A

PROJECT REPORT

ON

“ MARKETING MIX AND STATEGIES IN INSURANCE

SECTOR”

With reference to
IDBI FEDERAL LIFE INSURANCE

In Partial fulfillment for the Award of the Degree of

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

Submitted by
G. D ANIL KUMAR
(Regd No. 1209-18-684-050)

Under the esteemed guidance of

Mr. Satya Swaroop Roy, MBA, (Ph.D.)
Assistant. Professor

Department of Management
ST. MARY’S COLLEGE, YOUSUFGUDA, HYDERABAD
(AFFILIATED TO OSMANIA UNIVERSITY)
2018-2021
 DECLARATION

I hereby declare that the project work titled “MARKETING MIX AND
STATEGIES IN INSURANCE SECTOR” with reference to “IDBI FEDERAL
LIFE INSURANCE”, is a bonafide work done by me for the award of the degree of
“Bachelor of Business Administration” (BBA), from Osmania University, done
under the guidance of Mr. Satya Swaroop Roy. M, Assistant Professor,
Department of Management, St. Mary’s College, during the academic years 2018 –
2021 and it has not been submitted to any other University or Institution for the
award of any Degree or Diploma.

Faculty Guide: Name: G. D ANIL KUMAR

Mr. Satya Swaroop Roy. M Regd. No: 1209-18-684-050
Assistant Professor
Department of Management
St. Mary’s College
Yousufguda, Hyderabad
 CERTIFICATE

This is to certify that the project titled “MARKETING MIX AND

STATEGIES IN INSURANCE SECTOR” with reference to “IDBI FEDERAL
LIFE INSURANCE”, being submitted by G. D ANIL KUMAR in partial fulfillment
for the award of the degree of Bachelor of Business Administration (BBA) from
St.Mary’s College, Yousufguda, is a record of bonafide work carried out by him
under my guidance and supervision.

DATE: 17-07-2021 (Mr. Satya Swaroop Roy .M)

PLACE : Hyderabad Assistant Professor

(Mr. M. Bobby)

HOD, Department of Management

St. Mary’s College

Yousufguda, Hyderabad
 ACKNOWLEDGEMENT

It is of great pleasure to take this opportunity to acknowledge and express my

gratitude to all those who helped me throughout my project work.

First of all I would like to thank the Osmania University for having projects
as a part of BBA.

I express my sincere thanks to Mr. J. Mathew George, Principal, St.

Mary’s College for giving me permission for taking up my project work.

I thank Mr. M. Bobby, HOD, Department of Management, St. Mary’s

College, for giving me the opportunity to take up the project work and helping me
throughout the project.

I like to thank Mr. Satya Swaroop Roy. M, Asst. Professor, Department of

Management, for his/her valuable guidance and support for the completion of my
project work.

Finally I would also like to thank all my faculty in the Department of

Management, St. Mary’s College, for their enduring support throughout my BBA
Program.

Name: G. D ANIL KUMAR

Regd. No: 1209-18-684-050

 Abstract of Work Done

Life insurance business is booming in India. The business of life insurance is related to the protection of the
economic value of human life and this project is just offered to draw the attention of individuals, who are
interested in life insurance business running by Insurance Regulatory Development Authority (IRDA).

Insurance industry has Ombudsmen in 12 cities. Each Ombudsman is empowered to redress customer grievances
in respect of insurance contracts on personal lines where the insured amount is less than Rs. 20 lakh, in
accordance with the Ombudsman Scheme. Addresses can be obtained from the offices of LIC and other insurers.

This project is like just an extract of my rigorous work in Life Insurance Companies, and I hope the beneficiaries
‘decision regarding recruitment of advice; or, all information and data. This responsibility really in hence my
effective communication and convincing power and such quality will help me in near future for having decision
making.

This project aims to achieve primary objectives, i.e. learning in depth about marketing strategies in Insurance
Sector and promotional strategies in an insurance sector and assisting the company, IDBI Federal Life Insurance
Co. The first step was to understand in depth about the various types of strategies that affect the organizations in
the modern day. Following chart is a brief idea about it:-
 Fig-1: Strategy Map

EXECUTIVE SUMMARY

I, K.PUSHPAK 1201917684011, student of SMC Hyderabad successfully completed my Summer

Internship at IDBI Federal Life Insurance Company Limited, a leading insurance company in India.

Organization Description

Type: JointVenture(of IDBI Bank, Federal ageas)

Industry: Life Insurance

Founded: March 2008

Headquarters: Mumbai, India

Key People: Vignesh Shahane, CEO and Whole Time Director
License/Regulatory Body: Received license from Insurance Regulatory and Development Authority of India
(IRDAI).

Title of the Internship Report

Marketing mix and Marketing strategies in IDBI FEDERAL using fundamental and technical tools.
Objective of the Internship

To understand the importance of insurance and make others realize the same, to learn about the various
marketing strategies used in IDBI federal as well as to understand the marketing mix and swot analysis of IDBI
federal. Also to estimate the competition by using porter’s five forces model.

Background

Although insurance has been known to exist in some form or other since 3000 B.C, major populations of India
are not aware of the same even today. It is our duty to create the awareness among people and IDBI Federal Life
Insurance Co. will play vital role in it. In India, the principle of life insurance was reflected in the institution of
the joint-family system which is said to be one of the best forms of life insurance down the ages. The break-up of
the joint family system and emergence of the nuclear family in the modern era, coupled with other difficulties has
made it necessary to evolve alternative systems for security. Here lies the importance of insurance.

Methodology Used
Analysis and research is done in order to understand the limitations that the company is facing and the
different challenges it can face in future.
 INDEX

CHAPTER CONTENTS PAGE NO.

1.1 INTRODUCTION
1.2 NEED OF THE STUDY
1.3 OBJECTIVES OF THE STUDY
CHAPTER-I
1.4 METHODOLOGY OF THE STUDY 1-11
1.5 SCOPE OF THE STUDY
1.6 LIMITATIONS OF THE STUDY
1.7 SOCIAL RELEVANCE

CHAPTER - II REVIEW OF LITERATURE 12-18

CHAPTER - III INDUSTRY PROFILE 19-25

CHAPTER - IV COMPANY PROFILE 26-44

CHAPTER- V FUNCTIONAL ANALYSIS 45-52

CHAPTER - VI DATA ANALYSIS AND INTERPRETATION 53-59

FINDINGS 60
CHAPTER - VII SUGGESTIONS 61-62
CONCLUSION 63

. BIBLIOGRAPHY. 64
ANNEXURE 65-68
CHAPTER - I

1
 1.1 INTRODUCTION

The Indian insurance industry has undergone transformational changes since 2000 when the industry was
liberalized. With a one-player market to 24 in 13 years, the industry has witnessed phases of rapid growth
along with extent of growth moderation and intensifying competition. There have also been a number of
product and operational innovations necessitated by consumer need and increased competition among the
players.

Changes in the regulatory environment also had a path-breaking impact on the development of the
industry. While the insurance industry still struggles to move out of the shadows cast by the challenges
posed by economic uncertainties of the last few years, the strong fundamentals of the industry augur well
for a roadmap to be drawn for sustainable long-term growth. The decade 2001- 10 was characterized by a
period of high growth (compound annual growth rate of 31 percent in new business premium) and a flat
growth (CAGR of around two percent in new business premium between 2010-12).

There was exponential growth in the first decade of insurance industry liberalization. Backed by
innovative products and aggressive expansion of distribution, the life insurance industry grew at jet speed.
Regulatory changes were introduced during the past two years and life insurance companies adopted many
new customer-centric practices in this period. Product-related changes, first in ULIPs (Unit Linked
Insurance Plans) in September 2011 and now in traditional products, will have the biggest impact on the
industry.

This project involves an understanding of the marketing mix and finding out the various promotional
strategies presently implemented by IDBI Federal Life Insurance Co. Ltd. and to find out its effectiveness
through a study on consumer behavior towards these strategies.

Insurance industry is an industry which is said to be in its Golden period now. And IDBI Federal is a fast
growing company in this industry. IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank,
India’s premier development and commercial bank, Federal Bank, one of India’s leading private sector
banks and Ageas, a multinational

insurance giant based out of Europe. In this venture, IDBI Bank owns 48% equity while Federal Bank and

2
Ageas own 26%

Equity each. IDBI Federal endeavors to deliver products that provide value and convenience to the
customer. Through a continuous process of innovation in product and service delivery. IDBI intend to
deliver world-class wealth management, protection and retirement solutions to Indian customers. Having
started in March 2008, in just five months of inception it has become one of the fastest growing new
insurance companies to garner Rs 100 Cr in premium.

The company offers its services through a vast nationwide network across the branches of IDBI Bank and
Federal Bank in addition to a sizeable network of advisors and partner

This project aims in understanding the marketing mix which exists in the insurance industry. The
marketing mix is the combination of marketing activities that an organization engages in so as to meet the
needs of its targeted market.

The Insurance business deals in selling services and therefore due weight age in the formation of
marketing mix for the insurance business is needed. The marketingmix includes sub-mixes of the 7 P’s of
marketing i.e. the product, price, place, promotion, people, process & physical attraction.

This project also aims to help the company to achieve its objective by focusing on their promotional
strategies and to understand its effectiveness by understanding the customer perception towards these
strategies. There are insurance marketing strategies that can take any insurance agency from mediocre to
success when utilized correctly.

Breaking into a new business climate and finding customers is hard work, but when equipped with
innovative ideas and proven techniques, financial markets sales personnel can become extremely
successful. Getting an education and training is very important in every industry, sales is certainly no
exception. Those selling insurance will want begin their careers with the very best tools of the trade and
those with already established businesses that are in need of a motivational push will also gain great
benefits by researching and learning new insurance marketing tips.

3
Through this project we will be able to understand the promotional strategies implemented by the
company and also make an attempt to find out its effectiveness and suggest better promotional
strategies which would help in increasing the overall profitability of the company. Commercial
advertisements also create huge impact upon the minds of the customers hence this project also
focuses upon the role of advertising in this industry. Insurance industry is a service oriented
industry where promotional strategies play a vital role because this is an industry which deals with
intangible products. Hence it is very necessary that the company adopt the best marketing
strategies which help to communicate the product to the customer. With the help of questionnaires
and interviews, this project also aims to understand the perception of the customer regarding the
promotional strategies especially the commercial ads and thereby bringing the company more
closely to the customers’ heart.

Thus this project aims to study the promotional strategy the importance of these tools in creating
increased sales and customer base for the company.

4
 1.2 Need of the study

To understand the seven P’s (Product, Place, Price, Promotion, People, Process,
Physical evidence) of IDBI Federal Life Insurance Co. Ltd. and the promotional
strategies they are using to promote the insurance products. Understanding rolesand
functions of Marketing manager and factors affecting decisions of marketing
manager.New strategy has to think of to grow in this sector.
Insurance is the science of spreading of the risk: It is the system of spreading the
losses of an individual over a group of Individuals. Insurance is a method ofsharing
of financial losses: A few from a common fund formed out of contribution of the
many who are equally exposed to the same kind of loss, What is uncertainty for an
Individual becomes a certainty for a Group.
When it comes to ‘IDBI FEDERAL’, they don’t have financial products for rural
people. They don’t have any agricultural plan. IDBI does not believe in marketing.
They keep their brand value as strength and doing business.

5
 1.3 Objective of the study

The report seeks to achieve the following objectives:

a) Understanding marketing mix:

Marketing mix is a combination of factors that can be controlled by a company to influence consumers to
purchase its products .It is very important to understand this mix as they are different in nature from one
another and a response for one cannot be used to promote the organization from the other.

b) Assessment of strategies:
All the methods to market the products by preempting the procedures are worthless if one fails to assess
the magnitude of the type of risk involved. Hence it is equally important to assess the magnitude of risk
involved in the strategies to be adapted.

c) Understanding the impacts:

Risks being nothing but uncertainties function as catalysts in an unlikely situation
and their impact on the organization also differs from situation to situation. There will never be a condition
when the risks involved in a particular marketing strategy will have an equal impact over a business
concern.

d) Strategy Formulation:

Every organization forms a strategy for the marketing of product which is commonly referred to as the
Strategy Formulation. This strategies serves as guidance note as in this document, the organization lays
down what procedures are to be followed while marketing the product and what all steps are to be followed
in event of an unlikely situation.

6
 1.4 METHODOLOGY OF THE STUDY

In this project the method that will be followed are primary data and secondary data.

A) Primary Data :-

Data required for the study was collected through questionnaires. Questionnaires
were mailed to the respondents and few were handed over to them personally. Both
open ended and close ended questions are designed so as to know the opinion of the
customers relating to insurance and awareness about the brand IDBI FEDERAL and
how they respond to the marketing stimuli adapted by the company. The type of
questionnaire used in this project is structured. The questions are listed in
prearranged order and the respondents are informed about the purpose of collecting
information.

B) Secondary Data:-

Gathering data from internet and television, published articles, books, research
reports and other source.

7
 1.5 SCOPE OF THE STUDY

To understand the seven P’s (Product, Place, Price, Promotion, People, Process, Physical
evidence) of IDBI Federal Life Insurance Co. Ltd. and the promotional strategies they are
using to promote the insurance products. Understanding roles and functions of Marketing
manager and factors affecting decisions of marketing manager.New strategy has to think of
to grow in this sector.
Insurance is the science of spreading of the risk: It is the system of spreading the losses of
an individual over a group of Individuals. Insurance is a method of sharing of financial
losses: A few from a common fund formed out of contribution of the many who are equally
exposed to the same kind of loss, What is uncertainty for an Individual becomes a certainty
for a Group.
When it comes to ‘IDBI FEDERAL’, they don’t have financial products for rural people.
They don’t have any agricultural plan. IDBI does not believe in marketing. They keep their
brand value as strength and doing business.

A) Understanding marketing mix:

Marketing mix is a combination of factors that can be controlled by a company to influence

consumers to purchase its products .It is very important to understand this mix as they are
different in nature from one another and a response for one cannot be used to promote the
organization from the other.

8
B) Assessment of strategies:
All the methods to market the products by preempting the procedures are worthless if
one fails to assess the magnitude of the type of risk involved. Hence it is equally
important to assess the magnitude of risk involved in the strategies to be adapted.

C) Understanding the impacts:

Risks being nothing but uncertainties function as catalysts in an unlikely situation
and their impact on the organization also differs from situation to situation. There
will never be a condition when the risks involved in a particular marketing strategy
will have an equal impact over a business concern.

D) Strategy Formulation:

Every organization forms a strategy for the marketing of product which is commonly
referred to as the Strategy Formulation. This strategies serves as guidance note as in
this document, the organization lays down what procedures are to be followed while
marketing the product and what all steps are to be followed in event of an unlikely
situation.

9
 1.6 LIMITATIONS OF THE STUDY

Following points elucidate the limitations of the project:

A. Limited Access to information:

One part of the project includes assisting the company IDBI FEDERAL in formulating their own
marketing and promotional strategies. Due to access to only a limited piece of information, it is very
difficult to gather an exhaustive idea about the marketing and operational performance of the organization
which in turn creates difficulties in identifying and assessing the risks associated with the strategy adapted
by the organization. As disclosing the official details of the customers can lead to the violation of
company’s rules.

B. Limited Scope:

The scope of the project is limited to conceptual and marketing aspects of Life Insurance Companies and
doesn’t include Claim Settlement and the underwriting part of the operations which are equally important
aspect of learning

C. Methodological Error:

The methodology used for marketing is advertising and various promotional strategies like drawing
competition for children’s, conducting corporate presentations on the benefits of insurance for employees
. Hence, it has a probability of suffering with the errors related to promotional strategies and those related
to marketing methodology.

D. Low Quality Of Accuracy:

The survey conducted was more objective and completely based on the views of the correspondents. As
survey was conducted among the existing customers as well as with new prospective few of them replied
which resulting in low accuracy.

10
 1.7 SOCIAL RELEVANCE

Social media is an essential part of your marketing mix. Unlike any other form
of marketing social media allows you to engage directly with your prospects
and clients in a two-way/multi-way dialogue.

It allows other people to look over your shoulder and see what you have to say
and what others have to say about you. Social media allows you to connect
with your audience (ie, clients and prospects) in a way that:

• Demonstrates your authority and relevance

• Shows your personality

• Gives insights into the types of people you communicate with

and sorts of conversations you have

• See what others think of you

• Connects on a personal level

11
CHAPTER – II
REVIEW OF LITERATURE

12
 REVIEW OF LITERATURE

Literature no. 1

A study by Garg & Verma (2010), the insurance firms should focus on the concept of
marketing mix and implement the concept. They should quantify the level of expenditure for
their mix ingredients, study elasticity of the mix ingredients, carry out careful analysis in order
to identify the most effective and economic mix, analyze their competitors’ mix while
implementing marketing mix, review the whole mix in detail so that each segment gets its own
assemblage of mix components, and review their MM on a regular basis. The marketing
departments of the insurance firms should call other functional departments while developing
marketing mix and provide details of their thinking on the subject.

Literature no. 2

In the study by Abdalelah S. Saaty (2011), attempts to find out the factors important in
developing a suitable marketing strategy for insurance companies. It investigates the reasons
for buying insurance by the current users of insurance, reasons for not buying insurance by
non-users of insurance and the issues and problems faced by Saudi Insurance industry. The
results of the study show that the Social and regulatory factors played crucial role in the
consumer’s decision in purchasing insurance. However it was also found that the public at large
is unaware about the benefits of insurance, and various types of insurance products. The
insurance companies shall focus of promotional marketing strategies. The marketer’s primary
focus should be on promotional activities.

Literature no.3

A study by D’Andrea & Schleicher (2006). Attempts to understand the role of

promotions among other key drivers at determining consumer’s overall store price image
(OSPI) of grocery stores in Latin America, identifying its relative importance. Pricing is a
relevant issue to customers as well as for retailers. However, this research shows that price
promotions and its advertisement may blur the consumer’s possibilities of identifying which
retailer runs the best prices and minimizes their overall purchasing cost. At the same time, it

13
makes harder to the retailer to find which factors are more effective in forming the overall store
price image (OSPI). Further understanding of how OSPI is built seems necessary in order to
help retailers make the right decisions that will not confuse consumers.
However, a review of the literature shows that most of the studies have concentrated at
the product level, or have considered isolated variables. Our research was thenset for
understanding the relative importance of the different factors that form the OSPI, and consider
the differences towards price promotions across consumer segments and markets.

Literature no. 4

A study by Pulidindi Venugopal (2010). Attempts to understand the attitude of insured

on agents and promotional activities of life insurance companies Life Insurance is conceptual
and intangible in its nature and it is not understood by majority of the Indian population. Even
though every insurer knows that it is not bought and it has to be sold, there is a lot of gap among
promotional activities and advisors (agents). Hence it caused complications in marketing its
products. Making the uneducated, rural and economically backward people to understand the
insurance concept is a challenging task. Insurers may succeed if they develop separate
strategies for each segment. Promotional activities and agents of life insurance companies is all
about to inform, bringing awareness, develop belief, to reinforce trust etc. in the minds of the
consumers by using tools such as advertising, public relations, displays, word of mouth, sales
promotion, personal selling etc. Promotion bring positive attitude or may cause negative
attitude so knowing the feelings of respondents found essential.

Literature Review on Insurance Sector and penetration of Life Insurance

1) Aditya Nath Jha, (2014) studied proper analysis of various distribution channels in
life insurance industry in India has been done. Before privatization only individual insurance
agent was allowed to sell life Insurance. But After the IRDA Act, distribution channel further
expanded.

2) Anand Thakur, (2013) studied critical review of present marketing strategies in

health insurance sector has been availed and useful marketing ideas has been suggested.
Health insurance has vast potential in Indian insurance market. But at present, there are

14
limited products and less awareness resulting in poor penetration.

3) Anshuja Tiwari, (2012) evaluated bancassurance model of distribution of

insurance services has been discussed with reference to lift insurance industry. Insurance
sector was opened up in the year of 2000. Before that only individual insurance agent was
allowed to sell life insurance products But catering the need of industry IRDA introduced
several other distribution option like corporate agent, broker, direct selling and bancassurance.

4) Arvind Kumar Singh, (2014) studied the current scenario of life insurance sector
has been taken up. At present the market is moving rapidly and aggressively. There is
competition and force to more ahead. The features of this expansion strategy is hunting for
new business looking up for potential and grabbing it.

5) Arup Mazumdar, (2011) analyzed the broking system, challenges & opportunities
are discussed and new marketing concept as Relationship Model approach has been argued.
Indian insurance industry is growing fast after privatization and moving ahead.

6) Arnika Srivastava, (2012) studied the review of life insurance industry in the
country has taken up. Life insurance is the backbone of economy. LIC i.e. Life insurance
Corporation has monopoly in life insurance sector. But after the IRDA Act, the sector is
opened up for private Sectors.

7) Bidyadhar Padhi, (2013) emphasized the role and performance of private

insurance companies in Indian Insurance Sector after opening up of the sector in 1999 has
been examined and studied. Before liberazation, LIC & GIC had monopoly over the Sector.
But in the period of 2001 to 2012. 23 private insurance companies in life insurance sector and
28 private companies in General insurance sector started the business.

15
 8) Bhagabat Barik, (2014) A general study of life insurance sector in India has been
done. Life insurance is not merely an investment but it is a protective tool. The protection of
human being against calamities and financial compensation in term of death is the basic idea
of life insurance. Insurance is the fastest growing industry in the country.

9) B. Muthukrishnan, (2013) accessed health insurance sector in India has been

done. There is very less penetration of health insurance. Only 3% of the population has got
some what health insurance. Unfortunately health insurance is purchased only to save income
tax. The reason behind this is very poor level of awareness about health insurance products.

10) B. S. Bodla, (2012) studied ICICI Prudential Life Insurance Company is a leading
life insurance company in private sector. A study of this company has been done. Quality
service is the key for growth of any insurance company. Studied the quality of service is
accessed through following parameters. 1) Reliability 2) Responsiveness …….

11) B. Charumathi, (2012) reviewed the various factors which are affecting the
profitability of life insurance companies in India have been studied and discussed. Indian life
insurance industry has been ranked 9th largest market among 156 countries and 5th fastest
growing life insurance industry in the world.

12) D.Rajasekar, (2014) The SWOT analysis i.e. strengths, weakness, opportunities
and threats for bancassurance has been studied. Bancassurance is a distribution model for
insurance products. World bancassurance is a combination of bank insurance. Bank is a
vehicle which selling different types of financial products like loans, PPF, Money Transfer,
Share & debentures, deposits, etc.

13) G. Karunanithi, (2012) took overall review of performance and marketing

strategies of LIC of India. Before Privatization LIC has monopoly over the sector. But after
privatization now there 24 insurance companies in life insurance market. It has eroded LIC
share to 71% of the market. LIC was not able to tap all the market and more than 80% of the
population of India does not have any insurance cover.

14) Harpreet Singh Bedi, (2011) analyzed of business of life insurance before the
financial and economic reforms and after their reforms. Also present insurance scenario and
competitative environment has been discussed in detail. The investment strategy of LIC has
been studied.

15) Harmanpreet Singh, (2012) evaluated satisfaction level of female employees

working in insurance industry in India is critically analyzed. For this present scenario of
insurance sector and causes which produce stress on female employees has been studied.

16
 16) Ipsita Swain, (2012) Service delivery and relationship management in life
insurance industry has been critically analyzed. Quality of service is very important factor in
service industry. Life insurance is related to service industry. Customers satisfaction is key for
success in life insurance has been studied.

17) Joginder Singh Arora, (2011) the distribution channels in life insurance sector
has been critically examined from the period of 2001 to 2011. Distribution channels are
means to reach potential customers. The efficiency professionalism, effectively of the
distribution channels will directly result into the performance of the company.

18) Kavita Mahajan, (2013) studied quality of service in insurance sector is

analyzed and importance of delivery of quality service is stressed upon. Service is the key for
better performance. It is easy to get new business from existing customers by delivering good
service that to develop new business.

19) Kishor Kumar Meena, The impact of foreign investment in life insurance sector
has been studied. It is observed that private sector life insurance companies are breading life
insurance market and creating new business records. Easier it was LIC monopoly over this
Sector. Due to foreign investment, the needed capital is available. It has helped to boost life
insurance business in the country.

20) Kamal Gulati, (2012) studied customer satisfaction level and analyzed quality
of service and post sale relationship is very important. Many a times in Insurance industry, it
is assumed that “Sell it and forget it” nature of insurance agents and employees. But it is
Wrong.

21) Manoj Kumar Mishra, (2014) analyzed demand of life insurance. For this
annual financial data from the year 1970-71 upto 2009-10 has been considered. It is pointed
out that factors like income, inflation, interest rates, financial development, grows domestic
savings and the rate of growth of economy play vital role in creating the demand of life
insurance.

22) N. Prasanna Kumar, (2014) took overall review of Indian insurance market.
There are 52 insurance companies out of which 24 are in life insurance sector and 28 are in
general insurance sector. 8 companies belong to public sector and 44 companies are private
insurance companies.

23) Naresh Ramdas Madhavi (2014) studied and narrated about the growth potential
in insurance sector in India. There is huge potential as only 7% of the population has life
insurance cover and hardly 1% of the population has general insurance cover. Insurance

17
sector in India is ruled by Insurance Act 1938, LIC Act 1956, General Insurance Business Act
1972 and IRDA Act 1999. Insurance plays a vital role in development of economy.

24) Prarthana Shahi, (2013) evaluated the marketing strategies by LIC. After the
privatization through IRDA Act in 1999, now there are 23 private insurance companies
fighting for business with LIC. Before IRDA LIC had monopoly over insurance sector.

25) Preeti Upadhyay, (2013) The main objective has studied The Satisfaction level
of the policy folders. Simultaneously It is aimed to study the trends in insurance sector before
privatization and after a decade of privatization. Various products and plans offered by
insurance companies has been studied and awareness about public sector companies and
private sector companies has been analyzed.

26) R. Sridhar, (2013) It is emphasized that the growth of insurance sector in India
will go in hand with Public sector and private sector. 54 insurance companies are working in
India out of which 25 are in life insurance sector and 28 are in non life sector. Out of there 54
companies 8 companies are from public sector and remaining 46 companies are from private
sector. The penetration of insurance is improving in the country and density of insurance.

18
CHAPTER – III
INDUSTRY PROFILE

19
 INDUSTRY PROFILE

IDBI Federal Life Insurance Co Ltd. is a joint-venture of IDBI Bank, India's premier
development and commercial bank, Federal Bank, one of India's leading private sector banks
and Ageas, a multinational insurance giant based out of Europe. In this venture, IDBI Bank
owns 48% equity while Federal Bank and Ageas own 26% equity each. Having started in March
2008, in just five months of inception, IDBI Federal became one of the fastest growing new
insurance companies by garnering Rs.100 Cr in premiums. Through a continuous process of
innovation in product and service delivery IDBI Federal aims to deliver world-class wealth
management, protection and retirement solutions that provide value and convenience to the
Indian customer. The company offers its services through a vast nationwide network 2,308
partner bank branches of IDBI Bank and Federal Bank in addition to a sizeable network of
advisors and partners. As on March’31’2016 company has issued 8.23 lakh policies with sum
assured of 51,918 cores during the same period last year the company has issued 7.88 lakh
policies with a sum assured of 41,856 crores. They have achieved 40% growth on industry
growth of12%.IDBI Federal distributes its products through a multi-channel network
consisting of Insurance agents, Bancassurance partners (IDBI Bank, Federal Bank) Direct
channel, and insurance brokers.

IDBI Federal Life Insurance is one of India’s growing life insurance companies and
offers a diverse range of wealth management, protection and retirement solutions to individual
and customers.

IDBI Federal Life Insurance Co Ltd is a joint-venture of IDBI Bank, India’s

development and commercial bank, Federal Bank, one of India’s leading private sector banks
and Ageas, which is a multinational insurance giant based out of Europe

20
 Having commenced operations in 2008, IDBI Federal was able to achieve breakeven
within just 5 years; the Company’s passion for innovation and growth helped it achieved this
feat.

Through a nationwide network of 3, 014 branches of IDBI Bank and Federal Bank, and a
sizeable network of advisors and partners, IDBI Federal Life Insurance has achieved presence
across the length and breadth of the country. As on March 31, 2015, the company has issued
nearly 8.23 lakh policies with a sum assured of over 800crores.

Fig. 2. Equity Share of IDBI, FEDERAL AND AGEAS

ABOUT THE SPONSORS

IDBI Bank:

IDBI Bank Ltd., since its inception, India’s premier industrial development bank. It
came into being as on July 01, 1964 (under the Companies Act, 1956) to support India’s
industrial backbone. Today, it is amongst India’s foremost commercial banks, with a wide
range of innovative products and services, serving retail and corporate customers in all
corners of the country from 1082 branches and 1715 ATMs. The Bank offers its customers an
extensive range of diversified services including project financing, term lending, working
capital facilities, lease finance, venture capital, loan syndication, corporate advisory services
and legal and technical advisory services to its corporate clients as well as mortgages and
personal loans to its retail clients. As part of its development activities, IDBI Bank has been
instrumental in sponsoring the development of key institutions involved in India’s financial
sector –National Stock Exchange of India Limited (NSE) and National Securities Depository
Ltd, Stock Holding Corporation of India Ltd (SHCIL), Credit Analysis and Research Ltd
(CARL).

21
Federal Bank:

Federal Bank is one of India’s leading private sector banks, with a dominant presence
in the state of Kerala. It has a strong network of over 1104 branches and 1195 ATMs spread
across India. The bank provides over four million retail customers with a wide variety of
financial products. Federal Bank is one of the first large Indian banks to have an entirely
automated and interconnected branch network. In addition to interconnected branches and
ATMs, the Bank has a wide range of services like Internet Banking, Mobile Banking, Tele
Banking, and Any Where Banking, debit cards, online
bill payment and call center facilities to offer round the clock banking convenience to its
customers. The Bank has been a pioneer in providing innovative technological solutions to its
customers and the Bank has won several awards and recommendations.

Ageas:

Ageas is an international insurance group with a heritage spanning more than 180
years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to
concentrate its business activities in Europe and Asia, which together make up the largest
share of the global insurance market. These are grouped around four segments: Belgium,
United Kingdom, Continental Europe and Asia and served through a combination of wholly
owned subsidiaries and partnerships with strong financial institutions and key distributors
around the world. Ageas operates successful partnerships in Belgium, UK, Luxembourg,
Italy, Portugal, Turkey, China, Malaysia, India and Thailand and has subsidiaries in France,
Hong Kong and UK. Ageas is the market leader in Belgium for individual life and employee
benefits, as well as a leading non-life player through AG Insurance. In the UK, Ageas has a
strong presence as the fourth largest player in private car insurance and the over 50‟s market.
Ageas employs more than 13,000 people and has annual inflows of more than EUR 21 billion.

22
 Vision & Mission of IDBI Federal

1.31 Vision
“To be the leading provider of wealth management, protection and retirement solutions that meets the needs of
our customers and adds value to their lives”.
1.32 Mission
a) “To continually strive to enhance customer experience through innovative product offerings, dedicated
relationship management and superior service delivery while striving to interact with our customers in the most
convenient and cost effective manner”.
b) “To be transparent in the way we deal with our customers and to act with integrity”.
c) “To invest in and build quality human capital in order to achieve our mission”.
9

1.33 Values
a) Transparency : “Crystal Clear communication to our partners and stakeholders”.
b) Value to Customers : “A product and service offering in which customers perceive
value”.
c) Rock Solid and Delivery on Promise : “This translates into being financially
strong, operationally robust and having clarity in claims”.
d) Customer-friendly : “Advice and support in working with customers and partners”.
e) Profit to Stakeholders: “Balance the interests of customers, partners, employees,
shareholders and the community at large”.
1.4 Products of IDBI Federal Life Insurance Co Ltd.
IDBI Federal is providing various insurance policies for the commonwealth of the people and its customer in
particular. The various insurance policies provided by the company are:
a) Incomesurance
IDBI Federal Incomesurance Endowment and Money Back Plan is loaded with lots of benefits which ensure that
policyholder get Guaranteed Annual Payout along with insurance protection which will help policyholder to reach
their goals with full confidence. Incomesurance Plan is very flexible and allows policyholder to customise their Plan
as per your individual and family‟s future requirements. Moreover it also allows policyholder to choose Premium
Payment Period, Payout Period, Payout Options and more.

23
b) Wealthsurance
The Wealthsurance Milestone Plan is a unique Insured Wealth Plan designed to help cross different milestones in
one‟s life. It enables customers to save and build wealth under the protection of insurance to meet their financial
goals. The Wealthsurance Milestone Plan offers a wide range of Investment options, Insurance options and
unmatched flexibility that allows customers to customize a plan suited to their needs. This Plan comes with a wide
range of 13 investment options and 7 insurance benefits - all packaged with a low charge structure and unmatched
flexibility.

c) Termsurance
IDBI Federal Termsurance Protection Plan (Termsurance) comes with three cover options which policyholder can
select on the basis their requirement. Termsurance is designed with a host of benefits and options aimed at
satisfying their every need. It not only allows policyholder to customise their plan as per their individual and family‟s
needs, it also comes with a host of benefits like convenient insurance cover options, flexible premium payment terms,
choice of policy term and lots more flexible options.

d) Homesurance
IDBI Federal Homesurance Plan is a mortgage reducing term assurance plan – MRTA, which offers protection to
their home from their home loan. The Plan provides a cover equal to the outstanding balance of their home loan
against any unfortunate events that may occur to policyholder. This plan gives people the option of a Single Premium.

e) Childsurance
Whether policyholder‟s child wants to be a doctor, an engineer, an MBA, a sportsman, a performing artist, or
dreams of being an entrepreneur, the IDBI Federal Childsurance Dream builder Insurance Plan will keep you
future-ready against both, changing dreams and life‟s twists. It allows policyholder to create build and manage
wealth by providing several choices and great flexibility so that policyholder‟s plan meets their specific needs.
Childsurance allows policyholder to protect their child plan with triple insurance benefits so that their
wealth-building efforts remain unaffected by unforeseen events and their child‟s future goals can be achieved
without any hindrance.

f) Bondsurance
The IDBI Federal Bondsurance Advantage Plan is a single premium plan where policyholder needs to make just a
one-time investment. At the end of the chosen period, policyholder will receive a guaranteed maturity amount. In
case of death of the insured person before the Maturity Date, a guaranteed Death Benefit will be paid.

24
g) Group Microsurance
IDBI Federal Group Microsurance Plan provides affordable life insurance cover to groups.
This plan is extremely useful to Micro Finance Institutions, Self Help Groups and NGOs
to insure the lives of their group members and thus provide security to the group
members‟ families. The plan can also be used for providing loan protection to the group
members‟ families.

h) Retiresurance
A retirement plan designed to accumulate money to aid a comfortable retirement.
The plan provides a guaranteed return on investment and grows steadily over the years to
ensure that policyholder have a corpus on their retirement date, guaranteed.

i) Loansurance
Loansurance is a cost-effective way to ensure that the outstanding debt is settled in the
unfortunate event of death of the insured member. This term assurance plan provides
cover to a policyholder directly liable for loan repayment (and the partners, in case of a
partnership), as per the benefit schedule.

25
CHAPTER – IV
COMPANY PROFILE

26
 COMPANY PROFILE

IDBI Federal has line structure as its Organizational structure. Authority

flows from the top level to lower levels through various managerial positions.
There is vertical flow of authority and responsibility. Every person is
accountable to his immediate boss. There is limit on subordinates under one
manager. A manager has control only over the subordinates of his department.
Figure 3 shows the organizational structure of IDBIFLIC.

IDBI Federal Life Insurance Co Ltd.

IDBI Federal Life Insurance Co. Ltd. is a joint venture between three financial
companies Development and Commercial Bank, IDBI Bank, India‟s private sector
Bank, Federal Bank and European insurer Ageas (formerly Fortis). In this venture,
IDBI Bank owns
48% equity while Federal Bank and Ageas own 26% equity each. The Headquarter is
located in Mumbai, India. IDBI Federal started its operations in March 2008 and is
amongst the most successful start-ups in the Indian Life Insurance market.

27
1. Marketing Mix:

The term insurance marketing refers to the marketing of Insurance services with the
aim to generate profit and create customer through customer satisfaction. The Insurance
marketing focuses on the formation of an ideal mix for insurance business so that the
insurance organization survives and thrives in the right perspective.

The marketing mix is the combination of the marketing activities that an organization
engages in so as to best meet the need of its targeted market. The Insurance business deals in
selling services and therefore due weight age in the formation of marketing mix for the
Insurance business is needed.

The marketing mix includes sub-mixes of the 7p’s of marketing i.e., the product, its price,
place, promotion, people, process and physical attraction. The above mentioned 7p’scan is
used for marketing of Insurance products in the below manner as shown in figure 4:-

Fig 4: 7 P’s of Marketing Mix

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7P’S OF MARKETING MIX:

Following are the marketing mix to be used by management in Insurance sector:-

A. PRODUCT: A product means what we produce i.e., either a goods or services. A product
is both what a seller wants to sell and a buyer wants to buy. It can be both tangible and
intangible in nature. Insurance companies sell services, so services are their product. So
while deciding a product mix for their services the schemes should be motivational. When
a person or an organization buys an Insurance policy from the insurance company, he not
only buys a policy, but along with it the assistance and advice of the agent, the prestige of
the insurance company and the facilities of claims and compensation. It is natural that the
users expect a reasonable return for their investment and the insurance companies want to
maximize their profitability. Hence, while deciding the product portfolio or the product
mix, the services or the schemes should be motivational. IDBI Federal provides many
products which cater to the needs of the Indian customers. IDBI Federal products:

 CHILDSURANCE
 GROUP MICROSURANCE
 INCOMESURANCE
 LIFESURANCE
 LOANSURANCE
 TERMSURANCE
 WEALTHSURANCE

29
CHILDSURANCE:

Whether your child wants to be a doctor, an engineer, an MBA,

a sportsman, a performing artist, or dreams of being an entrepreneur, the IDBI Federal Child
insurance Dream bu ilder Insurance Plan will keep you future-ready against both, changing
dreams and life’s twists. It allows you to create build and manage wealth by

providing several choices and great flexibility so that your plan meets your specific needs.
However, what makes Child insurance a must-have for any parent who is looking to make
their child’s future shock –proof is its powerful insurance benefits. Child insurance allows
you to protect your child plan with triple insurance benefits so
that your wealth building efforts remain unaffected by unforeseen events and your child’s
future goals can be achieved without any hindrance.

Fig 5: Child insurance Plan

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INCOMESURANCE:

IDBI Federal Income insurance Endowment and Money Back Plan is

loaded with lots of benefits which ensure that you get Guaranteed Annual Payout along
with insurance protection which will help you to reach you goals with full confidence.
Income insurance Plan is very flexible and allows you to customize your Plan as per your
individual and family’s future requirements.
Moreover it also allows you to choose Premium Payment Period, Payout Period,
Payout Options and more.

Fig 6: Income insurance Plan

31
 The above example is applicable for 40 year old individual. Guaranteed annual payouts
are a percent of each annual premium. Premium shown are at the beginning of each policy
year and payouts are shown at the end of teach policy year.

LIFESURANCE:

IDBI Federal Life insurance Savings Insurance Plan is a fixed term non-
linked participating plan that provides you the twin
benefits of long- term savings and life cover. With Life insurance Savings,
your small savings will help you realize the big dreams that you have for yourself and your
family. This plan also offers you the benefit of life cover that will provide financial security to
your family in your absence. Despite all these tailored products there is still scope for
improvement in this field. The Group Insurance scheme is required to be promoted, the Crop
Insurance is required to be expanded and the new schemes and policies for the villagers or the
rural population are to be included. . The introduction of Rural Career Agents Scheme has
been found instrumental in inducing the rural prospects but the process is at infant stage and
requires more professional excellence. So there is lot of potential in insurance sector which is
waiting to be uncorked hence revealing to the economy the benefits of insurance industry.
The policymakers are required to activate the efforts. It would be prudent that the LIC is
allowed to pursue a policy of direct investment for rural development. Investment in
Government securities should be stopped and the investment should be channelized in private
sector for maximizing profits. In short, the formulation of product-mix should be in the face
of innovative product strategy. While initiating the innovative process it is necessary to take
into consideration the strategies adopted by private and foreign insurance companies.

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 Fig 7: Life insurance Plan

B. PLACE:

This component of the marketing mix is related to two important facets managing the
insurance personnel, and locating a branch. The management of agents and insurance
personnel is found significant with the viewpoint of maintaining the norms for offering the
services. This is also to process the services to the end user in such a way that a gap between
the services- promised and services offered is bridged over.
In a majority of the service generating organizations, such a gap is found existent
which has been instrumental in making worse the image problem. The transformation of
potential policy holders to the actual policy holders is a difficult task that depends upon the
professional excellence of the personnel. The agents and the rural career agents acting as a
link, lack professionalism. The front-line staff and the branch managers also are found not
assigning due weight age to the degeneration process. The insurance personnel if not managed
properly would make all efforts insensitive. Even if the policy makers make provision for the
quality up gradation, the promised services hardly reach to theend users.

33
 It is also essential that they have rural orientation and are well aware of the life styles
of the prospects or users. They are required to be given adequate incentives to show their
excellence. While recruiting agents, the branch managers need to prefer local persons and
provide them training and conduct seminars. In addition to the agents, the front-line staff also
needs an intensive training programmed to focus mainly on behavioral management. Another
important dimension to the Place Mix is related to the location of the insurance branches.
While locating branches, the branch manager needs to consider a number of factors,
such as smooth accessibility, availability of infrastructural facilities and the management of
branch offices and premises. The place management of insurance branch offices needs a new
vision, distinct approach and an innovative style. This is essential to make the work place
conducive, attractive and proactive for the generation of efficiency among employees. The
branch managers need professional excellence to make place decisions productive.

Thus the place management of insurance branch offices needs a new vision, distinct
approach and an innovative style. This is essential to make the work place conducive,
attractive and proactive for the generation of efficiency among employees. The
branch managers need professional excellence to make place decisions productive. IDBI
Federal has around thousands and thousands of insurance agents all over India to manage
their regional customers effectively. Also, IDBI Federal has over 1201 branches all over India
which help in increasing their customer base.

C. PRICE:

In the insurance business the pricing decisions are concerned with :

i. The premium charged against the policies

ii. Interest charged for defaulting the payment of premium and credit facility, and

iii. Commission charged for underwriting and consultancy activities.

With a view of influencing the target market or prospects the formulation of pricing
strategy becomes significant. In a developing country like India where the disposable income
in the hands of prospects is low, the pricing decision also governs the transformation of
potential policyholders into actual policy holders. The strategies may be

34
 high or low pricing keeping in view the level or standard of customers or the
policyholders. The pricing in insurance is in the form of premium rates. The three main
factors used for determining the premium rates under a life insurance plan are mortality,
expense and interest. The premium rates are revised if there are any significant changes in any
of these factors.

Mortality (deaths in a particular area): When deciding upon the pricing strategy the
average rate of mortality is one of the main considerations. In a country like South Africa the
threat to life is very important as it is played by host of diseases.

Expenses: The cost of processing, commission to agents, reinsurance companies as

well as registration are all incorporated into the cost of installments and premium sum
and forms the integral part of the pricing strategy.

Interest: The rate of interest is one of the major factors which determine people’s
willingness to invest in insurance. People would not be willing to put their funds to
invest in insurance business if the interest rates provided by the banks or other
financial instruments are much greater than the perceived returns from the insurance
premiums.

D. PROMOTION:

The insurance services depend on effective promotional measures. In a country like

India, the rate of illiteracy is very high and the rural economy has dominance in the national
economy. It is essential to have both personal and impersonal promotion strategies. In
promoting insurance business, the agents and the rural career agents play an important role.
Due attention should be given in selecting the promotional tools for agents and rural career
agents and even for thebranch managers and front line staff.
They also have to be given proper training in order to create impulse buying.
Advertising and Publicity, organization of conferences and seminars, incentive to
policyholders are impersonal communication Arranging Kirtans, exhibitions, participation in
fairs and festivals, rural wall paintings and publicity drive through the mobile publicity van
units would be effective in creating the impulse buying and the rural prospects would be
easily transformed into actual policyholders.

35
 IDBI Federal has also adopted various promotional strategies like:

 Commercial Ads
 Print Ads
 Events
 Personnel selling
 Word of mouth
 Viral marketing

They have brought out many interesting and humorous ads of their products such as
Life insurance, Income insurance, Child insurance etc which has got very good response from
customers. They have also conducted events with an aim to create interest around
financial planning with Life Insurance at branches which was critical to getting prospects
interested in IDBI Federal products. Building an engagement process around the solution
being offered gives an additional boost to this cause. Spelling Bee was a specially
created spelling contest created to connect with children. The philosophy of this module
hinged around making learning fun. The event was timed to coincide with Children’s day in
November 2010. The spellings to be completed

E. PEOPLE:

Understanding the customer better allows in designing appropriate products. Being a

service industry which involves a high level of people interaction, it is very important to use
this resource efficiently in order to satisfy customers. Training, development and strong
relationships with intermediaries are the key areas to be kept under consideration. Training
the employees, use of IT for efficiency, both at the staff and agent level, is one of the
important areas to look into. IDBI Federal has created various financial products which have
been tailored according to the needs of the customers. They have over thousands of sales
personnel who are trained efficiently to bridge in the gap between the customers and the
company.

36
F. PROCESS:

The process should be customer friendly in insurance industry. The speed and
accuracy of payment is of great importance. The processing method should be easy and
convenient to the customers. Installment schemes should be streamlined to cater to the ever
growing demands of the customer. Installment schemes should be streamlined to cater to the
ever growing demands of the customers. IT & Data Warehousing will smoothen the process
flow. IT will help in servicing large number of customers efficiently and bring down
overheads. Technology can either complement or supplement the channels of distribution
cost effectively. It can also help to improve customer service levels. The use of data
warehousing management and mining will help to find out the profitability and potential of
various customers product segments. IDBI Federal cushions their customers with their
services in such a way that the whole process involved is simple and convenient for them.
They have trained personnel to convert the prospective clients to net worthy customers.
The whole process starts off with meeting the prospect client and making them
understand the product and finally closing the deal .They also categorize their
high net worth customers from others. The customers are also given a set of choices for their
mode of payment. They also get the forms and bonds delivered to their door step thus making
the whole buying process very simple and tension free

37
G. PHYSICAL DISTRIBUTION:

Distribution is a key determinant of success for all insurance companies. Today, the
nationalized insurers have a large reach and presence in India. Building a distribution network
is very expensive and time consuming. If the insurers are willing to take advantage of India’s
large population and reach a profitable mass of customers, then new distribution avenues and
alliances will be necessary .Initially insurance was looked upon as a complex product with a
high advice and service component. Buyers prefer a face-to-face interaction and they place a
high premium on brand names and reliability. As the awareness increases, the product
becomes simpler and they become off-the-shelf commodity products. Today, various
intermediaries, not necessarily insurance companies, are selling insurance. For example, in
UK, retailer like Marks & Spencer sells insurance products. The financial services industries
have successfully used remote distribution channels such as telephone or internet so as to
reach more customers, avoid intermediaries, bring down overheads and increaseprofitability
.A good example is UK insurer Direct Line. It relied on telephone sales and low pricing.
Today, it is one of the largest motor insurance operators. Technology will not replace a
distribution network though it will offer advantages like better customer service. Finance
companies and banks can emerge as an attractive distribution channel for insurance in India.
In Netherlands, financial services firms provide an entire range of products including bank
accounts, motor, home and life insurance and pensions. In France, half of the life insurance
sales are made through banks. In India also, banks hope to maximize expensive existing
networks by selling arrange of products. It is anticipated that rather than formal ownership
arrangements, a loose network of alliance between insurers and banks will emerge, popularly
known as bancassurance. Another innovative distribution channel that could be used is the
non-financial organizations. For an example, insurance for consumer items like fridge and
TV can be offered at the point of sale. This increases the likelihood of insurance sales.
Alliances with manufacturers or retailers of consumer goods will be possible and insurance
can be one of the various incentives offered .IDBI Federal has built avast network of
distributors and agents because a face to face interaction is mostly preferred by the
customers. Also, they have formed alliances with IDBI Bank and Federal Bank through
which they have been able to tap the bank customers too.

38
PROMOTIONAL STRATEGIES FOR INSURANCE COMPANIES:
Promotional strategies are very important especially in a service oriented sector
because it deals with intangible product. Insurance is a field where much effort is required in
making people understand about the product and educate them about its features. Every
insurance company put their best efforts in formulizing promotional strategies which attract
people to their company and product. Push strategy is followed in insurance industry. This is
the strategy used when the manufacturer uses its sales force and trade promotion money to
introduce intermediaries to carry, promote and sell the product to its end users.

Fig.8: Promotional Strategies for insurance industry

39
 Consumers today value information. We live in the information age, and the savvy,
faithful customer is one that has knowledge about the products and services offered. The next
most valuable insurance marketing tips include the salesperson being the source of financial
information for the client. Newsletters, email updates, and notifications will keep customers
informed about issues surrounding insurance and other financial programs.
There are creative ways to approach these insurance marketing strategies. Newsletters
could include contests, special interest areas for kids, safety concerns, and economic updates.
There could even be an area for customer spotlights, or encouraging testimonies of how the
customers were helped through the office. Of course, all new products and services should be
showcased in any informative hard copy or email communication.
There are insurance marketing strategies that can take any insurance agency from
mediocre to success when utilized correctly. Breaking into a new business climate and
finding customers is hard work, but when equipped with innovative ideas and proven
techniques, financial markets sales personnel can become extremely successful. Getting an
education and training is very important in every industry, sales is certainly no exception.
Thoseselling insurance will want begin their careers with the very best tools of the trade and
those with already established businesses that are in need of a motivational push will
also gain great benefits by researching and learning new insurance marketing tips. Key
insurance marketing strategies will always include an in-depth review of the value of
follow-up. All successful sales agents understand that consumers need to be contacted again
and again in order to make a vital connection. Also, great follow-up protocol lets the potential
customer know that good, solid customer service will be part of the over-all package.
Follow-up says to a consumer that they are important, thought of, and that their business
would be greatly appreciated. The consumer today not only wants a product at a great price,
they also want a personal relationship, especially when it comes to financial system sales,
such as various insurances. Letters and phone calls are gentle reminders that the salesperson
intends to serve with his or her whole heart. And, once a sale is secured, a thank you call is
strongly advised. Those in this industry will also want to keep constant contact with existing
customers, too. The competition is fierce today, and no one wants to lose a customer to the
next guy or service to come along. Clients that have had no contact for a period of time
loose loyalty. Keep birthday and anniversary postcards going into the home
on a regular basis. Keeping a name before a consumer will keep a name in

40
their conscience. A small gift or token of appreciation is also a means for keeping customers
loyal. Christmas goody packages or dinner out certificates will leave lasting impressions on
consistent customers. These are few necessary tips which will help any insurance company to
take its business to the path of success. Community marketing is another great way to get
advertising and name recognition. Successful networkers join local community agencies,
such as the local Chamber of Commerce, and sign up to help in activities. This is a great way
to get name and photographs listed in newspaper articles and other media avenues. Also,
charity work cannot only be greatly beneficial to the community and those served, but may
also open doors to communicating with other volunteers, who could be potential clients.
People enjoy using services extended by like- minded providers. Creating a sense of
community is extremely important to insurance marketing strategies. There are other
insurance marketing tips and resources available and insurance agents may find investigating
several options to be beneficial. Many marketing support companies offer email or
publication updates, sharing information and techniques that are proven to bring in success.
Agents may want to browse the Internet and find a few different insurance marketing tips
programs to choose from. Not only will these resources help keep salespersons abreast of the
latest strategies, but these support programs can also create a sense of community and an
opportunity for agents to share their own struggles and challenges with others in the field.
Perhaps the most important insurance marketing tips are tips that speak of integrity and
honest business dealings. There are so many scams in various industries today; consumers are
looking for products and services that they can trust. Building trust will be crucial to keeping a
business growing in a stable direction. The most effective and followed modes of
communication are:

Promotional strategies at IDBI FEDERAL

1. ADVERTISING: Advertising reaches geographically dispersed buyers it can build up a

long term image for a product or trigger quick sales. Certain forms of advertising such as
television can require a large budget were as other forms such as newspapers do not. Just the
presence of advertising might have an effect on sales. Consumers might believe that a heavily
advertised brand must offer “good value”. Because of the many forms and a use of advertising
it is worth wise to note few observations. IDBI FEDERAL have brought out many interesting
and humorous ads of their products such as Wealth insurance, Income

41
insurance, Life insurance, Child insurance etc. which has got very good response from
customers.
 Pervasiveness: Advertising permits the seller to repeat a message many times it also
allows the buyer to receive and compare the messages of various competitors large
scale advertising says something positive about the sellers’ size, power and success.
 Amplified Expressiveness: Advertising provides opportunities for dramatizing the
company and its products through the artful use of print, sound and color.
 Impersonality: The audience does not feel obligated to pay attention or respond to
advertising. Advertising is a monologue in front of, not a dialog with the audience.
They have brought out many interesting and humorous ads of their products such as
Wealth insurance, Income insurance, Life insurance, Child insurance etc which has
got very good response from customers

A) SALES PROMOTION: Companies use sales promotion tools like coupons, contest,
premiums, and the like to draw a stronger and quicker buyer response, including short run
effects, such as highlighting, product offers and boosting sagging sales. Sales promotion tools
offer three distinctive benefits:-

 Communication: they gain attention and may lead the customer to the product.
 Incentive: They incorporate some concession, inducement, or contribution that gives
value to the customer.
 Invitation: They include a distinct invitation to engage in the transaction now. This
mode of communication is mostly followed by insurance companies because this
sector deals with a product which requires the full knowledge of the customer.

B) PUBLIC RELATIONS AND PUBLICITY: Marketers tend to underuse public

relations yet a well thought out program coordinated with the other communication mix
elements can be extremely effective, especially if accompany needs to challenge
consumer’s misconceptions. A company can generatebrand awareness either by creating
good will or negative buzz to capture the attention of customers. The appeal of public
relations and publicity is based on three distinctive qualities:

42
  High Credibility: News, stories and features are more authentic and credible to
readers than ads.
 Ability to catch buyers off guard: Public relations can reach prospects that prefer to
avoid salespeople and advertisements.
 Dramatization: Public relations have the potential for dramatizing a company or product.

C) EVENTS AND EXPERIENCES: Events and experiences reach out to thecustomer

and can be used for brand- building as well as selling products. There are many
advantages to events and experiences.

i. Relevant: A well-chosen event or experience can be seen as highly relevant

because the customer gets personally involved.
ii. Involving: Given their live, real time quality, events and experiences are more
actively engaging for customers.
iii. Implicit: Events are an indirect “soft sell”.

IDBI Federal have also conducted events with an aim to create

interest around financial planning with Life Insurance at branches which was critical to
getting prospects interest ed intheir products. Building an engagement process around the
solution being offered gives an additional boost to this cause. Spelling Bee was a specially
created spelling contest created to connect with children. The philosophy of this module
hinged around making learning fun. The event was timed to coincide with Children’s day in
November 2010. The spellings to be completed revolved around visual and verbal cues to
words related to saving, money and finance and aimed at teaching children the value of
money early in life. The engagement started with the spelling contest for kids and gave their
IRMs a natural opening for a discussion with parents about financial planning for their
children’s future needs like education. This is a sort of channel marketing which IDBI Federal
had adopted to create awareness as well as to educate the future generation about the company
and the importance of saving. Also IDBI Federal involved them in developing their business
by joining hands with SAMHITA, a community development organization

43
based out of Bhopalwhich works towards bringing financial literacy to the underprivileged
population in Madhya Pradesh. They believe that such financial literacy among the under
banked population will help bring a holistic change in the way people perceive and
understand financial products and their utility at various stages in IDBI Federal have also
conducted events with an aim to create interest around financial planning with Life Insurance
at branches which was critical to gettingprospects interested in their products.

D) DIRECTIVE AND INTERACTIVE MARKETING- Direct and interactive

marketing takes many forms over the phone, online or in person. They share three
distinctive characteristics. Direct and interactive marketing messages are :-
a) Customized
b) Up-to-date
c) Interactive
E) WORD OF MOUTH MARKETING - Word of mouth marketing also takes many
forms, online or offline. Three noteworthy characters are :-
a) Credible:-Because people trust others they know and respect, word of mouth
can be highly influential
b) Personal: - Word of mouth can be very intimate dialogue that reflects
personal facts, opinions and experiences.
c) Timely:-It occurs when people want it to and when they are most interested,
and it often follows noteworthy or eventful events or experiences.
2. PERSONAL SELLING-Personal selling is the most effective tool at later stages of the
buying process, particularly in building up buyer preference, conviction and action. Personal
selling has three distinctive qualities:
a) Personal interaction: -Personal selling creates an immediate and interactive
episode between two or more persons. Each party is able to observe the others reaction
b) Cultivation: -Personal selling also permits all kinds of relationships to spring up,
ranging from a matter of fact selling relationship to a deep personal friendship.
c) Response: -The buyer may feel under some obligation for having listened to the
sales talk. IDBI Federal has over thousands of sales personnel all over India to help them
with their sales thereby clarifying the doubts of any customer then and there.

44
CHAPTER – V

45
 FUNCTIONAL ANALYSIS OF IDBI FEDERAL

4.1 Functional Analysis

There are different functional areas in IDBI Federal Life Insurance Co. Ltd and analysis of different
departments has been explained below:
4.11 Marketing
The Marketing function at IDBI Federal Life Insurance covers an array of activities - brand and media
management, channel support, direct marketing and corporate communications. IDBI Federal Life Insurance
deals in services through 5 P‟s strategy.
a) Product Planning Process
In product planning process, the company does in-depth analysis starting with generation of theideato
produceanewproductinthemarketfortheconsumers,itsdesigning,itspricing, promotionalstrategiesto
beused,segmentationandpositioningofthenewproductforthe targeted consumers etc. IRDA is
considered to be the regulatory body for insurance companies. Thus, all the strategies used by insurance
company have to follow or adhere to the guidelinesoftheIRDA.Oncethenewproducthasbeenproduced
thesameismandatorytobe validated by IRDA and approved before moving or targeting the customers.
54

b) Pricing Strategy
Premiums are theamount ofmoney the insurer needs to collect fromthepolicyholder in order to cover
the expected losses, expenses, and a provision for profit. The pricing in insurance is in the form of
premium rates. Every product has its own premium which is designedasperthecustomerneedsand
wants.Aproductwithhighpremiumcatershigh income group whereas a product with low premium
is to cater low income and middle incomegroups.Peoplewouldnotbewillingtoputtheirfundsto
investininsurancebusiness iftheinterestratesprovidedbythebanksorotherfinancialinstrumentsare
muchgreater than the perceived returns from the insurance premiums.
c) Place
Place is one of the important part of marketing mix wherein different places are targeted and productissold.
Themajorplaceswhicharetargetedbythecompanyarecorporateareas, societies,naturalmarketliketheir
ownfamilyandreferences.Theproductaresoldinareas dependingupon theincome grouplike fora product
like incomesurance, theproduct is targeted to places from rural areas to urban area.
d) People
Prospectingisanimportanttermusedininsurancewhenpeoplearetobeconsidered.For selling its
services company focuses on people i.e. young people, old people, married couples, defense officers,
businessman and women entrepreneurs through different products as per needsofpeopleandagentsor
serviceprovider‟sactasalinkingpinbetweenthecompany and thepeople.
55

e) Promotion
Promotionofproductsisoneoftheimportantstrategies usedbyIDBIFederal.Ithelpsthe companyto
spreadthewordoftheirproductandservicestothecustomers.Ithelpstospread awareness among people
about the products of the company. The various promotional strategies used by IDBI Federal are:-

46
i. Events-Thecompanyorganizesvariouseventslike„HealthCamp‟forpeopleandaware them about
their health. At the same time, they gather details related to the people interested incampandaccordingly
managetoarrangeameetingwithagentssothattheycanselltheir products to these people according to
their needs and wants.
ii. Pamphlets - The company promotes its product by distributing the pamphlets of the products
among the targeted people. These pamphlets contain all the necessary information about the product.
Customer can read these pamphlets and if they have any queries related to the product, they can ask the
respective agent.
iii. Online media - Social networking websites like Facebook, twitter and email etc are used as one of the
easiest mode of promotions.
4.12 Human ResourceDepartment
Human Resource Management is considered to be the backbone of IDBI Federal Life InsuranceCo.
Ltd.Thecompanyemploys 1000agentseveryyearthroughbothdirectand indirectmethodof
recruitment.Astheno.ofagentsisincreasingeveryyear,it‟sdifficultfor HRDepartmenttomaintainand
updatethedatabaseonthedailybasis.HRisnotabletokeep thetrackontheagent‟sperformance.The
underperformingagentsarebeen ignoredin company instead of that HR should motivate and
encourage them to perform
56

better and special training sections should be given to the underperforming agents to improve their
performance.
a) Selection process
TheminimumcriteriatopassIRDAexamis33%,thusasaresultalotofagentsarerecruited every year
out of them. Many of the agents become inactive and stop
performing. Thus criteria should be stringent and there should be inter-competition among the agents.
b) Rewards and recognition
IDBI Federal believes the strength of the organization is their employees and they should be motivatedto
workeffectivelyandefficiently.Themotivationfunctionisperhapsthemost importantfortheretention
ofpeopleintoday‟sorganizations.Theaimofthecompanyisto provideaconduciveworkenvironment
totheemployeesandnurturingthemtomakethem feelcommittedandpsychologicallyattachedto the
organization.Thus,theperforming employees are accolade rewards and recognition in the form of
incentives, gifts vouchers etc.
c) Human Relation
Everyorganizationneedsagoodhumanrelationintheirorganizationsothattheycanwork without
conflicts. IDBI Federal maintains good human relation through organizing meetings everymonthbetween
alltheemployeesinwhichtheyhaveopencommunicationandinvolve theemployeeparticipationinthe
discussions.Theemployeeshavethefreedomtoputtheir points and interact with other employees. The
company
57

organizes family functions time to time which help in building bond among employees. Thus, the
working environment is very friendly and comfortable for employees to work. This leads to a strong
teamwork.
4.13 Finance Department
The Finance department does the analysis of risk associated with the investment to have higher profit
whichultimatelyleadstobetterperformanceofthecompany.Themain

47
purposeoftheFinancedepartmentisportfoliomanagementandriskmanagement.This department deals
with management of all the risk to the Company and thus needs to outperformineverysensetogenerate
maximumreturnsfortheinvestorsandIDBIFederal both. This department performs there all functions very
well because unlike other companies, IDBI Federal achieved its break even in just 5th year of its operations.
a) Portfolio Management
Theportfoliomanagementteamisabletogivehigherreturnstothecustomersastheydeeply analyzethe
riskassociatedwiththeinvestmenttohavehigherprofitwhichultimatelyleads
tobetter performanceofthecompany. Thecompany shouldinvest morein government bondsand
securitieswhichgeneratesfairreturnsandareriskfreeascomparedtoequity market.Therisk
managementisdonethroughcomparingtheperformanceofthedifferent companies where they want
to do investments of their product premium and generate returns from the investments. One can only
secure its investment by getting good knowledge infundsavailablewiththem.Anyonecaninvestinthe
marketfundsandgainhigherreturns. Practicalknowledgeoffundsplayssignificantroleandthusone
mustinvestinguaranteed funds and then move towards 58

market fund. Portfolio of IDBI Federal varies from month to month and become less trustful forinvestors
whowant higher return becausehigher flexibilityleadsto lower returns.
b) Analysis of Balance Sheet
According to this balance sheet the Net Current Assets has increased from Rs.5,63,436 to Rs.8,54,322
respectivelyfrom2012to2013,duetoincreaseinthecurrentassetsfrom Rs.19,37,957 to Rs.26,36,583. As
per the balance sheet the balance in Profit & Loss Account (Shareholders' account) as on march 2013 has
decrease from Rs.43,23,548 to Rs.42,31,116 which shows a down fall in profit approx Rs.1 crore.
4.14 IT Department
IT works as the support activity to its primary functions. Information Technologies in today‟s scenario,
playsamajorroleinthesmoothfunctioningoftheprocessesandoperationsofany organization.
Nevertheless, it has significantly operated in the same manner for IDBI Federal aswelllikealltheattendance
byeachemployeeiscentralized,alltheemployeeshavetheir ownidandpasswordtooperateandthusgive
themonlylimitedinformationtotheextentof their designation. There is a website made by the
organization which provides all information regardingtheproducts,premium,taxcalculatoretc.The
customerscancomplaintandpay premiumonlinewhichreducesthecostofadministration. Thus,IDBI
Federalareableto response the customers more effectively and efficiently which leads to customer
satisfaction. 59

4.2 Analysis of Equity Growth Fund

Theinvestmentobjectiveofthis fundistoinvestinlisted stocksandaimtogeneratehigh returnsby
pickingstocksthathavegrowthprospects.Itaimstodiversifyriskbyinvestingin Large-cap as well as
Mid-cap stocks and across multiple sectors.
4.21 Analysis ofAsset Allocation
TheassetsallocationforthemonthofJuly‟13andJune‟13hasbeenclassifiedmainlyinto equities,net
currentassets,andcashandequivalents–whichhasdifferentlevelsofriskand return, so each behaves
differently over time. There has been a negligible change in month of July‟13inassetsallocationascompared
toJune‟13whereinequityreducedto0.41%.The maximum investment is done in equity market and part of
the investment isdone in Net Current Assets and Cash CBLO. Thus here risk and return is high.

48
4.22 Analysis of Portfolio Market Cap Wise
PortfolioanalysisforthemonthofJune‟13andJuly‟13signifiestheinvestmentinthe companies as
per the size of the organization. In Portfolio analysis (Market capwise), the majorinvestmentisdone
inlargecapforthemonthofJuly‟13i.e.71.20%and10.02%& 11.12% for small cap and mid cap
respectively.
4.23 Analysis of Sector Weights
The amount invested by the portfolio manager in market on behalf of IDBI Federal Life
Insurance as per Sector wise. Sector weights are the weights or percentage, in
which this amount is invested in different sectors of the market in June‟13 and July‟13. 60

Thus the analysis clearly state that sectors like Auto, IT and NBFC which were showing higher
attractivenessandwereexpectedtogivehigherreturnsaregivenmorepriorityandmore investmentis
madeinthesesectorsandontheotherhandsectorslikechemical,coal,power andbankingareeither
completelydroppedfromtheportfolioorlessinvestmentismadein these sectors. Following are some of
the investment and disinvestment made into sectors like
1) Auto sector 3.8% to 7.8%
2) I.T sector 11.8% to 17%
3) Banking sector 21% to 19%
4) Power sector 7% to 3.8%.
Theinvestmentisthemajorpartofthecompanywhichdirectlydecreasethevalueofthe premium
fromwhichmoreandmorecustomersaretakingpolicyandhelpinincreasethe financial position of
the company.
4.24 Analysis through Quantitative Indicators

As per analysis of quantitative indicators, during portfolio revision stage there were some fluctuationsinthe
marketscenarioduetowhichportfoliowasreviewedagainandsome changesweremadewhichresultedinto
betterperformanceoftheequitygrowthfund.
a) As standard deviation increases from 10.53% to 11.14%, which shows higher Equity Fund risk for the
month of July.
b) Astherehasbeennosignificantchangeinthebetai.e.0.98inJuly‟13whichisless than 1 indicates that the
security's price will be less volatile than the market.
c) Sharpe Ratio summarizes therisk and return of aportfolio in a single measure that categorizesthe
performanceofthefundonariskadjustedbasis.AstheSharperatiohas increasefrom0.36%to0.70%
whichshowsthatportfolioofJuly‟13hasperformedbetter.
4.3 Conceptual Framework
4.31 Definition of Portfolio Management
Aportfolioisacollectionofsecuritiessinceitisreallydesirabletoinvesttheentirefundsof anindividualor
aninstitutionorasinglesecurity,itisessentialthateverysecuritybeviewed inaportfoliocontext.Portfolio
analysisconsidersthedetermineoffutureriskandreturnin holding various blends ofindividual securities.
Determining themixofassets toholdina portfolio is referred to as portfolio management. Investors
must balance risk and performance in making portfolio management decisions.
62

4.32 Objectives of Portfolio Management

The basic objective of Portfolio Management is to maximize yield and minimize risk. The other
objectives are as follows:

49
a) StabilityofIncome:Aninvestorconsidersstabilityofincomefromhisinvestment. He also considers the
stability of purchasing power of income.
b) CapitalGrowth:Capitalappreciationhasbecomeanimportantinvestmentprinciple. Investors seek
growth stocks which provide a very large capital appreciation by way of rights, bonus and appreciation in
the market price of a share.
c) Liquidity:Aninvestmentisaliquidasset.Itcanbeconvertedintocashwiththehelpofa stock
exchange. Investment should be liquid as well as marketable.
d) Safety : safety means protection for investment against loss under reasonably variations. In order to
providesafety, acarefulreview ofeconomicand industrytrends isnecessary. In otherwords,errorsin
portfolioareunavoidableand itrequiresextensivediversification.
4.33 Steps in Portfolio Management 1) Identification of the Objectives
a) The starting point in this process is to determine the characteristics of the various investments
andthenmatchingthemwiththeindividualsneedandpreferences.
b) All the personal investing is designed in order to achieve certain objectives.
c) These objectives may be tangible such as buying a car, house etc. and intangible objectives
such as social status, security etc.
d) Similarly, these objectives may be classified as financial or personal objectives. 63

e) Financial objectives are safety, profitability and liquidity.

f) Personal or individual objectives may be related to personal characteristics of individuals such as
family commitments, status, depends, educational requirements, income, consumption and
provision for retirement etc.
2) Formulation of Portfolio Strategy
a) The aspect of Portfolio Management is the most important element of proper portfolio investment
and speculation.
b) While planning, a careful review should be conducted about the financial situation and current
capital market conditions.
c) This will suggest a set of investment and speculation policies to be followed.
d) The statement of investment policies includes the portfolio objectives, strategies and constraints.
e) Portfoliostrategymeansplanorpolicytobefollowedwhileinvestingindifferenttypes of assets.
f) There are different investment strategies.
g) They require changes as time passes, investor‟s wealth changes, security price change, investor‟s
knowledgeexpands.
h) Therefore, the optional strategic asset allocation also changes.
i) The strategic asset allocation policy would call for broad diversification through an indexed
holding of virtually all securities in the asset class.
3) Selection of Asset Mix
a) The most important decision in portfolio management is selection of asset mix. 64

b) Itmeansspreadingoutportfolioinvestmentintodifferentassetclasseslikebonds,stocks, mutual funds etc.

c) Inotherwordsselectionofassetmixmeansinvestingindifferentkindsofassetsand reduces risk
and volatility and maximizes returns in investment portfolio.
d) Selectionofassetmixreferstothepercentagetotheinvested invarioussecurityclasses.

50
e) Thesecurityclassesaresimplythetypeofsecuritiesasunder:»moneymarketinstrument
» fixed income » equity shares » real estate investment » international securities
f) Oncetheobjectiveoftheportfolioisdeterminedthesecuritiestobeincludedinthe portfolio
must be selected.
g) The portfolio manager has to decide the goals before selecting the common stock.
h) Thegoalmaybetoachievepuregrowth,growthwithsomeincomeorincomeonly.Once the goal has
been selected, the portfolio manager can select the common stocks.
4) Portfolio Execution:
a) Theprocessofportfoliomanagementinvolvesalogicalsetofstepscommontoany decision,
plan, implementation and monitor.
b) Applying this process to actual portfolios can be complex.
c) Therefore, in the execution stage, three decisions need to be made, if the percentage holdings of
various asset classes are currently different from desired holdings
d) The portfolio than, should be rebalanced. If the statement of investment policy requires pure
investment strategy, this is only thing, which is done in the execution stage.
65

e) However, many portfolio managers engage in the speculative transactions in the belief that such
transactions will generate excess risk-adjusted returns.
f) Such speculative transactions are usually classified as timing or selection decisions.
g) Timing decisions over or under weight various asset classes, industries or economic sectors
from the strategic asset allocation.
h) Such timing decisions are known as tactical asset allocation and selection decision deals with
securities within a given asset class, industry group or economic sector.
i) Then the investor or portfolio manager can make any tactical asset allocation or security selection
decision.
5) Portfolio Revision
a) Portfolio management would be an incomplete exercise without periodic review.
b) Theportfolio,whichisonceselected,hastobecontinuouslyreviewedoveraperiodof time and if
necessary revised depending on the objectives of investor.
c) Thus, portfolio revision means changing the asset allocation of a portfolio.
d) Investmentportfoliomanagementinvolvesmaintainingpropercombinationofsecurities, which
comprisetheinvestor‟sportfolioinamannerthattheygivemaximumreturnwith minimum risk.
e) For this purpose, investor should have continuous review and scrutiny of his investment portfolio.
f) Whenever adverse conditions develop, he can dispose of the securities, which are not worth.
g) However,thefrequencyofreviewdependsuponthesizeoftheportfolio,thesum involved,
the kind of securities held and the time available to the investor.
66

h) The review should include a careful examination of investment objectives, targets for portfolio
performance,actualresultsobtainedandanalysisofreasonforvariations.
i) The review should be followed by suitable and timely action.
j) There are techniques of portfolio revision.
k) Investors buy stock according to their objectives and return-risk framework.

51
l) These fluctuations may be related to economic activity or due to other factors.
m) Ideally investors should buy when prices are low and sell when prices rise to levels

higher than their normal fluctuations.

n) The investor should decide how often the portfolio should be revised.

o) If revision occurs too often, transaction and analysis costs may be high.

p) If revision is attempted too infrequently the benefits of timing may be foregone.

q) The important factor to take into consideration is, thus, timing for revision of portfolio.

6) Portfolio PerformanceEvaluation

a) Portfolio management involves maintaining a proper combination of securities, which comprise

theinvestor‟sportfolioina manner thatthey givemaximumreturnwith minimum risk.

b) The investor should have continues review and scrutiny of his investment portfolio.

c) These rates of return should be based on the market value of the assets of the fund.

d) Complete evaluation of the portfolio performance must include examining a measure of the degree
of risk taken by the fund.
e) A portfolio manager, by evaluating his own performance can identify sources of strength or
weakness.

f) It can be viewed as a feedback and control mechanism that can make the investment
management process more effective.

g) Good performance in the past might have resulted from good luck, in which case such
performance may not be expected to continue in the future.

h) On the other hand, poor performance in the past might have been result of bad luck.
i) Therefore, the first task in performance evaluation is to determine whether past performance was
good or poor.
j) Then the second task is to determine whether such performance was due to skill or luck.
k) Goodperformanceinthepastmayhaveresultedfromtheactionsofahighlyskilled portfolio
manager.
l) The performance of portfolio should be measured periodically, preferably once in a month or
quarter

52
CHAPTER-VI
DATA ANALYSIS AND INTERPRETATION

53
 DATA ANALYSIS AND INTERPRETATION

An analytical review of the effectiveness of promotional strategy of IDBI Federal .The

survey was administered to 104 respondents through Google doc and personal meeting about
the insurance policy. The questionnaire method to find out the effectiveness of promotional
strategy of IDBI Federal Life Insurance co. lt was used. The main objective of this study is to
create awareness and identifying which the strongest promotional strategy to be used by IDBI
Federal. This survey has been conducted in Hyderabad and in Odisha. With the help of charts
some graphs and tables are shown below to understand the conducted research.

Chart number 1:- Age group of

respondents

Table No. 1:-

Age group years Respondents Percentage (%)

Below 25 10 8%
25-30 30 30%
30-35 30 30%
35 Above 34 32%
Total 104 100%

Interpretation: - From the graph it is cleared that majority holder are from the groups of
age 25- 30 and 35 above.

54
 Chart Number 2:-

Figure no 11:

Interpretation: - From the graph it is cleared that majority policy holders opted for money back scheme

55
Chart number 3:- Income slab of the respondent

Table number 3:-

Income slabs Respondents Percentage

Less than 2 Lakh 23 22.9%
2 to 4 lakh 30 28.6%
4 to 6 lakh 30 28.6%
6 to 10 lakh 13 12.4%
Above 10 lakh 9 7.6%
Total 104 100%

Figure no. 12:

Interpretation: - From the above chart we can conclude that income group of 2 to 6 lakh
are having more investments on insurance due to security and standard returns.
 Chart number 4:-

How did you come to know about IDBI FEDRAL life insurance ltd.?

Table number 5:-

Sources of Respondents Percentage

awareness
T.V. Ads 5 5.3%
You Tube 5 5%
Newspaper 5 5%
Agents 62 59%
Friends 19 18.1%
Others 8 7.6%

Figure no.13:-

Interpretation: - From the above table we can see that majority of people came to
know through agents which is a personal distribution.

57
Chart number 4:-

Figure no.14:-

 Interpretation: - From the above chart we can see that customers invest in IDBI by having trust
on the brand and its profile in the market.

58
CHAPTER – VII
FINDINGS - SUGGESTIONS – CONCLUSION

59
 FINDINGS

After analysis it is found that,

1. Television for entertainment and gaining information. So it is the best media for
promotion.

2. People don’t give more importance for the advertisements while compared to brand,
tax benefit, death benefit, security and low premium.

3. The promotional efforts and word of mouth is most influencing while compared to
internet.

4. The unmarried people are actually not interested to take insurance. They wanted to
invest their money in other fields like buying a house, bike, buildings, and real-estate
etc. They are even ready to take risk for more earnings.

A) The married peoples are interested in insurance for the benefit of their
partner as well as their children and medical expenses. Generally
educated people understand easily so most of graduate clearly
understand the benefits of insurance policies.

B) So IDBI Federal Life Insurance Corporation Limited can develop a

new policy by targeting the unmarried people.

60
 SUGGESTION

 IDBI have to increase their promotional activities in such a way

that even unskilled persons understand the importance of their
Insurance add value to their customer.

 The company’s advertisement should be more in Local TV channel and

News Paper.

 The company should be open more branches in, zonal areas.

 Hoardings at prime areas in recommended.

 In rural and tribal areas enormous promotional activities have to be

taken for bringing the awareness regarding different types of
insurance and their uses. IDBI Federal Life Insurance should
develop promotional activities in such a way that it should reach to
the tribal and interior areas in an easy and understandable manner.

And it has to increase its

61
 Promotional activities in tribal area. In rural and tribal areas they
have to use a different type of promotion, to make them understand
the various policies and their benefits
.

 Most of the insured people select policies based in the agent’s advice.
Compan Should advertise about their policies, as the agents suggest the
policies that fetch more commission to them, and this creates a negative
attitude among the customers.

 Irrespective of the occupation, age, marital status, caste, religion

and educational qualification everyone has to feel the need of life
insurance. Hence the company should bring awareness about the
insurance and its importance and need. The unfavorable feeling of
illiterates, daily wage workers etc., can be washed out by educating
the households extensively. IDBI Federal should create awareness
about insurance among people. Most of the uninsured have
negative attitude as they don’t have knowledge about insurance.
Generally insurance is considered as only for high income people.
This notion must be changed, through social marketing among the
low income people.

62
 CONCLUSION

While the fresh air of competition in every sector of economy brings in major changes in
consumer expectations and in organizations. But this insurance industry has experienced a
few unique aspects.

a) The challenge for IDBI FEDERAL is to address the motivating factor of customers and
come up with genuine solutions.

b) Customers in major cities appreciate the need for the higher level of insurance
coverage in accordance to their earning stage in working life which is still far successfully
being marketed by IDBI FEDERAL.

c) The entry of private players into insurance sector has expanded the product segment to
meet the different level of requirements of customers.

d) Our advertisements are done rigorously but it should include more details of the
benefits of our policies that differentiate our products from the othercompany.

e) The company has already up to dated itself with the new advancement in the
technologies by providing net banking. The next big thing if the company can do is
“Mobile Banking APP” where the customers can get more information related to the
products and premiums.

f) Instances of customers requiring agents to arrange for loans against their policies, or
change in nominations are rare. Therefore companies need to provide high service
standards directly.

63
 BIBLIOGRAPHY
(References)

 Life insurance by B.P Agarwal, (www.idbifederal.com) (www.irda.com)

 http://people.stern.nyu.edu/adamodar/New_Home_Page/background/cfin.htm

 http://www.quickmba.com/finance/cf/

 IDBIFEDERAL.com: www.idbifederal.com

 Indian life and non-life insurance industry

(http://www.towerswatson.com/india/newsletters/india-market-no
n-life-insurance)
 Elements of Insurance-bal Chandra srivastava.

64
 ANNEXURE
(QUESTIONNAIRE)

A Study on Customer’s Perception towards IDBI federal Life Insurance

Corporation of India. Dear respondent,

An analytical review of the effectiveness of promotional strategy of IDBI Federal. This

study attempts to understand your perception on marketing mix and promotional strategy and
is purely for an academic purpose only. It is not intended to by publish anywhere. Your
cooperation will be appreciated. Thanking you in advance!

Q.1. Name

Q.2. Age
Below 25 years 30-35 years
25-30 years above 35 years

Q.3. Sex
Male Female

Q.4. Married
Yes No

Q.5. Educational qualification

Degree Post Graduate M.Phils.

Q.6. Experience
Less than 1 year 1-5 years
5-10 years above 10 years

65
Q.7. Income
Less than 2 lakh 2 to 4 lakh
4 to 6 lakh above 6 lakh

Q.8. Have you heard about IDBI Federal life insurance Co.
Ltd? Yes No

Q.9. How did you come to know about IDBI Federal life insurance Co.
Ltd? TV Advertisement
You tube
Newspaper Bill Board / hoarding
Agents Friends

Others please specify

Q.10. Did you enquire more about the product after you came to know
about it? Yes No

Q.11. Have you seen the advertisement of IDBI Federal

Yes No
If yes specify the advertisement you have seen and rate them according to the example:

Excellent (5)
Good (4)

Average (3)

Poor (2)

Worst (1)

(Income insurance Life insurance Wealth insurance Child insurance)

Q.12. Do you feel these ads educate people about the product?
Yes No

66
Q.13. Which other insurance company you know?
LIC SBI
HDFC Bajaj Allianz
Bharti Axa National Insurance
ICICI
Others please specify _

Q.14. Total number of policies bought from IDBI federal

a) One
b) Two
c) More than two

Q.15. Mode of Payment

a) Monthly
b) Quarterly
c) Half-Yearly
d) Yearly
d) Doctorate

Q.16. Occupation
a) Student
b) Service
c) Self Employed
d) Others

Q.17. Annual Income

a) Below 1 Lac
b) 1 Lac – 5 Lac
c) 5 Lac – 10 Lac
d) Above 10

Q.18. What Kind of Investment do you prefer?

a) Short Term
b) Long Term

67
c) Both

Q.19. Give reasons for insuring with IDBI federal LIC

a) Company Profile
b) Brand
c) Grievances Handling
d) Undue Delay in Claims
e) Public Sector
f) All of the above

Q.20. What scheme of insurance policy have you taken

a) Whole Life
b) Endowment Plus
c) Money Back
d) Pension Fund
e) ULIP
f) Others

Q.21. Most Likely Periodicity of Policy

a) 5 years
b) 5 – 15 Years
c) 15 – 25 Years
d) Above 25 Years

Q.22. What would you like more in Insurance Policies of LIC of India?
a) More benefits
b) More security
c) Others, Please specify

68