TABLE & CONTENT
CHAPTER PREFACE PAGE NO.
CHAPTER 1 INTRODUCTION TO INSURANCE
1.4 FUNCTION OF LIFE INSURANCE
1.2 LIFE INSURANCE
1.3 TYPES OF LIFE INSURANCE
1.5 ROLE OF INSURANCE
1.6 IMPORTANCE OF INSURANCE
1.7 CONTROLING AUTHORITY
CHAPTER 2 INTRODUCTION TO INDIAN INSURANCE INDUSTRY
2.1 INDIAN INSURANCE INDUSTRY
2.2 A BRIEF HISTORY OF INSURANCE SECTOR
2.3 MILESTONES IN THE INSURANCE SECTOR
2.4 LIST OF INSURANCE COMPANIES WORKS IN INDIA
2.5 HOW BIG IS THE INSURANCE MARKET?
2.6 INDIAN SCENERIO
CHAPTER 3 INTRODUCTION OF TATA AIG
3.1 TATA GROUP
3.2 TATA GROUP IN INSURANCE
3.4 THE JOINT VENTURE- TATA-AIG
3.5 HOW COMPANY WORKS
CHAPTER 4 LEARNINGS FROM THE PROJECT
INTRODUCTION TO INSURANCE
"Insurance is a contract between two parties whereby one party called insurer undertakes in
exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount
of money on the happening of a certain event." Insurance may be described as a social device
to reduce or eliminate risk of life and property. Under the plan of insurance, a large number of
people associate themselves by sharing risk, attached to individual. With the help of Insurance,
large number of people exposed to a similar risk makes contributions to a common fund out of
which the losses suffered by the unfortunate few, due to accidental events, are made good.
Insurance is a tool by which fatalities of a small number are compensated out of funds
collected from plenteous. Gradually as competition increased benefits given by industry to its
customers increased by leaps and bounds. Insurance is a basic form of risk management which
provides protection against possible loss to life or physical assets. Person who seeks protection
against such loss is termed as insured, and company that promises to honor claim, in case such
loss is actually incurred by insured, is termed as Insurer. In order to get insurance, insured is
required to pay to insurance company a certain amount called premium. Premium is collected
by insurance companies which acts as trustee to pool created through contributions made by
persons seeking to protect themselves from common risk. Any loss to the insured in case of
happening of an uncertain event is paid out of this pool. Insurance business is divided into
• Life Insurance
• Property Insurance
• Health Insurance
• Auto Insurance
• Travel Insurance etc.
1.2. LIFE INSURANCE:-
Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a
premium paid undertakes to pay a fixed sum of money on The death of the insured or on the expiry of
a specified period of time Whichever is earlier. In case of life insurance, the payment for life insurance
policy is certain. The Event insured against is sure to happen only the time of its happening is not
known. So life insurance is known as “Life Assurance”.The subject matter of insurance is life of
human being. Life insurance provides risk coverage to the life of a person. On death of the person
insurance offers protection against loss of income and compensate the titleholders of the policy.
1.3. TYPES OF LIFE INSURANCE: -
• Term Insurance Policy
• Whole life Insurance Policy
• Endowment Policy
• Pure Endowment Policy
• Money Back Policy
Most of the products offered by Indian life insurers are developed and structured around these
"basic" policies and are usually an extension or a combination of these policies.
Term Insurance Policy:- A term insurance policy is a pure risk cover for a specified period of
time. What this means is that the sum assured is payable only if the policyholder dies within the
policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his family is entitled to
the money if he dies within that 15-year period. there is no element of savings or investment in
such a policy. It is a 100 per cent risk cover. It simply means that a person pays a certain
premium to protect his family against his sudden death. He forfeits the amount if he outlives the
period of the policy. This explains why the Term Insurance Policy comes at the lowest cost.
Whole life Insurance Policy:- As the name suggests, a Whole Life Policy is an insurance cover
against death, irrespective of when it happens. Under this plan, the policyholder pays regular
premiums until his death, following which the money is handed over to his family.
This policy, however, fails to fulfill the additional needs of the insured during his post-retirement
years. It doesn't take into account a person's increasing needs either. While the insured buys the
policy at a young age, his requirements increase over time. By the time he dies, the value of the
sum assured is too low to meet his family's needs. As a result of these drawbacks, insurance firms
now offer either a modified Whole Life Policy or combine in with another type of policy
Endowment Policy:- Combining risk cover with financial savings, endowment policies is the
most popular policies in the world of life insurance.
• In an Endowment Policy, the sum assured is payable even if the insured survives the
• If the insured dies during the tenure of the policy, the insurance firm has to pay the sum
assured just as any other pure risk cover.
Pure Endowment Policy:- A pure endowment policy is also a form of financial saving, whereby
if the person covered remains alive beyond the tenure of the policy, he gets back the sum assured
with some other investment benefits.
Money Back Policy:- These policies are structured to provide sums required as anticipated
expenses (marriage, education, etc) over a stipulated period of time. With inflation becoming a big
issue, companies have realized that sometimes the money value of the policy is eroded. That is
why with-profit policies are also being introduced to offset some of the losses incurred on account
• A portion of the sum assured is payable at regular intervals. On survival the remainder of
the sum assured is payable.
• In case of death, the full sum assured is payable to the insured.
• The premium is payable for a particular period of time..
In addition to the basic policy, insurers offer various benefits such as double endowment and
marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its
1.4. FUNCTION & CHARACTERSTICS OF INSURANCE:-
Provide protection:- The primary function of insurance is to provide protection against future
risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can
certainly provide for the losses of risk. Insurance is actually a protection against economic loss,
by sharing the risk with others.
Sharing of risk:- Insurance is an instrument to share the financial loss of few among many
others. Insurance is a mean by which few losses are shared among larger number of people. All
the insured contribute the premiums towards a fund and out of which the persons exposed to a
particular risk is paid.
Small capital to cover larger risk:- Insurance relieves the businessmen from security
investments, by paying small amount of premium against larger risks and uncertainty.
Contribute towards the Development of country :- Insurance provides development
opportunity to those larger industries having more risks in their setting up. Even the financial
institutions may be prepared to give credit to sick industrial units which have insured their
assets including plant and machinery.
Means of savings and investment:- Insurance serves as savings and investment, insurance is
a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the
purpose of availing income-tax exemptions also, people invest in insurance.
1.5. ROLE OF THE LIFE INSURANCE:-
Life insurance as an investment:- Insurance products yield more than any other investment
instruments and it also provides added incentives or bonus offered by insurance companies.
Life insurance as risk cover:- Insurance is all about risk cover and protection of life. Insurance
provides a unique sense of security that no other form of invest can provide.
Life insurance as tax planning:- Insurance serves as an excellent tax saving mechanism.
government gives tax relaxation on every life insurance policy.
1.6. IMPORTANCE OF THE LIFE INSURANCE:-
Protection against untimely death:- Life insurance provides protection to the dependents of
the life insured and the family of the assured in case of his untimely death. The dependents or
family members get a fixed sum of money in case of death of the assured.
Saving for old age:- After retirement the earning capacity of a person reduces. Life insurance
enables a person to enjoy peace of mind and a sense of security in his/her old age.
Promotion of savings:- Life insurance encourages people to save money compulsorily. When
life policy is taken, the assured is to pay premiums regularly to keep the policy in force and he
cannot get back the premiums, only surrender value can be returned to him. In case of
surrender of policy, the policyholder gets the surrendered value only, after the expiry of
duration of the policy.
Initiates investments:- Life Insurance Corporation encourages the public savings and
canalizes the same in various investments for the economic development of the country. Life
insurance is an important tool for the collection of small savings.
Credit worthiness:- Life insurance policy can be used as a security to raise loans. It improves
the credit worthiness of business.
Social Security:- Life insurance is important for the society as a whole also. Life insurance
enables a person to provide for education and marriage of children and for construction of
house. It helps a person to make financial base for future.
Tax Benefit:- Under the Income Tax Act, premium paid is allowed as a deduction from the
total income under section 80C.
1.7. CONTROLING AUTHORITY:-
Insurance Regulatory & Development Authority is regulatory and development authority
under Government of India in order to protect the interests of the policyholders and to regulate,
promote and ensure orderly growth of the insurance industry. It is basically a ten members'
team comprising of a Chairman, five full time members and four part-time members, all
appointed by Government of India. This organization came into being in 1999 after the bill of
IRDA was passed in the Indian parliament.
Composition of Authority:-
As per the section 4 of IRDA Act' 1999, Insurance Regulatory and Development Authority
(IRDA, which was constituted by an act of parliament) specify the composition of
Authority. IRDA was constituted by an act of parliament. The Authority is a ten member team
(a) a Chairman
(b) five whole-time members
(c) four part-time members
(all appointed by the Government of India)
Powers and Functions of IRDA:-
• It issues the applicants in insurance arena, a certificate of registration as well as renewal,
modification, withdrawal, suspension or cancellation of such registrations.
• It protects the interests of the policy holders in any insurance company in the matters
related to the assignment of policy, nomination by policy holders, insurable interest, and
resolution of insurance claim, submission value of policy and other terms and proposals
in the contract.
• It also specifies obligatory credentials, code of conduct and practical instructions for
mediator as well as the insurance company. Apart from this, it also defines the code of
conduct for the surveyors and loss assessors involved with the insurance business.
• One of the major functions of IRDA includes endorsing competence in the insurance
business. Apart from this, upholding and regulating professional organizations in
insurance and re-insurance business is also a major duty of IRDA.
• IRDA is also entitled to for asking information, undertaking inspection and investigating
the audit of the insurers, mediators, insurance intermediaries and other organizations
related to the insurance sector.
• It is also concerned with the regulation of the rates, profits, provisions and conditions
that may be offered by insurers in respect of general insurance business if it is not
controlled or regulated by the Tariff Advisory Committee.
• It is also entitled to supervise the functioning of the Tariff Advisory Committee.
• IRDA specifies the terms and pattern in which books of accounts are to be maintained
and statement of accounts shall be provided by insurers and other insurance mediators.
• It also regulates investment of funds by insurance companies as well as the maintenance
of margin of solvency.
• It is also empowered to be involved in the arbitration of disagreements between insurers
and intermediaries or insurance intermediaries.
• It is meant to specify the proportion of premium income of the insurer to finance
• IRDA also specifies the share of life insurance business and general insurance business
to be accepted by the insurer in the rural or social sector.
Impact of IRDA on Indian Insurance Sector:-
The creation of IRDA has brought revolutionary changes in the Insurance sector. In last 10 years
of its establishment the insurance sector has seen tremendous growth. When IRDA came into
being; only players in the insurance industry were Life Insurance Corporation of India (LIC) and
General Insurance Corporation of India (GIC), however in last decade 23 new players have
emerged in the field of insurance. The IRDA also successfully deals with any discrepancy in the
INTRODUCTION TO INDIAN INSURANCE INDUSTRY
2.1. INDIAN INSURANCE INDUSTRY:-
The Insurance sector in India governed by Insurance Act, 1938, the Life Insurance Corporation
Act, 1956 and General Insurance Business (Nationalization) 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 country’s 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.
2.2. A BRIEF HISTORY OF INDIAN INSURANCE MARKET:-
Insurance has a long history in India. In India, insurance has a deep-rooted history. It finds mention
in the writings of Manu ( Manusmrithi ), Dharmasastra and Kautilya ( Arthasastra ). The writings
talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire,
floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.
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 Nationalization b)- Nationalization and
c)- Post Nationalization. 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 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 999. Resultantly Indian Insurance was opened for private
companies and Private Insurance Company effectively started operations from 2001.
2.3. MILESTONES IN THE INSURANCE SECTOR:-
The business of life insurance in India in its existing form started in India in the year 1818 with
the establishment of the Oriental Life Insurance Company in Calcutta. Some of the important
milestones in the life insurance business in India are given in the following table.
Years Important milestones in the Indian life insurance business
1912: The Indian Life Assurance Companies Act came into force for regulating the life
The Indian Insurance Companies Act was enacted for enabling the government to
collect statistical information on both life and non-life insurance businesses.
The earlier legislation consolidated the Insurance Act with the aim of
safeguarding the interests of the insuring public.
245 Indian and foreign insurers and provident societies were taken over by the
central government and they got nationalized. LIC was formed by an Act of
Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and that
too from the Government of India.
2.4. LIST OF INSURANCE COMPANIES WORKS IN INDIA:-
Following is the list of all life insurance company granted permission by IRDA.
1. Bajaj Allianz Life Insurance Company Limited
2. Birla Sun Life Insurance Co. Ltd
3. HDFC Standard Life Insurance Co. Ltd
4. ICICI Prudential Life Insurance Co. Ltd.
5. ING Vysya Life Insurance Company Ltd.
6. Life Insurance Corporation of India
7. Max New York Life Insurance Co. Ltd
8. Met Life India Insurance Company Ltd.
9. Kotak Mahindra Old Mutual Life Insurance Limited
10. SBI Life Insurance Co. Ltd
11. Tata AIG Life Insurance Company Limited
12. Reliance Life Insurance Company Limited.
13. Aviva Life Insurance Co. India Pvt. Ltd.
14. Sahara India Life Insurance Co, Ltd.
15. Shriram Life Insurance Co, Ltd.
16. Bharti AXA Life Insurance Company Ltd.
17. Future Generali Life Insurance Company Ltd.
18. IDBI Fortis Life Insurance Company Ltd.
19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd
20. AEGON Religare Life Insurance Company Limited.
21. DLF Pramerica Life Insurance Co. Ltd.
22. Star Union Dai-ichi Life Insurance Comp. Ltd.
23.India First Life Insurance Company Ltd.
2.5. HOW BIG IS THE INSURANCE MARKET?
The insurance sector was opened up for private participation four years ago. For years now, the
private players are active in the liberalized environment. The insurance market have witnessed
dynamic changes which includes presence of a fairly large number of insurers both life and non-
life segment. Most of the private insurance companies have formed joint venture partnering well
recognized foreign players across the globe. There are now 29 insurance companies operating in
the Indian market – 14 private life insurers, nine private non-life insurers and six public sector
companies. With many more joint ventures in the offing, the insurance industry in India today
stands at a crossroads as competition intensifies and companies prepare survival strategies in a
detariffed scenario. There is pressure from both within the country and outside on the Government
to increase the foreign direct investment (FDI) limit from the current 26% to 49%, which would
help JV partners to bring in funds for expansion. There are opportunities in the pensions sector
where regulations are being framed. Less than 10 % of Indians above the age of 60 receive
pensions. The IRDA has issued the first license for a standalone health company in the country as
many more players wait to enter. The health insurance sector has tremendous growth potential, and
as it matures and new players enter, product innovation and enhancement will increase. The
deepening of the health database over time will also allow players to develop and price products
for larger segments of society. Insurance is a Rs.400 billion business in India, and together with
banking services adds about 7% to India's Gap.
2.6. INDIAN SCENERIO:-
Indian economy is the 12th largest economy in the world, with a GDP of $1.25 trillion and 3rd
largest in terms of purchasing power. With factors like a stable 8-9 per cent annual growth,
rising foreign exchange reserves, a booming capital market and a rapidly expanding FDI
inflows, it is on the hinge of an ever increasing growth curve. Indians have a tendency to invest
in properties and gold followed by bank deposits. They selectively invest in shares also but the
percentage is very small, 4-5%. This is itself is an indicator that growth potential for the
insurance sector is very high. It’s a business growing at the rate of 15-20% per annum and
presently is of the order of $47.9 billion. India is a vast market for life insurance that is directly
proportional to the growth in premiums and an increase in life density. With the entry of
private sector players backed by foreign expertise, Indian insurance market has become more
vibrant. Competition in this market is increasing with company’s continuous effort to lure the
customers with new product offerings. However, the market share of private insurance
companies remains very low, in the range of 10-15%. Even to this day, Life Insurance
Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of government
still dominates the market, with price controls, limits on ownership, and other restraints. The
upward growth trend started from 2000 was mainly due to economic policies adopted by the
then Indian government. In this year everyone saw the initiation of an era of economic
liberalization and globalization in the Indian economy followed by several reforms and long-
term policies that created a perfect roadmap for the success of Indian financial markets.
TATA-AIGLIFE INSURANCE COMPANY
3.1. TATA GROUP:-
The Tata group comprises over 90 operating companies in seven business sectors: communications
and information technology, engineering, materials, services, energy, consumer products and
chemicals. The group has operations in more than 80 countries across six continents, and its
companies export products and services to 85 countries.
The total revenue of Tata companies, taken together, was $67.4 billion (around Rs319,534 crore)
in 2009-10, with 57 per cent of this coming from business outside India. Tata companies employ
around 395,000 people worldwide. The Tata name has been respected in India for 140 years for
its adherence to strong values and business ethics.
Every Tata company or enterprise operates independently. Each of these companies has its own
board of directors and shareholders, to whom it is answerable. There are 28 publicly listed Tata
enterprises and they have a combined market capitalization of about $97.99 billion (as
on November 22, 2010), and a shareholder base of 3.4 million. The major Tata companies are
Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata
Global Beverages, Indian Hotels and Tata Communications.
Founded by Jamsetji Tata in 1868, Tata’s early years were inspired by the spirit of nationalism.
It pioneered several industries of national importance in India: steel, power, hospitality and
airlines. In more recent times, its pioneering spirit has been showcased by companies such as
TCS, India’s first software company, and Tata Motors, which made India’s first indigenously
developed car, the Indica, in 1998 and recently unveiled the world’s lowest-cost car, the Tata
3.2. TATA GROUP IN INSURANCE:-
The Late Sir Dorab ji Tata, was the founder Chairman of New India Assurance Co. Ltd.,
established in 1919. Government of India took over the management of this company as a part of
nationalization of general insurance companies in 1972. Not deterred by the move, Tata group
have ventured into risk management services having tied up with AIG group, back in 1977, with
the incorporation of Tata AIG Risk Management Services Pvt. Ltd.
American International Group, Inc. (AIG), is a major American insurance corporation based at the
American International Building in New York City. The British headquarters are located on
Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its
Asian HQ is in Hong Kong. According to the 2008 Forbes Global 2000 list, AIG was the 18th-
largest company in the world.
Company Background: AIG’s history dates back to 1919, when Cornelius Vander Starr
established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to
sell insurance to the Chinese. • In 1962, Starr gave management of the company's less than
successful U.S. holdings to Maurice R. "Hank" Greenberg, who shifted the company's U.S. focus
from personal insurance to high.1969. American International Group, Inc is the leading U.S. based
international insurance and financial services organization and the largest underwriter of
commercial and industrial insurance in the United States. Its member companies write a wide
range of commercial and personal insurance products through a variety of distribution channels in
over 130 countries and jurisdictions throughout the world. AIG's Life Insurance operations
comprise of the most extensive worldwide network of any life insurer. AIG's global businesses
also include financial services and asset management, including aircraft leasing, financial products,
trading and market making, consumer finance, savings products.
3.4. THE JOINT VENTURE - TATA-AIG:-
Tata AIG Life Insurance Co. Ltd. is capitalized at Rs. 185 crores of which 74 per cent has been
brought in by Tata Sons and the American partner brings in the balance 26 per cent. Mr. George
Oommen has been named managing director of Tata AIG Life. Tata-AIG plans to provide broad
array of life insurance plans to cover to both individuals and groups. The company headquartered
in Mumbai, with branch operations in Delhi, Chennai, Hyderabad, Bangalore Calcutta, Pune and
Tata AIG Insurance Solutions is one of the leading insurance companies that provide both life
insurance as well as general insurance. This pioneer company is a joint collaboration between the
American International Group, Inc. (AIG) and Tata Group. They own the company in the ratio of
26:74. It is a leading financial institution that has carved a niche for itself all over the world.
Tata AIG Insurance provides facilities to both corporate and individuals. Starting its operations on
April 1, 2001, it seeks to serve different categories of people. It acquired its license for carrying out
operations in India on February 12, 2001. Tata AIG Insurance Solutions is one of the most
prestigious organizations in the business world. It employs thousands of employees and offers
various opportunities to people to build a prospective career. As a leading name in the financial
world, it identifies the potential and experience of the individual. This insurance company
identifies the client’s needs and works accordingly. It stresses on innovative aspect and opening of
• Individual insurance.
• Small business insurance.
• Corporate insurance.
3.5. PRODUCTS OF TATA-AIG LIFE INSURANCE COMPANY:-
• Tata AIG Life Raksha
• Tata AIG Life Plus
• Assure Lifeline Plans
• Tata AIG Life Nirvana
• Tata AIG Life Nirvana Plus
• Tata AIG Life Assure Golden Year
• Tata AIG Life Mahalife Gold
• Tata AIG Life Easy Retire
• Tata AIG Life Lakshya Supreme
• Tata AIG Life Invest Assure Flexi Supreme
• Tata AIG Life Invest Assure Plus Supreme
• Tata AIG Life Starkid
• Tata AIG Life Assure Career Builder
• Tata AIG Life Assure Educare
• Tata AIG Life Assure 21 Money Saver Plan
• Tata AIG Life Health First
• Tata AIG Life Health Protector
• Tata AIG Life Health Investor
• Tata AIG Life Hospi Cash Back
• Tata AIG Life Maha Guarantee
• Tata AIG Life Assure 10/20/30 Years Security & Growth
• Tata AIG Life Assure Golden Years
• Tata AIG Life Shubh Life
3.6. How Company Works:-
The TATA AIG life insurance company is an insurance company which basically work on two
types of channel.
1. TRADITIONAL CHANNEL :-
There are many insurance company which works on traditional channel of marketing. The
traditional channel is an old one and still useful in current scenario to move business towards
success due to its acceptability and ability. In traditional channel a company has a branch
manager under which many sales manager and unit manager do their job and under the sales
manager many agents perform their work. In traditional channel there is fix payout of branch
manager and sales manager.
When we talk about insurance sector the traditional channel of marketing depends on three
• Branch Manager :- An executive who is in charge of the branch office of a bank or
financial institution. A branch manager is responsible for all of the functions of a branch
office, like hiring employees, approving loans and lines of credit, marketing the branch,
building a rapport with the community in order to attract business and assisting customers
with account problems. A branch manager is also responsible for making sure that the
branch's goals and objectives are met in time.
• Sales Manager or Unit Manager :- Responsible for the development and performance
of all sales activities in assigned market. Staffs and directs a sales team and provides
leadership towards the achievement of maximum profitability and growth in line with
company vision and values. Establishes plans and strategies to expand the customer base
in the marketing area and contributes to the development of training and educational
programs for clients and Account Executives.
• Insurance Agent :- Insurance agents, who may be referred to as insurance sales agents,
help clients choose insurance policies that suit their needs. Clients include individuals
and families as well as businesses. Captive agents work for an insurance company, and
only sell that company's products.
ADVANTAGE OF TRADITIONAL CHANNEL:-
A. It is broadly accepted.
B. Company provides a fix salary to its member.
C. Company has internal control on this channel.
LIMITATIONS OF TRADITIONAL CHANNEL:-
A. Lack of motivation.
B. Partly utilization of business capacity.
2. B.S.P. CHANNEL :-
BSP Channel of marketing in TATA-AIG LIFE INSURANCE COMPANY is a new concept of
• BSP channel is a channel of marketing which is introduced by TATA-AIG life insurance
Company. TATA-AIG used it as an external channel to promoting its business. In this
cannel company find out a person who has a good team of agents for business.
• The BSP channel is totally managed by the BSP himself and company never gives them
fixed Salary. Company always gives them commission on the basis of their business
• The basic aim to use BSP channel for marketing by TATA AIG Life Insurance Company
is to the reduction in the company’s expenses and increasing the business capacity of the
Often it has been seen that the traditional channels fail to approach some area like typical rural
areas for business, but BSP is a person who is well established and well known face in his area.
So he can increase companies business with the motive of earn something for himself.
The structure of BSP channel is as following.
BSP (Business Service Partner):- BSP is a operator of external marketing channel of TATA
AIG life insurance Company which means “business service partner”. BSP is the supreme
authority in the companies external channel of marketing. any person who has a team of
minimum 10 peoples with him on first day can be a BSP of company but company gives
preference to those people who has their own office, a team of minimum 10 people, a good and
sound business background and a accountable turnover of their business.
A BSP receive four types of payout from the company.
1 Agent Identification and Recruitment Fees:-
This is a onetime payout for BSP. It is provided to BSP for first five licensed agent who
get recruited by the BSP himself called a direct agent. In this payout company gives
2 Development Bonus:-
This is also a onetime payment. In this payout BSP earn commission on development his
team. This is based on agent’s commission which he receives on the FYC of an insurance
Commission of B.A. Bonus for BSP
3 Over Right Commission:-
This is a monthly commission for BSP. At the end of every month BSP receives this
commission from the company. Company gives up to 35% commission to BSP according
to predefined payout structure. If a BSP has 60% active member (earn minimum 1000 as
their commission) then company gives 150% of this 35% i.e. 52.5%.
4 Operational Expenses:-
This is also a monthly payment for BSP. Company gives this payment to BSP by
assuming that BSP has expenses to manage his team and etc. company gives this
payment to BSP on the basis of the no. of active members (receives commission of
minimum 1000 every month)in the team of BSP.
No. of active member OPEX for BSP
B.A. (Business Associate):-
B.A. is a second position holder in the hierarchy of BSP channel which means business
associate. In this BSP channel B.A’s are recruited by BSP and it is necessary that the
B.A. has a team of minimum three people on first day.
The basic requirements to be a B.A.:-
• He has to clear the IRDA exam.
• Having a team of minimum three people on first day which have cleared the IRDA exam.
• A contract in written with company.
A B.A. receives the following types or payouts from the company.
1 Development Bonus:-
This is a onetime payment. In this payout BA earn commission on development his team.
This is based on agent’s selling of product or on the FYP of an insurance policy.
Business or FYP DB for BA
2 Over Right Commission:-
This is a monthly payment for BA. In this over right commission a BA can receives up to
30% of FYC of agents. If BA have a totally new team than company gives it double i.e.
30%*2=60%. And if this BA have 5 active members (sell policies of min. Rs.
1200/month) then company gives 150% of this 60% i.e. 90%.
3 Quarterly Bonus:-
Company Gives up to 15% quarterly bonus on FYC of agents to BA according to
4 Annual Bonus:-
Company gives up to 15% annual bonus on FYC of agents to BA according to predefined
An agent is the last stage of last member in BSP channel who sales the policies (companies
product). Agent receives commission from the company on the basis of their performance. Any
person who full fills the given requirements can join the company as an agent.
• He has cleared the IRDA exam.
• Having an authorized license given by the company.
• Having completed the education till graduation.
Payouts of Agents:-
An agent simply gets only commission from the company as his compensation. The commission
is totally based on his selling or his performance. This commission is vary from product to
product. For example in
Mahalife Gold (Endowment Plan)
1st year 27%
2nd year 6.5%
3rd year 6.5%
4th -15th year 5%
Invest Assured Flexi Supreme (ULIP Plan)
First year 6%
Second year 6%
Raksha (Term Plan)
Learning from the project
A project is an in-depth study of particular subject which is having a wide analysis of every area
of subject. When we talk about the project of in the field of marketing management in a
particular company, it will defiantly contain all about
• Company’s working process.
• Company’s product.
And in last the most important thing which is “practical application” of various marketing
During the SIP, I have learned the following
Segmentation is a process of dividing the whole market in two groups and selecting those groups
which have the population which is suitable for the product .
During the SIP my task is to make BSP but every person can’t be a prospect for BSP because
company gives preference to those person who have a good team and a sound business
So here I have learned segmentation by selecting hot prospects of BSP from the whole market
Targeting is a further stage of marketing after the segmentation. A target market is a set of
buyers having common needs that a marketing firm or a company wants to serve. It is seems like
segmentation but both are different. After segmentation we have some options/ groups but in
targeting we choose only those option/ groups which we want to adopt as our target. In the SIP
after segmentation, we have many options as our prospects such as,
• BUSINESS FIRMS.
• INSURANCE/POSTOFFICE AGENTS.
But in the process of targeting we left CAs and decide to approach.
• BUSINESS FIRMS
• INSURANCE/POSTOFFICE AGENTS.
So here I can say that I have learned targeting.
3. Positioning :-
Positioning is the process of making mindset of target market towards the product’s quality and
company’s offering in a positive way. In other words we can say that positioning is selecting out
the USPs of a product or a offer which can helpful to make is sellable or acceptable.
During the SIP I have to position my offer in the mind of targeted person so that he become
agree to accept my offer .
For the purpose of positioning I founded some main points/ USPs for my offer such as,
• A chance to be a part of TATA group.
• Offer for a position equivalent to a branch manager.
• A chance to be a team leader.
• A chance to earn money without any monetary investment.
• Offering various payouts from company.
These are the points which I used to make a positive mindset about my offer to my BSP
prospects. So here I can say that I have learned positioning.
4. Taking Appointment:-
Appointments mean taking a specific time for meeting from a person which is suitable for him.
The basic motive behind taking an appointment is Respect of privacy of everyone, the
assumption that everyone is busy and the feeling of treating every one as a special one.
During the SIP my task of making BSPs is started with taking an appointment from the clients.
For this purpose I used the following process.
• Collects the data about cell/landline phone number.
• Make a phone call.
• If necessary than make phone call again.
• Take a specific time for meeting and be available that specific time.
LIMITATION OF THE STUDY:
• Time limitation
• B.S.P. can be search only in Indore.
• Possibility of Error in segmentation & targeting.
• Possibility of Error in data collection.
• Don’t get proper response from potential B.S.P.
• Possibility of failure in converting potential B.S.P into B.S.P..
• Respondents error .
• Limited resources
For the references different books, journals, and newspapers have been used and different websites
have been used.
Name of websites:
Name of book and journal:
IC 33 Life Insurance
Tata AIG Life Insurance Company Ltd, India, CGAP Working Group on Micro insurance
Name of newspaper:
The Economic Times,
6.2. BENEFITS TO THE COMPANY AND US:
During the survey time sales have been done. It is a win-win Situation for both company and me.
The benefits of this summer internship program are discussed below.
1. Benefit to the company:
2. Benefit to us:
a) Doing internship in TATA AIG have given me immense experience in the insurance industry
for these 45 days.
b) Interaction with the customers for survey and sales has developed our marketing skills.
c) Working in the office premises has given exposure to corporate world and an experience in working in
d) Learn how make tale call (open & closing)
e) Segmentation, positioning, targeting in market.