TOPIC

SELLING STRATEGY OF
MAX LIFE INSURANCE .
 Chapter-1
Introduction
Marketing is defined as the process of determining the needs and wants of consumer and being
able to deliver products that satisfy those needs and wants. Marketing includes all of the
activities necessary to move a product from the producer to the consumer. Marketing starts with
market research, a learning process in which marketers get to know everything they can about
the needs and wants of consumers, and it ends when somebody buys something. Many
companies feel that services provided to customers after the purchase also are an important part
of marketing. All of these enterprises production, advertising, transportation, processing,
packaging, and selling are included in the marketing process.
THE NINE FUNCTIONS OF MARKETING
In order for the marketing bridge to work correctly providing consumers with opportunities to
purchase the products and services they need the marketing process must accomplish nine
important functions.
The Functions are:
Buying - people have the opportunity to buy products that they want.
Selling - producers function within a free market to sell products to consumers.
Financing - banks and other financial institutions provide money for the production and
marketing of products.
Storage - products must be stored and protected until they are needed. This function is
especially important for perishable products such as fruits and vegetables.
Transportation - products must be physically relocated to the locations where consumers can
buy them. This is a very important function. Transportation includes rail road, ship, airplane,
truck, and telecommunications for non-tangible products such as market information.
Processing - processing involves turning a raw product, like wheat, into something the
consumer can use - for example, bread.
Risk-Taking - insurance companies provide coverage to protect producers and marketers
from loss due to fire, theft, or natural disasters.
WHAT IS MARKETING STRATEGY
Marketing strategy has the fundamental goal of increasing sales and achieving a sustainable
competitive advantage. Marketing strategy includes all basic short term, and long term activities
in the field of marketing that deal with the analysis of the strategic intial situation of a company
and the formulation , evaluation and selection of market oriented strategies and therefore
contribute to the goal of the company and its marketing objectives.
DEVELOP A MARKETING STRATEGY

• have decided on the nature of your business and you know that your business idea is .
• feasible;
• have also identified your market and decided on your target market;
• know what the needs of your customers are and you have identified and assessed your
• Competition.
 INDUSTRY PROFILE
Life insurance is a form of insurance that pays monetary proceeds upon the death of the insured
covered in the policy. Essentially, a life insurance policy is a contract between the named insured
and the insurance company wherein the insurance company agrees to pay an agreed sum of
money to the insured's beneficiary. With a large population and the untapped market area
insurance happens to be a very big opportunity in India. Today it stands as a business
11
growing at the rate of 15-20% annually. Together with banking services, it adds about 7 percent
to the country’s GDP. In spite of all this, the growth statistics of the penetration of the insurance
in the country is very poor. Nearly 80% of Indian population is without life and health insurance
cover. This is an indicator that growth potential for the insurance sector is immense in India. It
was due to this immense growth that the regulations were introduced in the insurance sector and
in continuation “Malhotra Committee” was constituted by the government in 1993 to examine
the various aspects of the industry. The key element of the reform process was participation of
overseas insurance companies with 26% capital. Creating a more competitive financial system
suitable for the requirements of the economy was the main idea behind this reform. Since then
the insurance industry has gone through many changes. The liberalization of the insurance
industry has never looked back and today stand as one of the most competitive and exploring
industry in India. The entry of the
private players and the increased use of the new distribution are in the limelight today. The use
of new distribution techniques and the IT tools has increased the scope of the industry in the
longer run. Insurance is the business which provides protection against financial aspects of risk,
such as those to property, life, health and legal liability. In insurance the insured makes payment
called “premiums” to an insurer, and in return is able to claim a payment from the insurer if the
insured suffers a defined type of loss. This relationship is usually drawn up in a formal legal
contract.
12
CLASSIFICATION OF INSURANCE
The insurance industry in India can broadly classified in two parts. They are.
1) Life insurance.
2) Non-life (general) insurance.
LIFE INSURANCE Life insurance can be defined as “insurance that provides a sum of money if
the person who is insured dies while the policy is in effect”. In 1818 British introduced to India,
with the establishment of the oriental life insurance company in Calcutta. The first Indian owned
Life Insurance Company was the Bombay mutual life assurance society which was set up in
1870. The life insurance act, 1912 was the first statuary measure to regulate the life insurance
business in India. In 1983, the earlier legislation was consolidated and amended by the insurance
act, 1938, with comprehensive provisions for detailed effective control over insurance. The
union government had opened the insurance sector for private participation in 1999, also
allowing the private companies to have foreign equity up to 26%. Following the opening up of
the insurance sector, 12 private sector companies have entered the life insurance business.
Need for life Insurance The need to safeguard the family brings in the need for life insurance.
Today insurance has become even more important due to the disintegration of the prevalent joint
family system, in which a number of generations co-existed in harmony, and a system in which a
sense of financial security was always there as there were more earning members. Times have
changed and the nuclear family has emerged. Apart from other pitfalls of a nuclear family, a high
sense of insecurity is observed in it today besides, the family has shrunk. Needs are increasing
with time and fulfillment of these needs is a big question mark. How will you be able to satisfy
all those needs? Better lifestyle, good education, a long desired house. But again one just cannot
fritter away all your earnings. You need to save a part of it for the future too – a wise decision.
This is where insurance helps. Factors such as fewer number of earning members, stress,
pollution, increased competition, higher ambitions etc are some of the reasons why insurance has
gained importance and where insurance plays a successful role. Life Insurance ensures that a
person gates better prepared to face the uncertainties in the following ways:
PROTECTION
You need life insurance to be there and protect the people you love, making sure that your family
has a means to look after itself after you are gone. It is a thoughtful business concept designed to
protect the economic value of a human life for the benefit of those financially dependent on him.

RETIREMENT Life insurance makes sure that you have regular income after you retire and
also helps you maintain your standard of living. It can ensure the post – retirement years are
spent in peace and comfort.
SAVINGS AND INVESTMENTS Insurance is a means to Save and Invest. Your periodic
premiums are like Savings and you are assured lump sum amount on maturity. A policy can
come in really handy at the time of your child’s education or marriage! Besides, it can be used as
supplement retirement income!
TAX BENEFITS Life insurance is one of the best tax saving options today. Your tax can be
saved twice on a life insurance policy-once when you pay your premiums and once when you
receive maturity benefits. Money saved is money earned!

Why is insurance superior to other forms of savings?

An immediate estate is created in favor of the policyholder.
Protection in case of death.
Liquidity in case of need-easy loans is available.
Tax relief-income tax.
Policies can be offered as collateral security.

Present Scenario

The Government of India liberalized the insurance sector in march 2000 with the passage of the
Insurance Regulatory and Development Authority (IRDA) Bill. Lifting all entry restrictions for
the private players and allowing foreign players to enter the market with some limits on direct
foreign ownership. Under the current guidelines, there is a 26 percent equity cap for the foreign
partners in an insurance company. There is a proposal to increase this limit to 49 percent.

The opening up of the sector is likely to lead to greater spread and deepening of insurance sector
in India and this may also include restructuring and revitalizing of the public sector companies.
In the private companies operating in life segments have started selling their insurance policies
since 2001.

The table shows the current market players in the field of Life Insurance Industry (source:
IRDA):
Serial No. Name of the company

1. Max Life Co. Ltd

2. Birla Sun Life Insurance Co. Ltd

3. HDFC Standard Life insurance Co. Ltd

5. ICICI Prudential Life insurance Co. Ltd

6. ING Vysya Life insurance Co. Ltd

7. Life Insurance Corporation of India Co. Ltd

8. Bajaj Allianz Life insurance Co. Ltd

9. Met Life India Insurance Co. Ltd

10. Kotak Mahindra Old Mutual Life insurance Co. Ltd

11. SBI Life insurance Co. Ltd

12. Tata AIG Life insurance Co. Ltd

13. Reliance Life insurance Co. Ltd

14. Aviva Life insurance Co. Ltd

15. Sahara India Life insurance Co. Ltd

16. Bharti AXA Life insurance Co. Ltd

.

INSURANCE SECTOR REFORMS:

In 1993, Malhotra Committee headed by former Finance Secretary and RBI Governor R.N.
Malhotra was formed to evaluate the Indian insurance industry and recommend its future
direction. The Malhotra committee was set up with the objective of complementing the reforms
initiated in the financial sector. The reforms were aimed at “creating a more efficient and is the
competitive financial system suitable for the requirements of the economy keeping in mind the
structural changes currently underway and recognizing that insurance is an important part of the
overall financial system where it was necessary to address the need for similar reforms…” In
1994, the committee submitted the report.The Authority has notified 27 Regulations on various
issues which include Registration of Insurers, Regulation on insurance agents, Solvency Margin,
Re-insurance, Obligation of Insurers to Rural and Social sector, Investment and Accounting
Procedure, Protection of policy holders’ interest etc. 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 an a provident societies taken over by the central
government and 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 business
in India, on the other hand, 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.

MARKET SHARE OF INDIAN INSURANCE INDUSTRY

The introduction of private players in the industry has added value to the industry. The initiatives
taken by the private players are very competitive and have given immense competition to the on
time monopoly of the market LIC. Since the advent of the private players in the market the
industry has seen new and innovative steps taken by the players in this sector. The new players
have improved the service quality of the insurance. As a result LIC down the years have seen
the declining phase in its career. The market share was distributed among the private players.
Though LIC still holds the 75% of the insurance sector but the upcoming natures of these private
players are enough to give more competition to LIC in the near future.

INDIA IN THE INTERNATIONAL CONTEXT :

The Indian insurance market is the 19th largest globally and ranks 5th in Asia, after Japan, South
Korea, China and Taiwan. In 2003, total gross premiums collected amount to USD 17.3 billion
,representing just under 0.6% of world premiums. Similar to the pattern observed in other
regional markets, and reflecting the country’s high savings rate, life insurance business
accounted for 78.5% of total gross premiums collected in the year, against 21.5% for non-life
insurance business.C

Fig: market share of Life Insurance companies

The above figure shows that:

 ICICI Prudential has the largest share of 22.1%.

 Bajaj Allianz has 13.8%share & then comes SBI Life which has 9.8% market share.

 The fourth position is acquired by Max Life Insurance & Reliance Life with 8% share in
market followed by other companies.

1.3 COMPANY PROFILE

Max Life Insurance Company Limited (formerly known as Max New York Life
Insurance Company Limited) is a leading life insurance company in India.
The company is a subsidiary of the publicly listed Max Financial Services Limited
and is the largest non-bank private-sector life insurer in India. It was founded in
2000 after the liberalization of the insurance sector in India and its operations
began in 2001.
Analjit Singh, founder of Max Healthcare, is the chairman of Max Life
Insurance.The company is headquartered at New Delhi.
 Max Life is a fortune 100 company and Max India Limited is one of the India’s leading
multi-business corporation.

 The company has an authorized and paid up capital of 250 crores.

 The very nature of their business make their highly customer sensitized at Max Life. This
company is widely known for its world class training.

 Max life insurance received the Insurance Regulatory and Development

Authority(IRDA) certificate of registration (R3) on 15 Nov. 2000 to conduct life
insurance business in India.

 First Indian Life Insurer to be given ISO 9001:2001 certification.

 Sold life insurance cover of over Rs49,800 crores.

 Secured financial future of 1.64 million policy holders.

 Operating in 120 cities with nearly 350 branches across the country.

 A strong foot prints of over 30,000 Agent Advisors.

 The company’s strategy is to establish itself as a trusted life insurance specialist through a
quality approach to business.
 It has developed a strong corporate governance model based on the core values of
excellence, honesty, knowledge, caring, integrity and teamwork.

 The AA’s are trained in-house to ensure optimal control on quality of training.

 201 agent advisors have qualified for the million dollar round table(MDRT) membership
in 2005

 MDRT is an exclusive congregation of the world’s top selling insuring agents and is
internationally recognized as the standard of excellence in the life insurance business.

 The company is using five pronged strategy to pursue alternative channels of distribution.

 These include the franchisee model, rural business, direct sales force involving group
insurance and telemarketing opportunities and corporate alliances.

 Max life offers a suite of flexible products. It now has 26 life insurance products and 8
riders that can be customized to have more than 400 products.

COMPANY LOGO

TAGLINE OF MAX
Max l i f e i n su ran ce Val u es an d B el i efs
Ex cel l ence " In ev e r y aspect o f work. R angi n g f rom t he i n -house t rai ni n g
i ns t i t ut e t o t he det ai l ed P erso nal Insu rance P l an. MAX Li f e i s focused on
achi evi n g t he hi ghes t st andards of qual i t y i n ev er y asp ect of t hei r busi nes s ".

1. KNO WL E DGE
Knowl ed ge l ea ds t o ex pert i se; and our ex pert i se i s i n hel pi ng peopl e
prot ect t hem . P erfe ct l y com bi ni n g gl ob al ex pert i se wi t h l ocal kno wl ed ge, w e
are Indi a 's l i fe i nsurance spe ci al i st . Max New York Li f e bel i eves t hat for
knowl edge t o be of val ue i t m ust be foc used, curr ent , t est ed and shared.

2. CARI N G
M ax New York Li f e i s rede fi ni ng t h e l i fe i nsuran ce pa r adi gm b y fo cus i n g
on cus t om ers fi rst . The servi ce p rocess i s responsi ve, p ers onal i z ed, hum ane
and em pat het i c. Ever y i ndi vi dual who repres ent s t he com pan y i s for us our
brand cham pi on.

3. H O NE S T Y
Honest y i s t he heart of t he l i fe i nsurance busi ness. It i s al l about t rus t.
Trans par enc y, i nt e gri t y and depend abi l i t y form t h e corn er st ones of t he M ax
New Yo rk Li f e e x peri ence. The co m pan y ensures t hat eve r yone wh o
repres ent s t he brand carri es a prom i se: we ca re — i n word as wel l as de ed.
4. E XCE L L E NCE
Ex cel l ence at Max New York Li f e i m pl i es t he abi l i ty t o per form at a
cons i s t ent l y hi gh l e vel . Focus ed on t he val ue of cont i nuou s i m provem ent i n
peopl e, process es a nd t he organi z at i on, t he com pan y s t ri v es for t he hi ghes t
s t andards of qual i t y i n ever y asp ect of i t s busi ness.

5.CULTURE: Our "i n house cul t ure reci p e" h as som e of t he fi nes t
i ngredi ent s goi ng i n t o i t s m aki ng. S om e of t he m ore prom i nent aspect s o f our
cul t ure ar e st at ed be l ow:
28
• C us t om er com es fi rst
• Do i t ri ght t he fi rs t t i m e
• Bi as for resul t ori ent ed act i on
• Fi nanci al st r en gt h and di sci pl i ne
• C l ari t y of purpos e
• Int e rnat i onal qual i t y st anda rds
• In cl us i ve Meri t ocr ac y
• Le arni n g opport un i t i es
• Fun at work

Vision:

 To become the most admired life Insurance company of India.

Mission:

 To become one of the top quartile life insurance companies in india.

 Be a national player.

 Be a brand of first choice.

  Be the employer of the choice.

 Become principal of choice for agents.

Achievements:

 First Life Insurance company in India to have 9001:2000 certificate.

 Top five most respected private life insurance in India according to business world
survey.

Continuous presence in top 50 MDRT global list

Products and services

Max Life has approximately 3,000 life insurance customers in India. Its distribution channel
includes banks, individual agents, brokers, and corporate agents, among others. It provides
linked, participating and non-participating products. Apart from life coverage, it also covers
health, pension, and annuity. It offers child, protection, retirement, savings, and growth plans to
individuals and to groups.

Max Life offers the following type of life insurance plans:

 Child plans[4]
 Term plans[5]
 Growth plans[6]
 Savings plans[7]
 Strategic plans
 Retirement plans[8]
 Group plans[9]

Children Plans
 Your parenting is perfect but is your planning adequate? Are you thinking beyond the
immediate to the future, about higher education and professional courses, in India and
abroad? Many children are keen to pursue unconventional careers. Are you in tune with
their aspirations and passions? As parents you would never let money come in the way of
your children and the fulfillment of their true potential. Our plans will help build the
corpus that allows your children to dream big and soar high.

• Children's Endowment to 18 (Par)

• Children's Endowment to 24 (Par)

• SMART Steps™

• SMART Steps™ Plus, SMART Steps™ Single Premium

Investment Plans
 Building a nest egg is about aggregating surplus amounts regularly to allow them to grow
into a sizeable sum. Investments should be aligned to specific, long-term goals. Luxury
car, foreign holiday or dream house, create your own wish list and make it come true.
Your dreams are in your hands. Every move that you make today will bring you a step
closer to your goals. Our Investment Plans offer the dual benefit of protection and
market-linked returns with the flexibility to choose the premium and determine the
market exposure.

• Life Maker™ Premium

• Life Maker™ Gold

• Life Maker™ Platinum

• Life Invest™ • SMART Assure

Retirement Plans

Let your golden years be the most precious of your life, full of freedom and choice. A
time to pursue your hobbies, travel and enjoy the good life. You will never miss your
salary cheque or be constrained by rising inflation. Even as you work hard to make a
better today, it is up to you to create a superior tomorrow. If you want to sustain your
current lifestyle even after you stop working, make that money work for you. Our
Retirement Plans will keep you comfortable and content, and let you live the life you
deserve. • Easy Life™ Retirement (Par) • SMART Invest™ Pension

Health Plans

Do you know the cost of healthcare has climbed faster than inflation? Medical costs can
be a big drain on finances. A medical crisis can strike anyone, anytime and may even
force an individual to dip into savings to meet these sudden and steep costs. Such an
eventuality could delay or destroy a cherished financial goal. No wonder, health is
wealth. The health of every member of the family is precious and you need to safeguard
it as a priority. Use our Health Plans to make sure your family stays fit and fine.

• Lifeline MediCash™

• Lifeline Wellness™ Plus

• Lifeline MediCash™ Plus

• Lifeline Safety Net™ • Lifeline Wellness™

Savings Plans

Is your money working for you? Clearly not, if it is lying idle in multiple bank accounts.
We will instill the discipline of investment through force of habit as you park your money
for protection and growth to meet your needs over your lifetime. Choose a plan that
matches your needs and budget. Our dual benefits saving plans recognize your need for
all round financial protection, and include a life cover that will protect you till the last
day.

• Whole Life Participating

• Life Gain™ Plus 25 (Par)

• 20 year Endowment (Par)

• Life Pay™ Money Back

• Endowment to Age 60 (Par)

• Life Gain™ Endowment & Life Gain™ Plus 20 (Par)

Rural Plans

We are conscious of our social responsibility to serve the financially vulnerable sections
of society. We have created specialized Rural Plans to meet the particular needs of
customers in rural areas. The ticket size has been kept low, the premiums are affordable
and the procedures are simple. Customers in rural areas can now find a plan to meet their
unique requirements. • Easy Term Policy

Strategic Products Plans

Most people desire a carefree life. They want to be happy and comfortable at all times.
But needs keep evolving and you must always be one step ahead. Our Strategic Products
Plans will meet your special needs and are available through additional distribution
channels. You can choose a plan to meet the planned events and unforeseen incidents in
your life.
Group plans

People are the most valuable asset of any organization. Organizations have to innovate
newer forms of compensation to retain talented employees. Pay and perks are all very
fine but an organization needs to show employees that it cares. Ensuring the financial
well being of employees and their families will earn an organization their enduring trust
and loyalty. Our Group Plans offer a three-inone advantage, as they are a powerful tool
for motivation, reward and retention, in these times of high attrition.

• Group Credit Life

• Unit Linked Group Superannuation Plan

• Group Gratuity cum Term Assurance

• Group Term Life

• Unit Linked Group Gratuity Plan

• Employee Deposit Linked Insurance

• Max Super Life

Advertising campaigns

Max Life Insurance has carried out several advertising campaigns. A few prominent are:

 Second Chance – Launched in January 2015. The campaign had two videos where people
spoke about how life gave them a second chance. The campaign was created to spread
awareness about the importance of protection through life insurance.
 Sachchi Advice – Launched in August 2015 through the TVC medium, the campaign aimed
to highlight the company's focus on providing transparent advice to all of its
customers.tradaddd

M ax Li f e has be en i nst rum ent al i n changi n g t he par adi gm of l i fe i nsuranc e i n

Indi a. It i s t he fi rst l i fe i nsurance com p an y i n Indi a t o i nt roduce cause r el at ed
m arket i ng.
C hi l dren are a t t he ver y h ea rt of Max Li fe's st r at e g y. S OS C hi l dren's Vi l l a ges
of Indi a i s i nt ernat i onal l y r eco gni z ed f or i t s work i n gi vi n g unde rpri vi l e ged
chi l dren a whol eso m e l i fe. The m i ssion of S OS i s "t o hel p orphaned and
abandoned chi l dren , b y provi di n g t he m wi t h a f am i l y, a perm an ent hom e,
educat i on and st rong foundat i on for an i ndependent l i fe." It 's m i ssi on t i es i n
wi t h M ax Li fe 's phi l osoph y of hel pi n g peopl e secur e t he f ut ure of t hei r nea r
and dear on es.

COMPETITORS OF MAX LIFE INSURANCE

1. Bajaj Allianz Life Insurance Company Limited

2. Birla Sun life Insurance Co. Ltd

3. HDFC Standard Life Insurance Co. Ltd

4. ICICI Prudential Life Insurance Co. Ltd

5. Life Insurance Corporation of India

6. PNB Metlife India Insurance Co. Ltd.

7. Kotak Mahindra Old Mutual Life Insurance Ltd

8. SBI Life Insurance Co. Ltd

9. Tata AIA Life Insurance Company Limited

10.Reliance Life Insurance Company Limited.

11.Aviva Life Insurance Company India Limited

12.Sahara India Life Insurance Co, Ltd.

 Objective Of Study
The main objective of the study is at first to gain some practical
knowledge regarding functioning of corporation which is very
necessary to fully understand the marketing strategy , henc it
fulfill the purpose of the intrrnship under mba programme.

CHAPTER-2
RESEARCH METHDOLOGY

2.1 RESEARCH METHOLOGY

A Research Methodology defines the purpose of the research. How the research proceeds, how to
measure progress and what constitutes success with respect to the objectives determined for
carrying out the research study. The appropri at e rese arch d esi gn fo rm u l at ed i s
det ai l ed bel ow. Ex pl orat or y res ear ch: t hi s ki nd of resea rch h as t he pri m ar y
obj ect i ve of dev el opm ent of i nsi ght s i nt o t he probl em . It st udi es t he m ai n
area wher e t he probl em l i es and al so t ri e s t o eval uat e som e a ppropri at e
cours es of act i on. T he r ese arch m et hodol og y for t h e pres ent st ud y has be en
adopt ed t o refl ect t h ese re al t i es and hel p reach t h e l ogi cal co ncl usi on i n an
obj ect i ve and sci ent i fi c m anner.

NAT URE O F D AT A
Pri mary d ata : i t i s di rect l y t ak en fr om i nvest or t hrough quest i onnai re t o
know t hei r per cept i on about i nsurance. S om e fi ndi ngs & a nal ysi s ar e dr awn,
on t he basi s of t hei r response .
Goal s :
  The pot ent i al m arket for a i nsurance product or servi ce
 R at i ngs of cu rrent p roduct s or servi ces
 Em pl o yee at t i t udes
 C ust om er sat i sfact i on l evel s
 C orporat e i m a ges

I n tervi ew i n g Meth od s
P ers onal Int ervi e ws

Advantages

 The abi l i t y t o l et t h e Int ervi e wee s ee, f eel product .

 The abi l i t y t o fi nd t he t arget popul at i on. For ex am pl e, yo u can fi nd
peopl e who h ave s een a fi l m m uch m ore e asi l y out si de a t heat e r i n
whi ch i t i s pl a yi n g t han b y cal l i n g phon e num bers at r ando m .
 Lon ge r i nt e rvi ews are som et i m es t ol er at ed. P eopl e m a y b e wi l l i ng t o
t al k l onger fa ce -t o - f ace t han t o som eon e on t he ph one.

Disadvantages

 P ersonal i nt ervi ews usual l y cost m o re p er i nt ervi e w t han ot her m et hods ,

where t r avel t i m e i s a m aj or fa ct or.
 S am pl e si z e i s sm al l enough t o achi ev e preci si on i n resul t

S econ d ary d ata: se condar y d at a t hat i s al read y avai l abl e and publ i shed .i t
coul d be i nt ern al and ex t ernal sou rce o f dat a. Int er nal source: whi ch
ori gi nat es from t he speci fi c fi el d or area where research i s carri ed out e.g.
publ i s h broachers, o ffi ci al repo rt s et c.
Advantages
S econdar y d at a m a y be avai l abl e whi ch i s ent i rel y appr opri at e and whol l y
adequat e t o dr aw co ncl usi ons and answe r t he quest i on or sol ve t he probl em .

 It i s fa r ch eape r t o c ol l ect seconda r y dat a.

 The t i m e i nvol ved i n searchi n g s econda r y sou rces i s m uch l e s s .
 S econdar y sour ces of i nform at i on can yi el d m ore ac curat e dat a. Thi s i s
not al wa ys t rue but where a governm e nt or i nt ernat i onal agenc y h as
undert aken a l ar ge scal e su rve y, o r ev en a c ensus, t hi s i s l i kel y t o yi el d
far m or e a ccur at e r esul t s t han cust om d esi gned and ex ecut ed surve ys
when t hese a re b ase d on rel at i vel y sm al l sam pl e si z es.
 S econdar y dat a can pl a y a subst ant i al rol e i n t he ex pl orat or y phas e o f
t he res ear ch wh en t he t ask at ha nd i s t o defi ne t he rese ar ch probl em and
t o gen erat e h ypot h e ses.
 S eco ndar y sou rces hel p defi ne t he pop ul at i on. S econdar y dat a c an be
ex t rem el y useful bo t h i n defi ni ng t he p opul at i on and i n st ruct uri ng t he
s am pl e t o be t ak en. For i nst an ce, gov e rnm ent st at i st i cs on a count r y's
agri cul t ure wi l l hel p deci de ho w t o st r at i f y a sa m pl e and, once sam pl e
es t i m at es have b ee n cal cul at ed, t hese can b e used t o p roj ect t hos e
es t i m at es t o t he popul at i on.

Disadvantages

It i s eas y t o fi nd an d col l ect seconda r y dat a. Howev er, you need t o be aw are
of t he l i m i t at i ons t he dat a m a y h ave and t he p robl em s t hat coul d ari se i f t hes e
l i m i t at i ons are i gnor ed:
  S econdary dat a can be general and vague and m ay not real l y hel p
com pani es wi t h deci si on m aki ng.
 The i nform at i on and dat a m a y not be accur at e. The sour c e of t he dat a
m ust al wa ys b e che c ked.
 The dat a m a yb e ol d and out of dat e.
 The sam pl e used t o gen erat e t he se cond ar y dat a m a yb e sm al l .
 The com pan y publ i s hi ng t he dat a m a y n ot be reput abl e.

External source: Thi s ori gi nat es out s i de t he fi el d of st ud y l i ke books,

peri odi cal s, j ournal s , newspape rs and t h e i nt ernet .

DATA COLLECTION
Bot h P ri m ar y &S e co ndar y dat a h as been used whi ch i s col l ec t ed t hrough
ques t i onnai res, art i c l es, report s, j ournal s, m agaz i nes, ne wsp apers r eport s
prepar ed b y res ear c h schol ars, uni versi t i es and i nt ernet .
PURPOSE OF RESEARCH STUDY
 To st ud y, unde rst an d and anal yz e MAR KET ING S TR ATEG Y OF E X IDE
LIF E INS UR A NC E.
 To vi ew t he i m pact of i nsurance on Indi an Econom y.
 An effort has b een m ade to m ake possi bl e suggest i ons and
recom m endat i ons fo r t he bet t erm ent .
 CHAPTER- 3
SELLING STRATEGIES OF MAX LIFE INSURANCE

In 1999, when the insurance sector was opened to private players in India, Max
India Limited tied up with New York Life to form Max New York Life (MNYL) to
provide individual and group life insurance solutions. In a short span of around 5
years, it established a wide distribution network with 28 offices and representatives
across 21 cities in India. Max New York Life offered 13 products and 9 riders’
customized to over 400 combinations that provided a number of options to the
customer.
Max New York Life mission, vision and values were all directed towards
becoming the most admired and preferred Life insurance Company in India. They
also aimed to be the first choice for employees as well as agents. In 2000, Max
New York Life realized that to compete against LIC, the only large player in the
life insurance segment, it had to build a huge network and implement a product
differentiation strategy to gain customers. However, the tie up with New York life
ensured that different options were given to the customer as against LIC products
which were not differentiated.
There was also an opportunity in the Indian markets as penetration rates were only
1.3% and insurance policies were mainly considered as a tax-saving investment,
rather than risk coverage. The leading player (LIC) concentrated only on selling
and very little qualitative advice was offered to the customer buying its insurance
policies. This service gap enabled a customer-oriented player like Max New York
Life to impress the potential customers.
Max New York Life laid stress on training of agents, as personal relationships
were the key to success in selling insurance. For this purpose, it took special
measures to train agent advisors who were the primary source of distribution. In
2002, it had around 1900 agent advisors who underwent 152 hours of training
before selling as against 100 hours stipulated byIRDA.
These training programs were spread over 2 years for 500 hours and ensured up
gradation of skills and knowledge. The training program covered consumer
psychology, the financial markets, and development of selling skills, discipline and
the right attitude in the agents. These agents were groomed to become financial
advisors to customers. Commenting on internal brand building, Debashis Sarkar
(Sarkar), senior vice-president, marketing, Max New York Life said:
“We will also be focusing on internal brand-building, since brand-building has a
larger context in the service sector. Internal employees are all opinion shapers and
indirect brand-builders and brand promise needs to be replicated down the chain at
every customer touch point”. To strengthen its distribution system further, in 2003,
Max New York Life adopted alternative distribution channels viz. franchisee
model, rural business, telemarketing, banc assurance and corporate alliances. It
appointed ‘gram sahayaks’ in some rural locales who were trained to identify and
sell specialized insurance products.
There are tapping opinion leaders in the village like schoolteachers, social workers
and chemists, and creating products which suit rural needs," commented Sarkar.
The company tied up with Shoppers' Stop and reached out to customers who held
the chain's "First Citizen" discount card and bought children's clothes more than
once a month. Such customers were tapped for child saving schemes as well.
Max New York Life created product differentiation by giving “Whole Life
“policies that offered customers the correct balance between protection and
savings. They offered for the first time in India a free-look period i.e., a customer
had 15 days period to weigh the various options offered by Max New York Life
which helped him to take an informed decision. This standard was adopted by
IRDA as the best practice to be emulated by all players in the Indian insurance
market. They were also the first company to sell a policy with riders.
For example, 5-Year Term Renewable and Convertible Policy had two riders
attached to it viz. Personal accident benefit and Dread disease benefit, which could
be attached at the time of purchase of policy or later, subject to certain conditions.
Max New York Life also offered a specialized rural policy provided term
insurance for Rs10,000 for a sum of Rs100, which was affordable to that particular
segment of society.
Max New York Life offered cash bonus in May 2003 to its Whole Life
policyholders, who joined before February 6, 2002. As a value added service, this
bonus could be used in five different ways: accumulated with the company and
earn interest, buy paid up additions to raise the death benefit of the base policy,
offset against future payable premiums, taken in cash or buy an additional term
cover for one year.
In 2003, Max New York Life realized that it needed a new workflow system, as the
existing one was unable to meet the customer requirements efficiently. Therefore,
it tied up with nugent to supply business process management tools. These
technological improvements helped to reduce the turnaround time for customer
request by 45%, aided in immediate retrieval of information, and generated savings
on paperwork and telephone costs.
Max New York Life also fixed benchmarks on claim processing time, processing
of complaints and customer satisfaction and monitored these regularly. All these
measures served to enhance customer service levels in the company.
At the outset, the mission and vision of Max New York Life clearly defined its
objective to be the most admired and preferred insurance company in India. It then
went about doing a SWOT analysis that formed the basis for its marketing strategy.
It had the advantage of variety of products from New York Life, a leading
insurance player in the US, which had to be introduced with Indian perspective.
The largest threat was LIC, which had a big distribution network. Max New York
Life also saw an opportunity in the under-penetrated insurance market where
insurance policies are considered as an investment or tax-saving tool. Using this
market analysis it went about building its distribution network through direct sales
personnel called “agent advisors”.
Special attention was given to training them so that they could go beyond selling
and offer professional advice to customers. Max New York Life leveraged the fact
that insurance policies were mainly treated as tax savers or investment tools.
Therefore, it emphasized on protection against risk in its products and combined
savings with protection creating a differentiated product. These measures coupled
with other product differentiations and customized processes helped it to gain a
presence in the insurance market.
Max New York Life mainly used the concept of protection against risk to promote
its products. It felt that existing insurance products, although having a money-back
offer, did not offer protection to the customer.
The “Whole Life” policies of Max New York Life, therefore concentrated on a
unique combination of protection and saving that appealed to the customer. Along
with this, riders in the form of supplementary policies served as an additional
benefit to the customer.
Another first for Max New York Life was its cash bonus offer which offered cash
back on certain policies. As a value addition, there were various options wherein
this cash could be invested with the company. Continuing with its innovations,
Max New York Life also offered a free-look for 15 days, which later became the
norm for insurance industry.
With a focused approach to the rural areas, Max New York Life introduced a rural
policy with minimum investment to suit the pockets of the lower income groups
residing in villages. To make this section of customers understand the benefits of
their policies, they adopted a unique strategy of appointing schoolteachers and
social workers as agents, who being opinion leaders helped convince the villagers
about the product.
Other distribution channels like banks and corporate alliances were a means to
expand the customer base of Max Life via customers visiting these places.
The direct selling agents established personal rapport with customers on one-to-
one basis, thereby increasing goodwill and loyalty towards Max Life. To support
their products and distribution, they built a customized business process system
using the web platform to generate quick customer response. This model also
helped them to track complaints and measure customer satisfaction. The improved
productivity and low costs helped to improve Max Life’s profits and gave them
increased business.
VARIOUS SELLING STRATEGIES ADOPTED BY MAX LIFE ARE
DISCUSSED BELOW :
1. BONUS STRATEGY
Bonus is a function of surplus funds available after adjusting for future liabilities
and current assets. This is based on actuarial experience.
Therefore, based on actuarial experience, bonuses will be announced not before
three years of operations.
Max New York Life offers innovative and immediate (not reversionary) bonus
options, which add value to customers. Bonuses can be received in cash, employed
to offset premium, left on deposit with interest, used to buy additional insurance by
way of paid-up additions or term insurance.
2. RURAL STRATEGY
Max New York Life recognizes the rural market and social sectors as being
distinct, requiring different selling and product strategies. Therefore, Max New
York Life have designed specific products and appointed village cooperatives in
various districts across India. These village cooperatives help increase awareness
of life insurance.
3. COMMUNICATION STRATEGY
Max New York Life objective is to build India’s most admired Life Insurance
Company. Max New York Life seeks to build trust with customers.
Max New York Life focus on life insurance and experience of over 158 years has
helped position us as life insurance specialists.
The selling strategy is to provide a consistent brand experience across all
stakeholders — customers, shareholders, employees, agents, regulator and the
public.
The brand experience will be based on positioning of being a trusted life insurance
specialist that can partner the customer for life.
Max Life is also sparing no efforts to increase awareness for the true value of life
insurance, which lies in risk protection.
4 .STRONG AGENCY FORCE AND DIFFERENT AGENCY COMMISION
STRUCTURE
Max Life has over 3,000 agents / advisors. Max New York Life believe in a quality
approach to business and therefore select and train only the best in class people so
that they can deliver value to the customer.
The company places a lot of emphasis on its selection process, which comprises
four stages — screening, psychometric test, career seminar and final interview.
The agents are given in-house training to ensure optimal control on quality.
Commission is purely a function of the business that they generate. Given
approach to business it will not be unusual to see some agents earn more
remuneration than the managing director of the company.

FUTURE PLANS OF THE ORGANIZATION

EXPANSION PLANS: Mr Sy Sternberg, Chairman & CEO, New York Life

Insurance Company, and Mr Analjit Singh, Chairman, Max India Ltd, at a press
conference in the Capital on Tuesday. - Kamal Narang
New Delhi , Nov. 28
Max Life Insurance plans to foray into the micro insurance sector. The company is
right now looking at the various aspects of micro insurance in terms of product
packaging, pricing and chalking out distribution models, Mr Gary R. Bennett,
Managing Director and CEO of Max New York Life Insurance Co Ltd, said.
Speaking to newspersons, he said, "we are in the early stages of talks with a
general insurance company for a tie up for the micro insurance foray." He,
however, declined to give any time frame when the company is likely to go for the
venture. It is going to be a great opportunity for the insurance company, he said
adding, the next phase of development of the life insurance industry will be in rural
areas.
Capital infusion
Speaking about the fresh capital infusion, Mr Analjit Singh, Chairman, Max India
Ltd and Max New York Life, said, the company planned to raise its paid-up capital
to Rs 1,000 crore in next two years and eventually to Rs 1,500 crore. Currently, the
paid-up capital of the company stands at Rs 617 crore.
The company expects to break even by 2008-09. The company, which registered
more than 100 per cent growth last year, intends to roll out about seven new
products next year.
FDI limit
Asked about the foreign direct investment limit (FDI) in the insurance sector, New
York Life Insurance Co, Chairman and Chief Executive Officer, Mr Sy Sternberg,
said the company wants the Indian Government to raise the FDI in the insurance
sector. "Our highest priority at the moment is to see the FDI cap lifted. It will help
us scale up our investment in India," he added.
New York Life has 26 per cent equity — the highest permitted at present and has
committed to increase its stake to 49 per cent, when the Government raises the cap.