SBI PENSION PLAN <br /> SBI Life Insurance is a joint venture between the <br /> State Bank of India (SBI) and France's BNP Paribas Assurance. <br /> State Bank of India has the largest banking franchise in India, along with its seven associate banks.<br />With over 14,500 branches across the country. SBI Life has forged a unique multi-distribution model <br /> SBI's entrenchment in the banking sector in India.<br />
BNP Paribas, part of the world’s top 6 group of banks by market value and a European leader in global banking and financial services.<br />It is one of the oldest foreign banks with a presence in India dating back to 1860.<br />BNP Paribas Assurance is the fourth largest life insurance company in France.<br />
SBI offers 4 basic Pension Plans.<br />01) SBI Life - Horizon II Pension <br />02) SBI Life - Unit Plus II Pension <br />03) SBI Life - Lifelong Pensions<br />04) SBI Life - Immediate Annuity<br />
MISSION<br /> “To emerge as the leading company offering a comprehensive range of life insurance and pension products at competitive prices, ensuring high standards of customer satisfaction and world class operating efficiency, and become a model life insurance company in India in the post liberalisation period" <br />
CATEGORY ANALYSIS<br />Category- SBI Life- Pension Plan<br />Product Category- SBI Life -Horizon II <br /> Pension Plan<br />
Category Analysis:<br />What is the Unit Linked Pension Plan?<br />The unit linked pension plan is basically an insurance contract, which is designed to provide a retirement income for life. <br />Your premiums are invested in units of the investment fund of your choice, based on the prevailing unit price. On vesting the value of your units will be used to buy your retirement benefits. <br />On earlier death, the beneficiary receives the value of your units plus a cash lump sum of Rs. 1,000. <br />Indian pension market :<br />1.Pension fund industry has a very bright future in India. Favorable savings pattern, growing life expectancy and government initiatives like pension reforms are making India as one of the potential prospects for investors looking for pension businesses, according to “Indian Pension Fund Market Forecast to 2013” .<br />
Here comes your footer Page 9<br />Category Analysis: <br />2.Majority of working population in India expects to have better quality of life or atleast maintain the current living standards after retirement. This is the prime reason – why pension plans today account for around 39% of insurance industry’s total business. Life insurers’ pension and annuity fund is forecasted to grow at a CAGR of around 39% between 2008-09 and 2012-13. However, more potential lies under New Pension System (NPS) proposed by the central government. <br />
. Private companies began to launch pension plans in 2002 following the opening of the insurance market in 2001 and they have already grabbed a 33% share of the overall pensions market.<br />"Pension plans account for 20% of our business already . Since its inception in February 2002 HDFC Standard has collected 410 million rupees as premiums on the Personal Pension Plan.<br />ICICI Prudential, India's largest private life insurer, has captured 73% of the private-sector pensions market and 24% of the overall pension market, as of January 2003.<br />
Category analysis:<br /> The Indian pension market is rapidly vanishing. The market shrunk almost 90 per cent in 2002-03, with assured and guaranteed long-term annuities being discontinued.<br />The Life Insurance Corporation of India, which has a 70 per cent share in the pension business, is expecting a premium income of Rs 275 crore (Rs 2.75 billion) from this segment for 2002-03. This is around 10 per cent of the Rs 2,564 crore (Rs 25.64 billion) it mopped up in 2001-2002. In 2000-01, it earned Rs 563 crore (Rs 5.63 billion).<br /> The pension markets in developed nations like the US and the UK have been driven primarily by tax reforms. In India, on investing Rs 10,000 annually for a period of 20 years, one only gets Rs 4,000 a month on retirement. "People are waiting for pension reforms and this partly explains why sales have not increased in 2003,<br />
SITUATIONAL ANALYSIS<br />CATEGORY SIZE<br /> SBI Life has provided cover to only 30 lakh lives and 62% of premium income was from banc<br /> assurance model .<br />STAGE IN THE PRODUCT LIFE CYCLE- It is in the growth stage.<br />
...projected to grow over time.<br />In the Indian context, the need for systematic retirement planning is even more acute, given the fact that as much as 87 per cent of India's workforce of 425 million has no formal pension cover.<br />NEWDELHI, April 7, 2007. The reform of the pension system in India holds the prospect of enlarging the market size to a whopping Rs.4,06,400 crore (US$ 95 billion) by 2025, from Rs.56,100 crore (in 2002). <br />Demand for pension cover is also seen rising, with 113 million Indians expected to be over 60 by 2016, a figure seen swelling to 179 million by 2026.<br />
PENSION PLAN<br />COMPANY AND COMPETITOR ANALYSIS<br />
COMPANY AND COMPETITOR ANALYSIS<br />OBJECTIVE<br /> It has a growth objective, it focuses on increase in the market share through their product features and quality of service.<br />
VISION- To be a leader and role model in financial services sector with a broad based and integrated business.<br />STRATEGY <br /> Expansion ,Differentiation, Transformation, Excellence <br />EXPANSION<br /><ul><li> Product and segment expansion
Scaling up distribution to reach across market channels.
Potential entry in new financial service segment.</li></ul>TRANSFORMATION<br /><ul><li>Leveraging on synergies.
Walk – inn </li></li></ul><li>CUSTOMER ANALYSIS<br />BUYING MOTIVE FOR PENSION PLAN<br />Customer buy the hope and expectations from pension plan - They hope that Pension plan will help them preparing for their retirement needs. And they have expectation that their money is invested in safer funds as their policy approaches maturity.<br />They use it after retirement by spending a peaceful and financially sound retired life.<br />
CUSTOMER ANALYSIS<br />Customer buy pension plan :<br /><ul><li>At Company Branch Office and
At their home.</li></ul>WHO CAN BUY THIS PENSION PLAN<br /><ul><li> A person having the age 18 is a customer of this plan. Generally the age duration are 18-60 years for this plan.</li></li></ul><li>CUSTOMER ANALYSIS<br />Customer will choose the pension plan on the following basis:<br /><ul><li>Guaranteed return
Other benefits </li></li></ul><li>customer analysis<br />Customer Preference for Horizon II Pension Plan:<br /><ul><li>SBI Life- Horizon II Pension plan is the most simple unit linked Pension plan.</li></ul>Only the customer has to choose the retirement date, plan option and the regular premium amount.<br />Based on the plan option and the term opted, SBI Life will invest the money in three different funds i.e. Equity pension fund, Bond pension fund and Money market pension fund.<br />This pension plan is available in pure pension and pension cum life cover option.<br />No medical required to enroll for Pure Pension plan<br />No premium allocation charges from year 11 onwards.<br />Tax saving u/s 80ccc(1) of IT Act upto Rs 1Lakh.<br />15 days free look period from the date on which the customer receive the policy document. <br />Automatic asset allocation facility. <br />
STRATEGIES<br />Market Penetration Strategy<br /> (1)Laying a firm foundation<br /><ul><li> Build momentum in pension plan and asset management.
Put together a winning team.</li></ul> (2) focus on the consistent investment performance.<br /> (3) product innovation<br /> age at entry- 18 yrs – 65 yrs ( as on last b’day )<br /> vesting age_ 50 yrs – 75 yrs ( as on last b’ day)<br />
STRATEGIES<br />Term period –<br /> 10 - 40 yrs <br /> Mode of payment – it can be done through the electronic clearing service ( ECS)<br /> Modification in the asset allocation – it can be done by following ways.<br />
Cautious<br />Secure managed fund II<br />Stable managed fund II<br />Equity managed fund II<br />
STRATEGIES<br />moderate<br />Equity managed fund II<br />Secure managed fund II<br />Stable managed fund II<br />
strategies<br />AGGRESSIVE<br />Growth fund II<br />Secure managed fund II<br />Stable managed fund II<br />
MARKET PENETERATION STRATEGIES:<br />Flexible options in terms and condition.<br /><ul><li>Premium Redirection
Changing your investment decision</li></ul>Funds options can be increased from 3.<br /><ul><li> liquid fund II
Balanced managed fund II</li></li></ul><li>MARKET PENETERATION STRATEGIES<br />Realigned organization and sales str. To bring in higher focus improve productivity and to cater to growth.<br />Enhance sales through cross selling.<br />Focused on the intensive distribution. Spreading to more locations as per their plans.<br /> Need based selling.<br /> Differential offering -<br /><ul><li> Lower premium for females.
Preferential rates for non-smokers.</li></ul> Stronger incentives for insurers to restrain competitors.<br />Practice of CRM. <br />
MARKET DEVELOPMENT STRATEGIES<br />Focus on rural market.<br />Key drivers:-<br /><ul><li>Total rural market size of 250 million .
Of the total 670 million rural Indians only 6% covered under insurance.
300 million of these have affordability to buy life insurance, pension products, health insurance.</li></li></ul><li>RURAL SECTOR LIVE LIHOODAND SBI LIFE PRODUCT MIX:<br />PRODUCT MIX:<br /> UNIT LINKED AFFLUENT SAVING HIGHEST AND IN<br />DECREASING ORDER <br />GURANTEED<br /> ENDOWMENT ENTREPRENEUR<br />RETURN OF<br /> PREMIUM SELF- EMPLOYED<br />LOW COST TERM<br /> PLAN SURVIVOR<br />GROUP COVER SUBSISTENCE <br />
MARKET DEVELOPMENT STRATEGIES<br />TARGET SEGMENT- The unorganized sector.<br />PRICING- Devising affordable and sustainable premium charges for rural customers.<br />RISK COVERED- Life,Health and Disability. <br />Offer micro pension products. <br />
MARKET DEVELOPMENT STRATEGIES<br />PRODUCT DELIVERY<br />For effective delivery successful integration with partners i.e. alternate channels, post office, self- help groups, NGO’s.<br />A dedicated sales force able to sell the concept of insurance to their clients.<br />An MIS system capable of handling timely data inputs critical for insurance delivery like premium collection,remittances,life covered , product type and claim reporting.<br />Effective screening mechanism for insurance related risk.<br />