1. Sr. No. Contents Page No.
Preface
Acknowledgement
Executive Summary
Chapter 1: Introduction
• Overview Of The Industry
• Overview Of The Company
Chapter 2: Marketing and Sales Department
Chapter 3: Human Resource Department
Chapter 4: Operations Department
Chapter 5: Recommendations and Suggestions
Bibliography
Annexure
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2. PREFACE
Insurance market is growing very fast. The opportunity is also high in this sector as only
5% of Indian market is covered by this sector and the players are trying to extend in to the
rest untapped 95%.
The insurance industry in India has been growing at a remarkable pace after its opening
to the private players. Entry of new players into the industry has increased the
competition which facilitated insurance companies to design newer insurance products
according to the needs of insured. In a country like India where insurance penetration is
not so high, there should be an intermediary between the insurers and insured who would
not only identify and analyse insurance needs of insured but also advise the insurance
companies in designing the insurance products accordingly. Insurance brokers play the
role of professional risk & insurance advisors who advise the client by analysing the
operational risk exposures of the client and getting proper insurance policies with the best
lowest premium determined from amongst competing insurers.
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3. ACKNOWLEDGEMENT
There is always a sense of gratitude which one express to other for the helpful so needy
services they render during all phases of life. We would like to express our gratitude
towards all those who have been helpful to us in getting this mighty task of training to a
successful end.
First of all, I consider it a pleasant duty to express my heart felt appreciation, gratitude
and indebtedness to Mr. Sailesh Mishra for his keen interest, invaluable pain taking &
excellent guidance, patience, endurance, encouragement & thoughtful advice throughout
the project work duration.
I would also like to be thankful to Mr. Mehul Ganjawal who has given us the right way to
prepare our project report at regular intervals whenever any query aroused in our mind.
And last but not the least we would like to greet heartily Mr. Narendra Jadav (Principal,
Navnirman Institute of Management) for providing us with an opportunity to gain proper
practical knowledge and widening our mind by making us enter real corporate world and
know the system.
Place: Beacon Insurance Brokers Pvt. Ltd. Akankasha Balar (12)
Date: 23/6/2011 Khushboo Golcha(48)
Divyesh Jain (56)
Rajesh Jain (63)
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4. Executive Summary
The Indian Insurance Industry is broadly segmented into public and private insurance
companies. Before year 2000, only public sector insurance companies were allowed to do
business in India. But after year 2000, insurance sector was thrown open for private
insurance companies as well.
But as of now there now around 19 private life insurance companies and around 9 private
non-life insurance companies doing business in India with around 310 Broking
Companies.
This report is prepared with an aim to provide an overview of present Indian Insurance
Industry. Also with Beacon Insurance Brokers Pvt. Ltd., heading the broking of public
and private life insurance companies.
Based on this report, the prospect will get to know a vivid description about Beacon
Insurance Brokers Pvt. Ltd..
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5. Chapter 1: INTRODUCTION
1.1 OVERVIEW OF THE INDUSTRY.
1.1.1 Insurance In India.
The insurance sector in India has come a full circle from being an open competitive
market to nationalization and back to a liberalized market again. Tracing the
developments in the Indian insurance sector reveals the 360 degree turn witnessed over a
period of almost two centuries.
1.1.2 A Brief history of 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 in India are;
1912: The Indian Life Assurance- For over 50 years, life insurance in India was defined
and driven by only one company- the Life Insurance Corporation of India (LIC). With the
Insurance Regulatory and Development Authority (IRDA) Bill 1999 paving the way for
entry of private companies into both life and general sectors there was bound to be new-
found excitement- and new success stories. Today, just three years since their entry, their
cumulative share has crossed 13% (source: IRDA), far exceeding expectations. Clearly
insurance is on a growth path. The percentage of premium income to GDP which was just
2.3% in 2000-01 rose to 3.3% in 2002-03; and life insurance has emerged as the
dominant contributor to this growth. The industry presented a huge opportunity. Life
insurance penetration, for instance, was at an abysmal 22% of the insurable population.
However, private players have had to rise to many challenges. They were faced with
attitudinal barriers towards the category and the perception that insurance was only a tax
saving tool. Insurance per se had lost it basic rationale: protection. It wasn’t surprising
then that its potential lay frozen and unexploited. The challenge for private insurance
players was to change the established category driver and get customers to evaluate life
insurance as an investment-cum-protection tool.
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6. 1.1.3. Brief Review of Scenario – Insurance
Insurance in India started without any Regulation in Nineteenth century.
It was story of a typical colonial era. A few British companies dominated the market
mostly in large urban centers.
Insurance was nationalized mainly on 3 counts First, Indian lives were not insured.
Second, even if they were insured, they were treated as substandard lives and extra
premium was charged. Third, there were gross irregularities in the functioning of Life
insurance was nationalized in the year 1956, and then general insurance was nationalized
in the year 1972. In 1999, the private insurance companies were allowed back again into
insurance sector with maximum cap of 26 percent foreign holding.
1818 The British introduce to India, with the establishment of the Oriental Life
Insurance company in Calcutta.
1850 Non life insurance debuts, with Triton Insurance Company.
1870 Bombay Mutual life Assurance Society is the first Indian-owned life insurer
1907 Indian mercantile Insurance is the first Indian non-life insurer.
1912 The Indian life assurance companies’ act enacted to regulate the life insurance
business.
1938 The insurance act, which forms the basis for most current insurance laws,
replaces earlier act.
1956 Life insurance nationalized, government takes over 245 Indian and foreign
insurers and provident societies.
1956 Government sets up LIC
1972 Non life insurance nationalized, GIC set up.
1993 Malhotra committee, headed by former RBI governor R.N.Malhotra, set up to
draw up a blue print for insurance sector reforms.
1994 Malhotra Committee recommends re-entry of private players, autonomy ot PSU
insurers.
1997 Insurance regulator IRDA (Insurance Regulatory and Development Authority)
set up.
2000 IRDA starts giving licensed to private insurers
2001 ICICI Prudential Life Insurance came into the market to sell a policy.
2002 Banks were allowed to sell insurance plans, as TPAs enter the scene
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7. 1.1.4 The Insurance Regulatory and Development Authority (IRDA):
Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in
Parliament in December 1999. The IRDA since its incorporation as a statutory body in
April 2000 has fastidiously stuck to its schedule of framing regulations and registering
the private sector insurance companies.
The other decisions taken simultaneously to provide the supporting systems to the
insurance sector and in particular the life insurance companies were the launch of the
IRDA’s online service for issue and renewal of licenses to agents. The approval of
institutions for imparting training to agents has also ensured that the insurance companies
would have a trained workforce of insurance agents in place to sell their products, which
are expected to be introduced by early next year. Since being set up as an independent
statutory body the IRDA has put in a framework of globally compatible regulations. In
the private sector 12 life insurance and 6 general insurance companies have been
registered.
With the demographic changes and changing life styles, the demand for insurance cover
has also evolved taking into consideration the needs of prospective policyholder for
packaged products. There have been innovations in the types of products developed by the
insurers, which are relevant to the people of different age groups, and suit their
requirements. Continued innovations in product development has resulted in a wide range
of flexible products to meet the requirements for cover at different stages of life -today a
variety of products are available ranging from traditional to Unit linked providing
protection towards child, endowment, capital guarantee, pension and group solutions. A
number of new products have been introduced in the life segment with guaranteed
additions, which were subsequently withdrawn/toned down; single premium mode has
been popularized; unit linked products; and add-on/riders including accidental
death; dismemberment, critical illness, fixed term assurance risk cover, group hospital
and surgical treatment, hospital cash benefits, etc. Comprehensive packaged products
have been popularized with features of endowment, money back, whole life, single
premium, regular premium, rebate in premium for higher sum assured, premium mode
rebate, etc., together with riders to the base products.
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8. 1.1.5 Historical Perspective
Prior to 1956 - 242 companies operating
1956 - Nationalization- LIC monopoly player -Government control
2001 - Opened up sector
1.1.6 Contribution to Indian Economy
-Life Insurance is the only sector which garners long term savings.
-Spread of financial services in rural areas and amongst socially less privileged.
-Long term funds for infrastructure.
-Strong positive correlation between development of capital markets and
insurance/pension structure.
-Employment generation.
1.1.7 Insurance Industry prior to de-regulation
Prior to deregulation in 2000, market was a public monopoly.
• Public Monopoly
- 2000 Offices
- Over 800,000 agents
• Distribution through tied agents only
• Sales approach primarily on a tax savings platform
• Traditional style product offering : Endowment and money back plans
• Inadequate and inflexible products
• Pensions: Small part of product offer
• Limited focus on customer needs
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9. 1.2 Overview Of The Company
BEACON INSURANCE BROKERS PVT. LTD.
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10. 1.2.1: Company Profile-
Beacon Insurance Brokers Pvt. Ltd. Introduces itself as one of the Leading Names
amongst Insurance Broking Companies in India.
(IRDA Licensed No. DB 307/05)
Incorporation: January 31, 2005
Main Objective: Act as Direct Insurance Brokers (Life & Nonlife)
Paid Up Capital: INR 5 Million
Net Worth : INR 20 Million
3rd floor, ITC BUILDING,
MAJURA GATE CHAR RASTA,
Registered
RING ROAD,
Office: SURAT-395002
GUJARAT-INDIA
Ahmedabad, Ankleshwar, New Delhi, Mumbai, Surat, Vadodara,
Our Presence :
Jaipur, Rajkot and expanding in Northern and Southern region.
Corporate A-201, Taksh complex, nr. ESI hospital crossing, Gotri Road,
Office: Vadodra- 390021.
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11. Beacon Insurance has a team of qualified MBAs, Engineers, Licentiates, Associates &
Fellows of the Insurance Institute of India. The Organization is set up to develop core
competency in Insurance Sector. We started our operations in the year 2005. Since then
Beacon is effectively Managing Insurance Portfolio of numbers of Individuals, Small,
Medium and Large Corporates.
Professionals with 20-30 years experience in Private and Public Sector blended with
young vibrant team have come up together to emerge BEACON as a one of the lastest
Growing Insurance Broking Company.
We have our Networks all over India and have in house expertise in all aspects of
Property, Human, Liability and other insurance domains. We have stron Infrastructure
which takes care of all needs of clients for General and Life Insurance.
Beacon is committed to bring changes in the mindset of Indian Corporates about
effectiveness of implementing insurance as Risk Management Tool.
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12. 1.2.2. From the Desk:
Beacon started its journey in 2005 with a modest strength of 7 persons. We have grown to
strength of 130+ persons. We take pride in the fact that our team is known in the industry
for its professional approach. We live by our principle of “Trust, Tolerance & openness”
& believe in delivering more than we promise. We have invested in systems &
technology to bring to you the most modern & complete service delivery module
ensuring the best is brought to your doorstep. Continuous training & evaluation of the
team ensures razor sharp capabilities to continue giving you the best possible solutions be
it simple or complex.
I would like to take this opportunity to thank all of our patrons who helped us reach so far
by reposing faith in us at all stages.
Insurance broking requires high degree of expertise as we work as your outsourced
business partners to ensure maximum protection from any unforeseen eventuality.
Selection of product & insurance company becomes a key decision in this process.
We act as a catalyst by associating with you in this decision making process.On behalf of
the company, I assure you that we shall deliver more than your expectations-always.
In Beacon our philosophy is “Customer satisfaction”. Each & every decision of ours is
towards achieving our goal of serving the customer to his fullest satisfaction. We have
learnt a lot in the process & designed & redesigned our processes to keep on bettering the
consumer expectations. Systems & processes so created always have customers interest in
mind & we keep on reinventing things to make services more & more customer friendly.
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13. Feedback mechanism from customers has immensely helped us we are thankful to them
for this. Our patrons have always been a source of inspiration for us. We would not like
to be remembered as a company doing huge business volumes. Instead, we shall be
pleased to be remembered as company giving the best customer service at all facets & in
all transactions.We look forward to your complaints & suggestions which shall help us in
improving ourselves
Mr. S . K. Rustagi Mr. Sanjay Agarwal
Managing Director Director
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14. 1.2.3. Mission, Vision and Philosophy:
Mission:
"We shall deliver excellent service and superior products to our customers, remaining
focused to their needs and strive for continuous improvement through communication
and technology. We will unite and operate our business through the shared value of Trust,
Tolerance and Openness. Our employees shall be known and respected within the
industry for their expertise, commitment and professional integrity."
Vision:
 The most successful and admired life insurance company, which mean that we are
the most trusted company, the easiest to deal with, offer the best value for money,
and set the standards in the industry. In short, “The most obvious choice for all”
 For retention in the market and highest market share, we need trust of our
customer. The customer should trust on our policies, services, employs and they
should be friendly with us.
 It wants to live in the eye and heart of the customer.
 It wants to give them the easiest deal so that they cane understood the terms and
policies.
 As we know that profit is the main aim of any business but it think not only about
his profit but also profit of the customer.
 It wants to be the choice of all people on the basis of trust of customer, delivering
high value to the customer, and deliver the best value of the money
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15. Corporate Philosophy:
 To work towards the utmost satisfaction of the client by always taking care of
their best.
 Work continuosly to improve Knowledge, Skill, Attitude, and Experience, to
 be most competent in the industry.
 Always provide the best services as an outsource partner.
 Flexibility in approach to innovate and continuosly deliver value added services.
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16. Beacon’s team is a perfect blend of fresh ideas in accordance with the exhaustive
experience of eminent professionals. And team truly demonstrates the statement.
Mr. S. K. Rustagi
M Sc., MBA, FIII
Over 25 years of experience in the insurance industry. Has worked with huge corporates
such as The New India Assurance Company Ltd, IFFCO Tokio General Insurance
Company, etc in various managerial capacities.
He is the Managing Director of Beacon Insurance Brokers Pvt. Ltd.
Mr. Sanjay Agrawal
B Sc (Hons), DIM, FIII
Over 22 years of experience in Insurance Industry. Has worked with big companies such
as The New India Assurance Company Ltd,IFFCO Tokio General Insurance Company
Ltd,Bajaj Allianz General Insurance Company Ltd.
He is the Promoter Director of Beacon Insurance Brokers Pvt. Ltd.
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17. Mr. Naresh Vig
B.Com, AIII
Over 31 years of experience in Insurance Industry. Has worked in various capacities with
companies such as The Oriental Insurance Company Ltd. & Pioneer Insurance &
Reinsurance Brokers Pvt. Ltd. He is the Vice President at Beacon Insurance Brokers Pvt.
Ltd.
Mr. Manish Shah
M.Com, AIII
Over 7 years of experience in the General Insurance Industry. Has previously worked
with IFFCO Tokio General Insurance Company Ltd. He is presently designated as the
Vice President & Branch Head for Baroda Office.
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18. Mr. H G Shah
B Sc. LIII
Over 26 years of experience in The New India Assurance Co. Ltd. He has been associated
with Beacon since inception as a consultant & is now designated as Assistant Vice
President for Corporate Office at Baroda.
Ms. Rupali Misra
B.Sc, MBA (HR/Mktg)
Over 4 years of experience in Insurance Marketing. She is currently designated as
Assistant Vice President for Ankleshwar Office.
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19. Mr. Sudhanshu Trivedi
BCA, MBA
Over 4 years of experience in General Insurance Marketing. He is currently designated as
HOD-Strategic Marketing Group at Surat Office.
Ms. Deepika Goyal
B.Com, MBA, FIII
Over 5 years of experience in General Insurance Operations. She is currently designated
as Assistant Vice President and branch head for Surat Office.
Ms. Radhalakshmi Iyer
B.Com, LLB, FIII
Over 22 years of experience in the General Insurance Industry wherein she has worked
with companies such as United India Insurance Company Ltd., & Bajaj Allianz General
Insurance Company Ltd. She is presently designated as Senior Manager (Operations) at
Ahmedabad Office.
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20. -:MARKETING AND SALES DEPARTMENT:-
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21. Chapter 2: Marketing and sales department
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22. 2.1: Basic Understanding of Marketing & Sales:
2.1.1: Meaning of marketing & sales:
"The term "sales and marketing" is used so commonly that it is assumed
that they are one and the same by many people - they are not. Definition
for sales is the activity of taking a lead and selling the item desired.
Definition for marketing is the activity of finding out what the market
wants to buy"
Marketing:
It is a process by which:
• one identifies the needs and wants of the people.
• one determines and creates a product/service to meet the needs
and wants. [PRODUCT]
• one determines a way of taking the product/service to the market
place. [PLACE]
• one determines the way of communicating the product to the
market place. [PROMOTIONS]
• one determines the value for the product.[PRICE].
• one determines the people, who have needs/ wants then creating
a transaction for exchanging the product for a value and thus
creating a satisfaction to the buyer's needs/wants” [PEOPLE]
Insurance Marketing:
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23. It is corporate objectives, including profitability, which are no less
important than that of industries. Marketing of insurance products has
become an important activity in this business. Its marketing is found to be
necessary both in life and non-life insurance sector. The main driver of
growth in the life segment is the unit linked product and in case of non-life
insurance, it has been the motor and health insurance portfolios.
Sales :-
What is selling?
The essence of Selling involves discovering the prospect’s need, and then offering
suitable Products, which will satisfy this need.
“Selling is a process in which the salesperson makes the prospect think, feel and do, just
the way he/she wants”
Selling is not cheating or conning…
In fact a salesperson must be honest, friendly and helpful in order to win the confidence
of the prospects. Selling is a practical implementation and part of marketing. It often
forms a separate grouping in a corporate structure, employing separate specialist
operatives known as salespersons (singular: salesperson. Sales is considered by many to
be a sort of persuading "art".
Sales Process:
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24. Proposer Proposer
is convinced Fills the relevant
about Proposal Form Underwriting
Insurance Plan (Assessment of Risk)
Insurer
evaluates the
proposal form
Policy document
sent to policy holder Accept
Revised offer Reject/Postpone
sent to proposer
Counter offer
2.1.2: Differentiate Between Marketing & Sales:
Sales and marketing are closely interlinked and are aimed at increasing revenue. As sales
and marketing are closely intertwined it becomes hard to realize the difference between
the two. In small firms, one cannot come across much difference between sales and
marketing. But bigger firms have made clear distinction between marketing and sales and
they have specialized people handling them independently.
Well, how is that sales and marketing are different? In very simple words, sales can be
termed as a process which focuses or targets on individuals or small groups. Marketing
on the other hand targets a larger group or the general public.
Marketing includes research (identifying needs of the customer), development of
products (producing innovative products) and promoting the product (through
advertisements) and create awareness about the product among the consumers. As such
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25. marketing means generating leads or prospects. Once the product is out in the market, it
is the task of the sales person to persuade the customer to buy the product.
Well, sales means converting the leads or prospects into purchases and orders. While
marketing is aimed at longer terms, sales pertain to shorter goals. Marketing involves a
longer process of building a name for a brand and pursuing the customer to buy it even if
they do not need it. Where as sales only involve a short term process of finding the target
consumer.
In concept also, sales and marketing have much difference. Sales only focuses on
converting consumer demand match the products. But marketing targets on meeting the
consumer demands. Marketing can be called as a footboard for sales. It prepares the
ground for a sales person to approach a consumer. Marketing as such is not direct and it
uses various methods like advertising, brand marketing, public relations, direct mails and
viral marketing for creating an awareness of the product. Sales are really interpersonal
interactions. Sales involve one-on-one meetings, networking and calls.
Another difference that is seen between marketing and sales is that the former involves
both micro and macro analysis focussing on strategic intentions. On the other hand, sales
pertain to the challenges and relations with the customer.
Summary:
1.Sales target on individuals or small groups. Marketing on the other hand targets a larger
group of the general public.
2.Marketing means generating leads or prospects. sales means converting the leads or
prospects into purchases and orders.
3.Marketing involves a longer process of building a name for a brand and pursuing the
customer to buy it even if they do not need it. Where as sales only involve a short term of
finding the target consumer.
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26. 2.1.3 Detailed Organization Structure of Marketing Department:
Beacon has a highly qualified marketing team with around 400 sales agents
working for the Surat Branch.
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27. M.D. & Promoter
Mr. S.K. Rastogi
Director & Promoter
Mr. Sanjay Agrawal
Marketing Manager
Deepika Goyal
Assistant
Assistant Manager
Manager Direct Marketing
(General Insurance)
(Life Insurance) Rana Pradeep Singh
Ritesh Nai
Pragnesh Soni
Sales Agents
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28. 2.2 Marketing Environment :
Marketing Relating To Insurance Industry:
Needless to say insurance industry is as interested in optimum result as any other
industry. it has corporate objective, including profitability, which are no less important
than that of other industries. before proceeding to talk at marketing and its modern trends,
one has to take note of some of its special characteristics.
Any undertaking where there is a risk of financial loss, there is a need for insurance
cover. merchants universally have long discussed such problems with businessmen in
convenient meeting places such as the now famous coffee house in which Edward Lloyd
met ship owners,
Seafaring men and merchants who had a common interest in shipping and marine
insurance. the main classes of risk covered in those early days were marine and fire
thoughts agents. Development of communications and expansion of industrial activity in
the 19th and 20th centuries led to the formation of more insurers and eventually to
establishment of branch network by successful companies, which absorbed local
concerns. Competition development between various forms of intermediaries like agents
and brokers and between insurers.
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29. 2.2.1: Concept of target and target customer:
The "Target Market" for a life insurance broking company is the type of client that they
want to concentrate on, based on income bracket, neighborhood, type of business, like
Beacon Insurance Brokers Pvt. Ltd. Highly focuses on Marine Insurance and Fire
Insurance in General Insurance sector while in life insurance sector almost every human
being is the target customer of the company which defies very clearly that how much big
is the scope for the company to unveil.
Some companies want to target the low - middle income families. Some want to target
the higher income families. Some want to write mostly blue collar workers, while others
want to concentrate on the white collar workers. Some insurance companies just want to
sell to business groups. So generally when we see the target customers of Beacon
Insurance Brokers Pvt. Ltd. Is mainly the target customers of the insurance companies
itself.
Apart From This every company wishes to sell minimum possible number of policies to
very aged persons because there is a high risk of insuring them.
Although companies have target markets, they still have the underwriting capabilities to
cross over into other markets to write business, but the majority of their business will
come from their target market
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30. 2.2.2: Macro environment:
PEST Analysis of Insurance Market:
There are several forces at work in every sector and every industry of an economy. The
dynamic nature of every industry keeps the pulses of the companies operating in each
sector racing. PEST refers to all political, economic, social and technological factors
affecting insurance industry. Following are the different factors affecting the insurance
sector:
Political:
• Malhotra Committee: Till the year 1993, the insurance sector accounted to just 2% of
the GDP whereas the world average was 8%. To improve the penetration of insurance as
a percentage of GDP, the government set up a committee called as the Malhotra
Committee in 1993. In 1993, Malhotra Committee headed by former Finance Secretary
and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry
and recommend its future direction. The Malhotra committee was set up with the
objective of complementing the reforms initiated in the financial sector.The reforms were
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31. aimed at “creating a more efficient and competitive financial system suitable for the
requirements of the economy keeping in mind the structural changes currently underway
and recognizing that insurance is an important part of the overall financial system where
it was necessary to address the need for similar reform.” In 1994, the committee
submitted the report and some of the key recommendations included: o Private
Companies with a minimum paid up capital of Rs.1bn should be allowed to enter the
industry o Foreign companies may be allowed to enter the industry in collaboration with
the domestic companies o Only one State Level Life Insurance Company should be
allowed to operate in each state The committee emphasized that in order to improve the
customer services and increase the coverage of the insurance industry should be opened
up to competition. But at the same time, the committee felt the need to exercise caution as
any failure on the part of new players could ruin the public confidence in the industry.
Hence, it was decided to allow competition in a limited way by stipulating the minimum
capital requirement of Rs.100 crores.
The committee felt the need to provide greater autonomy to insurance companies in order
to improve their performance and enable them to act as independent companies with
economic motives. For this purpose, it had proposed setting up an independent regulatory
body.
• The Insurance Regulatory and Development Authority (IRDA): Reforms in the
Insurance sector were initiated with the passage of the IRDA Bill in Parliament in
December 1999. The IRDA since its incorporation as a statutory body in April 2000 has
fastidiously stuck to its schedule of framing regulations and registering the private sector
insurance companies. The other decision taken simultaneously to provide the supporting
systems to the insurance sector and in particular the life insurance companies was the
launch of the IRDA’s online service for issue and renewal of licenses to agents. The
approval of institutions for imparting training to agents has also ensured that the
insurance companies would have a trained workforce of insurance agents in place to sell
their products, which are expected to be introduced by early next year. The IRDA since
its incorporation as a statutory body has been framing regulations and registering the
private sector insurance companies. IRDA being an independent statutory body has put a
framework of globally compatible regulations.
• Privatization of Insurance sector: The introduction of private players in the industry has
added to the colours in the dull industry. The initiatives taken by the private players are
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32. very competitive and have given immense competition to the on time monopoly of the
market LIC. Since the advent of the private players in the market the industry has seen
new and innovative steps taken by the players in this sector. The new players have
improved the service quality of the insurance. As a result LIC down the years have seen
the declining phase in its career. The market share was distributed among the private
players. Though LIC still holds the 80% of the insurance sector but the upcoming natures
of these private players are enough to give more competition to LIC in the near future.
• FDI in insurance sector: Then, the issue came of amount of FDI to be allowed by a
foreign player in the insurance sector. The government had allowed the private players to
have foreign equity up to just 26 %. Efforts are going on to raise this to 49 %. After the
opening up of the sector, a total of 18 private sector companies have entered the life
insurance business and all of them have entered with a foreign partner.
Economical:
• Indian economy – growth projections: By 2025 the Indian economy is projected to be
about 60 per cent the size of the US economy. The transformation into a tri-polar
economy will be complete by 2035, with the Indian economy only a little smaller than the
US economy but larger than that of Western Europe. By 2035, India is likely to be a
larger growth driver than the six largest countries in the EU, though its impact will be a
little over half that of the US. India, which is now the fourth largest economy in terms of
purchasing power parity, will overtake Japan and become third major economic power
within 10 years. All these facts or forecasts only drive at one point. India is booming as a
market. The global insurance industry has a big eye on India owing to its big opportunity.
India is the next big thing in the global insurance industry. Many new insurance
companies are planning to enter Indian markets. South African major Sanlam recently
announced a tie up with Chennai based Shriram Group for life insurance business. French
multinational Axa, which has been studying the Indian market for long, is expected to
finalize its plan this year. Dutch insurer Aegon, on its second visit to the country after a
gap of four years, is scouting for a partner and has set up an office. Korean giant
Samsung, the newest kid on the block, also has set up a representative office.
- 32 -

33. • Growing premiums: Growing premiums are obviously attracting the new players.
During the financial 2004 05 alone, the life insurance premium grew by 35% to over US
$ 13.5 billion in 2004-05. According to Mumbai based research agency Crystalise
Research, over the next five years, Crystalise believes this figure to zoom past the US $
33.5 billion mark. The numbers at the industry level perhaps tell only one part of the
story. The entry of private insurers in India has changed the way in which life insurance
business has been done in India. Premiums of each of the dozen private players has gone
up significantly within two years of operations, and the incumbent, LIC is being forced to
pull up its socks. SBI Life Insurance reported a rise of 166% in its premium income to
US $ 138 million for the financial year 2004-05, compared with US $ 53 million it
collected in 2003-04. HDFC Standard Life’s premium incomes went up from US $ 67
million to US $ 113 million for fiscal 2004-05.
In terms of first year premium revenue, the biggest gainer has been Bajaj Allianz, with a
growth of 446.9%. The increasing premium rates are a reason why multinational insurers
are flocking to India.
•Per capita GDP: According to a study by Swiss Re, a leading global reinsurance
company, once per capita GDP touches $10,000, life insurance premium collection takes
off. India’s per capita GDP is hovering around $ 3000 but is expected to go up steeply
given the economic growth projections. Also, India, despite being the second largest in
terms of population and insured lives, posts a very low figure in terms of the country’s
share of life insurance premium in the world’s total life premium collection – about 0.8%.
This shows that the insurance sector provides ample untapped market for insurers.
• Bank assurance: Bank assurance - selling life insurance through bank branches - has
also driven life insurance business over the two years. Here’s why. First, banks’ deposits
as a percentage of total financial assets of the household sector have gone down from
about 46% in 1980 to about 30% now. This means that banks have to seek other avenues,
beyond just interest income, to remain profitable. Banks have found that selling life
insurance policies is a great way to make profits. LIC distributes over US $ 1.6 billion as
commission to its sales force every year. Even if banks succeed in capturing 10% of this
amount, they would have revenue opportunities in the range of US $ 162 million, not a
small sum for many banks. Result: As many as 32 banks have tied up with LIC to sell its
life covers to their customers. LIC may have begun firming up its relations with banks,
but by way of bank assurance, it has collected only around US $ 335 million, which is
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34. less than 1% of what the corporation collected by way of first premium income last fiscal
year. In contrast, private players have excelled in bank assurance. SBI Life, which has
vaulted to the second position among private players, owes as much as 67% of its
premium income to bank assurance. SBI Life has tied up its promoter and India’s largest
commercial bank, State Bank of India, which has more than 10,000 branches spread
across the country, for selling its policies. Account holders with the bank are offered life
covers for as little as Re 1 per month. For most of the private insurance firms, bank
assurance has contributed to about 50% of premium income.
• Tax benefits: Payment of insurance premium had also been included in the service tax
net in the 2004 budget. Although 2004 seemed to be a dampener for individuals insured,
the Budget 2005 was a delight. Section 88 benefits have been scrapped. This means that
tax rebate under Section 88 will not be applicable to an individual anymore. It has now
been replaced by Section 80C. Under Section 80C, one can now invest a sum of up to Rs
100,000 in investment avenues like NSC, PPF, infrastructure bonds and/or life insurance
and the same will be deducted from an individual’s taxable income. This is a welcome
move. For one, there was a limit of Rs 70,000 on life insurance premium to avail of
Section 88 benefits. This ceiling has now been raised to Rs 100,000. An individual can
now allocate an enhanced amount to insure himself adequately and still get a tax benefit.
He can also manage his portfolio better without having to worry about tax benefits. For
example, he can increase his insurance coverage by buying a term plan (pure risk cover
plan) and allocate a sizable amount from his portfolio towards retirement planning. The
changes in this year’s budget have also come as a welcome move for individuals whose
annual earnings exceed Rs 500,000. Until now, these individuals did not benefit from the
tax-saving on account of paying a life insurance premium. But this year’s budget has
removed this anomaly and they too can now look at life insurance up to a ceiling of Rs
100,000 premium to avail of tax benefit.
Social:
• Life expectancy & Mortality rate: The life expectancy is defined as the number of years
for which a new born baby will live in the prevailing mortality condition of that particular
year. The mortality or crude death rate refers to the number deaths per thousand people.
Both these factors are very important as they are used to derive the premium of a
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35. particular policy. All the insurance companies follow a set standard table referring to
which they decide upon the premium rates. This is generally prescribed by the
government. Following is the life expectancy and death rate in India:
• Demographics: One of the major influences on the premiums or prices charged by
insurance companies is on the basis of the demographics. Premium rates largely depend
on the age, sex of the individual insured. All the insurance policies have a different rate of
premiums to be paid. This is mainly due to the difference in the risk involved of different
individuals insured.
• Gender discrimination: Gender based discrimination is rampant in any industry. In the
insurance industry the companies have different premium rates for men and women. This
cannot be actually called as gender discrimination. As is said earlier the premium depends
on the life expectancy in the particular country. More often than not the life expectancy is
different for men and women. Usually the women are expected to live more than the men
and the difference is 5 years and greater. Hence, what the insurers argue is that the
women are a relative less risk than the men and hence the premium charged is more for
women.
• Demographics: One of the major influences on the premiums or prices charged by
insurance companies is on the basis of the demographics. Premium rates largely depend
on the age, sex of the individual insured. All the insurance policies have a different rate of
premiums to be paid. This is mainly due to the difference in the risk involved of different
individuals insured.
• Gender discrimination: Gender based discrimination is rampant in any industry. In the
insurance industry the companies have different premium rates for men and women. This
cannot be actually called as gender discrimination. As is said earlier the premium depends
on the life expectancy in the particular country.
More often than not the life expectancy is different for men and women. Usually the
women are expected to live more than the men and the difference is 5 years and greater.
Hence, what the insurers argue is that the women are a relative less risk than the men and
hence the premium charged is more for women. Insurers are providing cover against risk
In order to provide them with cover against potential liabilities (that they can pay claims
or the right level of benefits), pricing would have to be biased towards the most secure
-and often least favorable- variant. This is to allow insurers to fulfill all their
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36. commitments. "Gender-neutral" insurance in the true meaning of the word is impossible
in voluntary insurance products.
• Religion – Islam: In its modern form, insurance was introduced in Muslim countries
when many of them were occupied by Western powers, or when they came under
Western influence. In some cases, its introduction was delayed in a country until its
international business flourished. Like everything that came with a “colonial” or Western
colour, insurance was first viewed by Muslim scholars with grave suspicion. A verdict of
disapproval was common to most things thought to be introduced by non-Muslims.
Muslim scholars are divided on the subject of the permissibility of life insurance. Some
consider it forbidden on the assumption that it involves a kind of gambling and it goes
against the principle oftaqdir in Islam. Most of the insurance organizations today are
involved inriba and other islamically prohibited transactions. It is for this reason
important that Muslims should have their own insurance companies based on Islamic
economic principles. Insurance can be re-organized under Islamic principles so that it is
free from all prohibited practices. After Islamic banking, it’s the turn of Islamic
insurance. Even as the Reserve Bank of India is exploring Islamic banking opportunities
for Indian banks, the Life Insurance Corporation of India has set the ball rolling ontakaful
(Islamic insurance). LIC’s new international joint venture company - Indo-Saudi
Insurance Company — will be the first to introduce takaful. This Arabic word means
‘guaranteeing each other’ or joint guarantee. The entire pricing will be different as the
benefits differ from conventional insurance policies. Its actuarial team has started
working on the pricing mechanism and senior officials have been sent to Saudi Arabia to
look into the product, he added. Takaful can be described as cooperative insurance where
policyholders contribute a certain amount of money to a common pool. Each member
pays his subscription (premium) to help those that need assistance.
• Insurance offered by NGO’s/ community based health insurance: Community-based
schemes are typically targeted at poorer populations living in communities, in which they
are involved in defining contribution level and collecting mechanisms, defining the
content of the benefit package, and / or allocating the schemes, financial resources.
Such schemes are generally run by trust hospitals or nongovernmental organizations
(NGOs). The benefits offered are mainly in terms of preventive care, though ambulatory
and in-patient care is also covered. Such schemes tend to be financed through patient
collection, government grants and donations.
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37. With these community based insurers mainly in the rural areas, the rural people have
good faith on them. This is one of the main reasons why the rural areas remain untapped
by most of the insurance companies. The rural population associate themselves well with
these community based insurers which makes life difficult for the big companies waiting
to enter the rural areas.
• Improving standard of living: If, by 2030 AD 50% Indian population reaches the level
of middle class, Indian market for Insurance Sector will reach the level of 600 million
from conservatively estimated present level of 100 million. Even at the present level of
100 million, Indian market is big enough by global standards for vigorous development
as the premium density is only 0.6% as compared to 3 to 5% for developed markets.
Prospects for conventional insurance development in Indian market in 21st Century are
bright provided its transformation takes place in the right form and right type of strategy
is developed to transform hidden potential into business.
• Consumer attitude and preferences: Insurance was always viewed by people as a safety
net. Indians specially are very emotional as far as family members, security, social status
and other such issues are concerned. The insurance industry is primarily based on the fact
that people live their family their belongings and hence want them to be with them
forever. This is the basic attitude of people towards insurance. The Indians, hence, are
more vulnerable and tend to pay more attention towards the insurance advertisements and
insurance products.
• Other factors: There are many other social factors that affect the insurance industry. The
consumer’s mindset is such that insurance is viewed as a liability. This happens because,
the policyholders have to pay regular premiums in the policy and as long as they live
there is no benefit. Thus, this is a classic irony of insurance. One has to die to avail of the
benefits. This brings about a negative picture of insurance as a product.
TECHNOLOGICAL:
• Computerization:
Initially in the late 1950's the insurance companies used unit record machines to
process data punched into cards. Computers were introduced in the mid 1960's and by
the 1980's the Unit Phased Machines were phased out and the entire process was
computerized. This brought about greater efficiency and quick service delivery.
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38. • Internet:
Internet usage has drastically improved in the last decade. There was a tremendous
increase in the use of technology by LIC during the late 1990's. The company
launched its website www.licindia.com in the mid 1990's to offer basic services such
as modifying polices and querying the status of policy.
But Today, the internet has completely changed the service delivery process. Internet is
today used to even selling insurance policies. Internet is infact proving to be one of the
widely used distribution networks for selling insurance policies. Also internet is used for
sending premium notices to policy holders through e-mails.
Also LIC has a special feature on its website. It has a premium calculator which
accurately displays the amount of premium month wise and the remaining balance. One
just has to enter the age, name of the insurance policy, the sum assured and weather there
is an accident cover or not.
By keying in this information, the entire premium amount are shown within no time. This
has helped the customers in a way so that he/she does not have to travel all the way to
branch to ascertain the amount of premium to be paid.
• Electronic Clearance Service (ECS):
Almost all the big organizations today provide the ECS facility to its customers. A
policy holder having an account in any bank which is a member of the local clearing
house can opt for ECS debit to pay premiums. The advantage here is that once the
option is exercised, the policy holder need not visit a branch for paying the premium
or collecting the receipts.
On the day indicated by the policy holder, the premium amount will be directly
debited to the bank account of the policyholder and the receipt will be issued by the
designated branch office.
• Bank ATM’s: Many insurance companies have a tie-up with commercial banks so
as to enable policyholders to use the facility of paying premiums through the bank
ATM’s. ICICI Prudential has a tie up with ICICI bank; LIC has a tie-up with
Corporation bank and UTI Bank.
- 38 -

39. • Call Centres and SMS services: Almost all the insurance companies have their
own call centres which cater to the phone based queries of the policyholders. This
service is 24x7 and they have the Interactive Voice Response (IVR) systems at all
the branches. Also, LIC and other companies now provide SMS services going
with the new trends like SMS banking in the banking sector
2.2.3: Details of competitors:
Overview of the competitors:
The insurance sector is a booming sector in India, the competition in insurance industry is
increasing day by day and so is with the insurance broking companies. As only 10% of
Indian market is covered so far in terms of Life Insurance there is a rising scope in both
Insurance Companies as well as the Insurance Broking Companies.
In all there are 410 competitors of Beacon Insurance Brokers Pvt. Ltd. All over India.
- 39 -

40. Following is the list of competitors in Surat of Beacon Insurance Brokers Pvt. Ltd.
Rajkrishna Ins. Broker Pvt. Ltd. (Earlier Rajkrishna House, 4th Floor, Opp: SMC
known as Raj Assurances) Pumping Station, Near Navjivan Circle,
Udhna Magdalla Road, Surat-395 017.
SNK General Ins. Pvt. Ltd SNK House, 31-A, Adarsh Society, Opp.
Seventh Day Adventist School, Athwalines,
Surat-395001
NJ Insurance Brokers Pvt Ltd NJ Centre, `B` Tower, 9th Floor, Udhna
Nagar Sangh Commercial Complex,
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41. Central Road No. 10,Udhna , Surat, 394
210.
Loyal Insurance Brokers Pvt Ltd Near Mahavir Cardiac Hospital, Athwa
Gate,, 55, Maher Park, A-Wing,, Surat,
Gujarat 395001
Havmor Insurance Brokers Pvt Ltd 1022, World Trade Centre, Udhana
Darwaja, Ring Road, Surat - 395002
Aviva Life Insurance Company India Pvt 4th Floor, Hiral Shopping Complex, Near
Ltd State Bank Of Indore, Ring Road, Surat -
395002
- 41 -

42. 2.3: Consumer and industrial buying behavior:
2.3.1: Meaning of consumer and industrial buying behavior
Consumer Buying Behaviour:
The Purchase Decisions:
The purchase decision in general is prompt by number of factors viz. Psycho graphical,
Economical, Social, Politico legal and Demographical. The list is not exhaustive but it is
sufficient to have the deep understanding of the factors influencing the decision.
Psycho graphical Factors are those factors that includes the behavioral aspect of the
individual viz. lifestyle, living standard. Here purchase decision in influenced by those
issues that affect the lifestyle of the consumer or in the other that reflects the status. For
e.g.: purchase decision related to buying of car and that to Mercedes Benz. Talking
specifically to the insurance sector, here customer will buy only that policy that has got
high premium or that type of policy which company is promoting to limited high-income
level group only. For e.g. "Classic Life premier" policy of Birla Sun life insurance is
meant for only those individual who can pay at least Rs. 25000/- per annum.
Economical factors affect the purchase decision by influencing the issues pertaining to
money and income level of the individual. Consumer will buy only that product which
will not have any negative effect on his pocket. For e.g. decision to buy an insurance
policy is influenced by the deepness in the pocket.
Social factor affect the purchase decision by influencing the issues pertaining to social
beliefs and morals.
Political and legal is the macro level environment. It effects in a way, say IRDA has
restricted the sale of Key Man Insurance policy through Term Plan only.
Demographical factor is that factor which has got the maximum of its effect in the
purchase decision of the product and specially if that product is life insurance product. It
is so because these factors incorporate other above said factors and includes those factors
that can influence the buying decision to maximum extent viz. Occupational factor
(service/business), Age factor, Gender, Marital status factor and Income level etc.
- 42 -

43. 2.3.2: Factor affecting Consumer buying behavior
We analyze consumers because; this is the basis for all market strategies like segmenting,
targeting, and positioning. Without an understanding of customer, it would be impossible
for the market to drive the offer. A consumer’s buying behavior is influenced by cultural,
social and personal factor.
Cultural factor; -
Culture is fundamental determinant of a person’s needs and behavior. People acquire a set
of value, perception and behaviors through his or her family and other institution. Indian
people want achievement and success, comfortable efficiency and practicality, freedom
and
youthfulness. In other word there are multicultural environment in India. Indian loves
their family and they want to secure their family from unnatural event. Indian give first
preference to his family after than others. They do not want to take loan and they want to
invest their money in long-term investment for child education and marriage. When we
say about metropolitan city, dependency on old age on son is decreasing. People want to
accumulate some fund for old age so Beacon concentrates on gratuity or pension plan.
Indian people also affected from sub culture. Urban people want to take more insurance
comparison than rural (due to high per capita income, insurance awareness, social
security, investment purpose, tax saving purpose).
Religion also effect on insurance. Consumer behavior is also affected from reference
group. Firstly, people see that which insurance is bestseller after that they purchase. They
also influence from agent. People do not concentrate on their need due to agent’s
influence. Social class also affect on consumer behavior. Lower class does not want
insurance. Upper lower class wants insurance for saving purpose. Working and middle
class want insurance for protection and saving purpose and lastly, upper class want to
purchase insurance for investment tax benefit and saving purpose.
- 43 -

44. Social factor:
Consumers are also influenced by social factor for example; reference group, family, and
social role and status. Consumer behavior is firstly influenced from membership group
such as family, neighbor and co- worker. Insurance is such type of product where people
awareness is
very low so people do not very much about insurance. They think, insurance is only tax
saving instrument so they fully dependent on agent for taking insurance. When agent say
about any product, that time they inquiry from neighbor and co-worker about that
product. If any body suggests that, this product and I have also taken this product.
Individual think that, this product also best for him. He does not concentrate on his need
and requirement. Secondly, he is influenced by information influences. If he goes to
purchase insurance, he makes enquiry about this product from his personal sources. He
study newspaper and search on Internet and gather all information related product. If he is
satisfied from that information, he decides to buy insurance. People also influence from
opinion leader, this opinion leader may be Mukhiya, or Surpanch in
rural area or this may be any leader, actor or cricket player in urban area. If opinion
leader say or advertise about any product, people are influenced from opinion leader
because opinion leader keep good position in society. Family and household pattern also
influence consumer behavior. Due to less security of individual family, people want to
purchase insurance, but in joint family people give less attention in buying insurance. If
all family are well earning, there are given less attention on insurance in such family. But
if earning member is less and dependent is more in such type of family insurance is very
important. Women want more security so women are taking main role in purchase
decision where, women influence consumer behavior.
- 44 -

45. Personal factor:
A consumer decision is also influenced by personal characteristics for example the buyer
age and stage in life cycle, occupation and economics circumstances, personality, self-
concept, life style and value. When we say about age and life, first is bachelor stage. They
are generally young independent and they are in early stage of his carrier and earning.
They mostly think that they have no need of insurance because in that time they have no
dependent. However, some people have some dream and dependent also. They are in
such stage where they can take more risk so they mostly prefer to invest in ULIP. Second
stage is newly married. In that stage people need and buying decision is influenced from
their future plan and earning capability. If they have to plan for purchase flat that time,
they will need term insurance. There after stage is one or two children after marriage,
they will be influenced from future need. They will accumulate fund for
children marriage and education, they can be plan time-to-time vacation. In forth stage,
they want to accumulate for retirement. People want to live alone after old age or in
peaceful place so they are ready to start saving for old age. Attitude also affect consumer
behavior positive attitude (about his life) person will take pension plan because people
think that they will live more. But negative attitude person will take life insurance
because they worry about their life.
- 45 -

46. 2.3.3: Process of buying behavior:
Stages of Adoption Process:
An innovation refers to any good, service, or idea. That is perceived by someone as new.
The idea may have long history, but it is an innovation to the person who sees it as new.
Innovation takes time to spread through the special system. The consumer adoption
process focuses on the mental process through which an individual passes from first
hearing about an innovation to final adoption. Adopters of new products have moved
through the following five stages.
1.AWARENESS: The consumer becomes aware of the innovation but lacks information
about it.
2.INTEREST: The consumer is stimulated to see the information about the innovation.
3.EVALUATION: The Consumer considers whether to try the innovation or not.
4.TRIAL: The consumer tries the innovation to improve his estimate of its value.
5.ADOPTION: The consumer decides to make full and regular use of the Innovation.
- 46 -

47. 2.4 Product:
2.4.1: Meaning of product/Service:
A service is the intangible equivalent of an economic good. Service provision is often an
economic activity where the buyer does not generally, except by exclusive contract,
obtain exclusive ownership of the thing purchased. The benefits of such a service, if
priced, are held to be self-evident in the buyers willingness to pay for it. Public services
are those society pays for as a whole through taxes and other means.
2.4.2: Types & Classification of Products & Services Offered By Organization:
List of Life Insurance Companies:
a) Bajaj Allianz Life Insurance Company Limited
b) Birla Sun Life Insurance Co. Ltd
c) HDFC Standard Life Insurance Co. Ltd
d) ICICI Prudential Life Insurance Co. Ltd
e) ING Vysya Life Insurance Company Ltd.
f) Life Insurance Corporation of India
g) Max New York Life Insurance Co. Ltd
h) Met Life India Insurance Company Ltd.
i) Kotak Mahindra Old Mutual Life Insurance Limited
j) SBI Life Insurance Co. Ltd
k) Tata AIG Life Insurance Company Limited
l) Reliance Life Insurance Company Limited.
m) Aviva Life Insurance Company India Limited
n) Sahara India Life Insurance Co, Ltd.
o) Shriram Life Insurance Co, Ltd.
p) Bharti AXA Life Insurance Company Ltd.
q) Future Generali India Life Insurance Company Limited
r) IDBI Federal Life Insurance Company
s) Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.
t) AEGON Religare Life Insurance Company Limited.
u) DLF Pramerica Life Insurance Co. Ltd.
- 47 -

48. v) Star Union Dai-ichi Life Insurance Co Ltd.
List of Non Life Insurance Companies:
1. Bajaj Allianz General Insurance Co. Ltd.
2. ICICI Lombard General Insurance Co. Ltd.
3. IFFCO Tokio General Insurance Co. Ltd.
4. National Insurance Co.Ltd.
5. The New India Assurance Co. Ltd.
6. The Oriental Insurance Co. Ltd.
7. Reliance General Insurance Co. Ltd.
8. Royal Sundaram Alliance Insurance Co. Ltd
9. Tata AIG General Insurance Co. Ltd.
10. United India Insurance Co. Ltd.
11. Cholamandalam MS General Insurance Co. Ltd.
12. HDFC ERGO General Insurance Co. Ltd.
13. Export Credit Guarantee Corporation of India Ltd.
14. Agriculture Insurance Co. of India Ltd.
15. Star Health and Allied Insurance Company Limited
16. Apollo Munich Health Insurance Company Limited
17. Future Generali India Insurance Company Limited
18. Universal Sompo General Insurance Co. Ltd.
19. Shriram General Insurance Company Limited.
20. Bharti AXA General Insurance Company Limited
21. Raheja QBE General Insurance Company Limited,
22. SBI General Insurance Company Limited
23. Max Bupa Health Insurance Company Ltd.
24. L&T General Insurance Company Limited
NOTE: As we can see Beacon deals with a huge number of products which is nearly
impossible to study for a project hence we have classified all its products into
different categories of Insurance Industry.
- 48 -

49. Popular traditional products:
 Term Insurance Plan: - This is the cheapest Life Insurance Policy. In this policy
the Insurance is covered for a fixed amount for Fixed Term. If unfortunately the
Life Assured passes away during the Policy Term than the full Sum Assured is
paid to the Nominee. If everything goes well and the Life assured is alive on
Maturity than nothing is payable on Maturity. It is just like a General Insurance
Policy the only difference is that it is along term contract & not a Yearly Contract.
 Whole Life Insurance Plan:- In this policy the risk cover continues for the whole
life but the premium is either to be paid in Single Mode, Limited Payment or
Whole Life. The Sum Assured is payable only on Death either with or Without
Bonus as per the Policy Condition.
 Endowment Insurance Plan :- In this plan the Policy is for a Fixed Term & in case
of unfortunate Death the Sum Assured with or Without Bonus as per the policy
Condition paid to the Nominee & if everything goes well than on Maturity the
Sum Assured is paid to the Life Assured with or Without Bonus as per the policy
Conditions.
 Money Back Insurance Plan :- This is also one type of Endowment plan but in this plan
very 3rd. 4th or 5th year a part of Sum Assured is paid to the Life Assured as Survival
Benefit & in case of unfortunate death during the policy term the Full Sum Assured
without deduction of Survival Benefits will be paid to the Nominee With or Without
Bonus as per the Policy Condition & in case everything goes well the Sum Assured after
deducting the Survival Benefits will be paid to the Life Assured With or Without Bonus
as per the Policy Condition
Beacon promise is financial security. A strong brand certainly boosts sale, but without
customer-friendly, innovative products, even the best brand would not last long.
Beacon’s product range has been developed on the understanding that different people
have their own sets of needs at various stages of their lives. It has thus built a flexible
portfolio of products that can be customized to cater to varying needs of people at each
- 49 -

50. stage, and thus ensure protection in every step of life. The company’s philosophy has
been to help customers understand their financial needs and work closely with them to
customize a product that would meet. Advisors can offer a complete range of products–
Savings plans, Child plans, Market-linked plans, Protection plans, and Retirement plans–
and tailor a flexible solution to meet customers’ changing needs at every stage of life.
-Add on services provided by the insurance companies:
 Flexible Rider Options
Insurance companies offers flexible riders, which can be added to the basic
policy at a marginal cost, depending on the specific needs of the customer.
 Accident & disability benefit: If death occurs as the result of an accident during
the term of the policy, the beneficiary receives an additional amount equal to the
rider sum assured under the policy. If an accident results in total and permanent
disability, 10% of rider sum assured will be paid each year, from the end of the
1st year after the disability date for the remainder of the base policy term or 10
years, whichever is lesser.
 Critical illness benefit: Critical Illness Benefit Rider provides protection against
critical illnesses to the policyholder when attached to the basic plan.
After Sale Services:
 Doorsteps claim settlement.
 Cheque pick up facility.
 Call Reminders on policy lapsing and other facilities.
 Site Visit
 Query Solving.
 Survey within the 24 hours of the loss
 Preparation of documents of claims.
 Regular follw up with surveyor.
- 50 -

51.  Scrutinizing the assessment of the loss.
2.4.3: Brand & Brand equity:
Beacon Insurance Brokers Pvt. Ltd. . The name itself is a brand in itself which provides
unmatched services unlike any other insurance broking company. Beacon Insurance
Broker Pvt Ltd is known as a hub for insurance policies where one can avail its superior
experienced services.
Life or General there are no bars in Beacon, it provides all kinds of insurance policies of
almost all the major players of insurance industries under one roof. Hence one can say it
is a combination of goodwill of all the major players of insurance industry of India. Not
just India now Beacon has international partner as well. Beacon has tied up with UNIBA
risk solution partners which has one of the largest independent broker network
internationally.
The key Features that make Beacon a Brand which is unlike any other broking company
are-
- Team of Professionals
- Blend of Experience and Youth.
- Wide network of offices worldwide.
- Impact of any adverse condition is countered effectively and speedily.
- Beacon’s logo of light house indicates that it is a light in one’s life that guides them
away from contingencies of future.
- Complete Range of Insurance Products/Services/ Risk Management.
- Beacon’s Branding is so strong that it does not require any advertisement for its
promotion, the customer references does the trick for its boosting sales figure.
- Beacon is a NSIC-CRISIL rated Company (SE 2B)
FINANCIAL STRENGTH
HIGH MODERATE LOW
PERFORMANCE
HIGHEST SE 1A SE 1B SE 1C
CAPABILITY
HIGH SE 2A SE 2B SE 2C
MODERATE SE 3A SE 3B SE 3C
- 51 -

52. 2.5: PRICE:
2.5.1: Meaning of price:
Pricing : Underwriting results of many classes of general insurance make dismal reading.
The history of motor and marine cargo rates over the years release a steady erosion of
premium income by rate cutting and bad underwriting in the face of competition,
particularly marine cargo. And, Motor had a tariff to boot. Fire, the cash cow all along
with the tariff ruling high, is heading for bad days with the abolition of tariff control. One
factor in the deterioration of the fire account has been the interplay of various
competative elements. Whereas one might consider the growth of broker control business
as such as element, it must be remember that it is the underwriter who is finally
responsible for setting the rate of premium. Not unnaturally broker have competed for
large accounts and have striven to preserve and enlarge the business by getting the best
possible terms for their clients, but the real competition has been between underwriters.
Much comments is made on the present day lack of business ethics. But who can blame
the underwriter who is presented with a proposition of fixing too find a rate for securing a
business that was too hotly contested. The effect of competition from life insurer is
probably more marked in the sphere of term insurance and in particular, group life
insurance, where rates of premium would almost appear to have reached levels which are
too find even for present day mortality. Yet, as long as company are judged on total sum
insured rather than premium income , group life and term insurance will be attractive as
"Window Dressing".
2.5.2: Pricing Policies Adopted By The Organization:
Beacon Insurance Brokers Pvt. Ltd. Is a very sound and sensible company. Its pricing
policy is also as simple as its simplicity. As Beacon deals with all kind of insurance
policies of several companies its pricing policy is almost same with all the companies.
Every policy sold under Beacon will be entitled of 15% commission (Average) from the
insurance company. Other charges applicable to the customers are based upon the policy
sold. Price of every policy differs from company to company. In case of General
Insurance Beacon may provide additional discounts from its own pocket. Hence we can
see that how simple its pricing policy is.
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53. 2.6 PLACE:
Definition:
The place is where you can expect to find your customer and consequently, where the
sale is realized. Knowing this place, you have to look for a distribution channel in order
to reach your customer.
2.6.1: Meaning:
This term really refers to any way that the customer can obtain a product. Provision of a
product can occur via any number of distribution channels, such as in a retail store,
through the mail, via downloadable files, on a cruise ship, in a hair salon, etc. The ease
and options through which you can make your product available to your customers will
have an effect on your sales volume.
2.6.2: Channel of Distribution used by Organization:
There are basically two types of distribution channel Direct Channel and Indirect
Channel. Beacon Insurance Brokers Pvt. Ltd follows both types of Distribution channels.
Under Beacon a customer can opt for having an insurance policy directly from beacon or
they may buy it from beacon through an agent. Hence beacon follows both two level
channel and three level channel
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54. Direct Distribution channel Two-LEVEL Distribution channel
COMPANY COMPANY
BEACON (BEACON INSURANCE
BROKERS PVT LTD)
INSURANCE
BROKERS PVT
LTD
INSURANCE
AGENTS
CUSTOMERS
CUSTOMERS
- 54 -

55. 2.6.3: Functions Performed By Channel Of Distribution:-
• Risk taking – Assuming the risk connected with carrying out channel work or
being a part of a channel
• Negotiations – Reaching an agreement on pricing and other terms which may be
a part of the transaction
• Matching – Placing order with the manufacturers and matching the orders to the
actual requirement.
• Contacts – Maintaining contacts with existing customers as well establishing
contacts with potential customers and maintaining the same with the regulatory
bodies
• Promotions – Carrying out effective communications to stimulate purchasing
• Information – Gathering information about potential customers, competition as
well as tracking the environmental factors.
• Providing Physical proof of policy to the customers
• Market Research
• Reporting
• Maintaining customer relations
• Providing after sale services
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56. 2.7: PROMOTION:
Definition of Promotion:
“An activity designed to boost the sales of a product or service. It may include an
advertising campaign, increased PR activity, a free-sample campaign, offering free gifts
or trading stamps, arranging demonstrations or exhibitions, setting up competitions with
attractive prizes, temporary price reductions, door-to-door calling, telemarketing,
personal letters on other methods”.
2.7.1: Meaning of Promotion:
More than any other element of the promotional mix, sales promotion is about “action”. It
is about stimulating customers to buy a product. It is not designed to be informative – a
role which advertising is much better suited to.
Sales promotion is commonly referred to as “Below the Line” promotion.
Sales promotion can be directed as:
• The ultimate consumer (a “pull strategy” encouraging purchase)
• The distribution channel (a “push strategy” encouraging the channels to stock the
product). This is usually known as “selling into the trade”
Under PULL STRATEGY Beacon tries to attract the customers through its unmatched
services like updating the customers through phone calls and letters, through door to door
visits, by providing the services of all the insurance companies under one roof,
negotiating with companies for special offers to offer to the customers and on top of all
the after sales services of company acts like a cherry on the cake.
Under PUSH STRATEGY the company tries to update the agents by organizing a small
party under which the are informed about the new products and the company’s expected
target is set before them with attractive offers for the agents through which they are
tempted to work for the company from their soul and whatever that comes from within
will always be in favour of the company’s growth.
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57. 2.7.2: Elements of Promotion Mix:
Beacon Insurance Brokers Pvt. Ltd has limited yet effective promotion mix. Mainly the
reason behind this limited promotion mix is that the company’s brand image is the best
part of it which does the trick to boost their sales. Beacon provides a high level of
customer satisfaction so the the customers themselves becomes the promoters of the
company when they give reference of the company to their relatives.
Following are the promotion mix performed by the company:
-Sales Promotion: There are around 400 sales agent working for beacon insurance
brokers pvt. Ltd. Promoting the sales by providing information to the customers about our
products to the customers. They find out the customer requirements and cater with the
best option available for them. Apart from sales the provide information to the company
as well that what is the customer demand in the market through which company may
negotiate with the insurance companies also.
-Personal Selling: Beacon Insurance Brokers pvt ltd believes that there should be no third
party between them and their customers which creates a sound communication between
them and they can cater them with a personal touch. Beacon provides personal selling
wherein they sell the insurance policy to the customers without any agents and enabling a
haste free environment.
-Direct Marketing: Beacon also holds Direct Marketing handled by Rana Pradeep Singh.
Direct marketing is a form of advertising that reaches its audience directly through
multiple channels including email, direct mail, social media, catalogs, online advertising,
interactive television, etc. Businesses communicate straight to the consumer with
advertising techniques such as fliers, catalog distribution, promotional letters, and street
advertising. Direct Advertising is a sub-discipline and type of marketing. There are two
main definitional characteristics which distinguish it from other types of marketing. The
first is that it sends its message directly to consumers, without the use of intervening
commercial communication media. The second characteristic is the core principle of
successful Advertising driving a specific "call to action."
-Publicity: As such in Beacon there is no publicity done externally but of course as said
earlier customers of beacon are the core part of their publicity the customer brings
customers for Beacon and this is how it goes.
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58. 2.7.3: Communication Process:-
We need to do 3 things to achieve this –
1. Greet the Customer
2. Briefly state purpose
3. Ask for time
Always state most relevant Features
Features of the product first
Advantages Explain the advantages of the
features
Benefits Emphasize the Benefits
that the prospect would derive
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59. S Smile
A Acknowledge
T Turn the Objection
M Show More Value
C Close
Probe thoroughly, until you
Identify the Need
Be relaxed. Business-like,
and yet unhurried…
Carry Conviction
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60. 2.8 Strength and Weakness:
Promoters with
Rich Industry
Experience
Experienced
Provision of
And
Web Enabled
Responsive
Services
Team
OUR
STRENGTHS
Good Network of
Organizational Offices Across
Infrastructure India
Weakness:
Unavailability of Equity, Mutual funds, Fixed Deposits and other investment options.
- 60 -

61. 2.9 Marketing Control:
2.9.1: Meaning and Importance of Marketing Control:
There is no planning without control.
Definition of Marketing control :
“Marketing control is the process of monitoring the proposed plans as they proceed and
adjusting where necessary. If an objective states where you want to be and the plan sets
out a road map to your destination, then control tells you if you are on the right route or if
you have arrived at your destination.”
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62. Type of Control Prime Responsibility Purpose of Control Approches
1. Annual Plan Control • Top To examine whether • Sales analysis
Management the planned results
• Market Share
are being achieved.
• Middle analysis
Management
• Sales-to-expense
ratios
• Financial analysis
• Market-based
scorecard analysis
1. Profitability Ratio Marketing Controller To examine where Profitability by:
the company is • Product
making and losing
• Territory
money.
• Customer
• Segment
• Trade Channel
• Order Size
1. Efficiency Control Line and Staff To evaluate and Efficiency of:
management Marketing improve the spending • Sales force
Controller efficiency and impact
• Advertising
of marketing
expenditure.
• Sales Promotion
• Distribution
1. Strategic Control Top Management To examine whether • Marketing-
Marketing Auditor the company is effectiveness rating
pursuing its best instrument
opportunities with
• Marketing Audit
respect to markets,
products and
• Marketing
channels
experience review
- 62 -

63. - 63 -

64. HUMAN RESOURCE MANAGEMENT DEPARTMENT
- 64 -

65. CHAPTER 3: Human Resource Department
3.1: INTRODUCTION
3.1.1: Basic Introduction Of Human Resource Department :
Beacon provides excellent opportunities to deserving people. Work atmosphere is
thoroughly professional & a lot of encouragement is given to new ideas & innovations.
We nurture talent & motivate people to work in an entrepreneurial environment. All
employees have a pre decided career path with excellent growth prospects. The team
comprises of a committed workforce of more than 100 persons who are from diverse
backgrounds & educational streams including engineers, MBAs & CAs.
We are looking for dynamic & committed professionals with an excellent track record
who like to work with no boundaries attached. If you are dreamer & want to make big in
life, please mail your resume at the following e mail id. We also welcome freshers in the
organization.
Training has always been an aspect of greatly emphasized upon at Beacon. Our
employees are constantly updated with the latest developments in the Insurance industry,
with the help of prominent Trainers (in hours & external). This help us cost effective
solutions to suit all your insurance needs under roof.
3.1.2: No. Of Employees And Branches :
Branches :
¢ Ahmedabad
¢ Ankleshwar
¢ Delhi
¢ Mumbai
¢ Surat
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66. ¢ Vadodara
Service centre:
¢ Anand
¢ Bhilwara
¢ Rajkot
¢ Pune
There are 40 Employees in Surat branch that is near majura gate in International
Trade Center on 3rd floor and round about 700 employees all over the india .
3.1.3: Organizational Structure :
Every Company has different Organization Structure according to their
comfortless . “Beacon Insurance Broker Pvt. Ltd” has a vertical authority structure. It
consist of various Managers at different level according to the requirement.
At the very important level there is a National Manager who have the highest
Authority. There are Zonal Heads for West & North Zones. And under each Zonal
Head there are various Area Head which takes care for their respective Areas. Under each
Area head there are various Branch Managers which takes care of the working of their
branches. And all the Sales Manager comes under their Respective Branch Manager.
There are 3 posts under Sales Manager which are Deputy Agency Manager, Manager
Distribution and Chief Agency Manager.
- 66 -

67. 3.1.4 :Activities Of Human Resource Manager :
HR Manager look after for the HR Department and smooth functioning of the human
resource department.
• Resourcing & Capability Development: comprises of Talent Acquisition and
Capability Development
• Rewards & Performance Management: comprises of HR Operations, Performance
Management and Employee Engagement, administration and property.
• Here the Human Resource Activities are hold by Ms.VRUNDA JAVERI and
SANJAY AGARWAL the director of the company.
• The activities of Ms. VRUNDA JAVERI is to
o to appoint people.
o Registration.
o Code.
o to make accounts.
- 67 -

68. As the activities like recruitment, selection, interview etc. hold by Mr. SANJAY
AGARWAL the director of the company.
3.1.5: Activity of Human Resource department:
Human resource (HR) department deals with wide range of activities from strategic
planning level to the day to day operations level. Therefore defining roles and
responsibilities of HR manager is a quite complex task but some of the functions carried
are summarized below.
 Involvement in the strategic planning process
HR manager gets involved in the strategic planning process of the organization and
identifies HR as a core competency of the organization. When HR is assumed as a
core competency HR becomes a competitive advantage for the organization and HR
manager is responsible of developing the HR of organizations to bring the stated
competitive advantage to the organization.
 Forecasting the labour requirement
The HR manager holds the responsibility of forecasting the labour requirement of the
organization in the future based on the future level of sales/production level of the
organization. The labour forecast may identify the need for need for hiring or firing
employees.
Ladies Men Ladies Men
Sarees Formal Full Sleeve Shirts Denim Pants or Denim Denim Pants or
( *Ties required if interacting with Skirts/Track Pants. Shorts/Track
external clients only) pants.
Salwar Formal Trousers T Shirts T Shirts
Suits
Formal Western Wear Blazers/Formal Suits
Formal Shoes ( toes Sports Shoes Sports Shoes, Sandals,
covered) Slippers etc.
- 68 -

69.  Recruitment
Once the labour forecast is done organization can identify the need for more labour in the
organization if the existing workforce is not sufficient to handle the future workload. In
such a situation HR manager has to recruit new potential candidates to fill the vacancies.
Recruitment is the process of creating a pool of potential candidates who can be
employed to fill the vacancies.
 Selection
Selection is the process by which the most suitable candidate is selected from the
recruited pool of candidates. Selection is done by carrying out various types of tests and
interviews. HR department/manager is responsible of selecting the
most suitable employees to fill existing vacancies.
 Induction
Induction is the process by which new employees are made familiarized with the
organizational environment. Once the employees are selected they need to be introduced
to other staff of the organization and they should be given necessary guidelines about the
organizational culture and the procedures.
 Training
Once the employees are done with the induction they become an employee of the
organization but the skills they possess may not be adequate to carry out required tasks.
The need for training arises when the there is a gap between expected level of skills and
the current level of skills of an employee. If a there is a training need HR department has
to design training programs and execute them.
 Motivation
HR manager is responsible of motivating employees to carry out their duties of a timely
and accurate basis.
 Performance Appraisal
This is where the employees performance are evaluated based on expected level and the
actual level of the performance. HR department needs to design performance appraisal
systems to appraise the employee performance on a fairly manner.
- 69 -

70. 3.2: HUMAN RESOURCE PLANNING:
3.2.1: Job description and job specification of various positions in the organization:
A job description is a list that a person might use for general tasks, or functions,
and responsibilities of a position. It may often include to whom the position reports,
specifications such as the qualifications or skills needed by the person in the job, or
a salary range. Job descriptions are usually narrative, but some may instead comprise a
simple list of competencies; for instance, strategic human resource
planning methodologies may be used to develop a competency architecture for an
organization, from which job descriptions are built as a shortlist of competencies.
Creating a job description
A job description is usually developed by conducting a job analysis, which includes
examining the tasks and sequences of tasks necessary to perform the job. The analysis
considers the areas of knowledge and skills needed for the job. A job usually includes
several roles. The job description might be broadened to form a person specification or
may be known as Terms Of Reference
While offering a Job to an Employee Job Description is given by the Branch Head which
covers all the responsibilities and authority for that position so the employee can perform
the job efficiently and his/her position is also stated in the hierarchy level.
- 70 -

71. 3.3: Recruitment & Selection :
3.3.1: Sources Of Recruitment:
Internal source:
1) Promotion: Promotion means to place or appoint a person on higher post with
higher salary, more power and more responsibility. Promotion of an employee
automatically increases his responsibility and salary as well. Beacon adopts
promotion policy. If an employee achieve the target or he deserves, he will
transfer to higher post.
2) Friends & relatives of an employee: Many organizations have structured system
where the current employees of the organization can refer their friends and
relatives for some position in their organization. Beacon recruits the friends &
relatives of present employee which are working in the organization.
- 71 -