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Somnath Dash

PGDM BATCH 12

ROLL NUMBER-67

KIRLOSKAR INSTITUTE OF ADVANCEDMANAGEMENT STUDIES, HARIHAR

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Insurance is defined as the equitable transfer

of the risk of a loss, from one entity to

another, in exchange for payment

Insurance is to provide protection againstfuture risk, accidents and uncertainty.

Insurance cannot check the happening of the

risk,but can certainly provide for the losses

of risk.

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Primaryfunction

Provide

protection

Assessment Ofrisk

ProvideCertainty

Secondaryfunction

Prevention of

losses

Small capital tocover large risk

Contributetowards the

development of

larger industries

Functions of insurance

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Micro Insurance is the process of delivering andservicing relevant and affordable life insuranceproducts to the low-income socio economicstrata. The focus of our companys Microinsurance program is rural India, wheretraditionally the far-flung, lower and lowermiddle-income segments have had limited accessto life insurance services.

FOCUS AREA-The flagship product of microinsurance nowadays remains life insurance. It

can combine life insurance coverage (when thepolicyholder is alive) and a savings product,which makes it a particularly well adaptedservice in the context of microfinance.

MICROINSURANCE

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The most important feature for growth would bethe purchase factor. For simulating purchasesthe following approach is intended

Affordability: product premiums should be lowand affordable in comparison to competitors.Evolve effective and innovative schemes likepremiums on a daily ,weekly or monthlyinstallment basis.

Secured feeling- since we are going to be anovice in the field building of goodwill and trustwould be considered important by the companyin its march towards growth and prosperity.

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Company image- the company would furtherinvolve itself in promotional activities ,

trying to carve out a place in the minds ofthe consumer by involving with the localpeople , trying to understand theirsentiments and providing need basedproducts and services. The products would

be designed by a through market analysisbased on a sample questionnaire to be filledin by the local mass in order to customize totheir needs.

Finally the company intends to partner withan insurance company Tata AIG life insurancein its efforts to position itself as a strongplayer in the field of micro insurance.

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The TATA brand name symbolizes trust.

AIG is one of the oldest and largest

multinational in the field of insurance.

Tata AIG Lifes Micro agent retailing model

has also been the subject of a case study

report sponsored by ILO/CGAP (International

Labour Organisation / Consultative Group to

Assist the Poor) & the Munich Refoundation.

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Insurance Regulatory Development Authority

First step would be to get permission from this

regulatory body.

We are insured to the Life insurer sector We do not want to focus our competencies on

general insurance keeping in view our target

market where we find the growth potential to be

low and the amount of risk to be potentiallyhigher. But at the same time we would not limit

ourself to the life sector in future and may move

in to other related sectors like crop insurance

and farm machinery insurance.

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No plans available for Low level income

groups

95% of companies are Targeting on high level

Income group.Huge untapped market available.

Large no of people unaware of Micro

Insurance.

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Differentiation on the basis of:-

People - low level income people( immense potential of

growth based on this differentiation based on daily low

premiums)

Process-two people available for every 20 km, collection

agents can be financially poor students or people looking for

a part time.

Convenience- easy access to claims , through our 24 *7 tollfree number

Profit- high profit because of low premiums, larger volumes

and lower claims because of focus on servicing to the low risk

category.

Time- claims to be serviced within in 15 days, else company

would be laible for payment of penalty on the same.

Marketing Analysis to focus on target customer based onaffordability and need requirement

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Product Mix

-Promoting innovation in product portfolio, include thoseservices and schemes which are likely to get a positiveresponse in the future and which are given lesser

importance by competitors.

-Polices should not take care of generating premium onlybut also cover people from all walks of life.

-Insurances should be there as per requirement of thecustomer.

-Instant policy making

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Focus on social benefit. Give due weight age to the socially and

economically backward classes.

Discover uncovered market places

Maximize the mobilization of savings by offering lucrativeschemes.

Assign due weight age to interests of investors.

Maintain economy in business by promoting cost effectiveness.

Keep in mind the emerging trends in business environment.

Improve the quality of customer / user services.

Try to come with innovative strategies

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Word of mouth advertising

Media Advertsing

Personal Selling

Participating in some social welfare activities.

Sponsoring events and festivals of local importance.

Providing for promotions like waiver on premiumschemes by focusing on schemes like chainmarketing as followed In retail sector by companieslike Amway.

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Cost effectiveness

Restructuring of premium, leverage on smaller

premium use of schemes like daily depositswhich would contribute towards the premiumwithout bringing in the burden factor.

Rationalizing or optimizing the social costs.

Providing waiver on premiums on local festivals.

Paving avenues for channelizing the productiveinvestments

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People

-No matter what distribution strategy acompany adopts, customer relationship acts

as a base to maintain the customer on a

long-term basis.

-Give training to local people for creating

awareness and employment.

-A satisfied Customer is a salesman

forever.He would then act as a partner with

us and help us in our road to growth.

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Insurance for life, health, home, business crop nand farmimplements is a necessity for many people in the middle andlower income group specially in rural and semi urban areas.

As agents we need to focus on the local community andfind ways to get our name out there i.e. focus on need basedadvertisement and increase awareness towards insurance asan investment option.

Local Newspapers: selective(based on readership reviews

Post cards advertisements

Radio during Business hours.

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Television: focus on local channels based onTRP ,ads would be shown during prime time.

Local Sign Advertising: Billboards, Neon Signs,

Transit System Signs, etc.

Advertisements through ads on the back of

railway tickets and long tour bus services.

Local Movie Theatre: advertisements as

screen shots during intervals and before the

start of the movie

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