Project Lombard Final

8/3/2019 Project Lombard Final

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CHAPTER I INTRODUCTION

The main objective of the study was to analyze

Marketing Strategy employed by ICICI Lombard’s

Bancassurance Home for its phenomenal growth in Trichy &

Tanjore within two financial quarters. The study was

conducted for ICICI Lombard’s Bancassurance Home. The

sample under study consists of Bancassurance Home’s Sales

Administration wing, who formulates strategy and Foot On

Street members, who implement the strategy.

The insurance sector in India had come to a full circle

from being an open competitive market to nationalisation

and back to a liberalised market again. Tracing the

developments in the Indian insurance sector reveals the 360

degree turn witnessed over a period of almost two centuries.

The respondents expressed definite opinion aboutformulated strategies by the sales administration wing and

the implementers (SO’s, Advisors, etc...) of the strategy.

Based on the analysis of the data collected the employed

strategies have been founded out. From the study it is found

that the strategies adopted by the sales administration wing

were the major reason behind the phenomenal growth of

Lombard’s Bancassurance Home in Trichy & Tanjore. There

are some strong areas by ICICI like their brand image, fast

processing of policies, single window processing for -Sell

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(Cross sell) , EMI support, better consideration for customers’

, are some of them.

Based on the findings certain recommendations aregiven to Bancassurance Home so as to create a more

positive perception about ICICI Lombard’s Bancassurance

Home and its products in the mind of prospective customers

as well as to improve the service provided for customers.

RESEARCH PROBLEM

ICICI Lombard General Insurance Company Limited.

(ICICI Lombard) is a 74:26 venture between ICICI Bank,

India's largest private sector bank and Lombard, one of the

oldest Property and Casualty Insurance Companies in

Canada. Trichy & Tanjore were a negative market for ICICI

and ICICI Lombard’s Bancassurance Home had a

phenomenal growth in Trichy & Tanjore within two financial

quarters. Possibility of differentiation for bancassurance

products is pretty low around factors like insurance

coverage, premium, since all major players are on an equal

footing and the major battle for market share is fought on

bancassurance sector. So to keep the edge on better

performance, they need to know the strategies employed by

sales administration wing so that the company can utilize it

into a tailor made one for other weaker markets. Future

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sales strategy will be invariably woven around service

improvisation strategies.

OBJECTIVES

The main objective of the study is “To analyzeMarketing Strategy employed by ICICI Lombard for its

phenomenal growth in Trichy & Tanjore”.

The sub-objectives are:

To find out driving factors instrumental in

growth and market presence.

To evaluate effectiveness of strategy at itsimplementation level.

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SIGNIFICANCE OF THE STUDY

Bancassurance is a new concept in India and ICICI

Lombard is the first company adopted this strategy with a

tie-up of ICIC Bank. The objective of all the marketing efforts

should be to maximize the customer satisfaction.

Strategy adoption will have prime importance in

insurance industry because insurance sector is directly

controlled by IRDA (The Insurance Regulatory and

Development Authority). The right strategy can bring

business and wrong will end up with loss, but in insurance itshould be formulated within the frame proposed by IRDA. In

this situation achieving penetration, especially areas like

Trichy & Tanjore are very difficult. In this context the sales

administration should play a crucial role considering many

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factors like communication and maintaining relationship with

all levels i.e. upward superiors to downward end customers.

Since it is directed towards the satisfaction of the customerneeds and in this context customer is the centre of attraction

for which the marketing is carried out. Like wise in the case

of Lombard’s Bancassurance Home, were the study on the

subject like finding out the strategy behind the growth, holds

a paramount significance. By a detailed study of the subject

the management can know more about the strategies which

can give results, opinion of sales officer’s category who

actually deals with customers more vividly and it can help

the management in alternation of the policies to some

extent.

These studies helpful in bringing the company and the

staffs, other associated divisions closer and bring about a

better communication network. The findings and suggestionsput forward by this report can help the management in

taking crucial decisions and help them to get a clear idea of

their strengths and weakness and the found strategies can

be converted to tailor made solution for similar weaker

regions.

RESEARCH METHODOLOGY

It was a conceptual structure within which research

conducted. It contributes the blue print or the collection

measurement and analysis of data. The design helps the

researcher to organize his ideas in a form their by it will be

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possible for his look for flows and inadequacies. Researcher

in the study has used descriptive design.

Descriptive research studies aimed at obtainingrelevant information concerning the current status of the

phenomena for valid generalization.

SAMPLING DESIGN

The sample under study consists of Bancassurance

Home’s sales administration wing, who formulates strategy

and Foot on Street members which includes Sales officers,Advisors, Cross-sell, Councilors from agencies, who

implement the strategy.

SELECTION AND SIZE OF SAMPLE:

Convenience sampling was used for selecting the

respondents. A total of 50 respondents from sales, which

comprise the person’s deals with ICICI Lombard’s Loan

Shield and 3 respondents from the sales administration wing

(ICICI Lombard’s Bancassurance Home) which comprises of

two Unit Sales Managers of Trichy & Tanjore and Sales

Manager constitute the sample.

DATA SOURCE:

Both primary and secondary data was collected for the

completion of this study.

(a) Primary data:

Primary data was collected through interview schedules and

questionnaires, which were administered to the respondents

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in person. These data included responses to various factors

considered for assessing marketing strategy employed and

effectiveness of implementation.(b) Secondary data:

Secondary data was needed for the successful

completion of the report. Data regarding the penetration

level and the total number of Loan Shield files from June to

November are collected from ICICI Lombard’s Bancassurance

Home’s office, Trichy & Tanjore. The data related to historyand profile of the organization was obtained from websites.

Textbooks were referred for other necessary information.

MODE OF STUDY:

The study conducted was descriptive. The interview

method as well as survey method was used for this study.

Data collection was through interview schedules and

questionnaires, which were filled through direct conversation

with the respondents both face-to-face and over telephone.

There were opportunities to record all relevant information

and opinions, which respondents expressed during the

course of conversation. Thus, valuable insights into different

views and perceptions of the customers could be gained.

PERIOD OF STUDY:

The period of study was one month, starting from 16-

12-2005 to 15-01-2006.

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PILOT – STUDY:

Researcher conducted a pilot study to find out and

assess the scope for a scientific investigation on the topic.

Researcher discussed the research topic with the faculty

members beyond researcher discussed the topic with his

guide and ICICI Lombard’s Bancassurance Home

management team from very beginning. Pilot study was very

useful and benefited to form research problem.

Pilot study helped to fix the universe of the study and toselect the sampling design and the preparation of final

interview schedule and questionnaire.

TOOLS FOR ANALYSIS:

Penetration Level

In this project the penetration level is calculated

from total number of “Home Loans with First and Full

Disbursement” divided by total number of Loan Shield

attached to it and multiplied with 100. The penetration

level is calculated to understand the movement of a

product in the market.

Eg: penetration level calculation of November is

calculated by the following way.

Penetration Level Calculation

Month Total number of Home Loan Files

with First and Fulldisbursement from

all channels.

Total number of Home Loan Fileswith Loan Shield.

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Novembe

r100 57

Source: Secondary data

Table: 4A.1

Penetration Level =

100

Penetration Level = 100 ÷ 57100

= 57 %.

Penetration Level = 57%

Rating

Rating is done for understand the areas where

opportunity for improvement. For this the attributes are

chosen like Policy Login, Follow-up of Sales Officers,

Policy Processing, Timely disbursement, Policy

Claim/grievance settlement. The rates are given on a

scale of 1-5.

Preferenceorder

I II III IV V

Rate 5 4 3 2 1

9

Total number of Home Loan Fileswith First and Fulldisbursement from

Total number of Home Loan Fileswith Loan Shield.



Pie charts and bar diagrams were used to represent the

results.

DATA ANALYSIS AND INTERPRETATIONS:

Based on the significant variables in this study data’s

where converted into table for further statistical analysis.

Tabulation data’s where presented by using diagrams.

LIMITATIONS OF THE STUDY

The sampling method adopted for the study wasconvenience sampling, a form of non-probability

sampling method. Therefore all inherent limitations of

convenient sampling might have crept in the study.

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The focus of survey, which is limited to Trichy & Tanjore

spokes, means that generalizations regarding founded

strategies may not be possible. The sample size used inthis study may be too inadequate for the study.

The duration of study was short in nature, hindering a

wide and deep investigation. The probability of bias in

respondent’s response cannot be neglected totally.

Despite of these limitations, a sincere attempt has been

made to collect and analyze the data collected andpresent the results as accurately as possible.

CHAPTER II INDUSTRY PROFILE

BACKGROUND:

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The insurance sector in India has come a full circle from

being an open competitive market to nationalisation and

back to a liberalised market again. Tracing thedevelopments in the Indian insurance sector reveals the 360

degree turn witnessed over a period of almost two centuries.

NATURE OF THE INDUSTRY

The insurance industry provides protection against

financial losses resulting from a variety of perils. By

purchasing insurance policies, individuals and businessescan receive reimbursement for losses due to car accidents,

theft of property, and fire and storm damage; medical

expenses; and loss of income due to disability or death.

The insurance industry consists mainly of insurance

carriers (or insurers) and insurance agencies and

brokerages. In general, insurance carriers are large

companies that provide insurance and assume the risks

covered by the policy. Insurance agencies and brokerages

sell insurance policies for the carriers. While some of these

establishments are directly affiliated with a particular insurer

and sell only that carrier’s policies, many are independent

and are thus free to market the policies of a variety of

insurance carriers. In addition to supporting these two

primary components, the insurance industry includes

establishments that provide other insurance-related

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services, such as claims adjustment or third-party

administration of insurance and pension funds.

Insurance carriers assume the risk associated withannuities and insurance policies and assign premiums to be

paid for the policies. In the policy, the carrier states the

length and conditions of the agreement, exactly which losses

it will provide compensation for, and how much will be

awarded. The premium charged for the policy is based

primarily on the amount to be awarded in case of loss, aswell as the likelihood that the insurance carrier will actually

have to pay. In order to be able to compensate policyholders

for their losses, insurance companies invest the money they

receive in premiums, building up a portfolio of financial

assets and income-producing real estate which can then be

used to pay off any future claims that may be brought. There

are two basic types of insurance carriers: direct and

reinsurance. Direct carriers are responsible for the initial

underwriting of insurance policies and annuities, while

reinsurance carriers assume all or part of the risk associated

with the existing insurance policies originally underwritten

by other insurance carriers.

Direct insurance carriers offer a variety of insurance

policies. General insurance provides financial protection to

beneficiaries—usually spouses and dependent children—

upon the death of the insured. Disability insurance supplies a

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preset income to an insured person who is unable to work

due to injury or illness, and health insurance pays the

expenses resulting from accidents and illness. An annuity (acontract or a group of contracts that furnishes a periodic

income at regular intervals for a specified period) provides a

steady income during retirement for the remainder of one’s

life. Property-casualty insurance protects against loss or

damage to property resulting from hazards such as fire,

theft, and natural disasters. Liability insurance shieldspolicyholders from financial responsibility for injuries to

others or for damage to other people’s property. Most

policies, such as automobile and homeowner’s insurance,

combine both property-casualty and liability coverage.

Companies that underwrite this kind of insurance are called

property-casualty carriers.

Some insurance policies cover groups of people,

ranging from a few to thousands of individuals. These

policies usually are issued to employers for the benefit of

their employees or to unions, professional associations, or

other membership organizations for the benefit of their

members. Among the most common policies of this nature

are group life and health plans. Insurance carriers also

underwrite a variety of specialized types of insurance, such

as real-estate title insurance, employee surety and fidelity

bonding, and medical malpractice insurance.

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Insurance carriers have discovered that the Internet

can be a powerful tool for reaching potential and existing

customers. Most carriers use the Internet simply to postcompany information, such as sales brochures and product

information, financial statements, and a list of local agents.

However, an increasing number of carriers are starting to

expand their Web sites to enable customers to access online

account and billing information, and a few carriers even

allow claims to be submitted online. Some carriers alsoprovide insurance quotes online based on the information

submitted by customers on their Internet sites. In the future,

carriers will allow customers to purchase policies through the

Internet without ever speaking to a live agent.

In addition to individual carrier-sponsored Internet sites,

several “lead-generating” sites have emerged. These sites

allow potential customers to input information about their

insurance policy needs. For a fee, the sites forward customer

information to a number of insurance companies, which

review the information and, if they decide to take on the

policy, contact the customer with an offer. This practice

gives consumers the freedom to accept the best rate.

The insurance industry also includes a number of

independent organizations that provide a wide array of

insurance-related services to carriers and their clients. One

such service is the processing of claims forms for medical

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practitioners. Other services include loss prevention and risk

management. Also, insurance companies sometimes hire

independent claims adjusters to investigate accidents andclaims for property damage and to assign a currency

estimate to the claim.

Other organizations in the industry are formed by

groups of insurance companies, to perform functions that

would result in a duplication of effort if each company

carried them out individually. For example, serviceorganizations are supported by insurance companies to

provide loss statistics, which the companies use to set their

rates.

BASIC CLASSIFICATION OF INSURANCE

Insurance

Life Insurance Non-Life or General

Insurance

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A written contract between

the insured (you) and the

insurer (LIC) that provides for

the payment of the insured

sum on the date of the

maturity of the contract or onthe unfortunate death of the

1. Property

2. Casualty

3. Health



Insurance is a financial agreement entered by two

people to protect one against a certain risk. The contract

that binds the two parties to certain obligations is known asPolicy. The one who buys the insurance is known as

policyholder or insured while the party that sells insurance is

known as the insurer. From the time the insured signs the

policy he/she has an obligation to pay a certain amount of

money known as premium.

A BRIEF HISTORY OF THE LIFE INSURANCE SECTOR

The business of life insurance in India in its existing

form started in India in the year 1818 with the establishment

of the Oriental Life Insurance Company in Calcutta.

Some of the important milestones in the life insurance

business in India are:

1912: The Indian Life Assurance Companies Act enacted as

the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to

enable the government to collect statistical information

about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by

the Insurance Act with the objective of protecting the

interests of the insuring public.

1956: 245 Indian and foreign insurers and provident

societies taken over by the central government and

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nationalised. LIC formed by an Act of Parliament, viz.

LIC Act, 1956, with a capital contribution of Rs. 5 crore

from the Government of India.

THE GENERAL INSURANCE SECTOR

A BRIEF HISTORY:

The Indian insurance industry is segmented into two

distinct markets: the life insurance market and the non-life,

or general, insurance market.

The General insurance business in India can trace its

roots to the Triton Insurance Company Ltd., the first general

insurance company established in the year 1850 in Calcutta

by the British. Some of the important milestones in the

general insurance business in India are:

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1907: The Indian Mercantile Insurance Ltd. set up, the first

company to transact all classes of general insurance

business.1957: General Insurance Council, a wing of the Insurance

Association of India, frames a code of conduct for

ensuring fair conduct and sound business practices.

1968: The Insurance Act amended to regulate investments

and set minimum solvency margins and the Tariff

Advisory Committee set up.1972: The General Insurance Business (Nationalization) Act,

1972 nationalized the general insurance business in

India.

January 1973: 107 insurers amalgamated and grouped into

four companies in public sector.

1. Oriental Insurance Company Limited.

2. New India Assurance Company Limited.

3. National Insurance Company Limited and.

4. United India Insurance Company Limited.

FEATURES OF INDIAN GENERAL INSURANCE MARKET

Low market penetration.

Ever-growing middle class component in population.

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Growth of consumer movement with an increasing

demand for better insurance products.

Inadequate application of information technology for

business.

Adequate fillip from the Government in the form of tax

incentives to the insured, etc.

India is one of the least insured countries but the potential

for further growth is phenomenal.

Rates of claim settlement were earlier in India the highestin the world, 70 per cent in general insurance, compared

to around 40 percent internationally.

Non-life premium has a 0.71 per cent share of GDP.

General Insurers (Private Companies) have earned around

Rs.1000-cr income.

Half of the current demand for comes from the corporatesegment.

BENEFITS OF GENERAL INSURANCE

Insurance is the instrument of Security, saving and peace

of mind. It provides several benefits by paying a small

amount of premium to an insurance company.

Safeguards one’s assets.

Peace of mind-in case of financial loss.

Encourage saving.

Tax rebate.

Protection from the claim made by creditors.

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Security against a personal loan, housing loan or other

types of loan.

ROLE OF GENERAL INSURANCE IN GROWTH OFECONOMY

The General Insurance Industry has an enviable track

record among public sector units. It has a consistent profit

and dividend paying record accompanied by a steady growth

in its financial resources. Through investments in the

Government sector and socially- oriented sectors the

Industry has contributed immensely to the nation's

development. The industry is recognized as one of the

largest financial Institutions in the country. The ventures

initiated by the industry in the areas of Mutual Fund, Housing

Finance has done exceedingly well in recent years.

To protect the country's foreign exchange reserves, the

reinsurance arrangement are so organized that maximum

retention is made possible within the country while at the

same time protecting interests of the policy holders. The

GIC’S inwards reinsurance wing, called the SWIFT,

maximizes the foreign exchange balance by acting as an

international insurer accepting risks from all over the globe.

INDIA VS. GLOBAL MARKET

India's insurance penetration is low at 1.95 per cent

and ranks 51 in the world. In premium collection the record

is better, at 23rd position. The ratio of premium collected to

gross domestic product is a mere 0.58 per cent. Compared

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with an average of 7.1 per cent in most industrialized

countries. India is still at a very nascent stage with an $8-9

(Rs.400-450) per capita expenditure on insurance, out of which $2 to $2.5(Rs.100-150) will be on general insurance.

This was primarily because in India non-life insurance is not

considered important and people perceive it as an

unnecessary expenditure. Non-life insurance premium at a

percentage of GDP is estimated at 2.70 for Japan, 2.55 for

South Korea, 1.89 for Malaysia, 1.62 for Singapore, 1.38 for Taiwan, 1.23 for Thailand, 0.86 for the Philippines, 0.68 for

China, 0.66 for Indonesia, and 0.51 for Pakistan.

Regions/Count

ryUSD (billions) Percentage %

North America 689.2 32.7Latin America 653.0 31.0Europe 32.9 1.6Asia 647.1 30.7India 3.0 0.15World 2,105.8 100.0Source: Secondary data (Published in May 2004. © India

Infoline Ltd 2003-4.)

THE INSURANCE REGULATORY AND DEVELOPMENT

AUTHORITY (IRDA)

In India Insurance is a federal subject. The primary

legislation that deals with insurance business in India is:

IRDA

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On the recommendation of Malhotra Committee, an

Insurance Regulatory Development Act (IRDA) passed by

Indian Parliament in 1993. Its main aim was to activate aninsurance regulatory apparatus essential for proper

monitoring and control of the Insurance industry. Due to this

Act several Indian private companies have entered into the

insurance market, and some companies have joined with

foreign partners.

In economic reform process, the Insurance Companieshas given boost to the socio-economic development process.

The huge amount of funds that are at the disposal of

Insurance Companies are directed as desired avenues like

housing, safe drinking water, electricity, primary education

and infrastructure. Above all the policyholders gets better

pricing of products from competitive insurance companies.

Liberalization

The opening up of Insurance sector was a part of the

ongoing liberalization in the financial sector of India. The

domain of State-run insurance companies was thrown open

to private enterprise on December 7, 1999, with the

introduction of the Insurance Regulatory and Development

Authority (IRDA) Bill. The opening up of the sector gave way

to the world known names in the industry to enter the Indian

market through tie-ups with the eminent business houses.

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What was once a quiet business is becoming one of the

hottest businesses today.

Post liberalization

The changing face of financial sector and the entry of

several companies in the field of non-life Insurance segment

are one of the key results of these liberalization efforts.

Insurance business by way of generating premium income

adds significantly to the GDP. Despite the fact that the

market is vast in India for the Insurance business, thecoverage is far less compared with the international

standards. Estimates show that a meager 35-40 million, out

of a population of 950 million, have come so far under the

umbrella of the insurance industry. The potential market is

so huge that it can grow by 15 to 17 percent per annum.

With the entry of private players, the Indian Insurance

Market may finally be able to make deeper penetration in to

newer segments and expand the market size manifold. The

quality of service will also improve and there will be wide

range of product catering to the needs of different

customers. The pace for claims settlement is also expected

to improve due to increased competition. The general

insurance market in India is likely to be risky in the initial

stages, but this will improve in the next three to five years

Therefore, it may be advantageous to be a second-round

entrant. In the general insurance market the need to build

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trust over time is less important than in the life market

because the risk assessment systems and data that are the

key to success in the general insurance market aresignificantly underdeveloped in India even today

MARKET PLAYERS

Presently there are 12 general insurance companies

with 4 public sector companies and 8 private insurers.

Although the public sector companies still dominate the

general insurance business, the private players are slowlygaining a foothold. A brief description of various players is

given below:

1. ICICI Lombard General Insurance

ICICI Lombard General Insurance Company Limited

(ICICI Lombard) is a 74:26 venture between ICICI Bank

Limited, India's largest private sector bank and Lombard

Canada Limited, one of the oldest property and casualty

insurance companies in Canada. ICICI Lombard

commenced business in September 2001 and is today

operational in 40 cities across India.

2. TATA AIG Insurance Company Ltd

IT is a joint venture between the Tata group; India's

most trusted industrial house and American International

Group, Inc. (AIG), the leading U.S. based international

insurance and financial service organization.

3. Bajaj Allianz

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Bajaj Allianz General Insurance Company Limited is a

joint venture between Bajaj Auto Limited and Allianz AG of

Germany. Both enjoy a reputation of expertise, stabilityand strength. The venture Bajaj Auto holds 74 per cent of

the paid up equity capital of Rs 110 crore, while the

remaining 26 per cent is held by Allianz.

4. HDFC Chubb General Insurance

HDFC holds 74 percent and Chubb 26 percent in the

new joint venture company, HDFC Chubb GeneralInsurance Ltd, was initially capitalized at Rs.100 crore.

5. Reliance General Insurance Company Limited

Reliance Industries has around Rs.300 Crores into its

insurance venture through its financial arm Reliance

Capital Ltd.It is the first Indian private company without

any foreign insurance tie-up.

6. Royal Sundaram

Royal Sundaram, a joint venture between Sundaram

Finance of Chennai, India and Royal & SunAlliance of UK,

is built upon values of truth, trust, teamwork, people

commitment and professionalism.

7. Cholamandalam MS General Insurance Company

Limited

Cholamandalam MS General Insurance Company

Limited (Chola-MS) is a joint venture of the Murugappa

Group & Mitsui Sumitomo. Chola-MS commenced

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operations in October 2002 and has issued more than 1.4

lakh policies in its first calendar year of operations.

8. GIC and Four subsidiariesPrior to 1973, general insurance was urban-centric,

catering mainly to the needs of organized trade and

Industry. One hundred and seven insurers including

branches of foreign companies operating the country were

amalgamated. These were grouped into four companies,

viz. the National Insurance Company Ltd., the OrientalInsurance Company Ltd., the New India Assurance

Company Ltd., and the United India Insurance Company.

The Government of India subscribed to the capital of GIC.

GIC, in turn, subscribed to the capital of the four

companies. All the four companies are government

companies registered under the Companies Act. GIC is

into the reinsurance business whereas its subsidiaries are

into the insurance of Non Life products.

BANCASSURANCE THE NEW CONCEPT IN

INSURANCE INDUSTRY

Bancassurance symbolizes the convergence of banking

and insurance. “Bancassurance” started in Japan, in which

banking and insurance sales services are integrated in much

the same way as in the individual financial markets of

Europe and the United States Incidentally. The term

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bancassurance was coined in France by combining "bank"

and "insurance.'"

Although bancassurance started with handling limitedproducts. the sales of insurance moved forward smoothly

because of factors such as the strengthened sales of housing

loans as core products under the banks' retail strategies at

the time and that the product is easy to understand.

Bancassurance in its simplest form is the distribution of

insurance products through a bank's distribution channels. Inconcrete terms Bancassurance, which is also known as

Allfinanz - describes a package of financial services that can

fulfill both banking and insurance needs at the same time. It

takes various forms in various countries depending upon the

demography and economic and legislative climate of that

country. Demographic profile of the country decides the kind

of products Bancassurance shall be dealing in with,

economic situation will determine the trend in terms of

turnover, market share, etc., whereas legislative climate will

decide the periphery within which the Bancassurance has to

operate.

The motives behind Bancassurance also vary. For banks

it is a means of product diversification and a source of

additional fee income. Insurance companies see

Bancassurance as a tool for increasing their market

penetration and premium turnover. The customer sees

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Bancassurance as a bonanza in terms of reduced price, high

quality product and delivery at doorsteps. Actually,

everybody is a winner here.Why should banks enter insurance?

There are several reasons why banks should seriously

consider Bancassurance, the most important of which is

increased return on assets (ROA). One of the best ways to

increase ROA, assuming a constant asset base, is through

fee income. Banks that build fee income can cover more of their operating expenses, and one way to build fee income is

through the sale of insurance products. Banks that

effectively cross-sell financial products can leverage their

distribution and processing capabilities for profitable

operating expense ratios.

By leveraging their strengths and finding ways to

overcome their weaknesses, banks could change the face of

insurance distribution. Sale of personal line insurance

products through banks meets an important set of consumer

needs. Most large retail banks engender a great deal of trust

in broad segments of consumers, which they can leverage in

selling them personal line insurance products. In addition, a

bank’s branch network allows the face to face contact that is

so important in the sale of personal insurance.

Another advantage banks have over traditional

insurance distributors is the lower cost per sales lead made

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possible by their sizable, loyal customer base. Banks also

enjoy significant brand awareness within their geographic

regions, again providing for a lower per-lead cost whenadvertising through print, radio and/or television. Banks that

make the most of these advantages are able to penetrate

their customer base and markets for above-average market

share.

Other bank strengths are their marketing and

processing capabilities. Banks have extensive experience inmarketing to both existing customers (for retention and

cross selling) and non-customers (for acquisition and

awareness). They also have access to multiple

communications channels, such as statement inserts, direct

mail, ATMs, telemarketing, etc. Banks' proficiency in using

technology has resulted in improvements in transaction

processing and customer service.

By successfully mining their customer databases,

leveraging their reputation and 'distribution systems’

(branch, phone, and mail) to make appointments, and

utilizing 'sales techniques’ and products tailored to the

middle market, European banks have more than doubled the

conversion rates of insurance leads into sales and have

increased sales productivity to a ratio which is more than

enough to make Bancassurance a highly profitable

proposition.

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Benefits to insurers

Insurers have much to gain from marketing through

banks. Personal-lines carriers have found it difficult to growusing traditional agency systems because price competition

has driven down margins and increased the compensation

demands of successful agents. Over the last decade, life

agents have sold fewer and larger policies to a more upscale

client base. Middle-income consumers, who comprise the

bulk of bank customers, get little attention from most lifeagents. By capitalizing on bank relationships, insurers will

recapture much of this under served market.

Most insurers that have tried to penetrate middle-

income markets through alternative channels such as direct

mail have not done well. Clearly, a change in approach is

necessary. As with any initiative, success requires a clear

understanding of what must be done, how it will be done and

by whom. The place to begin is to segment the strengths

that the bank and insurer bring to the business opportunity.

Collaboration is the key

In their natural and traditional roles and with their

current skills, neither banks nor insurance companies could

effectively mount a Bancassurance start-up alone.

Collaboration is the key to making this new channel work.

Banks bring a variety of capabilities to the table. Most

obviously, they own proprietary databases that can be

31



tapped for middle-market warm leads. In addition, they can

leverage their name recognition and reputation at both local

and regional levels. Strong players also excel at managingmultiple distribution channels, cross-selling banking

products, and using direct mail. However, most banks lack

experience in several areas critical to successful

Bancassurance strategies: in particular, developing

insurance products, selling through face-to-face "push"

channels underwriting, and managing long-tail insuranceproducts.

Where banks usually fall short, a strong insurer will

excel. Most have substantial product and underwriting

experience, strong "push" - channel capabilities, and

investment management expertise. On the other hand, they

tend to lack experience or ability in the areas where banks

prevail. They have little or no background in managing low-

cost distribution channels; they often lack local and regional

name recognition and reputation; and they seldom possess

access to or experience with the middle market.

BANCASSURANCE IN INDIA - A SWOT ANALYSIS

32



Even though, banks and insurance companies in India

are yet to exchange their wedding rings, Bancassurance as a

means of distribution of insurance products is already inforce in some form or the other. Banks are selling Personal

Accident and Baggage Insurance directly to their Credit Card

members as a value addition to their products. Banks also

participate in the distribution of mortgage linked insurance

products like fire, motor or cattle insurance to their

customers. Banks can straightaway leverage their existingcapabilities in terms of database and face to face contact to

market insurance products to generate some income for

themselves which hitherto was not thought of.

Once Bancassurance is embraced in India with full

force, a lot will be at stake. Huge capital investment will be

required to create infrastructure particularly in IT and

telecommunications, a call center will have to be created,

top professionals of both industries will have to be hired, an

R & D cell will need to be created to generate new ideas and

products. It is therefore essential to have a SWOT analysis

done in the context of Bancassurance experiment in India.

Strengths

In a country of 1 Billion people, sky is the limit for

personal lines insurance products. There is a vast untapped

potential waiting to be mined particularly for general

insurance products. There are more than 900 Million lives

33



waiting to be given a life cover (total number of individual

life policies sold in 1998-99 was just 91.73 Million). There are

about 200 Million households waiting to be approached for ahouseholder's insurance policy. Millions of people travelling

in and out of India can be tapped for Overseas Mediclaim

and Travel Insurance policies. After discounting the

population below poverty line the middle market segment is

the second largest in the world after China. The insurance

companies worldwide are eyeing on this, why not wepreempt this move by doing it ourselves?

Our other strength lies in a huge pool of skilled

professionals whether it is banks or insurance companies

who may be easily relocated for any Bancassurance venture.

LIC and GIC both have a good range of personal line

products already lined up, therefore R & D efforts to create

new products will be minimal in the beginning. Additionally,

GIC with 4200 operating offices and LIC with 2048 branch

offices are almost already omnipresent, which is so essential

for the development of any Bancassurance project.

Weaknesses

The IT culture is unfortunately missing completely in all

of the future collaborators i.e. banks, GIC & LIC. A late

awakening seems to have dawned upon but it is a case of

too late and too little. Elementary IT requirement like

networking (LAN) is not in place even in the headquarters of

34



these institutions, when the need today is of Wide Area

Network (WAN) and Vast Area Network (VAN). Internet

connection is not available even to the managers of operating offices.

The middle class population that we are eyeing at are

today overburdened, first by inflationary pressures on their

pockets and then by the tax net. Where is the money left to

think of insurance ? Fortunately, LIC schemes get IT

exemptions but personal line products from GIC (mediclaimalready has this benefit) like householder, travel, etc. also

need to be given tax exemption to further the cause of

insurance and to increase domestic revenue for the country.

Another drawback is the inflexibility of the products i.e.

it can not be tailor made to the requirements of the

customer. For a Bancassurance venture to succeed it is

extremely essential to have in-built flexibility so as to make

the product attractive to the customer.

Opportunities

Banks' database is enormous even though the goodwill

may not be the same as in case of their European

counterparts. This database has to be dissected variously

and various homogeneous groups are to be churned out in

order to position the Bancassurance products. With a good IT

infrastructure, this can really do wonders.

35



Other developing economies like Malaysia, Thailand

and Singapore have already taken a leap in this direction

and they are not doing badly. There is already anatmosphere created in the country for liberalisation and

there appears to be a political consensus also on the subject.

Therefore, RBI or IRA should have no hesitation in allowing

the marriage of the two to take place. This can take the form

of merger or acquisition or setting up a joint venture or

creating a subsidiary by either party or just the workingcollaboration between banks and insurance companies.

Threats

Success of a Bancassurance venture requires change in

approach, thinking and work culture on the part of

everybody involved. Our work force at every level are so well

entrenched in their classical way of working that there is a

definite threat of resistance to any change that

Bancassurance may set in. Any relocation to a new company

or subsidiary or change from one work to a different kind of

work will be resented with vehemence.

Another possible threat may come from non-response

from the target customers. This happened in USA in 1980s

after the enactment of Garn - St Germaine Act. A rush of

joint ventures took place between banks and insurance

companies and all these failed due to the non-response from

the target customers. US banks have now again (since late

36



1990s) turned their attention to insurance mainly general

insurance.

The investors in the capital may turn their face off incase the rate of return on capital falls short of the existing

rate of return on capital. Since banks and insurance

companies have major portion of their income coming from

the investments, the return from Bancassurance must at

least match those returns. Also if the unholy alliances are

allowed to take place there will be fierce competition in themarket resulting in lower prices and the Bancassurance

venture may never break-even.

Looking Around

Hardly 20% of all US banks were selling insurance in

1998 against almost 70% to 90% in many W. European

countries. Market penetration of Bancassurance in new life

businesses in Europe ranges between 30% in U.K. to nearly

70% in France. Almost 100% banks in France are selling

insurance products. In 1991 Nationale Nederlanden of

Netherlands merged with Post Bank, the banking subsidiary

of the post office to create the ING Group - a new dimension

to the Bancassurance i.e. harnessing the databank of the

post office as well. CNP, the largest independent insurance

company in France has developed its product distribution

through post offices. The merger of Winterthur, the largest

Swiss insurance company with Credit Suisse and Citibank

37



with Travellers Group have resulted in some of the largest

financial conglomerates in the world.

Despite the phenomenal success of Bancassurance inEurope, property and casualty products have not made

much inroads. In Spain, Belgium, Germany and France where

more than 50% of all new life premium is generated by

Bancassurance, only about 6% P & C business comes from

banks in Spain, 5% in Belgium, 4% in France and Italy.

A recent study by Boston Consulting Group and BankAdministration Institute in USA claims that if banks made a

major commitment to insurance and a more narrowly

targeted commitment to investors, within 5 years they could

increase retail revenues by nearly 50%. It further states that

Banks could capture 10% to 15% of the total U.S.

insurance and investment market by selling products to 20%

of their existing customers.

Banks' existing infrastructure enables them to operate

at expense levels that are 30% to 50% lower than those of

traditional insurers.

Bancassurance's bank-branch based sales system sells

3 to 5 times as many insurance policies as a conventional as

a conventional insurance sales and distribution force.

By simplifying Bancassurance products each back office

bank employee can quintuple managing policies compared

to traditional insurers.

38



Lessons we should take a leaf from the experienced

players and develop Bancassurance only gradually. As

happened in France, Italy, Germany and Canada - bankswere allowed first only to distribute the insurance products

for a fee. This itself amounted to substantial income for

banks since they were not carrying the risks and product

development was also left to insurance companies. This

seems fair since each player should contribute towards

something in which he excels; banks in mass distribution andinsurance companies in risk management. After stabilization,

the roles may be expanded in opposite directions.

We need to develop innovative products and services.

CIBC in Canada relieves the customer of having to report

and resolve auto claims. The bank assumes responsibility for

the process, even phoning the police for the customer at the

time of the accident. Another example is provided by Banco

Bilbao Vizcaya of Spain who offers a term life policy with

simple premium payments and a clear contract that is

designed to be sold, issued and signed at the point of sale

within 15 minutes.

Banks and insurance companies in India wishing to

pursue high aspiration insurance strategies would do well to

learn from European bancassurers, who have decades of

experience managing insurance subsidiaries. Some of them -

Lloyds TSB in the UK, Credit Agricole in France and Spain's

39



Banco Bilbao Vizcaya - are delivering outstanding results.

These bank have profitably sold insurance products to more

than a fourth of their customers while generating more than20% on sales. Credit Agricole, the second largest life insurer

in France, with $11 billion of premium in force, employs only

170 people in its insurance subsidiary. It is able to limit

overhead by harnessing the bank's existing resources and

capabilities.

Obstacles and success factorsEven insurers and banks that seem ideally suited for a

Bancassurance partnership can run into problems during

implementation. The most common obstacles to success are

poor manpower management, lack of a sales culture within

the bank, no involvement by the branch manager,

insufficient product promotions, failure to integrate

marketing plans, marginal database expertise, poor sales

channel linkages, inadequate incentives, resistance to

change, negative attitudes toward insurance and unwieldy

marketing strategy.

Conversely, Bancassurance ventures that succeed tend

to have certain things in common. Factors that appear to be

critical to success include strategies consistent with the

bank's vision, knowledge of target customers' needs, defined

sales process for introducing insurance services, simple yet

complete product offerings, strong service delivery

40



mechanism, quality administration, synchronized planning

across all business lines and subsidiaries, complete

integration of insurance with other bank products andservices, extensive and high-quality training, sales

management tracking system for reporting on agents' time

and results of bank referrals and relevant and flexible

database systems.

Finally

The creation of Bancassurance operations has amaterial impact on the financial services industry at large.

Banks, insurance companies and traditional fund

management houses are converging towards a model of

global retail financial institution offering a wide array of

products. It leads to the creation of 'one-stop shop' where a

customer can apply for mortgages, pensions, savings and

insurance products.

Discovery comes from looking at the same thing as

everyone else but seeing something different. Banks' desire

to increase fee income has them looking at insurance.

Insurance carriers and banks can become part of the vision

through strategic partnerships. Now is the time to position

your company for the new millennium of insurance product

distribution.

41



Marketing and Distribution Channels in

Bancassurance

One of the most significant changes in the financial

services sector over the past few years has been the growth

and development of bancassurance. Banking institutions and

insurance companies have found bancassurance to be an

attractive and profitable complement to their existing

activities. The successes demonstrated by various

bancassurance operations particularly in Europe havetriggered an avalanche of mergers and acquisitions across

continents and efforts are on to replicate the early success

of bancassurance in other parts of the world as well.

Distribution is the key issue in bancassurance and is

closely linked to the regulatory climate of the country. Over

the years, regulatory barriers between banking and

insurance have diminished and has created a climate

increasingly friendly to bancassurance. The passage of

Gramm-Leach Bliley Act of 1999 in US and IRDA Bill in India

in 2000 have stimulated the growth of bancassurance by

allowing use of multiple distribution channels by banks and

insurance companies.

Bancassurance experience in Europe as well as in other

select countries offers valuable guidance for those interested

in insurance distribution through the banking channel in

developing markets. Many banks and insurers are looking

42



with great interest at building new revenue through

bancassurance - including large, traditional companies that

wouldn't have considered such an approach about a decadeago. Of particular interest, many believe, is the potential for

bancassurance in developing economies such as those of

Latin America and Southeast Asia.

Distribution channels in Bancassurance Traditionally, insurance products have been promoted

and sold principally through agency systems in most

countries. With new developments in consumers’ behaviors,

evolution of technology and deregulation, new distribution

channels have been developed successfully and rapidly in

recent years. Bancassurers make use of various distribution

channels:

Career Agents

Special Advisers

Salaried Agents

Bank Employees / Platform Banking

Corporate Agencies and Brokerage Firms

Direct Response

Internet

e-Brokerage

Outside Lead Generating Techniques

43



The main characteristics of each of these channels are:

Career Agents: Career Agents are full-time commissioned

sales personnel holding an agency contract. They aregenerally considered to be independent contractors.

Consequently an insurance company can exercise control

only over the activities of the agent which are specified in

his contract. Despite this limitation on control, career agents

with suitable training, supervision and motivation can be

highly productive and cost effective. Moreover their level of customer service is usually very high due to the renewal

commissions, policy persistency bonuses, or other customer

service-related awards paid to them.

Many bancassurers, however avoid this channel,

believing that agents might oversell out of their interest in

quantity and not quality. Such problems with career agents

usually arise, not due to the nature of this channel, but

rather due to the use of improperly designed remuneration

and/or incentive packages.

Special Advisers: Special Advisers are highly trained

employees usually belonging to the insurance partner, who

distribute insurance products to the bank's corporate clients.

Banks refer complex insurance requirements to these

advisors. The Clients mostly include affluent population who

require personalised and high quality service. Usually Special

44



advisors are paid on a salary basis and they receive

incentive compensation based on their sales.

Salaried Agents: Having Salaried Agents has the advantagesof them being fully under the control and supervision of

bancassurers. These agents share the mission and objectives

of the bancassurers. Salaried Agents in bancassurance are

similar to their counterparts in traditional insurance

companies and have the same characteristics as career

agents. The only difference in terms of their remuneration isthat they are paid on a salary basis and career agents

receive incentive compensation based on their sales. Some

bancassurers, concerned at the bad publicity which they

have received as a result of their career agents

concentrating heavily on sales at the expense of customer

service, have changed their sales forces to salaried agent

status.

Platform Bankers (Cross-Sell): Cross selling involves selling

of different products and services from your portfolio to your

customers. It refers to sales activities that identify and

suggest related items to a prospect or customer, when an

initial item is purchased. It is a known fact that getting a new

customer is more difficult than selling to the existing ones. It

thus makes sense to encourage more business from your

present client list. This is where cross selling plays a vital

role. While making a sale to a customer, propose other

45



products linking them to his needs. Platform Bankers are

bank employees who spot the leads in the banks and gently

suggest the customer to walk over and speak withappropriate representative within the bank. The platform

banker may be a teller or a personal loan assistant and the

representative being referred to may be a tarined bank

employee or a representative from the partner insurance

company.

Platform Bankers can usually sell simple products.However, the time which they can devote to insurance sales

is limited, e.g. due to limited opening hours and to the need

to perform other banking duties. A further restriction on the

effectiveness of bank employees in generating insurance

business is that they have a limited target market, i.e. those

customers who actually visit the branch during the opening

hours.

In many set-ups, the bank employees are assisted by

the bank's financial advisers. In both cases, the bank

employee establishes the contact to the client and usually

sells the simple product whilst the more affluent clients are

attended by the financial advisers of the bank which are in a

position to sell the more complex products. The financial

advisers either sell in the branch but some banks have also

established mobile sales forces.

46



If bank employees only act as "passive" insurance sales

staff (or do not actively generate leads), then the

bancassurer's potential can be severely impeded. However,if bank employees are used as "active" centres of influence

to refer warm leads to salaried agents, career agents or

special advisers, production volumes can be very high and

profitable to bancassurers.

Set-up / Acquisition of agencies or brokerage firms: In the

US, quite a number of banks cooperate with independentagencies or brokerage firms whilst in Japan or South Korea

banks have founded corporate agencies. The advantage of

such arrangements is the availability of specialists needed

for complex insurance matters and -in the case of brokerage

firms - the opportunity for the bank clients to receive offers

not only from one insurance company but from a variety of

companies. In addition, these sales channels are more

conceived to serve the affluent bank client.

Direct Response: In this channel no salesperson visits the

customer to induce a sale and no face-to-face contact

between consumer and seller occurs. The consumer

purchases products directly from the bancassurer by

responding to the company's advertisement, mailing or

telephone offers. This channel can be used for simple

packaged products which can be easily understood by the

consumer without explanation.

47



Internet: Internet banking is already securely established as

an effective and profitable basis for conducting banking

operations. The reasonable expectation is that personalbanking services will increasingly be delivered by Internet

banking. Bancassurers can also feel confident that Internet

banking will also prove an efficient vehicle for cross selling of

insurance savings and protection products. It seems likely

that a growing proportion of the affluent population,

everyone's target market, will find banks with householdname brands and proven skills in e-business a very

acceptable source of non-banking products.

There is now the Internet, which looms large as an

effective source of information for financial product sales.

Banks are well advised to make their new websites as

interactive as possible, providing more than mere standard

bank data and current rates. Functions requiring user input

(check ordering, what-if calculations, credit and account

applications) should be immediately added with links to the

insurer. Such an arrangement can also provide a vehicle for

insurance sales, service and leads.

E-Brokerage: Banks can open or acquire an e-Brokerage arm

and sell insurance products from multiple insurers. The

changed legislative climate across the world should help

migration of bancassurance in this direction. The advantage

of this medium is scale of operation, strong brands, easy

48



distribution and excellent synergy with the internet

capabilities.

Outside Lead Generating Techniques: One last method fordeveloping bancassurance eyes involves "outside" lead

generating techniques, such as seminars, direct mail and

statement inserts. Seminars in particular can be very

effective because in a non-threatening atmosphere the

insurance counselor can make a presentation to a small

group of business people (such as the local chamber of commerce), field questions on the topic, then collect

business cards. Adding this technique to his/her lead

generation repertoire, an insurance counselor often cannot

help but be successful.

To make the overall sales effort pay anticipated

benefits, insurers need to also help their bank partners

determine what the “hot buttons” will be for attracting the

attention of the reader of both direct and e-mail. Great

opportunities await bancassurance partners today and, in

most cases, success or failure depends on precisely how the

process is developed and managed inside each financial

institution. This includes the large regional bank and the

small one-unit community bank.

Key Value Drivers

Which distribution model to use is a tactical decision

secondary to more basic strategic concerns. Bancassurance

49



strategies should be driven by markets and channels,

encompass a broad range of tactics and practices, and

leverage the competencies of the bank and the insurer. Theyshould identify and build upon a discrete set of value drivers,

those factors of such fundamental importance that to ignore

any one of them could be fatal to the success of the project.

The following four value drivers should be considered in a

bancassurance strategy:

•

Brand equity.• Distribution.

• Tehnology.

• Culture.

50



CHAPTER II COMPANY PROFILE

HISTORY ICICI BANK

ICICI Bank was

originally promoted in

1994 by ICICI Limited, an Indian financial institution, and was

its wholly-owned subsidiary. ICICI's shareholding in ICICI

Bank was reduced to 46% through a public offering of shares

in India in fiscal 1998, an equity offering in the form of ADRs

listed on the NYSE in fiscal 2000, ICICI Bank's acquisition of

Bank of Madura Limited in an all-stock amalgamation in

fiscal 2001, and secondary market sales by ICICI to

institutional investors in fiscal 2001 and fiscal 2002. ICICI

was formed in 1955 at the initiative of the World Bank, the

Government of India and representatives of Indian industry.

The principal objective was to create a development

financial institution for providing medium-term and long-

term project financing to Indian businesses. In the 1990s,

51



ICICI transformed its business from a development financial

institution offering only project finance to a diversified

financial services group offering a wide variety of productsand services, both directly and through a number of

subsidiaries and affiliates like ICICI Bank. In 1999, ICICI

become the first Indian company and the first bank or

financial institution from non-Japan Asia to be listed on the

NYSE.

AT PRESENT India’s 2nd largest bank; assets of US$ 22.1 bn

Rated higher than sovereign by Moody’s

Market leader in retail finance; 4.7 mn customers

Technology leader among Indian banks

Present across the spectrum of financial services

Establishing international footprint Subsidiaries in life insurance (ICICI Prudential), general

insurance (ICICI Lmbard), investment banking and venture

capital that are market leaders in their respective

segments.

Focus on Technology-Led Banking and Multiple

Channel Access

52



LOMBARD

Lombard can trace its history back as

far as 1861, when a group of

entrepreneurial businessmen in Rotherham recognized the

profit potential in hiring wagons to railway companies and

mine proprietors.

They set up the North Central Wagon and Finance

Company, quoting annual hire purchase (HP) rates varyingfrom £9 to £14 for the letting of wagons to railway

companies, collieries and quarries.

The company prospered, surviving the depression of

the 1860s with hardly a detectable check to its growth,

although the chairman reported in August 1862 that 'the war

in America continues with unabated ferocity, with every

nation in the world feeling the effects'.

The directors successfully pursued their aim to conduct

the business of North Central with 'special reference to

safety, combined with profit'. Profits for 1861 were £637.

53



And, in 1865, wagons to a total cost of £105,000 had been

let on HP.

Even in the crisis year of 1866, when Bank Rate waschanged 14 times, reaching ten per cent for three

consecutive months, North Central was able to report

increased profits. The directors were, however, moved to

complain about 'the panic that has prevailed in the moneyed

circles and the high rate of interest exacted by the Bank of

England'.By the turn of the century, North Central had nearly

25,000 wagons on hire. It was also heavily involved in the

business of repair and maintenance of railway wagons,

something which continued until 1918 when an agreement

was reached amongst some of the main railway wagon

builders to pool resources and Wagon Repairs Limited was

formed, taking over North Central's repairing assets in

exchange for shares.

The diamond symbol used in the corporate logo depicts

a lump of coal, reflecting North Central's early links with the

mining industry. After the First World War, the directors of

North Central, seeing the potential in road transport, turned

their attention to the financing of motor vehicles.

In 1928 North Central came into contact with a man

who was far ahead of his time in financial thinking,

particularly with regard to acquisitions. With financial

54



assistance from The Pru, Sir Connop made a successful offer

to the shareholders of North Central and he and the

Prudential became the owners of the whole of the ordinaryShare Capital.

1928 With Sir Connop at the helm, North Central made

a number of acquisitions, which included Southern Counties

Cars Finance and Consumer Credit Corporation.

In 1958 the whole of the ordinary share capital of North

Central was acquired by its bankers National Provincial Bank,with whom the company had had unbroken relations for

ninety-seven years.

Meanwhile, in 1947, a businessman by the name of Eric

Lombard Knight purchased a small finance company and,

together with his wife Peggy, Mr Norman Osborne and Henry

Alfrey, began the development of Lombard Banking. The

company expanded rapidly, acquiring a company, which

became known as Lombank.

In 1959 Lombank bought a controlling interest in Tricity

Finance, a company which offered retail credit facilities for

household, leisure and other consumer goods. It was then

decided to move the head office to a new office block in

Purley Way, Croydon.

By 1968, just 21 years after it came into existence with

net assets of £111,000 and a staff of eight, Lombard Banking

Group had net tangible assets in excess of £15m, gross

55



assets of more than £165m and held deposits of over £90m.

Its 'financial empire' stretched as far as Australia, New

Zealand and Canada and staff numbered in excess of 1,400.When, in 1969, National Provincial Bank and

Westminster Bank merged to form National Westminster

Bank, one of the first strategic moves of the new bank was

to acquire Lombard Banking, which merged with North

Central shortly afterwards and Lombard North Central (LNC)

was born.Austin Rover Finance was formed in 1977, the first joint

venture between a motor manufacturer and finance house,

and cemented the close relationship between Lombard and

Rover Group which came to an end over twenty years later.

It was the forerunner for a string of successful dealer point-

of-sale relationships with leading manufacturers including

Peugeot, Citroen, Jaguar, Nissan and Alfa Romeo.

Also in 1977 Farming and Agricultural Finance was launched.

In the 1980's Lombard Tricity Finance became a wholly

owned subsidiary of the group and Lombard acquired a 50

per cent shareholding in Lex Vehicle Leasing.

In 1983 British Car Contracts was set up offering

specialist contract hire facilities to the business user.

By 1985, the company's book had grown by 200 per

cent and through its sponsorship of the RAC Rally (1978 -

56



1992), Lombard had made its mark as the supporter of

Britain's leading motor sport event.

In the late eighties Lombard was marching into Europe.With off-shore operations, a business in Cyprus and plans for

expansion which encompassed all areas of the group,

Lombard North Central was rightly hailed as Europe's

premier finance company.

In 1991, the company restructured into three sectors;

motor, business and personal.In 1995, Lombard re-entered the big ticket leasing

market with the creation of Lombard Corporate Finance.

Foreseeing the changes which were happening in the

consumer finance market, Lombard launched one of the

early 'direct' loan services offering customers a fast and

easy way to finance their goods via the telephone, 24 hours

a day. Lombard Direct was a run-away success, far

exceeding expectations.

1998, Lombard made an impressive debut into the

rolling stock market with a successful bid to finance the

purchase of 78 trains worth £395m for Virgin Rail. This is

largest deal Lombard has ever transacted and is a poignant

link back to our roots and the financing of those early railway

wagons.

At the end of 1998 Lombard Motor, Lombard Tricity and

Lombard Business Equipment Leasing were sold to First

57



National. This allowed the remaining businesses to specialize

in distinct market segments: Lombard in business to

business asset finance and services, Lombard Direct in directpersonal finance and Lombard Banking Services in deposit

taking and banking services for overseas clients.

The new millennium brought more change and

opportunities for Lombard when National Westminster Bank

was acquired by The Royal Bank of Scotland. RoyScot Trust

and Royal Bank Leasing have now been brought togetherwith Lombard to form a new force in asset finance. It is from

here that Lombard steps forward into the new century, much

changed from the wagon finance company but still with the

same emphasis on entrepreneurial approach and success.

One can't help wondering what those gentlemen who

met at the Prince of Wales Hotel in Rotherham in January

1861 or Eric Lombard Knight and his fellow Lombank

'pioneers' would now think of the company they created. We

are sure that it would be with a sense of pride but, since

they were all men of vision and foresight, they surely

wouldn't be surprised.

58



ICICI LOMBARD GENERAL INSURANCE COMPANY

LIMITED

ICICI Lombard GeneralInsurance Company

Limited is 74:26 joint

venture between ICICI Bank Limited and the US-based $ 26

billion Fairfax Financial Holdings Limited. ICICI Bank is India's

second largest bank; while Fairfax Financial Holdings is a

diversified financial corporate engaged in general insurance,reinsurance, insurance claims

management and investment

management.

Lombard Canada Ltd, a group

company of Fairfax Financial

Holdings Limited, is one of Canada's oldest property and

casualty insurers. ICICI Lombard General Insurance Company

received regulatory approvals to commence general

insurance business in August 2001.

Why ICICI Lombard?

India 's number one private general insurance company

First general insurance company in India to be ISO

9001:2000 certified.

Simple and fast documentation

Lightning fast claims settlement

Instant online policy issuance

59



Comprehensive product line

Highest security level offered through 128-bit

encryption in case of online data exchange.

First company to provide digitally signed documents

through an online interface.

Achieved financial breakeven in first full year of

operations

Achieved underwriting breakeven in second year of

operations

ICICI Lombard is a FIVE S - Level 1 certified company

(Five S: The five S’s are Seiri (sorting out), Seiton

(Systematic Arrangement), Seiso (Spic-n-Span), Seiketsu

(Standardize) and Shitsuke (Self-Discipline). Five S is based

on the underlying principle of creating ownership for every

object in the organization, so that nothing is neglected.)VISION

To bring innovative insurance solutions to customers.

VALUESa. Managing Risk

The ability to identify, quantify and manage

risk is intrinsic to success in the business of

insurance. ICICI Lombard’s risk management

approach balances the need to provide cost

effective solutions to our customers while delivering

optimal shareholder returns. Success on both fronts

is reflected in the numbers: while the number of

60



policies sold increased by 2.5 times in fiscal 2004,

profits grew almost ten- fold during the year.

A strong capital base gives an insurer theability to service large claims in the event of a

catastrophe. This is a key determinant of growth as

it provides comfort to customers in a business that

is largely driven by trust.

Our reinsurance program is formulated in line

with the guidelines laid down by the Insurance

Regulatory Authority of India (IRDA), which aims at

optimum retention of premium within the country

and adequate risk coverage and diversification. Our

choice of reinsurance partners is in turn determined

by their strong reputation, high credit rating and

the alignment of their strengths with our risk

management objectives.

Staying ahead in managing risk through:-

A dedicated risk management team that

constantly monitors the risk exposure by

customer, product and region.

An indigenously developed Risk Accumulation

System that facilitates online tracking of various

risks down to the pin code level in anygeographical location.

Thus, our risk management program seeks to

blend the objectives of customer satisfaction and

61



investor return while operating within the statutory

norms.

b. IT & InfrastructureICICI Lombard has effectively used Information

Technology to meet growing customer needs while

improving operational efficiency and profitability.

The company’s IT strategy, architecture and

successful deployment form the backbone of its

business.

Staying ahead in IT infrastructure through:-

Online Manager: A web-based interface that

allows a customer to buy, endorse and renew

policy online. Claims intimation and status

tracking also forms part of the interface.

Using SMS technology to deliver timely alerts

and reminders to keep customers informed of

various transactions.

Using intranet effectively to enhance employee

productivity and simplify human resource

functions.

A state-of-the art data center with robust

connectivity and support.

Highest security level offered through 128-bit

encryption in case of online data exchange.

The only company to provide digitally signed

documents through the online interface.

c. Distribution Reach

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ICICI Lombard General Insurance Company’s

endeavor is to become India’s preferred provider of

the entire array of financial products and services. The company has built a robust franchise network

in association with its joint venture partners to

expand coverage. The company presently has 103

offices across India manned by over 1,200

employees. It believes in targeting customers

through multi-channel route including direct sales,

agents, brokers, bancassurance, alternate channels

and the Internet. Thus, the customers have number

of channels to choose from.

d. Human Resource

ICICI Lombard believes in a progressive human

resource philosophy that turns human capital into a

key source of competitive advantage. The capability

and motivation level of employees is a key

determinant in success of any service-oriented

organization. Our employee strength is over 1,200.

We have people from diverse backgrounds viz.

general insurance, banking, financial services,

consumer goods, telecom, automotive engineering

etc.e. Partnerships

Effective partnerships and alliances form an

integral part of the company’s strategy. ICICI

Lombard believes that a leveraged distribution

63



model via partnerships and alliances will be a key

driver of its growth in future. Partnership driven

alliances model allows the company to cash-in onthe partner’s customer network so that the

customer gets a packaged offering of products.

Staying ahead in partnership through

Bancassurance tie-ups:-

ICICI Bank

ABN Amro Bank

Rural Distribution tie-ups

f. Product Innovation

Product innovation is the key to business

growth. ICICI Lombard believes in challenging

existing product assumptions and targeting newproduct-market segments. This has helped the

company in customer acquisition and retention as

well as in increasing category penetration.

The company has launched a slew of products

and has emerged as a major player in the corporate

and retail segment driven by a well-balanced

portfolio.

Staying ahead in product innovation through:-

64



During the year 2004: The company in

coordination with the World Bank launched

Weather Insurance. The company’s Overseas Travel Insurance is the

only product in the market that offers premium

calculation on a ‘Pay-per-day’ basis as against

paying premium on a slab-wise basis.

A unique Senior Citizen Overseas Travel

Insurance Plan to cover senior citizens up to the

age of 85 years was launched by the company

during the year 2004. It is the only policy of its

kind in the market.

Loan Care – a first of its kind product to be

launched in India – protecting the lender from

borrower default on account of death, permanent

disability, loss of job and loss pay due to critical

illness.

g. Customer Service

Insurance is a service-specific industry.

Customer service is one of the key areas of focus

for ICICI Lombard. The company has built high

levels of customer loyalty and advocacy in

relatively short period of time.

Staying ahead in customer service through

Dedicated relationship managers for both sales

and customer service.

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Insurance portfolio analysis and risk advisory

services

Cashless claims service through a pan India

network of garages and hospitals

247 call center

Branch offices in 103 cities

Online centers to service better

Bancassurance branch network

PHILOSOPHY

♣ Claim Settlement

Lightning-fast claim settlement is one of the key

areas of focus for ICICI Lombard. Our dedicated

relationship managers, wide spread network across India

and presence of 24 7 call centers assure our customers

that we are always on call, day or night. Our tie-up with

Cunningham Lindsey, the world’s second largest loss

adjustors with its network in 80 locations across India,

ensures a surveyor on site in less than 24 hours.

The company strongly believes that the best

insurance company is not the one with the most

premiums earned, but the one that settles your claim at alightning speed.

It is ICICI Lombard’s endeavor to streamline

processes in order to settle your claim at a lightning

speed. Company has simplified claim procedures to help

66



you file a hassle-free claim. Company’s claims philosophy

promotes and ensures a mutual understanding with our

customers and offers an unwritten promise to honour thecommitments we make.

ICICI Lombard’s tie-up with Cunningham Lindsey, the

world’s second largest loss adjustors with its network in

80 locations across India, ensures a surveyor on site in

less than 24 hours.

♣

Rural InitiativeICICI Lombard believes in striking the right balance

between the commercial and socio-economic aspects of

the insurance business. In its endeavour to offer tailor-

made products to meet the requirement of the rural

population, explore business opportunities in the related

segments and build a competitive edge through strong

distribution network and product innovation, ICICI

Lombard uses intermediaries like ICICI Banks kiosks,

direct selling agents, state-level tie-ups, ITC’s e-choupals,

NGO’s and other micro- finance institutions (MFIs).

The rural segment offers immense business

opportunities for insurers since it constitutes 50% of the

GDP. Growing per capita and disposable income and risingfinancial awareness among rural masses has opened up

new avenues for insurers in this segment.

♣ Corporate Business

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ICICI Lombard via its CSG segment aims to tap large

corporates with high premium potential. The company has

emerged as a major player in the corporate segment witha well-balanced portfolio. It has made forays into

specialized products that require complex product

development and strong underwriting skills. In addition, a

strong distribution has enabled it to reach out to over

3,000 corporates. It also offers single point contact

through dedicated relationship managers for both salesand customer service.

♣ Bancassurance

The company has set up a dedicated SBU to cater to

bancassurance business managed by dedicated teams for

each bank partner across all locations to ensure highest

levels of service to the channel and their customers and to

provide complete support and value addition to the bank

partners. Our bancassurance philosophy emphasizes on

complete respect for the partner’s brand and business

model with a clear understanding that the partner owns

the customer.

The company has tied up with few partners like ABN

Amro Bank, ICICI Bank, UTI Bank etc, to ensure complete

support and continuous value addition to the partner. The

business philosophy behind the bancassurance initiative is

to leverage distribution synergies with partners. The

68



channel offers unmatched product suite customized for

bank channels and customers.

♣ Retail

ICICI Lombard aims to tap retail segment through

multi-product and multi-channel approach to marketing.

The company believes that retail segment has immense

potential and will drive the company’s growth in future. It

has presence in all retail categories - travel, health, home

and motor. It has launched a number of innovativeproducts and features in each category like `Pay-per-day’

in Overseas Travel Insurance and floater cover for

individual Health Insurance. The key to success in this

area is effective market segmentation and targeted

product offerings that meet customer needs.

♣ e-channel

ICICI Lombard’s e-channel initiative has embraced

technology with open arms. The effective use of

technology platforms has enabled customers to view all

their insurance transactions through the web on a real

time basis. ICICI Lombard’s e-channel mainly focuses on

targeting customers through Internet, intranet (of large

corporates and manufacturing companies) and other

national level distribution networks. The focus is on

targeting customers through the online medium. The

model is to develop an integrated and customized product

69



platform with key partners - ICICI Direct, ICICI Bank,

preferred partners – moneycontrol.com and

indiatimes.com and other websites.CHANNELS

ICICI Lombard follows multi-channel approach to tap

customers. Depending on the effectiveness, the following

channels are used for sales, service and other allied

activities. The main objective of these channels is:

• To create value beyond the “product”.• To convert customer to clients.

• To spread awareness about the company and its

products.

Major Channels

1. Advisors

2. Bancassurance

3. Insurance Online

4. Branches

5. Telesales

Bancassurance Philosophy of ICICI Lombard

Bancassurance:

Bancassurance is the distribution of insurance products

through a bank’s network. This channel has beensuccessfully deployed internationally to distribute insurance

products. In India, the concept caught on post insurance

industry’s privatization in December 1999.

♠ There are basically four models of bancassurance viz.:

70



♠ Distribution alliance between an insurance company

and a bank;

♠ Joint venture between a bank and an insurance

company;

♠ Merger between a bank and an insurer

♠ Bank builds and sells its own insurance products.

Most of the bancassurance operations fall in the first model.

♠ Every insurance company plans to grow quickly to

reduce start-up costs and break even. Banks with their

huge network and a large customer base provide

insurers with an opportunity to increase their market

penetration and premium income.

♠ This channel allows an insurer to effectively tap the

rural sector. Selling insurance through traditional

methods in rural area is an expensive proposition. A tieup with a bank allows an insurance company to access

large customer base at a low cost.

♠ Through this channel, an insurance company can cash

in on the existing pool of skilled professionals at a low

cost.

♠

Of late, banks have witnessed a decline in margins intheir core lending business. This in turn has adversely

impacted their income. Thus, bancassurance helps

them to augment their income.

71



♠ Bancassurance provides an opportunity to the bank

staff to harness their sales skills and adapt to the

changing business environment.

Though a relatively new concept, bancassurance has

been a phenomenal success. From just being lending

organizations, banks today have diversified and offer various

financial services across the board. Bancassurance is

beneficial to both – the insurance company and the bank.

Philosophy: The company has set up a dedicated SBU to cater to

bancassurance business managed by dedicated teams for

each bank partner across all locations to ensure highest

levels of service to the channel and their customers and to

provide complete support and value addition to the bank

partners.

ICICI Lombard bancassurance philosophy emphasizes

on complete respect for the partner’s brand and business

model with a clear understanding that the partner owns the

customer.

ICICI Lombard has tied up with partners like ABN Amro

Bank, ICICI Bank and Centurion Bank, to ensure complete

support and continuous value addition to the partner. The

business philosophy behind the bancassurance initiative is to

leverage distribution synergies with partners. The channel

72



offers unmatched product suite customized for bank

channels and customers.

ICICI Lombard is the only company with a dedicatedbancassurance distribution channel. Our key bancassurance

partners include ICICI Bank, ABN Amro Bank and Centurion

Bank. We completely respect the partner’s brand and

business model and believe that the customer is “owned” by

the partner.

• ICICI Bank: ICICI Bank has a network of about 470

branches and extension counters and over 1,800 ATMs.

It offers a wide spectrum of banking products and

financial services to corporate and retail customers

through a variety of delivery channels.

• ABN Amro: ABN Amro Bank (India) has 81 year long

experience in the Indian business scenario. It ranks

among the top 10 banks in the world in size and

strength. As an international bank, it has more than

3,500 branches in over 70 nations across the globe.

• Centurion Bank: Centurion Bank has an extensive

network of branches across India. Each branch has

access to Centurion Banks technologies to offer

unparalled services to customers. The Bank will

distribute personal and business covers of ICICI

73



Lombard through its branches, direct sales teams and

marketing offices across India.

PRODUCT PORTFOLIO OF ICICI LOMBARD

• Health Insurance

ICICI Lombard brings to you health policies that

cover your entire family under one umbrella, thereby

enabling you to pay only one premium and covering

each member to the full extent of the sum insured.

Save maximum tax under our 10K Tax Saving Plan.Health Plans:

♠ 10 K Tax Saver Plan: - A fixed premium plan

enabling highest tax saving u/s 80D with

comprehensive health benefits.

♠ Family Floater Plan: - A single policy that secures

the hospitalization expenses of your entire

family.

• Home Insurance

Insure your home and its contents against natural

calamities like fire, earthquake, flood, gas cylinder

explosion, fire due to electric short circuit as well as

man-made disaster like burglary.

Home Plans:

74



♠ Gold Plan: - The Gold plan covers much more

than just your home. It offers family protection,

covers loss of cash, public liability, temporaryresettlement, alternative accommodation and

baggage insurance. Other add-ons offered are loan

repayment for home and car and cover for

terrorism.

♠ Silver Plan: - The Silver plan covers the

structure of your home and its contents fromnatural and man-made calamities like fire, flood,

storm and burglary. The add-ons offered include

expenses of rent for alternative accommodation

and terrorism.

• Motor Insurance

A comprehensive policy for your vehicle covering

unfortunate accidents, third party liability, injuries and

damages. We are the first general insurance company

in India to bag the ISO 9001:2000 certification for

settlement of motor claims.

Motor Plans:

♠ Car Insurance: - A comprehensive policy

that not only covers you against third partybut also against accidents, damage, injury

and much more.

75



♠ Two Wheeler Insurance: - A composite

policies that protects you against

unfortunate accidents, third party liability,

injuries and damages.

• Travel Insurance

ICICI Lombard brings to you travel insurance

policies where you pay on a per day basis and not

according to the conventional slab rates. With a variety

of options to choose from, now select a product that

suits your needs the best.

Travel Plans:

♠ Individual Overseas Plan: - All overseas travel

policies charge premium on a slab basis. Which

means if you are on a 16 day trip, you end up

paying for 21 days, as the slab is 14 to 21 days.

But with us you ‘pay per day’.

♠ Student Medical Plan: - A comprehensive

cover, which insures you against unfortunate

incidents or unexpected expenses abroad and

provides timely assistance and support when you

need it the most.

♠ Domestic Travel Plan: - Domestic Travelpolicy takes care of you and your valued assets

left at home. A policy that let’s you enjoy your trip

leaving your worries with us.

• NRIs

76



No matter which part of the world you are in, you

can now secure your family and assets in India online.

Right from choosing the product to making a claim - itis all done in a few clicks of the mouse. We ensure that

the geographical distance does not hinder the security

of your loved ones.

NRI Plans:

♠ Parents' Health Insurance:- Securing the

health of your parents and family back home♠ Overseas Travel Insurance:- Securing the

overseas trip your loved ones would undertake

♠ Home Insurance:- No more worries about

your valuable asset in India

♠ Car Insurance:- The most comprehensive

policy for your four-wheeler

♠ Two Wheeler Insurance:- Avail of lightningfast claim settlement

♠ Student Medical Insurance:- Securing your

loved one's academic sojourn abroad

ICICI GROUP

77



THE ICICI GROUP IN INDIA

ICICI BANK and the subsidiaries ICICI Securities, ICICI

Venture, ICICI Lombard, ICICI Prudential

♦ ICICI Securities – India’s Leading Investment Bank:

ICICI Securities Limited is India’s leading full-service

investment bank with leadership position in all segments

of its operations - Corporate Finance, Fixed Income and

Equities. It is a subsidiary of ICICI Bank, the largest private

sector bank in India and operates out of Mumbai with

offices in New Delhi, Chennai, Calcutta and New York,

London and Singapore. ICICI Securities today is India's

leading Investment Bank and one of the most significant

players in the Indian capital markets.

♦ ICICI Venture: ICICI Venture is the largest and one of the

most successful private equity and venture capital

management companies in India with aggregate funds

under management in excess of USD 650 mn. ICICI

Venture is a subsidiary of ICICI Bank, the largest private

sector financial services group in India with assets of over

USD 30.0 bn (Sep. 2004) and market capitalization of

about USD 5.3 bn (Feb 2005).

78



♦ ICICI Prudential: ICICI Prudential Life Insurance

Company is a joint venture between ICICI Bank, a premier

financial powerhouse and Prudential plc, a leadinginternational financial services group headquartered in the

United Kingdom. ICICI Prudential was amongst the first

private sector insurance companies to begin operations in

December 2000 after receiving approval from Insurance

Regulatory Development Authority (IRDA).

ICICI Prudential's equity base stands at Rs. 11.85

billion with ICICI Bank and Prudential plc holding 74% and

26% stake respectively. In the financial year ended March

31, 2005, the company garnered Rs 1584 crore of new

business premium for a total sum assured of Rs 13,780

crore and wrote nearly 615,000 policies. The company has

a network of about 56,000 advisors; as well as 7

bancassurance and 150 corporate agent tie-ups. For the

past four years, ICICI Prudential has retained its position

as the No. 1 private life insurer in the country, with a wide

range of flexible products that meet the needs of the

Indian customer at every step in life.

♦ ICICI Lombard: ICICI Lombard General Insurance

Company Limited is a 74:26 joint venture between ICICI

Bank Limited and the US-based $ 26 billion FairfaxFinancial Holdings Limited. ICICI Bank is India's second

largest bank; while Fairfax Financial Holdings is a

diversified financial corporate engaged in general

79



insurance, reinsurance, insurance claims management

and investment management.

CHAPTER IV DATA ANALYSIS

Part: A

Penetration Level of Loan Shield from June

2005- November 2005

Month

Total No. of Home Loans with

First & FullDisbursement

Total No.of LoanShield

Penetration %

June 141 9 6.38 July 116 11 9.48

August 108 26 24.07Septemb

er99 25 25.25

October 106 24 22.64Novembe

r100 57 57

Source: Secondary data Table: 4A.1

80



Penetration Level of Loan Shield from June

2005- November 2005

Figure:4A.1

Inference:

It is obvious from the data that there is a significant rise

in the sales of loan Shield from June 2005 to November 2005

as more and more Home Loans where disbursed with Loan

Shield cover . By the end of November more than 50% of

penetration level has been achieved and this is a clear

indication of the high volume growth in the surveyed market.

6.38%9.48%

24.07% 25.25%22.64%

57%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

June July August September October November

81



Part: B

Awareness of Loan Shield Features

AttributeNo. of

Responses

Percentag

e % Yes 50 100No 0 0

Total 50 100Source: Primary data

Table: 4B.1

Awareness of All Features Loan Shield

82



Figure:

4B.1

Inference:

Out of 50 respondents all are aware of the features of

Loan Shield.

Training Provided By the Company

Attribute No. of

Responses

Percentage %

Yes 48 96No 2 4


Table: 4B.2

Training Provided By the Company

100%

0.00%0%

20%

40%

60%

80%

100%

120%

Yes No

83



Figure:

4B.2Inference:

Majority of the respondents got training from the

company and an insignificant percentage doesn’t got

training.

Average Number of Customer’s Meeting per

day

Attribute No. of

Responses

Percentage %

1 to 4 18 365 to 9 23 4610 to 14 6 1215 or more 3 6

96%

4%

Yes

No

84




Table: 4B.3

Average Number of Customer’s Meeting per

day

Figure:

4B.3

Inference:

A large number of respondents are meeting 5 to 9

customers per day, followed by 1to 4, 10 to 14 and a narrow

percentage of respondents are meeting 15 or more

customers.

The Average Customer Conversion Rate per

day

36%

46%

12%

6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1 to 4 5 to 9 10 to 14 15 or more

85



Attribute

No. of

ResponsesPercentage %

0 to 2 43 863 to 5 5 106 to 8 2 49 or more 0 0

Total 50 100

Source: Primary data

Table: 4B.4

The Average Customer Conversion Rate per

day

Figure:4B.4

Inference:

When it comes to the case of customer conversion

rate most of the respondents lays in 0 to 2.

86%

10%4%

0%0%

10%

20%

30%40%

50%

60%

70%

80%

90%

100%

0 to 2 3 to 5 6 to 8 9 or more

86



40%

46%

8%4%

2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Positive Somewhat

Positive

Not Sure Somewhat

Negative

Negative

Impact

Response from the Customer Regarding the

Product

Loan Shield

AttributeNo. of

Responses

Percentage

%Positive 20 40Somewhat Positive 23 46Not Sure 4 8SomewhatNegative

2 4

Negative Impact 1 2 Total 50 100Source: Primary data

Table: 4B.5

Response from the Customer Regarding the

Product

Loan Shield

87



20%

10%

30%

40%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Convincing theNeed of Insurance

Easiness of takingPolicy

Dual Coverage of The product EMI Support

Figure:4B.5

Inference:

A combined majority of the respondents given the

opinion that, they are getting a positive response from

customers.

Tackling customers with negative response

towards

Loan Shield

AttributeNo. of

Responses

Percentag

e %Convincing the need of Insurance

10 20

Easiness of taking Policy 5 10Dual Coverage of theproduct

15 30

EMI Support 20 40 Total 50 100 Source: Primary data

Table: 4B.6

Tackling customers with negative response

towards

Loan Shield

88



40%

50%

10%

0%

10%

20%

30%

40%

50%

60%

Great extent Moderate extent Slight extent

Figure:4B.6

Inference:

The response shows that convincing the EMI support of

the product is the major factor by which negative customers

are being converted; the very next is highlighting the dualcoverage of the product and convincing need of insurance.

Helpfulness of the Marketing Strategy Put

Forward By the Management in Achieving

the Monthly Target

AttributeNo. of

Responses

Percentage

%Great extent 20 40Moderate extent 25 50Slight extent 5 10Not much 0 0Not at all 0 0


Table: 4B.7Helpfulness of the Marketing Strategy Put

Forward By the Management in Achieving

the Monthly Target

89



Figure:

4B.7Inference:

The response shows that the marketing strategy by the

management helped them to a moderate extent, followed by

great extent and an insignificant percentage given the

opinion that it helped them to a slight extent.

Motivating Factors for Better Performance

AttributeNo. of

Responses

Percentage

%Incentives 15 30Salary Hikes 7 14Appreciation Letters 5 10Special Trainings 8 16Reference for higher

posts

15 30


Table: 4B.8

Motivating Factors for Better Performance

90



Figure:4B.8

Inference:

An equal majority of customers given the opinion that

Incentives and Reference for higher posts are the major

motivating factor for them, followed by Special trainings,

Salary hikes and Appreciation Letters are the other

motivating factors for them.

Adequate Support from Superiors

Attribute No. of Responses

Percentage %

Yes 37 74No 13 26

Total 50 100

Source: Primary data Table:

4B.9

30%

14%

10%

16%

30%

0%

5%

10%

15%

20%

25%

30%

35%

Incentives Salary Hikes Appreciation

Letters

SpecialTrainings

Reference for

Higher posts

91



Adequate Support from Superiors

74%

26%

Yes

No

Figure:4B.9

Inference:

Out of 50 respondents a large number of them

expressed their opinion that they are getting adequate

support form superiors.

Response That Best Describes Superior’s

Timeliness, in Response to Requests and

Inquiries

AttributeNo. of

Responses

Percentage

%

92



Very Timely 21 42Somewhat Timely 14 28Not Sure 5 10

Somewhat Slow 8 16Very Slow 2 4

Total 50 100 Source: Primary data Table:

4B.10

Response That Best Describes Superior’s

Timeliness, in Response to Requests and

Inquiries

Figure:

4B.10

Inference:

A combined majority of respondents responds that they

are getting response from superiors Very timely followed by

Somewhat Slow, Not sure and an insignificant percentage

says that the response is very slow.

42%

28%

10%

16%

4%

0%

5%10%

15%

20%

25%

30%

35%

40%

45%

Very TimelySomewhat

Timely Not SureSomewhat

Slow Very Slow

93



Sales Penetration of ICICI Lombard’s Loan

Shield in November 2005

AttributeNo. of

Responses

Percentage%

24% or less 0 025% - 49% 0 050% - 74% 48 9675% or more 2 4

Total 50 100

Source: Primary data Table:4B.11

Sales Penetration of ICICI Lombard’s LoanShield in November 2005

Figure:

4B.11Inference:

The total number of respondents given the opinion that,

the sales penetration in November is in between 50-74%.

0% 0%

100%

0%0%

20%

40%

60%

80%

100%

120%

24% or less 25% - 49% 50% - 74% 75% or more

94



Privilege of Status Checking of Policy

Process Extended to the Customer and its

impact on Business

Attribute No. of

Responses

Percentage

% Yes 38 76No 12 24

Total 50 100 Source: Primary data

Table: 4B.12

Privilege of Status Checking of Policy

Process Extended to the Customer and its

impact on Business

76%

24%

Yes

No

Figure:4B.12

Inference:

95



28%24%

46%

2%

0%5%

10%15%20%25%30%35%40%45%

50%

Easiness of Taking policy

Dual Coverageof the product

EMI Support Critical IllnessCover

A large number of respondents believe that the

privilege of status checking of policy process will help in

increasing sales and a significant percentage of respondentsare not believe in the above.

Advantages Loan Shield Has from Its

Competitor’s Products

AttributeNo. of

Responses

Percentage

%Easiness of taking

policy14 28

Dual Coverage of theproduct

12 24

EMI Support 23 46Critical Illness Cover 1 2

Total 50 100Source: Primary data Table:

4B.13

Advantages Loan Shield Have from Its

Competitor’s Products

96



Figure:4B.13

Inference:

Most of the respondents given the opinion that EMI

Support is the major advantage Loan Shield have from its

competitors product’s, followed by the Easiness of taking

policy, Dual coverage of the product and an insignificant

percentage of Critical Illness.

Intensity of Future Planning by ICICI

Lombard’s Home Insurance Section

Attribute No. of

Responses

Percentage

%Great extent 2 66.67Moderate

extent

1 33.33

Slight extent 0 0Not much 0 0Not at all 0 0

Total 3 100

Source: Primary Data Table:

4B.14

Intensity of Future Planning by ICICI

Lombard’s Home Insurance Section

97



Figure: 4B.14

Inference:

Majority of the respondents given the opinion that they

are planning business to a Great extent for the future.

Confidence Level in gaining market share in

the Future

Attribute No. of

Responses

Percentage

%Confident 2 66.67Somewhat confident 1 33.33Not sure 0 0Somewhat doubtful 0 0Doubtful 0 0

Total 3 100Source: Primary Data Table:4B.15

Confidence Level about gaining market

share in the Future

66.67 %

33.33 %

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Great extent Moderate extent

98



66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Confident Somewhat Confident

Figure:4B.15

Inference:

Most of them are confident that the company will gain

market share in the future.


Shield in November

Attribute No. of

Responses

Percentage

%24% or less 0 0

25% - 49% 0 050% - 74% 3 10075% or more 0 0


4B.16

99



0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

24% or less 25% - 49% 50% - 74% 75% or more


Shield in November

Figure: 4B.16

Inference:

The sales administration wing is regularly tracking the

business, and they given the opinion that sales penetration

in November is in between 50-74%.

Importance of Giving Privilege of StatusChecking of Policy Processing Extent to

Customers

Attribute No. of

Responses

Percentage

%Very Important 1 33.33Important 2 66.67Somewhat Important 0 0Not Sure 0 0Unimportant 0 0

Total 3 100

100



Importance of Giving Privilege of Status

Checking of Policy Processing Extent to

Customers

Figure:4B.17

Inference:

A combined percentage of response showing that it is

important to give privilege of status checking of policy

processing should be extended to customers.

Regular Monitoring of Subordinates is

Required in Terms of Productivity


Percentage %

Great extent 2 66.67Moderate extent 1 33.33Slight extent 0 0Not much 0 0

101

33.33%

66.67%

0.00%

10.00%

20.00%30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Very Important Important



66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%60.00%

70.00%

80.00%

Great extent Moderate extent

Not at all 0 0 Total 3 100Source: Primary data

Table: 4B.18

Regular Monitoring of Subordinates is

Required in Terms of Productivity

Figure:4B.18

Inference:

Most of the respondents given the opinion that, regular

monitoring of subordinates is required in terms of

productivity.

Major Channel through which Business is

carried out

Attribute No. of

Responses

Percentage

%

102



-Sell 2 66.67I Channel 0 0Aditya 1 33.33

A.N.M 0 0R.R.R. 0 0


4B.19

Major Channel through which Business is

carried out

Figure: 4B.19

Inference:

Majority of the respondents given the opinion that

X-Sell (Cross sell) is the major channel for their businessfollowed by Agency Aditya.

66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

X-Sell Aditya

103



Importance of Maintaining Relationship with

Home- Finance Division

Attribute No. of

Responses

Percentage

%Very Important 2 66.67Important 1 33.33Somewhat

Important

0 0

Not Sure 0 0Unimportant 0 0


4B.20

Importance of Maintaining Relationship with


Figure: 4B.20

Inference:

66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%


104



The combined percentage of response shows that

maintaining relationship with Home Finance Division is

very important.

Importance of Communication in Businessboth Upward & Downward

Attribute No. of

Responses

Percentage

%

Very Important 2 66.67

Important 1 33.33

SomewhatImportant

0 0

Not Sure 0 0Unimportant 0 0


4B.21

Importance of Communication in Businessboth Upward & Downward

66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%


105



Figure:4B.21

Inference:

The majority states that communication is very

important and followed by important.

Experience in ICIC Lombard’s Sales

Administrative wing


Percentage%

1-6 months 0 06-12 months 0 01 year 6 months 1 33.332 years 1 33.33More than 2years

1 33.33

Total 3 100

Source: Primary data Table:4B.22

Experience in ICIC Lombard’s Sales

Administrative wing

106



Figure: 4B.22

Inference:

The sales administration wing includes an equal

proportion of experienced people starting from 1-6 years

experience, 2 years followed by More than two years.

Business Volume Accounted For ICICI

Lombard by Loan Shield in November

Attribute No. of

Responses

Percentage %

1-4 Lakhs 0 05-9 Lakhs 0 0

10-14 Lakhs 3 10014 Lakh or more 0 01-4 Lakhs 0 0


Table: 4B.23

33.33% 33.33% 33.33%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

1 year 6 months 2 years More than 2 years

107



Business Volume Accounted For ICICI

Lombard by Loan Shield in November

Figure:

4B.23

Inference:

The business volume accounted for ICICI Lombard byLoan Shield is between 10-14 Lakhs.

ICICI Lombard’s Product Line Presently

Supported by Sales Administration

Attribute No. of

Responses

Percentage %

HealthInsurance 0 0

Home Insurance 3 100Motor Insurance 0 0

TravelInsurance

0 0

NRI Insurance 0 0

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

1-4 Lakhs 5-9 Lakhs 10-14 Lakhs 14 Lakh or More

108




4B.24ICICI Lombard’s Product Line Presently

Supported by Sales Administration

Figure:

4B.24Inference:

The respondents are purely supporting Home

Insurance products.

Level of Advantage Loan Shield Have from

Other CompetitorsAttribute No. of

Responses

Percentage

%Strongadvantage

2 66.67

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

HealthInsurance

HomeInsurance

Motor Insurance

TravelInsurance

NRIInsurance

109



Slight advantage 1 33.33About the same 0 0Slight

disadvantage 0 0Strongdisadvantage

0 0


4B.25

Level of Advantage Loan Shield Have from

Other Competitors

Figure: 4B.25

Inference:

The majority of the respondents given the response

that Loan Shield have strong advantage over othercompetitors.

Products That Have Stronger CompetitivePosition to Loan Shield

Attribute No. of Percentage

66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Strong advantage Slight advantage

110



66.67%

33.33%

0.00% 0.00% 0.00%0.00%

10.00%

20.00%30.00%

40.00%

50.00%

60.00%

70.00%

Home Assure-

ICICI Prudential

Loan Safe-

Centurion

Bank

Home Insure-

HDFC Chubb

Kotak LoanProtectionPlan (KLPP)

New Corp

Jeevan Griha

Raksha –

Corporation

Bank

Responses

%

Home Assure-ICICI

Prudential 2 66.67Loan Safe-Centurion Bank 1 33.33Home Insure-HDFC Chubb 0 0Kotak Loan Protection Plan(KLPP)

0 0

New Corp Jeevan GrihaRaksha – Corporation bank

0 0


4B.26

Products That Have Stronger CompetitivePosition to Loan Shield

Figure:4B.26

Inference:

111



When it comes to the case pf competitive products the

major competitor is ICIC Prudential followed by Loan Safe

from Centurion Bank.

Intense of Impact That Crated By the

Actions of Senior Sales and Marketing

Management on Business


Percentage

%Positive Impact 1 33.33Somewhat PositiveImpact

2 66.67

Not sure 0 0Somewhat NegativeImpact

0 0

Negative Impact 0 0

Total 3 100Source: Primary data Table: 4B.27

Intense of Impact That Crated By the

Actions of Senior Sales and Marketing

Management on Business

112



Figure:4B.27

Inference:

The combined percentage shows that the actions of

senior sales and marketing management created a positive

impact on business.

Lombard Management’s Timeliness in

Response to Requests and Inquiries

Attribute No. of

Responses

Percentage

%Very Timely 2 66.67Somewhat

Timely1 33.33

Not Sure 0 0

Somewhat Slow 0 0Very Slow 0 0


4B.28

33.33%

66.67%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Positive Impact Somewhat Positive Impact

113



Lombard Management’s Timeliness in

Response to Requests and Inquiries

Figure: 4B.28

Inference:

The response shows that the Lombard’s management

was very timely in response to requests and inquires,

followed by somewhat timely.

Satisfaction Based on Lombard’s Senior

Management Support

Attribute No. of Respon

ses

Percentage%

Very Timely 2 66.67Somewhat Timely 1 33.33Not Sure 0 0Somewhat Slow 0 0Very Slow 0 0

Total 3 100

66.67%

33.33%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

Very Timely Somewhat Timely

114



Source: Primary data Table:

4B.29

Satisfaction Based on Lombard’s Senior

Management Support

Figure: 4B.29

Inference:

The response from the respondents lays in between

completely satisfied to somewhat satisfied.

The Administrative Areas Where

Opportunity for Improvement Lays

AttributesRanking * Polic

yLogin

Follow-up

of SO’s

PolicyProcess

ing

TimelyDisburse

ment

Claim/Grievan

ceSettlem

ent

33.33% 33.33% 33.33%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Completely Satisfied Satisfied Somewhat Satisfied

115



I

No.Response

2 0 1 0 0

Points 10 0 5 0 0

II

No.Response

1 1 1 0 0

Points 4 4 4 0 0

III

No.Response

0 1 1 0 1

Points 0 3 3 0 3

IV

No.Response

0 1 0 2 0

Points 0 2 0 4 0

V

No.Response

0 0 0 1 2

Points 0 0 0 0 2

Total 14 9 12 5 5

Source: Primary data

Table: 4B.30

*For the purpose of ranking the following points are given for five options in

the following order. 5, 4, 3, 2, 1

116



The Administrative Areas Where

Opportunity for Improvement Lays

Figure:4B.30

Inference:

Most of the respondent’s preferred Policy Login as

an area for improvement, followed by Policy Processing

then Follow-up of Sales Officers.

14

9

12

5 5

0

2

4

6

810

12

14

16

PolicyLogin

Follow-up of Sales

Officers

PolicyProcessing

TimelyDisbursement

Policy Claim/GrievanceSettlement

117



FACTORS CONSIDERED TO FIND OUT

THE ADOPTED STRATEGY &

EVALUATING ITS IMPLIMENTATION .

1. Intensity of Future Planning by ICICI Lombard’s

Home Insurance Section

It examines how advanced is ICICI Lombard

Bancassurance Home on their future plans.

2. Sales Penetration of ICICI Lombard’s Loan Shieldin November 2005

It examines whether the respondents from both

strategy implementation and formulation are well aware

of the present position of the product which enjoys in the

market.

3. Importance of Giving Privilege of Status Checking

of Policy Processing Extent to CustomersIt examines whether they are maintaining

transparency throughout the process.

4. Regular Monitoring of Subordinates is Required

in Terms of Productivity

It examines whether the subordinates are achieving

their sales target along with consistency in performance.

5. Major Channel through which Business is carried

out

This examines which channel is generating higher

business volume to the company

6. Importance of maintaining relationship with


118



In this the importance of maintaining relationship

with Home Finance and its impact on business are

examined.7. Importance of Communication in Business

Communication is considered as one of the key

success factor in business. This examines effectiveness

and importance of communication in both ways upward

& downward.

8. Experience in ICIC Lombard’s Sales

Administrative wing

It indicates how equipped are the respondent’swith experience in the Sales Administration Wing.

9. Business Volume Accounted For ICICI Lombard by

Loan Shield in November.

This examines how much volume of business has

been generated from Loan Shield in November.

10. ICICI Lombard’s Product Line Presently

Supported by Sales administration

In this the product line supported by the wing isexamined

11. Products That Have Stronger Competitive

Position to Loan Shield

This examines the near competitors of Loan Shield in the

market.

12. Intense of Impact That Crated By the Actions of

Senior Sales and Marketing Management on

Business.

In this the effectiveness of the strategies and

supplementary actions of the senior management has

been examined.

119



13. Lombard Management’s Timeliness in Response

to Requests and Inquiries

This examines whether the strategy regarding

communication adopted by the management really

worked or not.

14. The Administrative Areas Where Opportunity for

Improvement Lays

In this the area for further improvement so that the

sales can be increased is examined.

15. Adequate Support from Superiors

This examines whether the sales people aregetting enough support from senior management from

all possible ways.

CHAPTER V CONCLUSION

CHAPTER SUMMARY

The whole project consists of five chapters together

with appendices and bibliography.

Chapter one is Introduction, which includes brief

industry profile, brief company profile, research problem,

objectives, significance or importance of study, research

methodology and limitation of the study.

Chapter two is detailed industry profile i.e. details

about Automobile industry, industry analysis by Porter’s

five forces.

120



Chapter three is detailed company profile i.e. details

of the company. It includes details about ICICI LOMBARD,

history, vision, values and product portfolio.

Chapter four is data analysis, which includes

percentage, diagrams and inferences along with the

customer satisfaction index analysis.

Chapter five is conclusion, which includes chapter

summary, findings, conclusion, suggestions and

recommendation

FINDINGS

Strategy Analysis

• From the study, the calculated penetration level

shows that ICICI Lombard Bancassurance Home is

having a phenomenal growth in Trichy & Tanjore.

121



• The penetration level of the month November is found

to be 57 %.

• The sales volume generated from the product LoanShield is found to be in between 10 – 14 Lakhs.

• The study reveals that -Sell (Cross Sell) is an effective

channel in bancassurance, since majority of the

business are coming from

-Sell.

• It is found that maintaining a good communication

network with Superiors, Subordinates and customers,

is one of the strategies that the Sales Administration

wing employed.

• It is been revealed from the study that a combined

majority of sales people are getting information from

superiors Very timely.

• From the study it is revealed that, firm relationship

with the Home Finance Division is a key success

strategy employed by the management of the

company, since the business is fully depends upon

the support of Home Finance Division.

• It is been revealed from the study that sales

people especially sales officers are using the

same strategy of maintaining relationship with

Home Finance is helping them in getting data

from Home Finance.

122



• From the study it is found that employing

Transparency as a strategy in this particular industry

plays a crucial role, since it leads to trustworthiness.• It is been found that privilege of status checking of

policy process extend to customers are helping the

company to increase sales.

• Regular monitoring of subordinates in terms of

productivity is found to be the next successful

strategy adopted by ICIC Lombard Bancassurance

home.• The strategies that are employed by the

management are helping sales persons to achieve their

target.

It is found that the strategies employed by ICICI

Lombard bancassurance Home’s administrative wing are

the major reason for this growth.

Key Success Factors behind Strategy &

Implementation

• The study shows that sales persons are well ware of the

features of Loan Shield, on which the study is focused.

• It is been found from the study that the majority of sales

persons are getting training from the company regarding

the product features.

• The majority of responses from the customers to the

product are lying in between positive and somewhat

123



positive in the case of their attitude towards the product

Loan Shield.

• It is been revealed from the study that on an average

sales people are meeting 5 to 9 customers per day

followed by a category of people are meeting 1to 4

customers a day.

• The average customer conversion rate per day is found to

be in between

0 to 2.• The study shows that the negatively responded customers

are tackled by highlighting the EMI support of the

product followed by dual coverage of the product. The

point highlighting the need of insurance is found to be

20%.

• It is found from the study that the administrative wing is

well advanced in planning their future business.• The majority of the response shows that ICICI Lombard is

very confident about gaining market share in the future.

• The study reveals that the sales administrative wing

consists of a good proposition the case of experience;

they are experienced in this wing starting from 1year

and 6 months to more than 2 years.

• From the study it is revealed that the sales administrationconsidered for the study is purely supporting Home

Insurance products.

124



• The response shows that Loan Shield has a strong

advantage over its competitors. (First mover to the

Bancassurance in India)• The study shows that ICICI prudential is a strong

competitor for ICICI Lombard.

• The study reveals the fact that the opportunity for

improvement mainly lies in the area of File login,

followed by Policy processing and follow-up of sales

officers.

Complimentary Factors• The particular study shows that major motivating factor

for the sales person includes an equal response to both

incentives and reference for higher posts(lateral entry to

company pay-roll), followed by special trainings from the

company and salary hikes.

• The study shows that the major advantage the Loan

Shield have from its competitor is EMI support followed by

easiness of taking policy and dual coverage.

Genera l F indings

Cultural Issues in Distribution

The managers of banks and of insurance companies

can come from quite different work-cultures. There may be

differences in the way of thinking and business approaches

of bankers and managers of insurance companies. These

differences create a communication and implementation

125



problem in bancassurance operations. Banks are traditionally

demand-driven organizations with a reactive selling

philosophy. Insurance organizations are usually need-drivenand have an aggressive selling philosophy.

It has been observed that this friction at the level of

bank employees and insurance salespeople arises from

differing philosophies towards selling, the jealousies of bank

employees regarding remuneration of insurance sales staff

and fears of "cannibalization" of deposits, e.g. the bankemployee fears that the salesperson encourages withdrawal

of bank deposits, putting the bank employee's job in greater

jeopardy. As a result the team spirit is negatively influenced

and, since this is a crucial factor for the success of any

operation, it has to be confronted.

CONCLUSION

126



The project was undertaken for the “ICICI LOMBARD

Bancassurance Home, A Division of India’s No.1 privateGeneral Insurance Company ICICI LOMBARD” to study on

strategy employed by ICICI Lombard Bancassurance Home

for its phenomenal growth. The main objective of the study

was to analyze Marketing Strategy employed by ICICI

Lombard for its phenomenal growth in Trichy & Tanjore.

Certain recommendations were given to improve the sales,service and level of customer satisfaction of Loan Shield

holders. It is hoped that the interpretations, suggestions and

ideas and findings of this study would support the company

in an efficient and better way.

127



SUGGESTIONS AND

RECOMMENDATIONS

• As per the study, the achieved penetration level is more

than 50% with the implementation of found strategies,

the region under study was a large area covering Trichy

District & spokes and Tanjore includes Nagapattanam,

Velangkanni, and Thirunelveli etc. So the company

should recruit more efficient man power in the area of

sales persons to convert maximum business, so that

the company can keep lead in the industry.

• In the present scenario there is a lot of competition

from other players and they are offering the same withlot of advantages, especially ICICI Prudential, a

company from the same family coming as rival. So to

keep going the company should have some window

dressing and product feature increase is needed. The

basic problem arises with customers is the time period

of insurance coverage.• At present there are a lot of competitors like, Home

Assure-ICICI Prudential, Loan Safe-Centurion Bank,

Home Insure-HDFC Chubb, Kotak Loan Protection

Plan (KLPP), New Corp Jeevan Griha Raksha –

128



Corporation bank etc are offering similar product

features and packages. So there is a chance for

changing the insurance policy from ICICI Lombard to

others. To avoid such shifting the company should

try to reduce premium or dole out some value

added services to customer flexi pay, covering

period extension for those who correctly pays

premium etc. are some of them in order to hold the

customers.

• In Trichy considering as a centre point for reporting

of business from both Trichy and Tanjore, they need

an independent full-fledged office in Trichy for its

further growth in the region and it should be very

near to the Home Finance Cell so that the

communication and information transfer can be

improved.

• Bancassurance is one of the modern concepts in

insurance industry, so to maximize benefits, the work-

cultural differences between the banking and the

insurance industries must be understood, respected

and lived with in order for the bancassurance venture

to succeed. The development of a single culture is

another possible solution but this requires a very strong

commitment from the top management. This

129



commitment must be continuously conveyed to all bank

employees and insurance agents. One way of achieving

this is to develop a "statement of mission" for the neworganization and to get the staff to commit to fulfilling

this statement. This can help to ensure that there is a

common path for the bank and the insurer.

Apart from these suggestions I would like put some

general suggestions to the company which will help

them to success.• Customers are always search for alternatives. If

they think that there is alternative which satisfy

his/her need then he/she will shift. Practicing some

newly emerged concept like “Total Relationship

Marketing” will help to prevent such shifting.

According to this concept the firm should give prior

importance to the needs of the customer. That

means listening the needs and complaints of the

customer and on the basis of this make necessary

changes in the operations of the firm. If such a

practice is there the customer will be loyal to the

firm and they will become the ambassadors also.

•

This era considers customer as a king there is a newpractice like "Involvement Marketing" are emerging

now a days .Involvement Marketing means

involvement of customers, persons who are

interested in the firm in future and the company it

130



self making a communication network so as to

implement the decisions which are beneficial for all

the parties and it leads high quality products at

lower costs. So it is necessary to be friendly with

customers or having a communication network

between the firm and customers.

These practices are very much helpful to improve the

customer satisfaction and for the company for their

existence and success in future.

APPENDIX- I

Questionnaire I

131



A Study on Growth Strategy Unleashed by ICIC

Lombard’s Bancassurance Home to Grab

Market Presence.

Name: Designation:

Please r ate your response with each of the

following:

Place a tick mark [] wherever applicable

1. To what extent do you plan to give ICICI Lombard greater

emphasis in your business over the next few years?

Great extent[ ] Moderate extent [ ] Slight extent

[ ]

Not much [ ] Not at all [ ]

2. Overall, how confident are you that ICICI Lombard will gain

additional market share in the product industry in the

coming year?

Confident [ ] Somewhat confident [ ] Not sure

[ ]

Somewhat doubtful [ ] Doubtful [ ]

3. What is the range of your region’s sales penetration of

ICICI Lombard’s Loan Shield last month?

24% or less [ ] 25% - 49% [ ] 50% - 74% [ ]

75% or more [ ]

4. How much important is giving privilege of status checking

of a Policy processing extent to customers?Very Important [ ] Important [ ] Somewhat

Important [ ] Not Sure [ ] Unimportant [ ]

5. To what extent do you believe that regular monitoring of

subordinates is required in terms of productivity?


132



[ ]


6. Which are the major channels through which business is

being carried out?

- Sell [ ] I Channe [ ] A.N.M [ ] Aditya

[ ]

RRR [ ]

7. Taking into consideration of the -sell prospects what

importance should be attached for maintaining the

relationship with Home Finance?Very Important [ ] Important [ ] Somewhat

Important [ ] Unimportant [ ]

8. How important is communication, both upward and

downward in your business?

Very Important [ ] Important [ ] Somewhat

Important [ ]

Unimportant[ ]

9. What are the motivating factors the company uses formotivating your subordinates?

10. How long have you been in ICIC Lombard’s

Administrative wing?

1-6 months [ ] 6-12 months [ ] 1 year 6 months

[ ]

2 years [ ] More than 2 years [ ]

11. How much of business volume is accounted for ICICI

Lombard’s Loan Shield last month from Trichy & Tanjore?

1-4 Lakhs [ ] 5-9 Lakhs [ ] 10-14 Lakhs [ ]

133



14 Lakh or more [ ]

12. Which of the following Lombard’s product lines do you

fully support at this time?

Health Insurance [ ] Home Insurance [ ]

Motor Insurance [ ] Travel Insurance [ ] NRI

Insurance [ ]

13. How advantageous is Loan Shield compared to other

competitors, in selling situations?

Strong advantage[ ] Slight advantage [ ] About the

same [ ]

Slight disadvantage [ ] Strong disadvantage [ ]14. Which product line do you see as offering a stronger

competitive position to Loan Shield?Home Assure-ICICI Prudential [ ] Loan Safe-Centurion

Bank [ ]Home Insure-HDFC Chubb [ ]Kotak Loan Protection Plan (KLPP)[ ]New Corp Jeevan Griha Raksha – Corporation bank[ ]

15. Overall, have actions taken by the company’s senior sales

and marketing management over the past year had any

impact on your business?

Positive impact [ ] Somewhat positive impact [ ]

Not sure [ ] Somewhat negative impact [ ] Negative

impact [ ]

16. On average, which of the following best describes

Lombard management’s timeliness in response to your

requests and inquiries?

Very timely [ ] Somewhat timely [ ] Not Sure [

]

Somewhat slow [ ] Very slow [ ]

17. How do you rate ICICI Lombard on the basis of senior

134



management support?

Completely Satisfied [ ] Satisfied [ ] Some what

satisfied [ ] Dissatisfied [ ] Completely

dissatisfied [ ]

18. Which of the following administrative areas would you say

presents the greatest opportunity for improvement? Rate

it on a Scale of 0-5

Policy Login [ ] Follow-up of Sales Officers [ ]

Policy Processing [ ] Timely disbursement [ ]

Policy Claim/grievance settlement

[ ]19. Please specify the marketing and sales programs adopted

to propagate Loan Shield?

20. What suggestions do you have for ICICI Lombard’s

senior management which would help you improve the

success of ICICI Lombard’s business in the forth comingyear?

Questionnaire II

A Study on Effectiveness of Strategy

Implementation, Conducted Among Sales

Persons.

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Name: Designation :

Please r ate your response with the sales

department on each of the following: Place a tick

mark [] wherever applicable

1. Are you aware of all the features of Loan Shield?

Yes [ ] No [ ]

2. If yes, whether the company had provided any training?

Yes [ ] No [ ]

3. On an average, how many customers do you meet per

day?1-4 [ ] 5-9 [ ] 10-14 [ ] 15-19

[ ]

4. What is the average conversion rate per day?

0 to 2 [ ] 3 to 5 [ ] 6 to 8 [ ] 9 or More [ ]

5. What is the response you get from the customer

regarding the product Loan Shield?

Positive [ ] Somewhat positive [ ] Not sure [ ]

Somewhat negative [ ] Negative [ ]6. How do you tackle customers with negative response

towards Loan Shield?

Convincing the need of Insurance [ ] Easiness of

taking policy [ ]

Dual Coverage of the product [ ] EMI Support

[ ]

7. To what extent does the marketing strategy put

forward by the management help you in achieving your

monthly target?


[ ]


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8. What are the factors which motivates you to put

forward a better performance?

Incentives [ ] Salary hikes [ ] AppreciationLetters [ ]

Special Trainings [ ] Reference for higher posts

[ ]

9. What are the strategies that you are adopting for

getting data from ICICI Home Finance?

10. Do you think that you are getting adequate

support from superiors?

Yes [ ] No [ ]

11. If yes, which of the following best describes yoursuperior’s timeliness in response to your requests and

inquiries?

Very timely [ ] Somewhat timely [ ] Not Sure

[ ]

Somewhat slow [ ] Very slow [ ]

12. What is your regions sales penetration for the

product Loan Shield in November?24% or less [ ] 25% - 49% [ ] 50% -

74% [ ] 75% or more [ ]

13. Does the privilege of status checking of the policy

process extended to the customer helps in increasing

sales?

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Yes [ ] No [ ]

14. What are the advantages Loan Shield has from its

competitor’s products?

Easiness of taking policy [ ] Dual Coverage of the

product [ ]

EMI Support [ ] Critical Illness Cover

[ ]

15. What suggestions do you have for ICICI Lombard’s

senior management which would increase business in the

forth coming year?

APPENDIX - I I

ICIC LOMBARD BOARD STRUCTURE

BOARD MEMBERS

Mr K V Kamath : Chairman

Mr R Athappan : Director

Mr B V Bhargava : Director

Mr Dileep Choksi : Director

Mr James F Dowd : Director

Ms Lalita D Gupte : Director

Ms Kalpana Morparia : Director

Mr S Mukherji : Director

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Mr Chandran Ratnaswami : Director

Mr H N Sinor : Director

Mr Sandeep Bakhshi: Managing Director & CEO

BOARD COMMITTE

Audit Committee

Mr S Mukherji : Chairman

Mr Dileep Choksi : Director

Mr James F Dowd : Director

Investment Committee

Mr Chandran Ratnaswami : Chairman

Ms Kalpana Morparia : Director

Mr Sandeep Bakhshi: Managing Director & CEO

Mr S Gopalakrishnan : Head – Investments

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Mr Rakesh Jain : Head-Finance & Accounts

Mr Liyaquat Khan : Appointed Actuary

Board Governance Committee

Ms Kalpana Morparia : Chairperson

Mr Chandran Ratnaswami, Director

Mr H N Senior, Director

APPENDIX - I I I

PRODUCT FEATURES OF LOAN SHIELD

Complete Protection for Your Home and Home

Loan!

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Coverage

Covers Principal Outstanding or EMI due for a specified

period. Cover for Maximum period of 5 years

Covers outstanding principal balance in the event of:

Death on account of misfortune

Accidental Permanent Total Disability resulting in

inability to continue gainful employment

Covers EMI Payments (for salaried persons only) in the

event of:

Critical Illness (CI) Hospitalization

Loss of Income on account of Critical Illness

Includes hospitalization and post-hospitalization

domiciliary care

Aggregate claims paid: Up to 12 EMI

Covers successive hospitalizations under the policyup to the policy aggregate of 12 EMI

Covers EMI Payments (for salaried persons only) in the

event of:

Loss of Job

Termination, retrenchment, dismissal due to

unforeseen circumstances

VRS if preceded by company shutting a division and

minimum 20 person opting for VRS

Aggregate claims paid: Up to 3 EMI

Property Cover for 5 years

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Gives protection in the event of any loss due to fire

and earthquake

Protects home loan liability

∗ Financial security in the event of distress

Coverage is for the reinstatement cost of

construction of the house (Built up area of the house

X Cost of construction per sq. foot)

Critical Illness cover

Cancer Myocardial Infarction

Stroke

Coronary Artery Bypass Surgery

End stage Renal Failure

Major Organ Transplant

Paralysis

End stage Liver disease

Heart valve Replacement

Coverage Exclusions

Death from intentional self-injury, suicide or attempted

suicide

Pre existing Condition

Any Critical Illness discovered within 90 days of inception

of the policy

Unemployment arising within 90 days of the policy

inception

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Loan Period 5-7 8-10 11-15 16-20 21-25 26-30

Age Groups

20-30 1.73% 2.10% 2.33% 2.47% 2.54% 2.58%

31-35 1.96% 2.43% 2.70% 2.86% 2.94% 2.99%

36-40 2.38% 2.92% 3.28% 3.50% 3.62% 3.68%

41-45 3.31% 4.04% 4.55% 4.86% 5.02% 5.12%

46-50 4.88% 6.17% 7.06% 7.61% 7.89% 8.05%

Unemployment arising out of circumstances known to the

insured

Resignation, VRS, super-annuation or early retirement

Eligibility conditions

Age at entry: 20 to 50 years

Minimum Loan Tenure: 60 months

Maximum Amount covered: Rs 1 crore.

Health Declaration

CI cover not available for pre existing illnesses as declared

in the application form

For self employed persons: Death, disability and free

property cover available

Property cover for completed constructions only

Property cover available for a year only for commercial

loans

Loan Shield Pricing

Premium as a % of the loan amount

10% discount on the premium for self employed persons

LOAN SHIELD PROCESSING

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At sanction stage (BCM): Fill the intent-to-buy form along

with HFC app form

Compute premium with the help of the computationchart.

Mark the file as a Loan Shield Case confirming the

interest of the customer for Loan Shield.

ICICI Bank sanctions the premium loan along with the

home loan in the sanction letter to customer.

At disbursement stage (CAM): At the time of the first

disbursal, fill in the Loan Shield application form along with

the DRF.

Confirming the application for Loan Shield.

Ensure the health declaration is filled in confirming

that applicant is medically fit and does not suffer

from CIs.

In case of pre-existing CI tick the relevant box – the

same would be excluded from cover.

Check premium computation using the table

If any discrepancy exists, revert to BCM

If the customer refuses to opt for Loan Shield at the

disbursal stage

Refer the case back to the BCM with a written

customer request for opting out.

Collect the cheque from the customer at the time of first

disbursal-in the name of ICICI Lombard

Tear away of the application form to be given back to

customer

Cheque and app form to be submitted along with other

loan documents at the HFC branches

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Cheque Bounce cases

IL to write to customer requesting for a demand draft

4 attempts made to contact customer If no response received, the Loan Shield case is

cancelled

Customer wanting to opt for Loan Shield at disbursement

Application form and cheque collected from customer

No premium funding by I Bank

POLICY STRUCTURE

Policy issued in the name of Bank

Borrower insured under the policy on payment of premium

Optional cover at the option of borrower

IL issues confirmation of cover certificate

Customer can contact IL if the certificate not received

within 6 weeks

Claim servicing solely the responsibility of IL

Claim will be paid only to the Bank-Bank is the whole and

sole beneficiary

CLAIMS PROCESS

In case of claim, customer calls up the ICICI Lombard call

center

ICICI Lombard will send the customer the claim form

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Customer sends completed claims form and other

supporting documents

ICICI Lombard settles claims directly to the Bank within 21

days of receipt of all completed documents

Claims Documents:

Death

Claim form

Doctor’s Report/Hospital Report

Death certificate Accidental Death(additional documents)

Police report

Post mortem Report

Accidental PTD (additional documents)

Doctor’s disability report

Investigation Reports

Laboratory test

X-rays and reports essential for confirmation of the

injury

Police report

Loss of Job

Claim Form

Employer certificate

Certificate from Bank on amounts due and date of

payment

Notice from bank to customer requiring payment

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Critical Illness

Doctor’s certificate

Employer’s certificate intimating loss of pay

Notice from bank to customer requiring payment

Property Insurance

Claim form

Occupancy certificate

Fire Brigade Report

Repair Bills Surveyor’s report

FIR

BIBLIOGRAPHY

Print Resources:1. MARKETING MANAGEMENT : PHILIP KOTLER

2. RESEARCH METHODOLOGY : C.R.KOTHARY

3. MARKETING RESEARCH : RAJENDRA

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NARGUNDKAR

4. CONSUMER BEHAVIOUR : LEON G.

SCHIFFMAN

LESLIE L.KANUK

Electronic Resources:

1. http://www.icicilombard.com

2. http://www.iciciknowledgepark.com/icicikp/index.a

sp

3. http://www.icicibank.com

4. http://www.irdaindia.org

5. http://www.investopedia.com/investopedia/pre_pri

ntable.aspx?a=/features/industryhandbook/insurance.asp

6. http://www.dibc.co.uk/bancassurance.html

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Project Lombard Final

Documents

Transcript of Project Lombard Final