Distribution Channels

of TATA-AIG

Prepared By :-Group -2

Company Background

Tata AIG General Insurance Company Limited is an Indian insurance company. Headquartered in Mumbai Tata-AIG Life has been in operation since April 2001 (incorporated on Aug 23,

2000). While the company itself is relatively new, the Tata group is widely known in Indian households.

Tata-AIG Life Insurance Company is a joint venture between the Tata Group (74% equity stake) and American International Group Inc. (AIG) (26% equity stake). The company offers a broad range of life insurance products to individuals and groups. The products offered to individuals are variations of term life with or without a savings element, e.g., endowment policies and money back policies.

It offers a range of general insurance products including insurance for automobile, home, personal accident, travel, energy, marine, property and casualty as well as several specialized financial lines.

Key peoples

Gaurav Garg (MD of Tata AIG General Insurance) Miranjit Mukherjee (CFO of Tata AIG General

Insurance) Koushik Gopinath (CIO of Tata AIG General

Insurance)

Distribution Channel Tata AIG has multi distribution channel

having tie ups with corporate agents, brokers and banks. The company has more than 40 branches in 35 cities in India.

The Company's products are available through various channels of distribution like agents, brokers, banks (through bank assurance tie ups) and direct channels like Telemarketing, Digital Marketing, worksite etc.

There are essentially two types of micro-agent models:-

1) One is that of groups of micro-agents called CRIGs

2) individual micro-agent

CRIG Model: Advantages The CRIG model creates an insurance

distribution infrastructure in low-income neighborhoods; it creates a new profession, the micro-agent, with new livelihood opportunities for poor women.

The problem with the MFI partner-agent model in India is that, because of the pressure to meet the rural and social quotas, most large, efficient MFIs are already in partnerships. The CRIG model can draw from many suitable NGO partners, while not being dependant on a few good MFIs.

It is sometimes difficult to sell long-term policies through MFIs because of the link to the loan. The loan may be for a short term (often 4 to 12 months) and may not be repeated. Without the link to loan, there are no economies of scope for the MFI.

CRIG Model: Advantages It is possible that, in the long run, the

CRIGs may not need the assistance of the NGO and may deal with Tata-AIG directly, providing long-term sustainability.

The micro-agent model can also expand to higher premium products to richer segments of the rural market. The introduction of rural products, after achieving a critical mass of social products, serves to integrate micro insurance into mainstream insurance, while benefiting the insurer and the agent.

This inclusive nature of the model would be difficult to achieve with an MFI since it tends to focus on a narrower target market.

CRIG Model: Disadvantages Training is costly in relation to premium

values. The transactions costs of the sales agent

are cheap at first, but increase after they have sold policies to all the people they know and need to sell to strangers, especially those that live far away from the sales agent.

In many cases in the partner-agent model, when a claim arises, the MFI or NGO, investigates the claims themselves, pays the benefit immediately and then claims it from the insurer.

An immediate claims payment helps maintain client confidence and is not possible with a CRIG methodology.

What is Sold and What Sales?

Initially the CRIGs are encouraged to sell social products with premiums ranging from Rs 10

a month to Rs 60 with death benefits ranging from Rs 10,000 to Rs 54,000 .

CRIGs have so far sold 1,530 Jana Suraksha, 880 of Karuna Yojana and eight of Kalyan Yojana.

Individual Micro-agents Besides the group approach of the

CRIGs, the micro-agent model could also be done on an

individual basis. Again, the model involves an NGO

business associate that recommends the agents and monitors them.

Like the CRIGs, micro-agents tend to be women who are either office bearers of an SHG or a voluntary worker of an NGO.

THANK YOU !!