H Y D E R A B AD

A STUDY ON MARKETING CONCEPTS APPLIED BY

“MAX NEW YORK LIFE”

Theme: Knowledge for application

(Component 2)

INDEX Page No.

1) Company Profile 3
2) How New York Life enter the Indian Market 4
3) Vision, Mission and Values 5
4) Achievements 6
5) The MAX VIJAY New product development process 7
6) Multi- channel distribution 11
7) Product life cycle 13
8) Product Hierarchy 14
9) Product Mix and Product line length for MYNL 15
10) Type of Marketing in the Service Industry 17
11) Product Strategies 19

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12) Product levels of an Insurance Industry 20

13) Diversification by MAX VIJAY 21
14) Customer Expectations 22
15) Customer Satisfaction 23
16) Customer Development Process 24
17) Customer Relationship Management 25
18) Traditional Organizational Chart 27
19) Customer Oriented Organization Charts 28
20) Basis for Segmenting market 30
21) Differentiation Strategies 31
22) Karo Jyaada Ka Iraada – Brand Philosophy 33
23) Positioning 34
24) Two Way Stretch 36
25) Emerging trends in the Insurance Sector 39
26) SWOT Analysis 40
27) Literature Review 42
28) Bibliography 46

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COMPANY PROFILE

Max New York Life Insurance Company Ltd. is a joint venture between Max India Limited, one
of India's leading multi-business corporations and New York Life International, the international
arm of New York Life, a Fortune 100 company. The company has positioned itself on the quality
platform. In line with its vision to be the most admired life insurance company in India, it has
developed a strong corporate governance model based on the core values of excellence, honesty,
knowledge, caring, integrity and teamwork.

Incorporated in 2000, Max New York Life (MNYL) started commercial operation in 2001. In
line with its values of financial responsibility, Max New York Life has adopted prudent financial
practices to ensure safety of policyholder's funds. The Company's paid up capital as on 30th
April, 2009 is Rs 1782 crore. MYNL shares a market share of 5.9% in the life insurance sector.

MNYL has multi-channel distribution spread across the country. Agency distribution is the
primary channel complemented by partnership distribution, banc assurance, alliance marketing
and dedicated distribution for emerging markets. The Company places a lot of emphasis on its
selection process for agent advisors, which comprises four stages - screening, psychometric test,
career seminar and final interview. The agent advisors are trained in-house to ensure optimal
control on quality of training. The company currently has around 92,760 agent advisors at 710
offices across 385 cities. The company also has 36 referral tie-ups with banks, 24 partnership
distribution and alliance marketing relationships each. Max New York Life has put in place a
unique hub and spoke model of distribution to deepen our rural penetration. The company has
133 offices dedicated to rural areas.

MNYL offers a suite of flexible products. It now has 43 life insurance products and 8 riders that
can be customized to over 800 combinations enabling customers to choose the policy that best
fits their need. The company currently has more than 13,923 employees.

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HOW NEW YORK LIFE ENTERED THE INDIAN MARKET:-

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New York Life International, INC., a Fortune 100 company, decided

to select JOINT VENTURE as a medium to enter into the market of India. It has chosen MAX
INDIA LTD., one of the India’s leading multi-business corporations. Through its wide network
of highly competent wide network of highly competent agent advisors and flexible product
solutions, MYNL is creating a partnership for life with its customers in INDIA to meet their life
stage needs..

VISION
To become one of the most admired life insurance company of India.

Strong Corporate Governance Model

MISSION
• Become one of the top quartile life insurance companies in India
• Be a national player
• Be the brand of first choice
• Be the employer of choice
• Become principal of choice for agents

VALUES

Knowledge:
Knowledge leads to expertise; and our expertise is in helping people protect themselves.
Perfectly combining global expertise with local knowledge, we are India's life insurance
specialist. MNYL believes that for knowledge to be of value it must be focused, current, tested
and shared.

Caring:
MNYL is redefining the life insurance paradigm by focusing on customers first. The service
process is responsive, personalized, humane and empathetic. Every individual who represents the
company is for us our brand champion.

Honesty:
Honesty is the heart of the life insurance business. It is all about trust. Transparency, integrity
and dependability form the cornerstones of the MNYL experience. The company ensures that
everyone who represents the brand carries a promise: we care — in word as well as deed.

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Excellence:
Excellence at MNYL implies the ability to perform at a consistently high level. Focused on the
value of continuous improvement in people, processes and the organization, the company strives
for the highest standards of quality in every aspect of its business

ACHEIVEMENTS
• MNYL Insurance felicitated with the ‘Golden Peacock Innovation Award’ for the year
2008 for Excellence in innovation in conceptualizing and marketing Max Vijay.

• MNYL is the first life insurance company in India to be awarded the IS0 9001:2000
certification.
• MNYL was among the top 25 companies to work with in India, according to 2003
Business World magazine, "Great Workplaces In India", MNYL was ranked at the 20th
position. This survey is the local version of the "Great Places To Work" survey carried
out every year in 22 countries.
• Been among top five most respected private life insurance companies in India according
to a 2004 and 2006 Business World survey.
• MNYL Insurance has emerged as one of the best employer in the recently announced
Business Today-Mercer-TNS Survey of 'The Best Companies to Work For in India'. The
company was ranked 7th in the survey and the best life insurance company to work for in
India.

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THE MAX VIJAY NEW PRODUCT DEVELOPMENT PROCESS

A. IDEA GENERATION

Since no other insurance company had ventured into the rural market, MNYL came with an idea
to serve the lower strata of the society, which represents the maximum population in the country.

B. IDEA SCREENING

Since Uttar Pradesh is the biggest and the most populous state in India, the company strategists
suggested implementing Max Vijay scheme in all the 52 districts of the state. They felt that there
would not be any dearth in the number of people who are ambitious and wish to achieve
something in their lives, in such a populous state.

C. CONCEPT DEVELOPMENT AND TESTING

• The scheme would be valid for 10 years

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• Maturity period – 10 years

Max Vijay would give a choice to the customer for making payment using three premium
options

1) Rajat

2) Swarna

3) Heera

The sum assured from the policy is guaranteed with choice to invest any amount ranging from
Rs.10 to Rs.2500000, anytime, anywhere

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D. MARKETING STRATEGY DEVELOPMENT

• Affordable, accessible and flexible

• Widespread distribution network

• Payment through neighborhood retail outlets and grocery stores

• NGO’s

E. BUSINESS ANALYSIS

MNYL has set a target of achieving a collection of Rs.100 Crore premium in three months
through Max Vijay scheme.

It further plans to implement the scheme to 50,000 customers in 52 districts through 15000
counters.

F. PRODUCT DEVELOPMENT

• Minimum formality in buying the policy

• Premium can be paid easily just like TOPPING UP A MOBILE

G. MARKET TESTING

Before launching the scheme throughout India, they have chosen the state of Uttar Pradesh as a
pilot project (β - testing). This also ensured that any drawbacks and loopholes, if any, would be
corrected before launching the scheme nationwide.

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H. COMMERCIALIZATION

Commercialization involves the following four processes:

1) WHEN (timing): In commercializing a new product like Max Vijay, market entry timing
is critical. MNYL was first to capitalize the opportunity created during the financial crisis
and enter the untapped market.
2) WHERE (geographical strategy): Uttar Pradesh, the biggest and the most populous state
was chosen.
3) TO WHOM (target market): Lower strata of the population, Rural India.
4) HOW:
• Tie up with Indian Oil Corporation: 2000 Kisan Seva Kendras
• Outsourcing agreement with technology major, IBM
• Recently, Mr. Amitabh Bacchan was roped in as the brand ambassador for Max Vijay
product. The reason behind using him as a Brand ambassador is his strong association
with the character “Vijay” who symbolized people’s hero who fought for the cause of
the common man by standing up for their rights. His appointment as the brand
ambassador for Max Vijay is a rebirth of the old Vijay, who is today propagating the
cause of small savings and financial inclusion for the underserved masses of the
country.”

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MULTI CHANNEL DISTRIBUTION

MNYL has mainly used ZERO Level channels to sell its products to the customers. This helps
in removal of the intermediaries which dilutes the profit. The various channels employed are:-

• Insurance Agents

• Direct Selling Agents

• Internet

• Banc-assurance (First level): Here the Banks act as a mediator between MNYL & the
customer. Hence it comes under the First Level Channel for distribution.

Eg: It has tied up with Andhra Pradesh Rural Bank to distribute its products.

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Different Channels of Distribution

i) Agency Channel:- In MNYL , business is done mainly through Agent Advisor. In India it
has more than 55000 agents. Two Programs are run under Agency Channel

• AAP(Agency Association Program)

• CEIP

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ii) Banc assurance: Banc assurance is an innovative distribution channel involving banks to sell
insurance products of Insurance Companies. MNYL has tied up with several banks

iii) Direct Sales Team(DST ):- Max New York Life Insurance makes a data base of potential
customers; contact them on the telephone to market different policy of the company.

iv) Alternate channel- Business is done through associate partners, internet etc.

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PRODUCT LIFE CYCLE

The MNYL lies in the growth stage of the PRODUCT LIFE CYCLE (PLC). There has been a
period of rapid market acceptance and substantial profit improvement. The different strategies
that have been adopted by MNYL in this stage are as follows:

• Persuasive advertisements (display of regular ads during prime time shows)

• Addition of new product features

• Increase in the distribution coverage (tie-ups with IOC, AP Rural bank, Mercantile Bank
etc.)

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• It has shifted its focus from product-awareness to product-preference advertising

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Product Hierarchy :

Seven levels for life insurance sector are:

1. Need family: The core need that underlies the existence of a product family. E.g. security.

2. Product family: All the product classes that can satisfy a core need. E.g. savings.

3. Product class: A group of products having a certain functional coherence. E.g. financial
instruments.

4. Product line: a group of closely related product w.r.t (e.g. life insurance)
 Functions
 Same customers
 Channels
 Price range

5. Product Type: A group of items within a product line that share on of the possible forms of
the product. E.g. term life insurance

6. Item: a distinct unit within a brand or product line distinguishable by size, prize, appearance,
or some other attribute E.g. Max New York SMART Steps™ Plus insurance.

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PRODUCT MIX AND PRODUCT-LINE LENGTH FOR MNYL

LIFE PLANS GROWTH CHILD PLANS HEALTH PENSION

PLANS PLANS PLANS
1) Five Yr Renewable 1) Life 1) Children's 1) LifeLine 1) Easy Life™
& Convertible Plan Maker™ Endowment MediCash™ Retiremen
Premium to 18 (Par) t (Par)
Plan Plan

2) Level Term 2) Life 2) Children's 2) LifeLine 2) SMART

Policy Maker™ Endowment Wellness™ Invest™
Gold to 24 (Par) Plus Pension
Plan

3) Whole Life 3) Life 3) SMART 3) LifeLine

Participating Maker™ Steps™ MediCash™
Platinum Plus

4) Life Gain™ 4) Max New 4) SMART 4) LifeLine

Plus 25 York Life Steps™ Plus Safety
Participating SMART Net™
Plan Xpress

5) 20 year 5) SMART 5) SMART 5) LifeLine

Endowment Assure Steps™ Wellness™
(Par) Plan Single
Premium

6) Life Pay™
Money Back
6) Max New
York Life
Plan
LifeLine
Healthy
Family

7) Endowment to
Age 60 (Par)
Plan

8) Life Gain™
Endowment
Plan

9) Life Gain™
Plus 20
Participating
Plan

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Life e
Plus
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In the above diagram:

WIDTH OF PRODUCT MIX OF MAX NEW YORK: 5

LENGTH OF PRODUCT MIX OF MAX NEW YORK: 28

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TYPES OF MARKETING IN THE SERVICE INDUSTRY:-

MAX NEW
YORK LIFE

INTERNAL EXTERNAL
MARKETING MARKETING

INTERACTIVE
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EMPLOY CUSTOM
EES ERS

INTERNAL MARKETING:-

As far as the Internal Marketing of the MNYL is concerned, it regularly motivates

its employees to perform better in difficult times. Training is a continuous process for agents at
MNYL and ensures development of skills and knowledge through a structured programme
spread over 500 hours in two years.

This focus on continuous quality training has resulted in the company having amongst
the highest agent pass rate in IRDA examinations and the agents have the highest productivity
among private life insurers. MNYL has been awarded the best employer to work with; hence it
shows the commitment it has towards its employees.

INTERACTIVE MARKETING:-

MNYL has developed skills in its workforce i.e. agents to serve their clients
effectively and with ease. The technology backup provided by the IBM also helps MNYL to
have an edge over the other insurance companies.

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PRODUCT STRATEGIES

The Insurance Industry exhibits the following FIVE product levels:-

CORE BENEFIT: SECURITY

BASIC PRODUCT: HEALTH, CHILD, LIFE, PENSION, GROWTH

EXPECTED PRODUCT: CLAIM SETTLEMENT

AUGMENTED PRODUCT: ELECTRONIC FUND TRANSFER FACILITY FOR CLAIM

SETTLEMENT (DONE BY MNYL)

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PRODUCT LEVELS OF AN INSURANCE INDUSTRY

MNYL has extended its brand by introducing the MAX VIJAY in a new Product Category.

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The brand name remains the same i.e. MAX NEW YORK LIFE after the launch of the new
product in the market. The product category was new in this case, it was specially designed to
cater the lower strata of the society giving them multiple paying options of the premium.

DIVERSIFICATION BY MAX VIJAY:

ANSOFF GRID

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MNYL has diversified by introducing the Max Vijay Scheme, which is a new product and
offered into a new market. The new market is Uttar Pradesh, since it was earlier catering to the
other parts of the country.

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CUSTOMER EXPECTATIONS:-

In the today era, Customer expectations are rising. Customers, faced with a dizzying array of
insurance products expect customized offerings, value, ease of access, and personalization from
insurers. Today, customers are expecting individual attention, responsiveness, customization and
access. At the same time, they don’t want to pay a premium for these services. High customer
expectations and lower exit barriers could lead to increased customer attrition.

To meet the customer expectations is a daunting task for today’s insurance companies. If the
customer’s expectations are met, then only he will be satisfied and continue your services.

The company tries to utilize every moment of truth and tries to satisfy him at maximum
possible touch points.

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CUSTOMER PERCEIVED
VALUE

Total Customer Total Customer

Benefit Cost

Product Benefit Monetary Cost

Services Benefit Time Cost

Personnel Benefit Energy Cost

Psychological
Image Benefit
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CUSTOMER SATISFACTION:

Customer satisfaction refers to the extent to which customers are happy with the
products and services provided by a business. Gaining high levels of customer satisfaction is
very important to a business because satisfied customers are most likely to be loyal and to
make repeated orders and to use a wide range of services offered by a business. Since sales
are the most important goal of any commercial enterprise, it becomes necessary to satisfy
customers. For customer satisfaction it is necessary to establish and maintain certain
important characteristics like:
a. Quality
b. Fair prices
c. Good customer handling skills
d. Efficient delivery
e. Serious consideration of consumer complaints.

Satisfaction is the feeling of pleasure or disappointment attained from comparing

a products perceived performance (outcome) in relation to his or her expectations. If the
performance falls short of expectations, the customer is dissatisfied. If the performance
matches the expectations, the customer is satisfied. If the performance exceeds expectations,
the customer is highly satisfied or delighted.

MNYL is an ISO 9001-2001 Certified Company. Some of the benefits it provides to its
customers are as follows:

• MNYL issues Policies to its customers in quick time and with maximum accuracy.
• Fast settlement of Claims and demonstrate reliability and trust amongst our customers
• Effective touch points for the customers who are regularly working towards resolving
customers’ queries and needs.

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• MNYL is constantly designing products keeping in mind long term customer benefits and
responsibly fulfill the regulatory requirements.

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CUSTOMER DEVELOPMENT PROCESS

Potentials

Prospects Disqualified
Prospects

First time
customers

Repeat
customers

Clients Inactive or
Ex-customers

Members
CUSTOMER RELATIONSHIP MANAGEMENT:

CUSTOMER RELATIONSHIP MANAGEMENT is the process of carefully managing detailed

Advocates
information about individual customers and all customers touch points to maximize customer

Partners
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loyalty. A customer touch point is any occasion on which a customer encounters the brand and
product-from actual experience to personal or mass communications to casual observation.

Max New York Life Insurance Company has also undertaken various steps to strengthen its
customer relationship management.

Max New York Life Insurance has announced the introduction of INTERACTIVE VOICE
RESPONSE (IVR) service in 10 different languages. The leap is in a bid to enhance and improve
max New York Life’s customer and distributor experience by availing the customer service in
their own language.

Sanjeev Mago, executive vice president, Customer Operations and Service Delivery, Max New
York Life Insurance, said, "This initiative is yet another step towards improving customer
satisfaction by enhancing their ease of resolving pre and post policy issues. At Max New
York Life, we lay emphasis in interacting with our customers and distributors in their
choice of language."

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In order to improve its customer relationship management, MNYL has maintained internal
records and marketing intelligence systems to maintain a database of profile and contact
information of the customers.

Databases, Data Warehousing and Data Mining

MNYL Insurance has organized their information:-

• Customer databases

• Product databases

• Salesperson databases

The most important of the above three is the customer database in which the profile
and the contact information of the customer is saved. The customer database may even include
the demographics and psychographics (activities, interests and opinions) according to which a
customized policy is formulated for his/her needs.

“Carpet Bombing” is also being done to target the random customers in order to
spread awareness and market the policies at a large scale.

MYNL conducted a study in association with AC Nielsen, which revealed that the
customers want return and protection in an insurance policy. Based on this study, the company
launched ‘Smart Express’ for a smooth ride through the volatile markets.

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TRADITIONAL ORGANIZATION CHART

This is the system when managers believe the customer as the company’s only true
“Profit Centre”. It was the traditional approach and off late it was changed to the modern
approach wherein customers are given prime importance.

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MAX NEW YORK LIFE FOLLOWED MODERN

CUSTOMER-ORIENTED ORGANIZATION CHART

The Max New York Life culture is about:

• The customer comes first

• Do it right the first time

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• Bias for result oriented action

• Financial strength and discipline

• Clarity of purpose

• International quality standards

• Inclusive meritocracy

• Learning opportunities

• Fun at work

• Commitment to published value system

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DIFFERENTIATION STRATEGIES:

Product Differentiation:

MNYL decided to straddle more on life benefits than death benefits. On the basis of a study
conducted on the category & competition they realized that the competitors were focusing on
pure protection & family protection as a benefit. So MNYL decided to focus on the aspirational
proposition – thereby differentiating from their competitors.

Services Differentiation:

With the launch of ‘Health Family Floater Plan’ MNYL became the first and the only company
to offer benefits for congenital disorder. It also introduces some other significant firsts and bests
to the industry:

• Relevant and segmented benefit for parents

• Yearly increases on surgical benefits, even after claims
• Guaranteed renewability till the age of 75 years
• Highest number of Hospitalization Days and Daily Cash limits
• Highest number of critical illness covered
• Health insurance coverage for the longest duration - 10 years
• No upper limit on the family size.

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Personnel differentiation:

The companies differentiate themselves by having better-trained employees. MNYL

provides 150 hours of training to their employees against the industry average of 100 hours.
The result is they have some of the best Agent Advisors in the business. Backed by the best
training and infrastructure, their expert Agent Advisor will spend time evaluating the
customers’ needs rather than just selling. They are professionals who will thoroughly
understand the customers’ needs before recommending the policy tailored to meet them.
They offer the best products with Flexibility as their cornerstone.

Re-training:
Following the stock market meltdown in 2009, a large number of MNYL financial
advisors had stopped visiting their customers, since they did not know how to deal with their
queries about the fall in the value of investment. At this juncture, MNYL felt that the financial
advisors needed a fresh perspective & communication skills to address the needs of their
customers. Thus they re-trained & certified around 85,000 odd financial advisors.

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Today, India sits as the cusp of greatness both in its potential and in its achievements. Some
argue that it has already crossed that threshold and is destined for greatness no matter what.
MNYL believes that there are examples of this greatness all around and is proud to chronicle it
for our collective inspiration.

MNYL’s philosophy of ‘Karo Zyaada ka Iraada’ is a salute to all those who happily challenge
status quo and push the boundaries in the search and in the creation of a bigger, brighter
tomorrow.

The dream of a larger good is no longer confined to a limited few. MNYL intends to awaken
today’s India to re-look at itself, its realities and the possibilities and new ways to progress
through its new business philosophy. ‘Karo Zyaada ka Iraada’ appears at a time when people are
happier if we could articulate and then live our ambitions.

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POSITIONING:-

In order to achieve superior brand positioning, any marketer has to address three basic questions,
which are:

Who is the target group; what is the value proposition to them; is the communication effective or
not.

Positive answers to the above questions indicate that the company’s brand positioning is
successful and that the customers are receptive 2 the product.

The target groups for MNYL

1. People in the age group of 30 – 45 years

2. People in the age group 20 – 50 years

3. People in the age group 18 – 70 years

4. Health conscious people

5. Large families

6. Rural and semi urban masses

Value propositions to the target groups (in the same order followed for target groups)

• On the basis of age demographics several children plans were there to target the segment
of people who lie within 30-45 years of age and for the education of their children. This
target groups also includes married couples who are interested in securing the future of
their children. Children's Endowment to 18 (Par) Plan, which provides an option to buy a
permanent life insurance policy without medical underwriting. With the Stepping

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Stones™ (Par) Plan, the customers are entitled to make withdrawals for any unplanned
expenses.
• Various plans like 20 year endowment plan, whole life participating plan etc. and various
life plans have been designed exclusively for this target group.
• For this target group, pension plans have been designed to facilitate the customers to
derive benefits post retirement.
• Various plans like Life maker premium plan, Life line safety net etc. have been designed
to help customers derive benefits through health insurance policies.
• MNYL's Five Year Renewable and Convertible Term Insurance (Non-Participating) is
particularly useful as a short-term protection plan. An important feature of this policy is
that it allows the insured to convert the policy to a regular policy during the tenure of the
policy.
• Max Vijay is a policy aimed to provide benefits to the rural and semi urban people.

Is the communication proper?

MNYL has adopted an all persuasive brand positioning. The new television commercial (TVC)
highlights the fact that today it is a general human tendency to desire and aim for more as against
the old mind set of being content with whatever one has. The present trend is to dream bigger
and a brand should partner that dream. MYNL believes that it is the age of consumerism and
hence they its better to partner with their customers in their ambitions. The creative strategy
captures that spirit. Through the TV commercial they have tried to highlight basic human
tendency of 'Desire for More'.

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In addition to the TVC, MNYL have gone for the whole nine yards in terms of its marketing
activities. As a part of its online promotions, MNYL has designed a game in the form of question
and answer to not just engage better with the customers but also add to its database. The
company had also advertised on websites.

The company had promoted itself through malls, the Delhi Metro, traffic police stands, Mumbai
railway stations and television programs such Big Boss, and Zee TV’s Sa Re Ga Ma and also
targeted the news channels.

Nearly, 60 per cent of the marketing budget was spent on mass media and the rest 40 per cent
on below-the-line (BTL) activities.

Media mix:

MNYL had shifted its strategy from being a lot on 9 pm English news channels to
mainstream popular family programmes. They have done a lot of digital advertising as well.
They have concentrated on TV by choice as part of their strategy.

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TWO WAY STRETCH

MNYL, in order to achieve a higher market reach, has adopted a two way stretch. According to
this strategy, MNYL has designed and delivered products and services for the two major
segments – affluent segment and the lower strata segment of the Indian population.

1. Up – Market Stretch :

Life Maker™ Premium Investment Plan

MNYL wants to cash in on the affluent class’s mentality to think beyond basic necessities of life
i.e. Food, Clothes and Shelter. The latest Life Maker™ Premium Investment Plan gives
consumers a lot of choices - especially when they are looking for Great life style, Big Home,
their own well established Business and top of all - Protection for their family. Max New York
Life Insurance provides customers a powerful investment-cum-insurance plan where they can
direct their investments in the customized unit linked funds such as equities, money market
instruments, investment grade corporate bonds, and government securities. These funds offer a
wide range of returns based on market returns. Customers can choose to invest their premiums in
one or more of these funds, depending on their risk taking ability.

The switching feature of this policy provides customers the facility to change the investment
pattern by moving from one fund to other fund(s) amongst the funds offered under this contract.
In case of unforeseen urgent needs; the plan ensures easy liquidity to the customers by accessing
their fund through surrender benefit.

2. Down market stretch (Max Vijay) :

Max Vijay is a savings cum life insurance plan aimed at the rural masses. This plan has been
designed keeping in mind the lifestyle, income patterns and the needs of semi urban and rural
people. It empowers millions of Indians to benefit from the economic boom in financial services
that was hitherto denied to them. 'Max Vijay-Insurance Savings Box' or "Bima Gullak" combines

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the best of insurance and savings and gives customers a means to aggregate his earnings in a
structured and well-planned manner.

UPMARKET STRETCH

DOWN MARKET STRETCH

This kind of two-way stretch helped MNYL to gain the market dominance in the microinsurance
category.

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Emerging Trends in the Insurance Sector:

Micro-insurance

The concept of micro insurance is to provide insurance to people living in rural areas & to people
living below the poverty line. As Majority of India’s population is concentrated in the villages &
most of them don’t have access to any financial products. Hence the opportunity is huge as it is
an untapped market.

According to IrDA, micro insurance products are those that provide term cover of between Rs
5,000 and Rs 50,000 for 5-15 years, or are endowment policies for 5-15 years that provide
insurance of between Rs 5,000 and Rs 30,000.

As Micro Finance sector is in evolving phase, Innovations are required at all stages for products,
in pricing policy and in delivery channels.Success of marketing micro insurance depends on
understanding the social and cultural needs of the target population. Clients should also receive
price differentials for using different channels. Groups & their promoters can provide ideal
platform to kick start the micro insurance.

MNYL has targeted this segment with its MAX VIJAY product, which takes into account the
unique needs of this audience. Max Vijay offers financial inclusion for a 10-year period, for
minimum enrolment premium options of Rs 1,000, Rs 1,500 and Rs 2,500, respectively, and does
not require compulsory time-bound renewals. Customers are given a privilege to deposit
premiums any time from as low as zero to Rs 2,500 per day at their nearby retail shop or NGO.

“Max Vijay has received an encouraging response from the market, having provided financial
inclusion to over 55,000 households and has reached average sales of 1,000 policies per day,”
Mehta said.

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SWOT Analysis
Strengths:-

• Strong corporate governance model

• Quality products

• Adaptability to changes

• Strong Brand name

• Large networks

• Leading company in insurance sector

• Diversification of funds

• Well Efficient Management

Weakness:-

• Less awareness about all products of life insurance in market

• Low advertising

• Focus only on URBAN areas

Opportunities:-

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• Fast growing economy

• Scope for opening of new branches in state/country

• High growth of ULIP industry

• Increasing population will increase in insurance business

• Increasing per –capita income in India

• Catering to the untapped Rural and Semi-Urban market

Threats:-

• Market uncertainty (Recession)

• Consumers do not invest easily

• Arrival of new entrants in the insurance industry.

• Cut throat competition within the industry

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LITERATURE REVIEW

MAX LIFE UNVEILS NEW SERVICE

Financial Chronicle

Max New York Life Insurance has launched electronic fund transfer facility for settling
policyholders' claims.

WE’RE FOCUSING ON ‘GUARANTEED’ PRODUCTS: MNYL

K.R. Srivats
The Hindu Business Line

As life insurers adjust to the new market reality, they are recalibrating their marketing strategies
to cope with the economic downturn. The current slowdown is being seen as an opportunity to
make more gains and strengthen brand visibility.

Impact of economic downturn on Max New York Life Insurance:

For the first time, there has been negative growth in the industry in December 2008. Hence there
is a need for a more balanced portfolio. What the customer is seeking at this point of time is more
traditional products that have a safety aspect built into them. A company like MNYL has such
products, and it has approached customers upfront, saying their money is safe with the company.
It is important to have a balanced product suite from a company perspective.

Company’s marketing strategy:

MYNL is making a conscious effort to move our portfolio focus from being highly skewed
towards pure equity-linked investment products to a more balanced mix of traditional savings
instruments that provide capital protection and guaranteed returns.

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The new products that could be introduced in these tough times:

MNYL have more or less a comprehensive product suite. There will be additional focus on
introducing more products on the guaranteed space. In the next six months, that is going to be the
focus. They are working on launching guaranteed products. Health is an area un-impacted by
recession. MNYL has 5 health products, in different variations. In future, they have planned for
additional products on pension.

Curtailment of advertisement expenses in these tough times:

Not really a dip in spends but there’s stricter control on the return on investment. Marketing
budgets are a function of business. The advertisement-to-sales ratio has not gone down. MNYL
has got budgets that are aligned to business needs.
The linkage with lead-generation and meeting business objectives will be of prime importance,
hence online and on-ground activities might witness additional focus.
Also, sharper segmentation, focused activities, tighter control on spends and ensuring maximum
bang for each marketing dollar being spent.

Marketing initiatives to sustain brand visibility:

The activities we’re consciously undertaking are ones that educate and engage our consumers
about the benefits of investing with a long-term horizon and hence how life insurance has a
stronger role to play in times like these, even more so than when the going is good anyway.’

Karo Jyada Ka Irada’ — what has been the response to this campaign launched six months
ago?
The new brand campaign has been instrumental in ensuring the brand breaks through the ad-
clutter in life insurance advertising. The same is visible via an unprecedented surge in our brand
metric measures for the year 2008.
When we launched ‘Karo Jyada Ka Irada’, we did not see it as a return of investment
proposition. Because it is a financial product, people see that very literally.

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The representation is dreams and aspirations — you get into long-term investments for fulfilling
those dreams and aspirations.

MAX NY LIFE LAUNCHES ELECTRONIC FUND TRANSFER

Business Standard

Max New York Life Insurance today announced the launch of Electronic Fund Transfer of
claims payment for its policyholders.
The idea behind launching EFT is to cut down on the settlement period to ensure smooth and
hassle-free settlement of claims, a company release said.
"Approved claims can now be settled within 72 hours of submitting all documents", it said.
"The amount due under the settlement of claims will be credited directly into the claimant's bank
account enabling us to reach the bereaved families at the earliest and when most needed", the
release added.

INNOVATION FLASH ISSUE 2, FEBRUARY 2009, THE NEWSLETTER OF

MICROINSURANCE INNOVATION FACILITY:

Max New York Life Insurance Company Ltd has developed ‘Max Vijay’, a business model
designed to serve 100 million low-income households in India by improving access to life
insurance and minimizing transaction costs. The model is based on extensive and widespread
distribution of a simple, tangible savings and insurance product through non-conventional
insurance channels like small retailers, NGOs and MFIs, and leveraging IT, including handheld
terminals, mobile phone and Internet portals, to manage payments that are likely to be small and
irregular. The Facility grant will support the purchase of low cost, Wireless, printer integrated
hand-held terminals (HHT) that can be used to collect small amounts at convenient locations.

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The grant will also be used to test new technology methods using mobile phones and Internet
portals

BT- Mercer-TN survey places Max New York life insurance among “BEST COMPANIES
TO WORK FOR IN INDIA”

Max New York Life Insurance, India's leading private life insurance company, emerged as one
of the best employer in the recently announced Business Today-Mercer-TNS Survey of 'The
Best Companies to Work For in India'.

Max New York Life Insurance was ranked 7th in the survey and the best life insurance
company to work for in India. The top ranking in the survey, reiterates relentless focus on
making Max New York Life a great place to develop work, maximize potential and build careers.

As one of the most premium survey for best employers in India; a four-pronged methodology -
i) HR Metrics
ii) HR Processes & Policies
iii) Employee Perception
iv) Stakeholder Perception
forms the basis for the survey. Max New York Life was a great performer in the Employee
Satisfaction Level - one of the parameter of BT-Mercer-TNS Survey.

BT Survey identifies Max New York Life as an excellent nurturing ground for grooming talent
systematically; which undoubtedly makes it a leader in HR practices.

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BIBLIOGRAPHY

 Marketing management by Philip Kotler

 www.maxnewyorklife.com

 www.4psbusinessandmarketing.com

 www.wikipedia.com

 www.thehindubusinessline.com

 www.business-standard.com

 www.financialexpress.com

 www.businessweek.com

 www.afaqs.com

 www.investing.businessweek.com

 www.mydigitalfc.com

 www.nextbillion.net

 www.business.mapsofindia.com

 www.info2india.com
 http://www.researchandmarkets.com/reports/223363
 http://www.nabard.org/pdf/report_financial/Chap_XI.pdf

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