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Life Insurance Industry

MNYL Vs Industry

Value Chain Analysis

Prepared by

Abhishek Kumar Roll No 1

Sakshi Grover Roll No 39

Samarth Gupta Roll No 40

Shruti Kumar Roll No 47

Vinay Kumar Roll No 62

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Industry Analysis

y Dominant Player LIC

y Regulatory Body IRDA

y FDI route opened in 1999

y No. of Pvt. Players 23y Indian Market Nascent Stage

y Average Break Even Point 10 years

y Nature of Business Highly Capital Intensive

y Current Category Penetration XX %

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Business Models

Agency Model: Brick and Mortar Model/ DSTy Self Managed Branch Offices Better Customer Service / Better

Accessibility

y HighFixed Cost

y LIC / MNYL /Aviva

Bancassurance :y Operations through Banca infrastructure

y ICICI Pru / HDFC Life / Canara HSBC Oriental Life

Brokers / Strategic Alliances:y StrategicAlliance :Amway (Amsure)

y Broker: India Infoline, Peerless, Indiabulls, Karvy Brokers, Religare etc

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UpcomingBusiness Model

y Online:

y Paperless and cheapest way for Consumer as well as company

y Most reliable as only educated class is active in this space

y Still at its nascent stage

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Factors that drive the purchase

behaviour

y Trust

y Purchase Exp

y Premium Payment

y

Quality ofA

gent'sA

dvisey Product Portfolio

y Call Centre

y Accessibility

y

Brand Recally Online Presence

y Claim Settlement

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Value Curve (Option 1)

0

2

4

6

8

10

12

LIC

ICICI Pru

MNYL

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Value Curve (Option 2)

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Four Action Framework

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Reduce

No.OfOffices:

y Reduction in fixed costs

y Benefits can be passed on to the customer by lesser charges

y

Bancassurance /Other strategic alliances tie up:

y Arrangements with retain chains for premium payment

y Tie Ups withDiagnostic Centres

y Contract with agencies : Feet on Street (FOS) in various cities

y Improve Processes: Get maximum customers active into ECS

(Electronic Clearance System) mode

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RaiseBrand Recall

y Appropriate customer communication

y Differentiation in brand image

y Brand Track

y Effective Campaigns

Quality ofAgentsAdvise

y CompetitiveAdvantage

y Invest in Training

y Provide career path toAgentAdvisors

y Build Sales Force for maximum coverage

y Empower them with effective Sales Tools

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Raise Contd..

y Premium Payment Options

y Tie Ups with retain chains

y Tie ups withAgencies (providing cheque pick up facility

through their FOS

y Drop Boxes

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Eliminate

y Non Value Added (NVA)Activities

y Outsourcing customer services (front end & back end)

y Better services

y Cost efficiency

y h

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Createy Trust

y ThroughTVC and other modes of communicationy Leverage on Quality ofAgentsAdvise Word of MouthAdvertising works

effectively in the industryy Leverage on its claims efficiencies

y Online Presencey Look across the time horizon The future lies here

y Focus only to Mass and Mass Affluent (Blue Ocean)y 80% of the Business is realized by 20% of peopley Retention Programme High acquisition costsy Focus On Group Business (B2B)y No focus on rural market (lower ticket size but high fixed costs)

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Create Contd..

y Clear focus onTraditional Life Insurance Products

(Blue Ocean)

y People still apprehensive of market volatility

y People prefer products that offer guaranteed returns

y Higher persistency and business conservation two key

parameters

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New Value Curve

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Thank You