2

Interpretation: The above is a factor analysis which states various important factor which influence the customer to buy insurance policy the most when he/she buys through mall. Here the factors coming in component 1 like safety , accuracy in transaction , ease of communication , advertisement matters the most. Hence we can say the psychological factors play a vital role rather than financial factors.

Factor important for Mall Assurance

Test Statistics reliabilit responsivene assurance empathy y Chi-Square df Asymp. Sig. 5.700a 4 .223 ss 17.900a 4 .001 70.000a 4 .000 4.700a 4 .319 35.200a 4 .000 uitility

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Interpretation: The above is a chi square analysis which states that empathy and reliability are two most important factor which influence the effectiveness of mall assurance.

Suggestion to friends

Interpretation: The above frequency analysis shows that almost half of the people will say to their friends and half will not. It may because mall assurance is a very new concept in market now. People still believe in agency and purchasing insurance from a bank

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CHAPTER- V

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Findings
General Findings: Future Generali has increased its share capital by adopting this innovative strategy. Mallassurance is still a very small part of the business. Currently it contributes to 58% of business. The average ticket size for life products sold through Mallassurance is Rs 18,495 for Apr-Oct 2010, registering 20% increase, primarily due to an increased focus on pension products and ULIPs.

Specific Findings: Majority of the respondents fall in the age group of 30-40 The male respondents constitute the major portion. 80% of the respondent are married. Most of the respondent are aware about the mall assurance strategy of Future Generali. Around 50% of the respondent will suggest their friends to take insurance policy through mall assurance. As per respondents this strategy gives the customers convenience and freedom to choose appropriate and tailored insurance solutions in a format that is readily accessible. Respondents also stated that People connect with the brand name and the products are more acceptable.

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Recommendations
In the view of competition from other private players Future Generali should conduct more and more awareness program about mall assurance strategy. Future Generali should not only follow this strategy only through Big Bazar and Pantaloons it should also take into consideration other retail outlets of Future Group like Central and Brand Factory. To generate more and more customers through mall assurance it should come up with various offers which will attract more and more customers. As this strategy is majorly followed in Big Bazar so it should come up with new offers on Wednesdays as it is sasta bazaar day where inflow of customers is more as compare to other days.

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References
1.May 11 , Friday , 2012 , Business Standard , Life insurance firms eye 10-15% growth in 2011-12 , . http://www.business-standard.com/india/news/life-insurance-firms-eye-10-15growth-in-2011-12/436582/ 2. Booming Insurance Market in India (2008-2011) , http://www.rncos.com/Report/IM126.htm 3. Budget reactions from Insurance Industry , . http://www.bimabazaar.com/index.php?option=com_content&view=article&id=664:budget2012-impact-on-insurance-industry-in-india&catid=97:insurance-news&Itemid=79 4. Indian Insurance Industry: New Avenues For Growth 2012 http://www.rncos.com/Report/FM033.htm 5.'Strong case for insurance FDI cap hike' http://www.financialexpress.com/news/strongcase-for-insurance-fdi-cap-hike/943431/ 6. Future Generali India Insurance Company Limited- Annula Report-2010-2011 7. IRDA Annula report -2010 2011 Books: Jyotsna Seth & Nishwan Bhatia, 2007 Elements of Banking and Insurance, PHI Learning Private Limited C. R. Kothari, 2010 Research Methodology Methods and techniques, New Agw International Publishers S.C. Sahoo & S.C. Das, 2009 Insurance Management Text and Cases, Himalaya Publishing House. Websites: www.irda.gov.in www.indiankanoon.org www.investorwords.com

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Annexure

Questionnaire on Effectiveness of Mall Assurance

NameAge61

Martial StatusOccupationIncome category per annuma) 1-2 lakhs b) 2-5 lakhs c) 5-10 lakhs d) Beyond 10 lakhs

1. Do you have life insurance policy?

Yes

No

2. Which type of policy? a) ULIP b) Endowment c) Term d) Health e) Do not know

3.What parameters you consider while you go for Insurance?(Rank in 1-5 Scale) A. Brand Name B. Returns C. Tax benefits D .Risk covers

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E. Services

4.From where you purchase policy? A. Agent B. Bank C. Direct marketing D. With house loan. E. Malls

5. . What factors would you consider most important before choosing an investment?(Rank in 1-4 Scale) A. Returns. B. Liquidity. C. Flow of money. D. Risk Involved.

6. How do you make the payment of your premium ?(Rank in 1-5 Scale) A.Net banking B. Renewal Employee C .Recovery Agent D. Direct Employee E. Through Malls

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7.Are you aware that insurance policies are sold through mall? A. Yes B. No

8. What factors matters you most while purchasing an insurance policy through mall assurance? Extremely Important a) Safety b) Promptness of service c) Accuracy of transaction d) Ease of communication e) Performance in past f) Security in transactions g) Advertisements Important Neutral Unimportant Highly unimportant

h) Recommendations of friends and

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relatives.

9. Which is more important for mall assurance to become one of the important mode of selling insurance?(Rank in 1-5 Scale)

A. Reliability B. Responsiveness C. Assurance D. Empathy. E. Utility

10. Please state the best aspects of selling insurance through mall assurance?

11.Please state the drawbacks of selling insurance through mall assurance?

12. Would you say your friends and relatives to take insurance policies through mall assurance? A. Yes B. No

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13. How do you find processing procedure while taking insurance through mall ? A. Excellent B. Good C. Average D. Bad.

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