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CHAPTER 1
INTRODUCTION
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GENERAL INSURANCE IN INDIA In todays age of consumerism, insurance requirements have expanded to keep pace with the increasing risks. Gone are the days when life insurances ruled the roost today we have a wide assortment of risk coverage commencing from health insurance to travel insurance to theft insurance to even a wedding insurance. !ith affluence and spending capacity on the surge there is a growing trend to fulfill needs, deal with responsi"ilities and secure ones possessions, "e it good health or worldly wealth. General or #on $ife insurance companies have willingly catered to these increasing demands and have offered a plethora of insurance covers that almost cover anything under the sun. %ny insurance other than &$ife Insurance falls under the classification of General Insurance. It is comprised of ''' ( insurance of property against fire, theft, "urglary, terrorism, natural disasters etc ( personal insurance such as %ccident )olicy, *ealth Insurance and lia"ility insurance which covers legal lia"ilities. ( +rrors and ,missions Insurance for professionals, credit insurance etc. ( )olicy covers such as coverage of machinery against "reakdown or loss or damage during the transit. ( )olicies that provide marine insurance covering goods in transit "y sea, air, railways, waterway and road and cover the hull of ships. ( Insurance of motor vehicles against damages or accidents and theft

%ll these mentioned on the previous page, form a ma.or chunk of non'life insurance "usiness. General insurance products and services are "eing offered as package policies offering a com"ination of the covers mentioned a"ove in various permutations and com"inations. /here are package policies specially designed for householders, shopkeepers, industrialists, agriculturists, entrepreneurs, employees and for professionals such as doctors, engineers, chartered accountants etc. %part from standard covers, General insurance companies also offer customize o! tailo!"ma e policies "ased on the personal requirements of the customer. % suita"le general insurance cover is an a"solute essential for every family. /his is a necessity to overcome uncertainties and risks prevalent in life. It is also necessary to protect ones property against risks as a loss or damage to ones property can leave one in doldrums. 0imilarly, an individual can "e provided with a suita"le insurance cover against )ersonal %ccidents. % *ealth Insurance policy can provide financial relief and lowering of mental agony to an individual undergoing medical treatment on account of a disease or an in.ury. It is important for prospective customers to read and understand the terms and conditions of a policy "efore they enter into an insurance contract. /he proposal form needs to "e filled in correctly and completely with all factual and relevant data "y the customer. *e must also ensure that the insurance cover is adequate and an appropriate one, as desired. /he entire general insurance "usiness in India was nationali1ed "y General Insurance 2usiness 3#ationali1ation4 %ct, 1562 3GI2#%4. /he Government of India 3G,I4, through #ationali1ation took over the shares of 77 Indian insurance companies and the undertakings of 72 insurers carrying on general insurance "usiness.

General Insurance 9orporation of India 3GI94 was formed in pursuance of 0ection 5314 of GI2#%. It was incorporated on 22 #ovem"er 1562 under the 9ompanies %ct, 157: as a private company limited "y shares. GI9 was formed for the purpose of superintending, controlling and carrying on the "usiness of general insurance. %s soon as GI9 was formed, G,I transferred all the shares it held of the general insurance companies to GI9. 0imultaneously, the nationali1ed undertakings were transferred to Indian insurance companies. %fter a process of mergers among Indian insurance companies, four companies were left as fully owned su"sidiary companies of GI9 314 #ational Insurance 9ompany $imited, 324 /he #ew India %ssurance 9ompany $imited, 3-4 /he ,riental Insurance 9ompany $imited, and 384 ;nited India Insurance 9ompany $imited.

CLASSI#ICATION O# INDIAN INSURANCE INDUSTR$

#IGURE 1% T&pes o' i(su!a(ce i( I( ia)

*HAT IS +ANCASSURANCE , 2ancassurance ' a term coined "y com"ining the two words "ank and insurance 3in <rench4 ' connotes distri"ution of insurance products through "anking channels. =2ancassurance=, is the relationship "etween a "ank and an insurance company where"y the insurance company uses the "ank sales channel in order to sell insurance products. !hile the "ank sells general insurance products to "ank customers "y "ank staff and employees it allows the insurance company to maintain smaller direct sales teams. 2ank staff are advised and supported "y the insurance company through product information, marketing campaigns and sales training. 2oth the "ank and insurance company share the commission. Insurance policies are processed and administered "y the insurance company. 2I> 32%#9%00;?%#9+4 is extremely popular in +uropean countries such as 0pain, <rance and %ustria. It is also fast emerging in developing countries like India due to expansion of commercial "anks. *owever, the evolution of "ancassurance as a concept and its practical implementation in various parts of the world, have thrown up a num"er of opportunities and challenges. %spects such as the most suited model for a given country with its economic, social and cultural ramifications interacting on each other, legislative hurdles, and the mindset of persons involved in this activity, have dominated the study and literature on "ancassurance. /he motives "ehind "ancassurance also vary. <or "anks it is a means of product diversification and a source of additional fee income.

Insurance companies see "ancassurance as a tool for increasing their market penetration and premium turnover. /he customer sees "ancassurance as a "onan1a in terms of reduced price, high quality product and delivery at doorsteps. %ctually, every"ody can "e a winner here. !ill it work in India@ /hat can only "e answered in the future the initial action does show that many "anks seem to "elieve that "ancassurance will "e a "ig success here.

E-PANSION O# +AN.ING SECTOR IN INDIA AND ENTR$ O# +AN.S IN NON LI#E/GENERAL INSURANCE +USINESS )enetration of commercial "anks in India has "een quite extensive. /here are around 66,000 "ranches of scheduled commercial "anks. +ach "ranch serves an average of 15,000 people. /he only other national institution with a "igger reach is the postal service. ,f the total num"er of "ranches of commercial "anks, there are 32,600 "ranches in rural areas, and 14,400 semi'ur"an "ranches. In addition, there are 196 exclusive regional rural "anks in deep hinterland. In India, there are 75 "ranches per million inha"itants. 9learly, thats something insurance companies "oth private and state'owned' would find nearly impossi"le to achieve on their own. ?egulations requiring certain proportions of sales to the rural and social sectors give an added impetus to the drive for "ancassurance. 0elling through traditional methods to these sectors can "e inefficient and expensive. /ying up with a "ank with an appropriate customer "ase can give an insurer relatively cheap access to such sectors. /his is still an issue for insurers despite the recent widening of the definition of the rural sector 3so that it now accords with the census definition4. In India, as elsewhere, "anks are seeing margins decline sharply in their core lending "usiness. 9onsequently, "anks are looking at other avenues, including the sale of insurance products, to augment their income. /he sale of insurance products can earn "anks very significant commissions 3particularly for regular premium products4. In addition, one of the ma.or strategic gains from implementing "ancassurance successfully is the development of a sales culture within the "ank. /his can "e used "y the "ank to promote traditional "anking products and other financial services as well.

2anks have "ecome the main saving vehicle in the economy. 2etween 15A7 and 1557, the growth of deposits in "anks stalled at under -7B of the GC) 3that itself is a high num"er "y the standard of the developing economies4. <rom 1557, the "anking sector started growing again. /he deposits in "anks grew another 1DB of GC) "y 2DDD. /his level of growth in "ank deposit has "een totally unprecedented in India since independence. !hy did the "ank deposits take a leap@ ,ne simple 3"ut partial4 reason is a su"stitution from the stock market. In 1558, Indian stock market was hit "y the worst scandal of manipulation of stock prices in its long history. /he stocks fell sharply driving many investors into safer investment options. ?ising saving rate during the late 155Ds led to sustained growth of "ank deposits 3that is, additional investment in the stock market came in the form of fresh money and not a flow of money out "ank saving. /he rising saving came as a result of rising income across the "oard. !ith this "ackground, it is therefore not surprising that "anks have "ecome a vehicle for selling insurance products.

THE GRO*TH O# +ANCASSURANCE IN INDIA <rom an unknown channel when the insurance sector opened up in India a"out ten years ago, "ancassurance has now secured its position as a key distri"ution platform, and is widely attracting the attention of "anks, insurers, regulators and policy planners. India is known for its large variety of "anks and extensive "ranch networks, and over the last few years, these "ranches are increasingly "eing utili1ed to serve the insurance needs of over 8DD million "ank customers. %ccording to /owers !atsons India 2ancassurance 2enchmarking survey a"out 5-B of the life insurance companies are using the 2ancassurance channel.

<igure 2E 0howing distri"ution channels preferred "y insurance companies in India. 30ourceE /owers !atson 0urvey4

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REASONS #OR +ANCASSURANCE *H$ +AN.S SELL INSURANCE PRODUCTS, &2ancassurance helps to lower the distri"ution costs of insurers. % study "y /illinghast, /owers and )errin in the ;F shows that the cost of selling insurance through direct sales force is approximately twice as high as the cost of selling through "ancassurance. %cquisition cost of insurance customer through "anks is low. 0elling insurance to existing mass market "anking customers is far less expensive than selling to a group of unknown customers. $ower cost per sales lead is made possi"le "y their si1a"le, loyal customer "ase. 2anks also en.oy significant "rand awareness within their geographic regions, again providing for a lower per'lead cost when advertising through print, radio andGor television. 2anks that make the most of these advantages are a"le to penetrate their customer "ase and markets for a"ove'average market share. 2y leveraging their strengths and finding ways to overcome their weaknesses, "anks could change the face of insurance distri"ution. 0ale of personal line insurance products through "anks meets an important set of consumer needs. >ost large retail "anks engender a great deal of trust in "road segments of consumers, which they can leverage in selling them personal line insurance products. In addition, a "anks "ranch network allows the face'to'face contact that is so important in the sale of personal insurance. ,ther "ank strengths are their marketing and processing capa"ilities. 2anks have extensive experience in marketing to "oth existing customers 3for retention and cross selling4 and non'customers 3for acquisition and awareness4. /hey also have access to multiple communications channels, such as statement inserts, direct mail, %/>s,

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telemarketing, etc. 2anks proficiency in using technology has resulted in improvements in transaction processing and customer service. Keeping in mind the reasons we can form the following hypothesis ! "ypothesis 1: <or "anks, if the "usiness per employee is low, it is likely to "e attracted to improve productivity "y adding "ancassurance in their portfolios. "ypothesis 2: <or insurance companies, non'performing assets of a "ank will act as a "rake on the "ankGinsurance company tie'up for insurance distri"ution. "ypothesis 3 If a "ank is profita"le 3"y the standard of "anking industry4, it could "e less likely to get away from core "usiness. ,n the other hand, a more profita"le "ank might "e willing to gam"le some of its profits to a new line of "usiness. "ypothesis 4: <or insurance companies, the larger the network of "ank "ranches 3for "anks with national presence4, the more the likelihood of a "ankGinsurance company tie up for insurance distri"ution.

/here are natural synergies "etween "anks and insurance companies. In India, with the deli"erate expansion policies of "anks in remote areas, a large num"er of "ank "ranches indeed reach even the remote areas. 2anks also a huge H/rusted 2randI advantage. +ven from from the point of view of private generallGnon life insurance companies they expect a"out 27B of their products to "e sold through "anks within five years. ?egulatory changes made "y the ?eserve 2ank of India and the Insurance ?egulatory and Cevelopment %uthority have "een favora"le to "ancassurance Cevelopment.

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+ANCASSURANCE DISTRI+UTION 0ODELS INTEGRATI1E/ GENERALIST 0ODEL

)roduct distri"ution through existing "ank channel 2ankers themselves sell the products to customers )rocess managed "y "ank and insurer acts only as a productGservice provider +xampleE /ele marketing, direct mail SPECIALIST 0ODEL Cistri"utes insurance products generally through employees or representatives of insurance company 2ankers help to identify prospects who are further contaced "y insurance company ?equires less training and higher compensation to support the referral process It lengthens the process of sale

#INANCIAL PLANNING 0ODEL Insurer employs sales force and deploys them at "ank "ranches. Juick to implement as compared to other models. 2anks offer customer and prospects a full financial planning package addressing all of the individuals financial concerns.

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+ANCASSURANCE IN INDIA" A S*OT ANAL$SIS 2ancassurance as a means of distri"ution of insurance products is already in force. 2anks are selling )ersonal %ccident and 2aggage Insurance directly to their 9redit 9ard mem"ers as a value addition to their products. 2anks also participate in the distri"ution of mortgage linked insurance products like fire, motor or cattle insurance to their customers. 2anks can straightaway leverage their existing capa"ilities in terms of data"ase and face'to face contact to market insurance products to generate some income for themselves, which hitherto was not thought of. *uge capital investment will "e required to create infrastructure particularly in I/ and telecommunications, a call center will have to "e created, top professionals of "oth industries will have to "e hired, an ? K C cell will need to "e created to generate new ideas and products. It is therefore essential to have a 0!,/ analysis done in the context of "ancassurance experiment in India. 1#1# $trengths ( In a country of 1 2illion people, sky is the limit for personal lines insurance products. /here is a vast untapped potential waiting to "e mined particularly for #on $ife insurance products. ( /here are a"out 2DD >illion households waiting to "e approached for a householders insurance policy. >illions of people travelling in and out of India can "e tapped for ,verseas >ediclaim and /ravel Insurance policies. %fter discounting the population "elow poverty line the middle market segment is the second largest in the world after 9hina.
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,ur other strength lies in a huge pool of skilled professionals whether it

is "anks or insurance companies who may "e easily relocated for any "ancassurance venture. GI9 has a wide and good range of personal line products already lined up, therefore ? K C efforts to create new products. 1#2 %ea&nesses ( /he I/ culture is unfortunately missing completely in all of the future colla"orators i.e. 2anks and GI9. +lementary I/ requirement like networking 3$%#4 is not in place even in theheadquarters of these institutions, when the need today is of !ide %rea #etwork 3!%#4 and Last %rea #etwork 3L%#4. Internet connection is not availa"le even to the managers of operating offices. ( /he middle class population that we are eyeing at is today over"urdened,

first "y inflationary pressures on their pockets and then "y the tax net. !here is the money left to think of insurance@ /he personal line products from GI9 3medi' claim already has this "enefit4 like householder, travel, etc. also need to "e given tax exemption to further the cause of insurance and to increase domestic revenue for the country. ( %nother draw"ack is the inflexi"ility of the products i.e. it cannot "e

tailor made to the requirements of the customer. <or a "ancassurance venture to succeed, it is extremely essential to have in'"uilt flexi"ility so as to make the product attractive to the customer. 1#3# 'pport(nities ( 2anks data"ase is enormous even though the goodwill may not "e the same as in case of their +uropean counterparts. /his data"ase has to "e dissected variously and various homogeneous groups are to "e churned out in

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order to position the "ancassurance products. !ith a good I/ infrastructure, this can really do wonders. ( ,ther developing economies like >alaysia, /hailand and 0ingapore have already taken a leap in this direction and they are not doing "adly. /here is already an atmosphere created in the country for li"erali1ation and there appears to "e a political consensus also on the su".ect. ( /herefore, ?2I or I?C% should have no hesitation in allowing the marriage of the two to take place. /his can take the form of merger or acquisition or setting up a .oint venture or creating a su"sidiary "y either party or .ust the working colla"oration "etween "anks and insurance companies. 1#4# )hreats ( 0uccess of a "ancassurance venture requires change in approach, thinking and work culture on the part of every"ody involved. ,ur work force at every level are so well entrenched in their classical way of working that there is a definite threat of resistance to any change that "ancassurance may set in. %ny relocation to a new company or su"sidiary or change from one work to a different kind of work will "e resented with vehemence. ( %nother possi"le threat may come from non'response from the target

customers.

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NON LI#E INSURANCE CO0PANIES AND THEIR +AN.ING PARTNERS +a2a2 Allia(z " 2ank of )un.a", 2ank of ?a.asthan, Mammu K Fashmir 2ank, Farur Lysya 2ank, $ord Frishna 2ank, )un.a" K 0ind 2ank, 0hamrao Lithal 9o'operative 2ank, Farnataka 2ank, IC2I. Ro&al Su( Allia(ce " 9iti"ank, %2# %mro, 0tandard 9hartered, %merican +xpress, ?epco 2ank, 02I'G+, Farur'"ased $akshmi Lilas 2ank. Tata AIG" *029, IC2I, Cevelopment 9redit 2ank, ;nion 2ank of India ICICI Lom3a! "I9I9I 2ank and others in the pipeline. U(ite I( ia" )un.a" #ational 2ank %ndhra 2ank, Chanalakshmi

2ank Indian 2ank, 0outh India 2ank, <ederal 2ank. Ne4 I( ia" ;nion 2ank of India ,02I, 9orporation 2ank, and ;nited !estern 2ank.

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 O!ie(tal "Cepartment of )osts, ,riental 2ank of 9ommerce, 0tate 2ank of 0aurashtra

+AN.S SELLING NON LI#E INSURANCE POLICIES AND THEIR PRODUCTS CENTRAL +AN. !ith a view to provide Hone stop "ankingI to the valued customers, 9entral 2ank of India has undertaken selling and distri"ution of General Insurance products of most trusted insurers through its "ranches. /he 2ank has tied'up with *hola +$ ,eneral -ns(rance *o#.td.to undertake non'life insurance as corporate agent of "oth the insurance companies on fee /asis without any risk participation. 2ank has trained a good num"er of its officers who have "een authori1ed "y I?C% to act as specified persons for selling insurance products. $ome of the most pop(lar plans0prod(cts are as (nder <ire Insurance 2urglary Insurance +ngineering Insurance >otor Insurance ?ural Insurance ,verseas >ediclaim Insurance
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 )ackage Insurance /ravel Insurance plan $ia"ility Insurance Group personal Insurance /hese products are sold through all their "ranches throughout the country. ID+I +AN. IC2I 2ank $imited is one of India=s leading pu"lic sector "anks. It is currently the 1Dth largest development "ank in the world in terms of reach with 1712 %/>s, 5D5 "ranches. IC2I 2ank has "een associated with 2a.a. %lliance generalGnon life insurance since 2DD7. %hat was the reason for choosing 1a2a2 3llian45 IC2I considered several parameters when they decided to choose a general insurer. /hey selected 2a.a. %llian1 after evaluating all these parameters and found that they scored very high in these parameters. /hey were impressed "y their claims paying a"ility reinforced "y the highest rating of Hi%%%I "y I9?%. /heir speed of claims settlement measured "y the timelines and strict monitoring also was impressive. !hen IC2I asked them whether they can design tailor made products for their customers, 2a.a. %lliance expressed their a"ility and agility in this regard. 2a.a. %llian1 also agreed to provide IC2I with dedicated manpower to assist and train -61- personnel in closing the sale# $teps ta&en /y -61- to enhance the sale of general ins(rance prod(cts' /hey launched several campaigns to motivate and train thier sales team. /hese campaigns were launched to activate every single "ranch and also to improve the num"er of policies sold through "ank "ranches across the country.
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 IC2I also focused on cross selling of more than one general insurance product to the customer. Caily "usiness report was shared with the clusters and "ranches to help them measure their performance and drive them to sell general insurance. /hey started insuring their loan "ooks, providing our customers with Home Insurance along with our Home Loans. /his vertical made significant contri"ution towards general insurance premium. A-IS +AN. %xis 2ank, India=s third largest private "ank announced the signing of a strategic agreement with /ata %IG General Insurance as its 9orporate %gent for General Insurance on ,cto"er 1Dth 2D12. ;nder the partnership, /ata %IG will offer a range of General Insurance solutions to %xis 2ank customers through the 2ank=s extensive distri"ution network across India. /his initiative "y %xis 2ank is aimed at enhancing insurance cover options, while offering /ata %IG=s award winning 9ustomer and 9laims service to its= customers across the country. /his association will leverage the strengths of "oth companies to "ring to %xis 2ank customers a comprehensive suite of insurance covers designed to protect all aspects of their lives. 7rod(cts offered /he %xis 2ank'/ata %IG partnership will offer insurance policies providing protection for a range of insurance needs includingE >otor *ealth /ravel *ome in ?etail and $ia"ility
2D

 )roperty etc. in 9ommercial lines.

/hese products are availa"le at %xis 2ank=s retail "ranches across India and through direct mar&eting channels s(ch as online, mailers etc.

STANDARD CHARTERED +AN. 0tandard 9hartered offer the range of innovative general Insurance products in association with 8oyal $(ndaram to its customers. ?oyal 0undaram %lliance Insurance 9ompany $imited is a .oint venture "etween 0undaram <inance and ?oyal K 0un %lliance plc, ;F, where the former holds 68B and the latter holds 2:B of the equity of the venture. ?oyal 0undaram currently has over 2.1 million customers in its fold. Its products are distri"uted in over 17D cities across India. $ome of the &ey ,eneral -ns(rance prod(cts availa/le at $tandard *hartered Dou3le P!otect

2 year *ealth Insurance )lan for family >aternity expenses are 9overed up to 1DB of the 0um insured su".ect to a maximum of ?s.2D,DDDG' <amily Ciscount ' % discount of 7B for covering 2 people and 1DB if or more are covered

Su!gical S5iel
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0urgical 0hield is a comprehensive insurance cover that offers financial protection to customer and hisGher surgical care. /otal coverage 1DD surgeries classified into 8 categories including *eart 2ypass, 9ataract, *ip G Fnee replacement

family when in need of hospitali1ed

)ayout is fixed depending on clinical intensity not on the actual cost of surgery 2alance amount is paid to the customer after the discharge as "enefit.

Secu!e All 0ecure %ll is a -'in'1 two year comprehensive insurance plan, this unique com"o plan providesE

*ospitali1ation 9over *ospital 9ash 2enefit )ersonal %ccident 2enefit

Home Co(te(t /he *ome 9ontent )olicy covers customers household contents, appliances and .ewels against the risk of <ire and %llied perils, 2urglary and +lectrical and >echanical 2reakdown. Sta( a! #i!e /he standard cover is a named'peril policy covering a lot of perils. /he policy also covers ?emoval of de"ris up to 1B of claim amount and %rchitect=s and 0urveyor=s fees up to -B of claim amount
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678 Deg!ee S5iel 9#o! S5ops: O''ices: Hotels: Ca'es: +POs; /he -:D Cegree 0hield is a comprehensive insurance solution for 0mall and >edium #on'manufacturing +nterprises. -:D Cegree 0hield provides all'round protection to customers "usiness "y com"ining the following insurances in a single and convenient easy'to'manage policyE

<ire K 0pecial )erils 2urglary <idelity Guarantee >oney )u"lic $ia"ility

#amil& #loate!

,ne sum insured covering all family mem"ers of the customer. 9ashless hospitali1ation through more than -DDD network hospitals across India. 9umulative 2onus ' 0um insured under the policy shall "e progressively increased "y 7B for every claim free year of insurance, su".ect to a maximum of 7DB. 9overage for pre'existing diseases after 8A months of continuous insurance under this policy.

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 PUN<A+ NATIONAL +AN. /he "ank has 2ancassurance /ie up with ,riental Insurance 9ompany $imited, a )u"lic sector undertaking, which offers variety of products e.g <ire insurance, >arine insurance, >otor vehicle insurance and >isc. insurance policies like 0hop keepers )olicy, /heftG2urglary )olicy, <idelity Guarantee )olicy, )ersonal accident )olicy, *ealth Insurance, *ouse hold Goods )olicy etc at a competitive price with assured post sale services. 7rod(cts offered Healt5 i(su!a(ce% /he product has "een offered to only the %Gc holders of )#2 to take cover under this scheme. /he product is availa"le in all "ranches across the country. 0alient <eatures' % family floater scheme, 9over for 8 family mem"ers under single premium, %ge group coveredE - months to AD years, #o medical +xamination for entry at any stage, 9ashless facility availa"le at a large #et !ork of *ospitals. /he policy will "e serviced "y /)%s,

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)remium much lower and quite compara"le with all availa"le health insurance products in the markets. 1e5icle i(su!a(ce% 0pecial discount for )#2 customers ''' 8DB discount on Indian >otot /ariff 2DD2 rates for private cars. -DB discount on Indian >otor tariff 2DD2 rates for commercial vehicals. Ot5e! popula! p!o ucts% )ersonal %ccident N individual *ouseholders insurance )olicy ,verseas >edi claim +mployment and study Fissan packages insurance. STATE +AN. O# INDIA 02I General Insurance 9ompany $imited is a .oint venture "etween the 0tate 2ank of India and Insurance %ustralia Group 3I%G4. 02I owns 68B of the total capital and I%G the remaining 2:B. 02I General closed the financial year 2D11'12 with a Gross !ritten )remium of ?s.27D.15 9rores. 02I General follows a ro"ust multi'distri"ution model encompassing 2ancassurance, %gency, 2roking K ?etail Cirect 9hannels. 2ancassurance is the ma.or channel and will continue to "e so during the next few years. 02I General=s current geographical coverage extends to 27 cities pan India and plans are on to extend this reach to another 27 cities "efore the end of the current financial year. /hey are currently serving - key customer segments i.e. ?etail 0egment 3catering to Individual K <amilies4, 9orporate 0egment 3catering mid to large si1e 9ompanies4 and 0>+ 0egment. In a short span, 02I General has emerged as one of the few General Insurance companies in India
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to have a dedicated 0>+ /eam catering exclusively to the needs of 0>+ 0egment. 9urrent )olicy offering of 02I General covers >otor, *ealth K *ome Insurance for Individuals and <ire, >arine, )ackage, 9onstruction K +ngineering, Group *ealth, Group )ersonal %ccident K >iscellaneous Insurance for 2usinesses. 3/o(t $tate 1an& of -ndia 0tate 2ank of India en.oys the largest "anking franchise in India. 0tate 2ank of India is country=s largest K a premier commercial 2ank in terms of "alance sheet, profits, assets, deposits, "ranches and employees. %long with its 7 %ssociate 2anks, 02I Group has the unrivalled strength of over 15,DDD "ranches across the country, argua"ly one of the largest in the world. 0tate 2ank of India is today going through a momentous phase of 9hange and /ransformation. /he 2ank has ventured into many new "usinesses with strategic tie ups in )ension <unds, General Insurance, 9ustodial 0ervices, )rivate +quity, >o"ile 2anking, )oint of 0ale >erchant %cquisition, %dvisory 0ervices, structured products etc each one of these initiatives having a huge potential for growth. /he 2ank is surging ahead with cutting edge technology and innovative new "anking models, to expand its reach. 3/o(t -ns(rance 3(stralia ,ro(p Insurance %ustralia Group $imited 3I%G4 is an international general insurance group, with operations in %ustralia, #ew Oealand, the ;nited Fingdom and %sia.

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 I%G=s "usinesses underwrite around %P5.D "illion of premium per annum and employ around 1-,:DD people. I%G operates some of %ustralia=s leading general insurance "rands including #?>% Insurance, 9G;, 0GI,, 0GI9 and 0wann Insurance. In 2DD5, it also launched an on'line insurance "usiness called /he 2u11. I%G=s heritage dates "ack to 1527 when the #ational ?oads and >otorists= %ssociation 3#?>%4 started providing insurance to its mem"ers in #ew 0outh !ales 3#0!4 and the %ustralian 9apital /erritory 3%9/4.

P!o ucts o''e!e u( e! S+I ge(e!al i(su!a(ce%" +otor -ns(rance 1) 0oto! P!i=ate ca! /his )olicy is designed to cover the compulsory /hird )arty $ia"ility as required "y >otor Lehicles %ct, together with loss or damage to the Lehicle itself. /he )olicy also provides cover forE
)ersonal %ccident <or an additional )remium, provides the followingE %dditional $egal $ia"ilities towards )aid Criver and employee 2i'fuel Fit #il Cepreciation #92 )rotection ?eturn to Invoice

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 9over for Fey ?eplacement $oss of )ersonal 2elongings 2. 0oto! T4o 45eele!

9eat(res
9ustomi1ed )ricing "ased on customer )rofile %vail discount if customers are aged "etween 27 and 77 years

+n.oy additional discount for insuring vehicle without a "reak "ome -ns(rance 9eat(res
02I General=s $ong /erm *ome Insurance )olicy provides a

comprehensive solution for protection of *ome against any unpleasant surprises.

It covers against, the losses to the structure of the house due to any

natural and man'made calamities ,n additional payment, coverage against /errorism can "e opted 7ersonal 3ccident -ns(rance 02I Generals Group )ersonal %ccident Insurance )olicy coversE
$oss of $ife due to %ccident /he Group )ersonal %ccident Insurance )olicy can "e "ought "y any

permanent Indian resident having 0avings 2ank %ccount with 0tate 2ank of India and aged "etween 1A years to :7 Qears. "ealth -ns(rance 9eat(res !ide 9overage N <rom ?s.7D,DDD up to ?s.7DD,DDD #o medical test up to the age of 87 for people with no medical history

2A

 <amily <loater "enefit giving comprehensive protection to family mem"ers under one single )olicy <lexi"le )lan ,ptionsN>etro )lan, 0emi >etro )lan K ?est of India %ssured renewal 9overage of )re and )ost *ospitalisation +xpenses ' -D days "efore and :D days after the hospitali1ation <ree >edical check'up for every 8 claim free years up to a maximum limit of ?s.2,7DD 'ther prod(cts <ire insurance >arine insurance )ackage insurance 9onstructionG +ngineering insurance >oney insurance )late glass insurance

Claims P5ilosop5& 02I General=s claims team aim to deliver the customers a differentiated customer service of a fast, fair, convenient and transparent claims process for the management and settlement of their claim. %t 02I General, the philosophy is to always look for ways to pay valid claims in a fair and timely manner. /heir claims service willE )rovide assistance in emergency situations ?elieve the stress of a claim "y coordinating repair and replacement of customers assets.
25

 Feep customers informed of the progress of their claim. )rovide customers with the choice of accessing their preferred local service providers.

REGULATIONS +$ R+I AND IRDA /he ?eserve 2ank of India and the insurance development and regulatory authority have a set of guidelines for companies that couple to form "ancassurance. 2ased on the equity a "ank should hold in .oint venture, the highest allowa"le value of equity, the type of "anks and insurance companies that can couple together and the operation of "ancassurance are all the factors that are regulated "y ?2I and I?C%. /he I?C% has very recently drafted guidelines to promote open architecture in "ancassurance. 9urrently a "ank has a tie'up with only one life insurer and one

-D

non'life insurer. 2ut in the new model the "anks necessarily have to have multiple tie'ups. /he country is divided into 1ones and every "ank has to choose multiple insurers within the 1ones. !ith this the customer will have a wider range of insurance products offered "y different insurers. It will also lead to a deeper penetration in the selling of insurance products. /he development of "ancassurance in India has "een slowed down "y certain regulatory "arriers, which have only recently "een cleared with the passage of the Insurance 3%mendment4 %ct, 2DD2. )rior to this, all the directors of a company wishing to take up corporate agency 3such as a "ank4 were technically required to undertake 1DD hours of agency training and pass an examination. /his was clearly an impractical requirement and had held up the implementation of "ancassurance in the country. %s the current legislation places the training and examination requirements upon a designated person 3the corporate insurance executive4 within the corporate agency, this "arrier has effectively "een removed. ,ther regulatory changes of note in this area are the recently pu"lished Insurance ?egulatory and Cevelopment %uthority 3I?C%4 regulations relating to the licensing of corporate agents. /his specifies the institutions that can "ecome corporate agents and sets out the training and examination requirements for the individuals who will "e selling on "ehalf of the corporate agent, the so'called &specified persons &0pecified persons have to satisfy the same training and examination requirements as insurance agents. % noticea"le exception is that for those possessing the 9ertified %ssociate ship of Indian Institute of 2ankers 39%II24 only 7D hours of training 3rather than 1DD hours4 will "e required. /his also applies to certified accountants and actuaries. It is hoped that this aspect of the regulations will lead to well educated, professional "ank officers carrying out the financial advisory process.
-1

Given the open'mindedness and responsiveness of the I?C% to regulations in general, there is a hope that it will not "e too long "efore profit'sharing agreements are permitted "etween insurers and corporate agents.

RULES O# R+I #OR +AN.S ENTERING INTO INSURANCE +USINESS Moint venture will "e allowed for financially strong "anks wishing to undertake insurance "usiness with risk participation. <or "anks which are not eligi"le for this .oint venture option, an investment option of up to 1D B of net worth of the "ank or ?s. 7D crore whichever is lower, is availa"le.

%ny commercial "ank will "e allowed to undertake insurance "usiness as agent of insurance companies. /his will on fee "asis with no risk participation. RULES +$ IRDA #OR +AN.S ENTERING INSURANCE +USINESS +ach "ank that sells insurance must have a chief insurance executive to handle all the insurance activities %ll the people involved in selling should under go mandatory training at an institute accredited "y I?C% and pass the examination conducted "y the authority

-2

 9ommercial "anks may "ecome corporate agents for one insurance company 2anks cannot "ecome insurance "rokers.

13:K$ !)he preferred distri/(tion mo el 'o! i(su!a(ce compa(ies a( 3a(ks Insurance industry witnessed a sea change in its functioning when the industry was opened up for private sector players. /hree ma.or changes which happened due to the said measure are as underE 1. Pricing of the product 2. Product Innovation 3. Distribution Model

--

!hile, all three areas saw ma.or overhaul after reforms in the insurance sector, one area which underwent ma.or change was the distri"ution model, especially "y recogni1ing "ancassurance as one of the important channels of distri"ution as the way forward to reach the masses, especially considering the fact that penetration of insurance products is at a very low level in India as compared to the rest of the world. 2ancassurance channel has emerged as the most preferred distri"ution model for insurance companies as well as for "anks. <or insurance companies, the channel gives wider reach at lower infrastructure investments and recurring costs. %t the same time, for "anks, the channel helps in customer retention "y offering different financial products under one roof and at the same time earning much needed fee "ased income. 2ancassurance activity has resulted in following value addition to "anks and customersE 1. as! access to insurance products to the customers at ban"s itself# i.e. one point of contact for different financial products. 2. $uic" settlement of claims 3. Increase in customer lo!alt! %. &ee based income to the ban" /his channel has opened up a new exciting avenue for the "ank as well as insurance companies. Its long term success depends upon addressing certain key issues as followsE A'te! Sales se!=ices /here is an urgent need to develop a strong after sales service mechanism, since "ank=s customers primarily depend upon "ank personnel to address their issues post sales. >any times such issues are redirected to insurance companies which results in undue delay in resolving the customer issues which finally results in dissatisfaction among customers.

-8

Competiti=e p!ici(g +specially after de' tariffing of premium, the issue has taken prominence. 9ut throat competition among insurance companies result in offering finer premiums for similar products "y different companies. /his results in customer getting a feel of not "eing treated fairly. /here is an urgent need for customer education on this front on the part of "ank as well of insurance companies. >oreover, there is also a need for self discipline among insurance companies in this area U( e!sta( i(g p!o uct (ee o' t5e custome!s% 9ustomer "ase of the "ank is a diversified one and it calls for understanding the need of each customer "efore marketing the product to him. <ailure to address this issue may result in mis'selling of the products, which has direct "earing on customer trust with their "ank. /his calls for proper segmenting of customer "ase depending upon profile of each customer. P!o uct T!ai(i(g >any times personnel selling the product from insurance as well as from "ank=s side lack adequate product knowledge, which results in dissatisfaction of customers and limits further up'selling or cross selling opportunities to such customers. Simpli'ie P!o ucts /here is a need to introduce products on simplified term and features, especially products for individuals, like health insurance products, vehicle insurance products, mortgage insurance products etc. speciali1ed products with features matching with the profile of customers of the "ank should "e placed which can "e easily marketed over the counter along with regular "anking products.

-7

1ancass(rance channel has potential to emerge as one of the most preferred distri/(tion channel for mar&eting ins(rance prod(cts, once a/ove shortcomings are addressed# 'ne sho(ld not /e s(rprised when more than 75; of premi(m is generated thro(gh this channel in the years to come#

NEED #OR +ANCASSURANCE IN INDIA ?esearches and present day statistics speak a"out the need of a well equipped financial structure for a country that helps it to grow economically. /he financial resources in the hands of people should "e channeli1ed in effective manner so as to increase the returns from the "asic financial structure of nation and also the quality of living of people. Insurance policies are instrumentsGproducts that play ma.or role in upholding the financial structure of
-:

developed countries. /hough the teething phase of insurance, one may say is .ust past, a desira"le foothold is yet to "e found. !ith growth in num"er of middle class families in the country, ?2I recogni1ed the need of an effective method to make insurance policies reach people of all economic classes in every corner of the nation. Implementing "ancassurance in India is one such development that took place towards the cause. /he need and su"sequent development of "ancassurance in India "egan for the following reasonsE To imp!o=e t5e c5a((els t5!oug5 45ic5 i(su!a(ce policies a!e sol /ma!kete so as to make t5em !eac5 t5e 5a( s o' commo( ma()

To 4i e( t5e a!ea o' 4o!ki(g o' 3a(ki(g secto! 5a=i(g a (et4o!k t5at is sp!ea 4i el& i( e=e!& pa!t o' t5e (atio()

To imp!o=e t5e se!=ices o' i(su!a(ce 3& c!eati(g a competiti=e atmosp5e!e amo(g p!i=ate i(su!a(ce compa(ies i( t5e ma!ket

+ENE#ITS O# +ANCASSURANCE 1<:<9-)$ )' 13:K$ 9ustomer retention >ore profita"le resource utili1ation. >ore enriched .o"s +sta"lish sales oriented culture

-6

 ?evenue diversification

1<:<9-)$ )' -:$=83:*< *'+73:-<$

-A

 Juality customer access 9reation of "rand equity Juicker geographical reach +sta"lish low cost acquisition channel

1<:<9-)$ )' *=$)'+<8$

-5

 It encourages customers of "anks to purchase insurance policies and further helps in "uilding "etter relationship with the "ank. /he people who are unaware of andGor are not in reach of insurance policies can "e "enefited through widely distri"uted "anking networks and "etter marketing channels of "anks. Increase in num"er of providers means increase in competition and hence people can expect "etter premium rates and "etter services from "ancassurance as compared to traditional insurance companies.

DISAD1ANTAGES O# +ANCASSURANCE
8D

 Cata management of an individual customers identity and contact details may result in the insurance company utili1ing the details to market their products, thus compromising on data security. /here is a possi"ility of conflict of interest "etween the other products of "ank and insurance policies 3like money "ack policy4. /his could confuse the customer regarding where he has to invest. 2etter approach and services provided "y "anks to customer is a hope rather than a fact. /his is "ecause many "anks in India are known for their "ad customer service and this fact turns worse when they are responsi"le to sell insurance products. !ork nature to market insurance products require su"missive attitude, which is a point that has to "e worked on "y many "anks in India. Insurers have their own perceptions of 2ankers as their marketers and feel that often 2ankers do not do enough to push their products. 2ankers may not appreciate certain finer points of insurance products they sell, and consequently face administrative and legal hassles from the customers.

81

82

8-

CHAPTER >
O+<ECTI1ES O# STUD$
P!ima!& O32ecti=e% /he primary o".ective of this pro.ect report is to study consumer preference toward "anks selling non life insurance policies 3 2ancassurance4. Seco( a!& O32ecti=es% /o analyse consumer perception toward non'life insurance products, offered "y different "anks. /o assess the relationship "uilding factors "etween "anks and insurance companies. /o ascertain customers expectations from the "anks which sell non life insurance policies $ast "ut not the least to study the satisfaction level of customers with regards to 2%#9%00;?%#9+ 3i.e non life insurance policies sold "y the "anks4.

88

87

CHAPTER 6
RESEARCH 0ETHODOLOG$
0ea(i(g o' Resea!c5" ?esearch refers to a search for knowledge. It is also defined as a scientific and systematic search for pertinent information on a specific topic) Acco! i(g to Cli'o! : ?Resea!c5 comp!ises e'i(i(g a( !e e'i(i(g p!og!ams: 'o!mulati(g 5&pot5esis o! suggeste solutio(s: collecti(g: o!ga(izi(g a( e=aluati(g ata: maki(g e uctio(s a( !eac5i(g co(clusio(s a( at last ca!e'ull& testi(g t5e co(clusio(s to 'o!mulate 5&pot5esis) Scope o' Resea!c5% /he scope of this research is to get first hand information a"out Co(sume! p!e'e!e(ce a( pe!ceptio( to4a! 3a(ks selli(g No( li'e i(su!a(ce policies o! +ANCASSURANCE) Resea!c5 Desig(% /he research design constitutes the "lueprint for the collection, measurement and analysis of data. I 5a=e use esc!ipti=e 3ecause t5is stu & Desc!ipti=e !esea!c5 stu ies. It is eals 4it5 esc!i3i(g t5e pe!ceptio( a( ete!mi(e 45et5e! t5e& 'it t5e

p!e'e!e(ce o' custome!s to4a! 3a(ks selli(g (o( li'e i(su!a(ce policies) Data Collectio(% 78-+38> 63)3

8:

)rimary data are those data, which are collected "y the investigator himself for the purpose of a specific enquiry or study. 0uch data are original in character and are generated "y surveys conducted "y individuals or research institutions. /hus we can say that the data that is collected for the first time is called primary data.

$<*':638> 63)3 !hen a person uses data, which has already "een collected "y someone else, then such data is known as secondary data. /his type of data should "e used with extra care since someone else has collected it for his or her use.
#o! t5e pu!pose o' t5is !esea!c5 p!ima!& ata 4as collecte 4it5 t5e

5elp o' @uestio((ai!e met5o )

A Auestio((ai!e co(tai(i(g a (um3e! o' Auestio(s !elati(g to t5e

topic ?Co(sume! p!e'e!e(ce to4a! 3a(ks selli(g No( li'e i(su!a(ce PoliciesB 4as ist!i3ute )
T5e !espo( e(ts 4e!e

i!ectl& co(tacte

a(

i('o!matio( 4as ata '!om =a!ious

collecte t5!oug5 'ille Auestio((ai!es)

T5e p!ese(t stu & also i(co!po!ates seco( a!&

3ooks9 ;: Su!=e&s a( t5e i(te!(et) Sample Desig(% 7op(lation )opulation is finite num"er of elements which the researcher is going to target in a particular area. People t5!oug5out Lu 5ia(a 45o 5a=e attai(e t5e age o' 1C co(stitute t5e populatio( o' m& !esea!c5) $ample =nit 0ampling ;nit is the single unit of population.
86

Sampli(g u(it 'o! m& !esea!c5 is D8 i( i=i uals 45o 5as o3tai(e t5e age o' 1C &ea!s) $ampling )echni?(e /here are two methods of conducting survey or research i.e. census survey and sampling survey. #o! t5e pu!pose o' t5is pa!ticula! !esea!c5 I 5a=e c5ose( sampli(g su!=e& met5o ) #u!t5e! u( e! sampli(g su!=e& I 5a=e use sampli(g met5o ) No( P!o3a3ilit& 2u gme(t sampli(g) U( e! (o( p!o3a3ilit& tec5(iAue I 5a=e use

8A

LI0ITATIONS O# STUD$
+very study has to have limitations in terms of cost, human error and so on the "est efforts were put in to get information from the company. Curing the entire research period there were certain constraints faced "ecause of circumstances and capa"ilities. /he research conducted was under the following constraintsE
!hile every possi"le effort was made to get the questionnaire filled

personally, even then some elements of "iasness might have crept in.
,nly 7D respondents have "een contacted due top time constraint.

0ample selected may not "e the true representative of the universe.

85

CHAPTER E
INTERPRETATION AND ANAL$SIS O# DATA
7D

/his chapter deals with the analysis and interpretation of consumer preference and perception toward 3a(ks selli(g No( Li'e I(su!a(ce policies i)e) +ANCASSURANCE) 1) LE1EL O# A*ARENESS A0ONG PEOPLE REGARDING +AN.S SELLING NON LI#E INSURANCE POLICIES OPTIONS $ES NO CANT SA$ TOTAL NO) O# RESPONDENTS 8D 6 D8 PERCENTAGEF AD 18 : 188

I(te!p!etatio(% ADB of people have awareness regarding "anks selling #on $ife insurance policies. 18 percent people are not aware of the same. >) SOURCES O# A*ARENESS REGARDING +ANCASSURANCE OPTIONS NO) O# RESPONDENTS PERCENTAGEF

71

TELE1ISION ADS SOLE SELLING

11 18

22 2A

AGENTS *ORD O# 0OUTH NE*SPAPERS HOARDINGS 0AGAGINES OTHERS TOTAL

1D 8 : 2 D8

2D A 12 : 8 188

I(te!p!etatio(" >CF !espo( e(ts get a4a!e(ess !ega! i(g 3a(ks selli(g (o( li'e i(su!a(ce policies: t5!oug5 sole selli(g age(ts o' 3a(ks)>>F !espo( e(t get a4a!e(ess: t5!oug5 tele=isio( a =e!tiseme(t) >8 F !espo( e(ts a!e a4a!e !ega! i(g t5e same t5!oug5 4o! o' mout5) 6 9A; PEOPLE *HO HA1E PURCHASED POLICIES #RO0 +AN.S OPTIONS $ES NO TOTAL -D 2D D8
72

NO O# RESPONDENTS

PERCENTAGEF :D 8D 188

I(te!p!etatio(% :DF o' people pu!c5ase policies '!om 3a(ks) *5ile t5e !est E8F pe!ce(t o (ot)

69+; T$PE O# POLIC$ PURCHASED OPTIONS NON LI#E LOAN +ASED OTHERS TOTAL 17 5 : 68 NO O# RESPONDENTS 7D -8 28 188 PERCENTAGEF

7-

I(te!p!etatio(' 7DB of policies purchased from "anks: a!e (o( li'e i(su!a(ce) *5e!eas 68 F o' !espo( e(ts 5a=e pu!c5ase policies a( >8F !espo( e(ts 5a=e pu!c5ase i(su!a(ce: eposit 3ase policies etc) E9A; T$PE O# INSURANCE POLIC$ O##ERED +$ DI##ERENT +AN.S OPTIONS HEALTH 1EHICLE 0EDICAL #IRE THE#T OTHERS TOTAL 17 1D 5 7 6 8 D8 NO O# RESPONDENTS -D 2D 1A 1D 18 A 188 PERCENTAGEF loa( 3ase ot5e! policies like li'e

78

I(te!p!etatio(" -DB people responded that their "ank offers health insurance. >8F !espo( e(ts a!e o''e!e 1e5icle i(su!a(ce 3& t5ei! 3a(ks) 18F !espo( e(ts sa& t5at t5ei! 3a(ks p!o=i e 'i!e i(su!a(ce) A3out E F !espo( e(ts sa& t5at t5ei! 3a(k sells ot5e! policies like P!ope!t& i(su!a(ce: Pe!so(al acci e(t i(su!a(ce etc) E9+; CONTRI+UTION OPTIONS
%. STRONGL$

O# ELECTRONIC NO O# RESPONDENTS

TRANSACTIONS IN PERCENTAGEF -D 82 1D

PURCHASE O# NON LI#E INSURANCE #RO0 +AN.S

17 21 7

AGREE 2. AGREE 9. NUETRAL

77

C. DISAGREE +. STRONGL$

6 2 D8

18 8 188

DISAGREE <. TOTAL

I(te!p!etatio(" 82B of people agree that electronic transactions are "eneficial in selling non life insurance policies =ia 3a(ks c5a((els) *5e!eas: o(l& 1EF isag!ee to t5e same) D) PRE#ERENCE O# PEOPLE REGARDING CHANNEL O# DISTRI+UTION O# NON LI#E INSURANCE POLICIES OPTIONS +AN.S INSURANCE CO) AGENTS +RO.ERS TOTAL 22 15 7 8 D8 NO O# RESPONDENTS 88 -A 1D A 188 PERCENTAGEF

7:

I(te!p!etatio(" >a.ority of people i.e. 88B prefer "uying non life insurance from "anks. %"out -AB "uy them from insurance companies and the rest "uy the from agents and 3!oke!s) 7) #ACTORS THAT IN#LUENCE CUSTO0ERS TO PURCHASE NON LI#E INSURANCE POLICIES #RO0 +AN.S #ACTORS RATING 1 +AN.S ARE TRUST*ORTH$ > 6 E D

2G7D 1G7D -G7D 8G7D 8DG7D 8B 2B :B AB ADB

ONE STOP SHOP

DG7D 8G7D 8G7D -7G7D 6G7D DB AB AB 6DB 18B

CON1ENIENCE

1G7D DG7D -:G7D :G7D 6G7D

76

7A

I(te!p!etatio("
H2anks are /rustworthyI N ADB respondents rate this factor as 1ER$

HIGH 45ile pu!c5asi(g (o( li'e i(su!a(ce '!om 3a(ks) O(l& EF !ate t5is i('lue(ci(g 'acto! as 1ER$ LO*)
H,ne stop shopI N 6DB respondents considerGrate this factor as HIGH H9onvenienceI ' 62B of respondents give 0EDIU0 !ati(g to t5is

'acto!)

75

 H+asy %ccessi"ilityI' 68F !espo( e(ts !ate t5is 'acto! as 1ER$

HIGH a( o(l& EF !ate it as 1ER$ LO*

H9redi"ilityG/ransparencyI' 6:B respondents rate it as *IG* H)roduct )ortfolioI' :8B respondents give >+CI;> rating to this

factor.
H0ervices ,fferedI' :DB rate this factor as *IG*. H<inancial 0trengthI' :2B respondents "elieve that financial strength of

the "ank should "e strong while purchasing non life insurance from "anks.
H 2rand and ?eputationI' % whooping A8B respondents rate this factor

as *IG*. ,nly 8B of them consider it $,!

H)DISTRI+UTION

O#

NON

LI#E NO) O#

INSURANCE

UNDER

+ANCASSURANCE OPTIONS PERCENTAGEF RESPONDENTS

:D

%. INDEPENDENT AD1ISOR$I +AN. 2. )TRANSITION SALES PARTNER 9. SUPPORT 1IA STA## COOPERATION IN SALES 1IA SALES STA## O#

17

-D

TO 7 O#

1D

SALES -D *ITH TO D8

:D

COOPERATION

SPECIALISTS ACCESS CUSTO0ERS C. TOTAL

188

I(te!p!etatio(" %"out :DB of non life insurance policies are sold via "anks with support in sales "y cooperation specialist with access to customers.

:1

C) CONSIDERATION THAT SHOULD +E PAID +$ +AN.S TO #OLLO*ING SUCCESS #ACTORS #OR SELLING NON LI#E INSURANCE POLICIES #ACTORS RATING LO* %. PRODUCT SOLD +$ +AN. 7G7D 1DB 2. PRICE O# PRODUCT 6G7D 18B 9. I0PLE0ENTATION REGULATOR$ RE@) C. ACCEPTANCE CUSTO0ERS +. TRANSPARENT DEALINGS O# O# 1AG7D -:B 8G7D AB 7G7D 1DB <. TRAINING O# STA## -G7D :B G. PROTECTION DATA+ASE *. COST E##EICIENT O# CUST) 1DG7D 2DB :G7D 12B 0EDIU0 -7G7D 6DB 2DG7D 8DB -DG7D :DB 16G7D -8B 1DG7D 2DB -AG7D 6:B 17G7D -DB -2G7D :8B HIGH 1DG7D 2DB 2-G7D 8:B 2G7D 8B 25G7D 7AB -7G7D 6DB 5G7D 1AB 27G7D 7DB 12G7D 28B

DISTRI+UTION S$STE0

:2

+AR GRAPH REPRESENTING DI##ERENT RATINGS +$ THE RESPONDENTS"

I(te!p!etatio("
H)roduct sold "y 2ankI' 6DB of respondents are of the view that "anks

should give >+CI;> consideration to this factor for effective selling on #on $ife insurance policies.
H)rice of the )roductI' 8:B respondents say that "anks should give

*IG* consideration to this factor while selling #on $ife insurance. ,nly 18B "elieve that consideration paid "y "anks toward this factor can "e $,!.
:-

 HImplementation of regulatory requirementsI' :DB of respondents hold

the view that "anks should pay >+CI;> consideration to this success factor. !hereas, only 8B regard this as *IG* .
H%cceptance of customersI N 7AB respondents "elieve that "anks should

give *IG* importance to their customers when offering products related to non life insurance. /his includes their level of satisfaction as well as acceptance of products "y the customers.
H/ransparent CealingsI' 6DB respondents "elieve that "anks should give

*IG* importance this factor.

H/raining of staffI' 2anks should give >+CI;> consideration when it

comes to training of their employees for selling #on $ife insurance. 6:B respondents are of this view. ,nly :B respondents say that $,! consideration may "e given to this factor. ?P!otectio( o' Custome! Data3aseB" D8F 3elie=e t5at 3a(ks s5oul gi=e HIGH co(si e!atio( to t5is 'acto! 45ile selli(g No( li'e i(su!a(ce policies)
H9ost efficient distri"ution systemI' :8B respondents say that "anks

should give >+CI;> importance to this factor.

:8

J) A*ARENESS REGARDING DI##ERENT NON LI#E INSURANCE PRODUCTS SOLD +$ +AN.S) OPTIONS #ULL$ A*ARE 6 NOT A*ARE AT 12 ALL PARTIALL$ A*ARE TOTAL -1 D8 NO) O# RESPONDENTS 18 28 :2 188 PERCENTAGEF

I(te!p!etatio(" :2B people are partially aware a"out the non life insurance products offered "y their "anks. !hile on the other hand 28B are not aware at all. 189A; LE1EL O# SATIS#ATION O# CUSTO0ERS REGARDING +AN.S SELLING NON LI#E INSURANCE PRODUCTS

:7

OPTIONS %. HIGHL$ SATIS#IED 2. SATIS#IED 9. 0ODERATEL$ SATIS#IED C. DISSATIS#IED +. HIGHL$ DISSATIS#IED <. TOTAL 5 16 17 : D8

NO) O# RESPONDENTS 1A -8 -D 12 :

PERCENTAGEF

188

I(te!p!etatio(' 1CF o' !espo( e(ts a!e 5ig5l& satis'ie a'te! pu!c5asi(g No( li'e i(su!a(ce '!om 3a(ks)6EF people a!e satis'ie a'te! pu!c5asi(g (o( li'e i(su!a(ce policies '!om 3a(ks) *5ile o(l& 1>F a!e issatis'ie ) 189+; REASONS STATED #OR SATIS#ACTION
Good 0ervice "y "anks +asy and 9onvenient %dvisory 0ervices offered "y "anks +asy claim philosophy ::

189C; REASONS STATED #OR DISSATIS#ACTION

$ack o' t!ai(i(g o' 3a(k sta''

Poo! a'te! sale se!=ice

11.

HAS +ANCASSURANCE CONTRI+UTED TO THE GRO*TH O# INSURANCE SECTOR IN INDIA, OPTIONS NO) O# RESPONDENTS 82 : 2 D8 PERCENTAGEF A8 12 8 188

$ES NO CANT SA$ TOTAL

:6

I(te!p!etatio(" % huge chunk, i.e. A8B of respondents "elieve that 2%#9%00;?%#9+ contri"uted positively in the growth of insurance sector in India. ,nly 12 percent do not have the same viewpoint. 12. 9A;) *HETHER PEOPLE *ANT TO PURCHASE NON LI#E INSURANCE #RO0 +AN.S IN THE NEAR #UTURE, OPTIONS $ES NO CANT SA$ TOTAL 8D 8 : D8 NO) O# RESPONDENTS AD A 12 188 PERCENTAGEF

:A

I(te!p!etatio(' C8F o' !espo( e(ts 4oul

like to pu!c5ase (o( li'e

i(su!a(ce policies '!om a 3a(k i( t5e (ea! 'utu!e)

1>)9+; REASONS #OR #UTURE PURCHASE OPTIONS A) +a(ks sell policies i( a 3ette! 4a& +) A =iso!& NO O# RESPONDENTS PERCENTAGEF

1>

-D

28 8D 1D 188

se!=ices/'acilities C) Eas& claim 17 5a( li(g D) Ot5e!s +. Total

8 E8

:5

I(te!p!etatio("8DB !espo( e(ts 4ill pu!c5ase a polic& '!om 3a(ks ue to t5ei! eas& claim p5ilosop5&) *5e!eas: 68F !espo( e(ts 3elie=e t5at 3a(ks sell policies i( a 3ette! 4a& a( t5at t5e& 4ill pu!c5ase a (o( li'e i(su!a(ce p!o uct '!om a 3a(k i( t5e (ea! 'utu!e)>8F 4ill pu!c5ase (o( li'e i(su!a(ce i( (ea! 'utu!e '!om a 3a(k ue to a =iso!& se!=ices o''e!e 3& t5em)

6D

61

CHAPTER D
RESULTS AND #INDINGS
62

 ADB of people have awareness regarding "anks selling #on $ife

insurance policies.
2AB respondents get awareness regarding "anks selling non life

insurance policies,

through sole selling agents of "anks.22B

respondents get awareness, through television advertisement. 2D B respondents are aware regarding the same through word of mouth. 78F o' people pu!c5ase policies '!om 3a(ks) *5ile t5e !est E8F pe!ce(t o (ot) Out o' t5ose 45o 5a=e pu!c5ase t5e polic& D8F 5a=e a (o( li'e i(su!a(ce polic&) *5e!eas 68 F o' !espo( e(ts 5a=e pu!c5ase loa( 3ase policies a( >8F !espo( e(ts 5a=e pu!c5ase ot5e! policies like li'e i(su!a(ce: eposit 3ase policies etc)
-DB people responded that their "ank offers health insurance. 2DB

respondents are offered Lehicle insurance "y their "anks.

1DB

respondents say that their "anks provide fire insurance. %"out 8 B respondents say that their "ank sells other policies like )roperty insurance, )ersonal accident insurance etc.
82B of people agree that electronic transactions are "eneficial in selling

non life insurance policies via "anks channels. !hereas only 18B disagree to the same.
>a.ority of people i.e. 88B prefer "uying non life insurance from "anks.

%"out -AB "uy them from insurance companies)

6-

 H2anks are /rustworthyI N ADB respondents rate this factor as L+?Q

*IG* while purchasing non life insurance from "anks. ,nly 8B rate this influencing factor as L+?Q $,!.
6DB of respondents are of the view that "anks should give >+CI;>

consideration to product sold "y them for effective selling on #on $ife insurance policies.
6:B respondents "elieve that "anks should give >+CI;> importance

to staff training in order to sell #on $ife insurance effectively. ,nly :B respondents "elieve that this factor may"e given a $,! rating on "anks "ehalf.
%"out :DB of non life insurance policies are sold via "anks with support

in sales "y cooperation specialist with access to customers.

:2B people are partially aware a"out the non life insurance products

offered "y their "anks. !hile on the other hand 28B are not aware at all.
1AB of respondents are highly satisfied after purchasing #on life

insurance from "anks.-8B people are satisfied after purchasing non life insurance policies from "anks. !hile only 12B are dissatisfied.
?easons quoted "y respondents for their satisfaction areE ?easona"le

price, easy claim policy of "anks, advisory services and additional products offered.
?easons quoted "y respondents for their dissatisfaction areE +asy claims

are fiction rather than fact, lack of training on the part of "ank employees.

68

5uge

c5u(k:

i)e)

CEF

o'

!espo( e(ts

3elie=e

t5at

+ANCASSURANCE co(t!i3ute i(su!a(ce secto! i( I( ia) C8F o' !espo( e(ts 4oul

positi=el& i( t5e g!o4t5 o'

like to pu!c5ase (o( li'e i(su!a(ce

policies '!om a 3a(k i( t5e (ea! 'utu!e)

,ut of those who would like to purchase a policy in near future, E8F

!espo( e(ts 4ill pu!c5ase a polic& '!om 3a(ks policies i( a 3ette! 4a& a(

ue to t5ei! eas&

claim p5ilosop5&) *5e!eas: 68F !espo( e(ts 3elie=e t5at 3a(ks sell t5at t5e& 4ill pu!c5ase a (o( li'e ue to a =iso!& i(su!a(ce p!o uct '!om a 3a(k i( t5e (ea! 'utu!e)>8F 4ill pu!c5ase (o( li'e i(su!a(ce i( (ea! 'utu!e '!om a 3a(k se!=ices o''e!e 3& t5em)

RECO00ENDATIONS AND SUGGESTIONS

67

/he concept of 2%#9%00;?%#9+ or "anks selling non life insurance policies has a huge potential of growth in the Indian market. /his is "ecause the population India is huge and "anks are expanding at a very fast pace, even in rural areas which were earlier not accessi"le.
In order to sell non life insurance policies to customers "anks should

keep certain guidelines and suggestions which can help improve their clientele.
2anks should give utmost importance to selling the right kind of product

to the right kind of people. In other words selection of customer segments should "e done carefully and then the product should "e offered to them, keeping their needs in mind.
0econdly "anks should concentrate on "eing fare and transparent in their

dealings.
%nother suggestion for "anks that hold importance is proper training and

motivation of "ank staff for selling non life insurance products. ;nless and until they do not have in depth knowledge regarding products they wont fetch customers.
$ast "ut not the least, selection of insurance partner should "e made

carefully and the claims philosophy of the "anks should "e easy so that customer is a"le to settle hisGher claim without hassle.

6:

CHAPTER 7
66

CONCLUSION

/hough 2%#9%00;?%#9+ is a recent concept, "anks sell non life insurance policies in a "etter, fast and efficient way. 9ustomers prefer "uying non life insurance products from "anks "ecause there is trust factor involved. )eople in Indian trust "anks more than insurance companies. /here are a num"er of "anks in the list of 17D trusted "rands 3with the 0tate 2ank of India 5ea i(g t5e list at t5e 'i't& 'i!st place )T5e!e is (o ot5e! i(su!a(ce compa(& i( t5at list) *5e( 3a(ks go i( 'o! i(su!a(ce 3usi(ess it is a *i(" *i( situatio( 'o! i(su!a(ce compa(ies: custome!s a( t5e 3a(ks t5emsel=es) ?egulatory changes made "y the ?eserve 2ank of India and the Insurance ?egulatory and Cevelopment %uthority have "een favora"le to "ancassurance De=elopme(t) 2anks are even attracting many foreign insurers. /hey would like to see t5e 3a(k 3!a(c5es as t5ei! mai( ist!i3utio( c5a((el) O' cou!se: t5is ca( o(l& 3e o(e i' t5e!e is smoot5 'lo4 o' i('o!matio( 3et4ee( t5e custome! o' t5e 3a(ks a( t5ei! i(su!a(ce pa!t(e!s) U(less ata3ase o' &ea!s)

compute!izatio( 3ecomes u(i=e!sal: t5is e=elopme(t 4ill take a (um3e!

+I+LIOGRAPH$ AND *E+LIOGRAPH$

6A

 www.google.com www.s"igeneral.in
5ttp%//444)sta( a! c5a!te!e )co)i(/pe!so(al/i(su!a(ce"

i(=estme(ts/e(/ge(e!al"i(su!a(ce)5tml www.indiatimes.com httpEGGarticles.economictimes.indiatimes.comG2D12'1D' 1DGnewsG-8-:-7D7R1Rthird'largest'private'"ank'axis'"ank'general' insurance

2ook on ?isk >anagement and Insurance "y /.? Lishvanathan

httpEGGwww.irda.gov.inGCefaulthome.aspx@pageS*1

ANNE-URE
@UESTIONNAIRE
65

I am a student of 22% -. I am going to undertake the research on 9ustomer preference and perception toward "anks selling non'life insurance policies. Findly, take some time out to fill my questionnaire. #%>+ERRRRRRRRRRRRRRRRRRRRRRRRR G+#C+?E >G< %G+ERRRRRRRRRRR

>%?I/%$ 0/%/;0ERRRRRRRRRRRRRR %##;%$ I#9,>+ERRRRRRRRRRRRRR

J1. %re you aware a"out "anks selling #on life insurance policies or 2%#9%00;?%#9+@ Q+0 9%#/ 0%Q #,

J2. !hat are the sources of your awareness a"out "anks selling #on life insurance policies@ /+$+LI0I,# 0,$+ 0+$$I#G %G+#/0 ,< 2%#F0 !,?C ,< >,;/* #+!0)%)+? *,%?CI#G0 >%G%OI#+0 ,/*+?0 30)+9I<Q4RRRRRRRR

J-. 3a4 *ave you ever purchased an insurance policy from a "ank@ Q+0 #,
AD

3"4 If Q+0, select the kind of insurance policy purchased. $ife Insurance )olicy #on $ife Insurance )olicy $oan "ased ,thers specify4RRRRR

J8. 3a4)lease select the type of #on $ife Insurance policies offered "y your "ank. *+%$/* I#0;?%#9+ <I?+ I#0;?%#9+ >+CI9%$ I#0;?%#9+ ,/*+?0 30)+9I<Q4RRRRRRR L+*I9$+ I#0;?%#9+ /*+</ I#0;?%#9+

3"4 %ccording to you, Is electronic transaction "eneficial in purchase of non life insurance policies from "anks @ 0/?,#G$Q %G?++ #+;/?%$ 0/?,#G$Q CI0%G?++ %G?++ CI0%G?++

J7. 2ased on your choice, which mode of #on $ife insurance channel would you prefer to "uy #on $ife insurance policy from@ 2%#F0 I#0;?%#9+ 9,>)%#Q %G+#/0G <I#%#9I%$ %CLI0,?0 2?,F+?0 J:. )lease rate the importance of the following factors in purchase of #on $ife insurance policies from "anks 31 "eing least important and 7 "eing most important4.

A1

FACTORS 1 One stop shop with single window service. Ban s are tr!stworth" Convenience #as" Accessi$ilit" Credi$ilit"%Transparent dealings &rod!ct &ort'olio Services O''ered Financial Strength Brand ( Rep!tation o' $an J6. %ccording to you, how is the distri"ution of #on $ife insurance policies organi1ed under 2%#9%00;?%#9+@ Independent %dvisory and 0ales via 0ales staff of 2ank. /ransition to sales staff of 9o'operation )artner. 0upport in sales via 9o'operation specialists with access to customers 2 3 4 5

JA. %s a customer, what do you think, how much consideration should a "ank give to the following success factors for effective selling of #on $ife insurance policies@ FACTORS &rod!ct sold $" $an &rice o' prod!ct -1ple1entation o' reg!lator" re2!ire1ent Acceptance o' c!sto1ers
A2

)O* +

+#,-.

/-0/

 Transparenc" in ,ealings Training o' $an sta'' &rotection o' c!sto1er ,ata$ase Cost #''icient ,istri$!tion S"ste1 J5. %re you aware a"out all the #on $ife insurance products offered "y your "ank@ <;$$Q %!%?+ )%?/I%$$Q %!%?+ 5 #,/ %/ %$$ %!%?+

J1D. 3a4 !hat is your level of satisfaction if you have purchased #on $ife insurance from a "ank@ *IG*$Q 0%/I0<I+C >,C+?%/+$Q 0%/I0<I+C *IG*$Q CI00%/I0<I+C 0%/I0<I+C CI00%/I0<I+C

3"4 If you are satisfied, please state the reasons for your satisfaction. RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR

3c4 If dissatisfied, please state the reasons for your dissatisfaction.

A-

RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR

J11. In your opinion has 2%#9%00;?%#9+ helped in improving the growth of insurance market in India@ Q+0 #, 9%#/ 0%Q

J12. 3a4 If you do not have a #on $ife Insurance policy presently, would you purchase any policy from your "ank in the near future@ Q+0 #, 9%#/ 0%Q

3"4. If Q+0, please select the reasons for your future purchase from a "ank. 2anks sell policies in a "etter way %dvisory services and other facilities offered "y "ank +asy claim handling. ,thers 3specify4RRRRRRRRRRRRR

A8