Summer Internship Project Report

On

Life insurance and its potential avenues in India

Completed At

PNB MetLife India Insurance Co. Ltd.

By

Srishti Kumari

Roll No. FC19177

PGDM 19-21

Under Joint Supervision of

Dr Deepti Kakar and Mr. Love Sherawat

Presented in Partial Fulfillment of the Requirements of

Post Graduate Diploma in Management

3, Institutional Area, Rohini, Sector 5,

New Delhi – 110085 India
 PNB MetLife India Insurance Co. Ltd.
Unit No.4, (Flat No.201, 2Nd
Floor, Plot No.7 & 8),
Vardhman Trade Centre, Nehru
Place, New Delhi - 110 019

CERTIFICATE

Certified that the summer internship project report on “Life insurance and its
potential avenues in India.” is the bonafide work of “Srishti Kumari, Roll
No: FC19177”, pursuing PGDM, Batch (2019-21) of Jagan Institute of
Management Studies, 3, Institutional Area, Rohini, Sector 5, New Delhi -
110085. The work has been done under my supervision during 05/05/2020 –
30/06/2020.

Date: Signature of the Supervisor

LOVE SHERAWAT
SUPERVISOR Name
Chief Business Manager
PNB MetLife India Insurance Co. Ltd.
 CERTIFICATE

This is to certify that the summer internship project report on “Life insurance
and its potential avenues in India.” is the bonafide work of “Srishti Kumari,
Roll No: FC19177”, pursuing PGDM, Batch (2019-21) of Jagan Institute of
Management Studies, 3, Institutional Area, Rohini, Sector 5, New Delhi -
110085. The work has been done under my supervision during 05/05/2020 –
30/06/2020.

Date: Signature of the faculty Guide

Dr Deepti Kakar
Professor
JIMS, Rohini, Sector 5, New Delhi - 85
 STUDENT’S DECLARATION

I declare that the Report on “Life insurance and its potential avenues in
India.” is an original work done by me in accordance with the guidelines
prescribed by the Dean’s office for preparation of Summer Internship Project
Report and the work has not been submitted anywhere else for review.

I understand that if the content of the work is found to be plagiarized at any

time of its evaluation, my report can be rejected and disciplinary action may
be initiated against me.

Signature of the student

Srishti Kumari
FC19177
PGDM Batch 19-21
 Acknowledgement
I would like to take this opportunity to extend my gratitude to all those who have helped me in
completion of my project report and made my working on the project comfortable.
Firstly, I would like to thank JIMS, Rohini, Sector 5, New Delhi – 85 for giving me the
opportunity to work as an intern with PNB MetLife India Insurance Co. Ltd., Delhi.
I would also like to extend my thanks to PNB MetLife India Insurance Co. Ltd., that they
believed in me and gave me the opportunity to work so closely with their organization and
provided me an experience of the professional world.
It gave me a platform to understand real life situations and implement all those concepts which I
had earlier come across only in textbooks as part of my course.
I express my sincere gratitude to Mr. Love Sehrawat – Chief Business Manager – PNB MetLife
India Insurance Co. Ltd., Delhi for his constant support throughout the internship. I thank him
for his valuable guidance which has helped me thoroughly during the project.
I would also like to convey my deep sense of gratitude and thanks to the Faculty Guide- Prof. Dr
Deepti Kakar for her constant support and feedback throughout the internship.
I extend my warm regards to my parents who have been my pillars of strength during all walks
of life.
Lastly, I want to thank my friends who helped me throughout the project by giving their valuable
inputs as and when required.
 List of Figures

1 Figure 1 19
2 Figure 2 20
3 Figure 3 21
4 Figure 4 21
5 Figure 5 22
6 Figure 6 22
5 Figure 5 22
6 Figure 6 22
7 Figure 7 23
8 Figure 8 23
9 Figure 9 24
10 Figure 10 25
11 Figure 11 25
12 Figure 12 26
13 Figure 13 36
14 Figure 14 36
15 Figure 15 37
16 Figure 16 37
17 Figure 17 38
18 Figure 18 39
19 Figure 19 40
20 Figure 20 41
21 Figure 20 42
22 Figure 21 43
23 Figure 22 44
24 Figure 23 45
25 Figure 24 46
26 Figure 25 47
27 Figure 26 48
28 Figure 27 49
 LIST OF TABLES

Table 1 16
Table 2 36
Table 3 36
Table 4 37
Table 5 38
Table 6 39
Table 7 40
Table 8 41
Table 9 42
Table 10 43
Table 11 43
Table 12 44
Table 13 44

List of Notations and Symbols Used

CRO: Customer research organization
CRM: Customer relationship management
MGIP: MetLife guaranteed insurance plan
IRDAI: Insurance regulatory and development of India

Table of Contents
Certificate (from the organization) I
Certificate (from the faculty mentor) ii
Author’s Declaration iii
Acknowledgement iv
List of Figures v
List of Tables vi
List of Notations and Symbols Used vii

Executive Summary 1

Chapter1: Overview 3
 1.1 Introduction
1.2 Overview of the company
1.3 Overview of the industry
Chapter 2: Research Methodology
2.1 Objectives and scope
2.2 Research design
2.3 Sources of data collection
2.4 Data analysis - tools/techniques
2.5 Sampling design
2.6 Limitations of the study
Chapter 3: Conceptual Background
Chapter 4: Data Analysis and Findings
Chapter 5: Discussion and Conclusion
Chapter 6: Recommendations
Chapter 7: Learnings from Summer Internship
Bibliography
Annexure
 Executive Summary

Distribution channel/avenues is a crucial factor for any investor in making all types of financial
investments. It is a psychological and mental process of decision making based on an
individual’s frame of reference that changes from time to time. This report explores individual
investor’s preference for potential distribution avenues of life insurance and investigates impacts
of perception on their investment decision. An attempt is also made to understand the factors
affecting distribution channel of a person. Primary and secondary research is conducted to gather
the data from 100 respondents, for this study and it is analyzed that the overall perception level
of investors about the potential distribution in India. It shows that moderate to high and there is
no significant relationship between gender and investment choices. This implies that the sample
does not prove that a particular gender has a higher or a lower degree of risk tolerance. It is also
observed that experience in stock market has a higher significance on the level of risk appetite of
a person and as experience increases, the risk-taking capability also increases. The reason for
overall moderate-risk perception among these 100 respondents could be the average level of
financial awareness and knowledge about markets and finance because 60% of the respondents
belong to the age group of 18-40 years and hence it can be said that they have comparatively
more knowledge about finance and investment. Yet, the knowledge about finance and financial
market is not sufficient enough to increase their risk-taking capacity.

1
 Chapter1: Overview

1.1 Introduction
The Indian insurance industry is going through a phenomenal growth phase and has been one of
the primary drivers of the nation’s economy. The life insurance sector, in particular, is evolving
rapidly, embracing international standards, and best practices, and offering innovative products
and services to customers. Changes in the regulatory environment have also impacted the
industry positively.
India has always been a nation of ‘savers’ and life insurance was once purchased primarily as a
tax-saving tool. However, the paradigm shift in the regulatory environment has led to more
customized solutions that combine protection and long-term wealth creation. The years 2001 to
2010 saw a period of high growth with a CAGR of about 31% in new business premiums
according to research firm KPMG. The number of insurance holders more than doubled to 5.32
crore policy holders in 2010, with the total life insurance premium tripling to Rs. 2.65 trillion
during the same period.
The improved and personalized products and services are delivered through a range of
distribution channels such as banks, agents, direct offices, and online platforms. The emergence
of a more diversified and multi-channel distribution network in today’s dynamic business
environment has revolutionized the insurance sector, providing customers increased access to
better services.
Distribution channels are the extended arm of life insurers. A well strategized and effective
distribution plan not only affects the top line and bottom line of a company, but also reduces
operational costs by giving deep, actionable, and detailed customer insights and analysis for
enhanced customer segmentation. Inefficient customer segmentation and targeting actually ends
up delivering less value to the customer and increasing effort and costs for insurance companies.
By developing and leveraging an effective multi-channel distribution strategy, insurance
companies can look forward to meeting customer expectations, enhancing their journey and
experience, and earning customer loyalty.

2
With changing demographics of insurance buyers, insurance companies are also using multiple
types of distribution systems. These systems are chosen based on the needs and status of the
target customer segment. A combination of all or most of the following distribution channels
contribute a multi-channel strategy:
• Broker
• Individual agents
• Corporate agents
• Micro-insurance
• Bancassurance
• Internet marketing
• Worksite marketing
• Direct marketing – Internet

REVIEW OF THE ASSIGNMENT:

• I have been assigned the task of sales and promotion of financial product (Life insurance) to
the customers.

• I have worked as a lead generator and counsellor for life insurance plan like PNM MetLife
super saver plan and MetLife guaranteed Insurance plan.

RESPONSIBILITIES ASSIGNED TO ME:

• To generate leads.

• To counsel the customer about different life insurance product.

• To convince them to invest in life insurance plans.

• Increasing awareness about life insurance.

• Providing complete knowledge about the product.

3
1.2 Overview of the Industry
Introduction
The insurance industry of India has 57 insurance companies - 24 are in the life insurance
business, while 33 are non-life insurers. Among the life insurers, Life Insurance Corporation
(LIC) is the sole public sector company. There are six public sector insurers in the non-life
insurance segment.
Types of Insurance
There are two broad types of insurance:

• Life Insurance: Life insurance is a contract that offers financial compensation in case
of death or disability. Some life insurance policies even offer financial
compensation after retirement or a certain period of time. Life insurance, thus, helps
you secure your family’s financial security even in your absence.
• General Insurance: General insurance is a contract that offers financial
compensation on any loss other than death. It insures everything apart from life. A
general insurance compensates you for financial loss due to liabilities related to your
house, car, bike, health, travel, etc.
Market Size
o Government's policy of insuring the uninsured has gradually pushed insurance
penetration in the country and proliferation of insurance schemes.
o Gross premium collected by life insurance companies in India increased from Rs 2.56
trillion (US$ 39.7 billion) in FY12 to Rs 7.31 trillion (US$ 94.7 billion) in FY20. During
FY12–FY20, premium from new business of life insurance companies in India increased
at a CAGR of 15 per cent to reach Rs 2.13 trillion (US$ 37 billion) in FY20.
o Overall insurance penetration (premiums as per cent of GDP) in India reached 3.69 per
cent in 2017 from 2.71 per cent in 2001.
o The market share of private sector companies in the non-life insurance market rose from
15 per cent in FY04 to 56 per cent in FY21 (till April 2020). In life insurance segment,
private players had a market share of 31.3 per cent in new business in FY20.

Market segmentation in the insurance organization:

Markets are segmented into different customer groups. Each product or services is tailored to
match the needs of the customer group. The segmentation helps the insurance organization in
dividing the market into small segments where the customer needs are identical.

4
Segments include:
• household sector
• industrial sector
• trade sector
• institutional sector
• region-wise sector; and
• rural sector

List of insurance companies in India:

Following is the list of insurance companies in India which have been approved by the Insurance
Regulatory and Development Authority of India (IRDAI) which is a statutory body regulating
and promoting the insurance and re-insurance industries in India.

1 Life Insurance Corporation of India Public Mumbai 1956

2 HDFC Standard Life Insurance Co. Ltd. Private Mumbai 2000

3 Max Life Insurance Co. Ltd. Private Delhi 2000

4 ICICI Prudential Life Insurance Co. Ltd. Private Mumbai 2000

5 Kotak Mahindra Life Insurance Co. Ltd. Private Mumbai 2001

6 Aditya Birla Sun Life Insurance Co. Ltd. Private Mumbai 2000

7 TATA AIA Life Insurance Co. Ltd. Private Mumbai 2001

8 SBI Life Insurance Co. Ltd. Private Mumbai 2001

9 Exide Life Insurance Co. Ltd. Private Bangalore 2001

10 Bajaj Allianz Life Insurance Co. Ltd. Private Pune 2001

11 PNB MetLife India Insurance Co. Ltd. Private Mumbai 2001

5
 Table: 1

1.3 Overview of the Company

PNB (Punjab National Bank) has always been a people’s bank since its inception in 1895
and is serving millions of customers in India. PNB is a well-known brand of providing
various types of financial services like drafts, loans, etc., among Indian customers and is
famous due to its strong fundamentals, a huge franchise value, loyal word of mouth and a
brand value which has helped the company come a long way and maintain its position even
at the time of cut-throat competition of private and public sector enterprises.
MetLife, Inc., the holding corporation for the Metropolitan Life Insurance Company,
popularly known as MetLife, was founded in 1868. MetLife is one of the largest global
providers of insurance, annuities, and employee benefit programs and asset management
with a customer base of around 90 million in over 60 countries including United States,
Japan, Europe and so on. MetLife has always been profitable in its business apart from some
ups and downs in its trajectory of becoming successful.
PNB MetLife India Insurance Co. Ltd.
It was incorporated in India in 2001. It is an amalgamation of two companies (Punjab
National Bank-PNB and MetLife, Inc.) which are known to be the leading brands of their
own separate domains. PNB MetLife India Insurance Company Limited (PNB MetLife) is
one of the leading life insurance companies in India. PNB MetLife has its major
shareholding with MetLife International Holdings LLC (MIHL), Punjab National Bank
Limited (PNB), Jammu & Kashmir Bank Limited (JKB), M. Pallonji and Company Private
Limited. PNB MetLife has its presence in over 105 locations across the country with access
to over 100 million customers in more than 11,000 locations. All this could be achieved
through its strong banking partnerships with PNB, JKB, KBL and other bank partners. The
brand value and vast customer reach of PNB coupled with the expertise of MetLife in the
area of insurance makes PNB MetLife a strong and trusted brand of insurance provider.

PNB MetLife helps its customers for their entire ‘Circle of Life’ covering their 4 different
stages of life – Child Education, Family Protection, Long Term Savings and Retirement.
6
One of the most innovative products of this venture is ‘PNB MetLife Grameen Ashray’
which is a micro insurance non participating term plan which focuses on short term life
insurance protection for rural market including death benefit.

Core Values
1. Put Customer First
2. Be the Best
3. Make Things Easier
4. Succeed Together

Life Insurance Products

The company has over 15 insurance benefit plans to help its customers in all the stages of
their life from childhood till death and benefits for the family after death. These plans also
come up with riders (ad on benefits) that a customer/ investor can alter according to his/ her
needs. The plans are briefed below.
1. PNB MetLife Guaranteed Income Plan- In this plan, the insured gets regular annual
income ranging from 11% to 13% of Basic Sum Assured (BSA), based on the Premium
Payment Term. The policy also includes death benefits wherein 30% to 55% of Basic Sum
Assured (BSA) on Maturity, based on the policy term is given.
2. PNB MetLife Super Saver Plan- This participative plan comes with three different types
of plan options saving and a waive off rider can also be added under this plan. Plan options
are Savings + Family Care and Savings + Health Care Option. This plan has maturity
benefit, death benefit and critical illness add on benefit.
3. PNB MetLife Group Term Life Insurance Plan- This plan is a group term life
insurance policy that’s not only convenient but also provides cover against death and
protects the family.
4. PNB MetLife Smart Platinum (ULIP)- A unit linked life insurance plan which gives
cover and profit both. The risk under this is borne by the policy holder and the choices are
given to choose the investment from.

7
PRODUCT RANGE OF THE COMPANY

Figure: 2

8
Figure: 3

Figure: 4

9
Figure: 5

Figure: 6

10
Figure: 7

Figure: 8

11
Figure: 9

12
Figure: 10

Figure: 11

13
 Figure: 12

FAST FACTS
MD & CEO: Ashish Kumar Srivastava
Established in India: 2001
Regional Headquarters: Hong Kong
Employees: 10,444*
Offices: 107 locations
Products: Life Insurance, Retirement Solutions and Employee Benefit Programs
*As of March 31, 2020

RECENT NEWS
• PNB MetLife receives three new International Organization for Standardization (ISO)
certifications.
• Ashish Kumar Srivastava, MD & CEO, PNB MetLife, said “The ISO certifications
provide global validation to PNB MetLife’s rigorous efforts in developing and
implementing a quality management system that continuously delivers beyond the
expectations of all the stakeholders. We are building a resilient organization that is
prepared to support our customers in any situation.”
• New Delhi, 02nd January 2020: RevFin India's leading digital lending startup, has
partnered with PNB MetLife India Insurance Company Limited (PNB MetLife), one of
the top 10 life insurance companies in India (Source: CRISIL), to provide protection to
the customers through life cover on their loans. This partnership supports financial

14
 inclusion by securing families of the borrowers against loan repayment burden, in the
event of the unfortunate demise of the borrower during the loan term.

15
 Chapter 2: Research Methodology

2.1 Objectives:
o To identify the concept of distribution channels in insurance sector.
o To explore recent trends and demands for channel of distribution in Insurance sector.
o To analyze consumer awareness about various channels of distribution in public as well
as private Insurance sector.
o To analyze consumers awareness towards various channels of distribution on the basis of
their age, gender, occupation, income and profession.
Scope:
o Customer’s preferences and awareness about traditional and modern channels.
o Utility and advantages to insurance companies, customers and economy as a whole.
o Trends in Channels of distribution in Insurance sector

2.2 Research design

This project follows descriptive research method. The methodology of the survey is done with
the help of questionnaire.

2.3 Sources of data collection

• Primary data: In this project, primary data has been collected through questionnaire from
my own reference group who has opted for any life insurance policies. Some information
was also collected by taking informal interview from my own reference group. (friends
and families). The sampling technique used is simple random sampling technique.
• Secondary data: Secondary data was mainly collected from the internet.

16
2.4 Data analysis - tools/techniques
I have designed a questionnaire to know about the preferred distribution channel by the
customers in life insurance. I have also used Microsoft excel as a software for data analysis.
Pivot table is also used as a tool to analyze data. Hypothesis testing is performed using T-test for
unequal variances.

2.5 Sampling design

In order to have an overall understanding of the research perspective of investors, the data is
collected from investors who have an experience in buying of life insurance policies. Total 100
respondents are collected majorly from Delhi and Bihar.

2.6 Limitations of the study

• The economy is at the verge of entering into recession which could affect the market
scenario and hence, the decisions of the investors could be biased.
• There were time constraints to gather adequate data, analyze and interpret the market
scenario and investors’ psychology.
• There was a lack in the consistency of the responses given by a few customers.
• The data collected is limited to Delhi and Bihar region.

17
 Chapter 3: Conceptual Background
A combination of all or most of the following distribution channels contribute a multi-channel
strategy:

o Bancassurance

Insurance companies see bancassurance as a tool for increasing their market penetration and
premium turnover. It takes various forms in various countries depending upon the demography,
economic and legislative climate of that country. It was introduced in India when insurance
industry was opened up for private players. In India, a bank can tie up with one general insurance
and one life insurance Company as mandated by IRDA bancassurance practice is yet to be much
popular. 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 life
insurance products. In addition, a bank’s branch network allows face to face contact that is
important in the sale of personal insurance.

o Private agents
Agency is the largest distribution channel of almost all life insurance companies, comprising a
large advisor force that targets various customer segments. The strength of agency channels lies
in an aggressive strategy of expanding and procuring quality business. With focus on sales &
people development, tied agency has emerged as a robust, predictable and sustainable business
model.
All life insurance companies have an agency-building distribution strategy under which they
recruit, train, finance, and supervise their agent/advisers. For decades, agency was the only
distribution channel for life insurance in India. Even today more than 70% of business is carried
through insurance agents. Through agency channel, personal contact and relationship can be
established with the customer. The system of agents is a major source of both presales and post
sales services to customers, since it has the direct relationship with customers. Due to personal
contact, it can provide valuable feedback about the need and expectation of consumers.

18
 o Corporate agents
The corporate agency channel is a key one for life insurance companies and it is facing stringent
licensing guidelines. Since April 2012, the life insurance industry has lost nearly a third of its
corporate agents, while for most of the bigger private life insurers, the number has shrunk by
more than 50 per cent.
The main focus remains the traditional agency channel, which accounts for nearly 65 per cent of
total new business. After introducing stringent guidelines on licensing of corporate agents in
June 2012, which tightened the licence renewal process, IRDA also recommended regular on-site
inspection of corporate agents to curb various malpractices that had crept into the system. There
have been many instances in which the same set of individuals have floated different corporate
agencies and employed people without valid licences for selling products.

o Internet marketing
The growth of the Internet has led to a great deal of speculation and discussion regarding its
potential impact on traditional distribution channels. Though India is joining the fast-growing
breed of net users, using net for transactions has not yet caught up. Though few companies
provide online insurance service, the usage is still a small fragment.
The insecurity associated with transactions over the net is still an inhibiting factor. At present,
most of the insurance companies have product information and illustrative tools available on the
web. But web is not seen evolving into a means for direct selling of insurance in the current
scenario. In the Indian market, where insurance is sold after considerable persuasion and face to
face selling, selling over the net which must be initiated by the client, would take some more
time
o Worksite marketing
Worksite marketing is the distribution method providing voluntary insuance products to
employees at their work place with the sponsorship of their employer, which is done on a
deduction from their payroll. The contract for insurance is directly made with the employee
rather than the employer. Benefits to the Insurer: o Captive customer base o Potential to sell
individual insurance and group insurance o High trust factor o High hit ratio for the
intermediaries.
The challenges would be the:

19
cost effectiveness,
product customization
efficient post sales servicing,
Technology has a key role to play in worksite marketing to ensure cost benefits. Banks and
financial institutions have been successfully marketing credit cards and other financial products
using this channel
o Direct marketing
Direct marketing means selling products by dealing directly with consumers rather than through
intermediaries. More recently telemarketing, direct radio selling, magazine and T.V advertising,
and on-line computer shopping have been developed.
Benefits of Direct Marketing
• There is no need to share profit margins and the insurer has complete control over the
sales process.
• There may also be specific market factors that encourage direct selling.
• There may be a need for an expert sales force, to demonstrate products, provide detailed
presale information and after-sales service.
• Retailers, distributors, dealers and other intermediaries may be unwilling to sell the
product. Existing distribution channels making it hard to obtain clientele like direct
marketing channel. Insurers have resorted to direct marketing wherein insurance
companies get in touch with the customers without the aid of an intermediary

o Broker
Brokers have a unique advantage as they can combine the life, non-life and health insurance
requirements of a client. This allows brokers to work with relatively smaller companies in a
profitable manner. Individual insurers and agents would not have the same economies of scale in
serving small clients. Brokers are constantly exposed to people and product offerings of different
companies. Brokers participate in training programs conducted by different companies. A few
brokers are part of international broking networks. This puts brokers in a unique position to
understand market trends and developments. A good broker will harness this information to
create deep market expertise. Such expertise has three main benefits. First, brokers educate
clients about product options and then push insurers hard to develop the appropriate products.

20
The result is a steady improvement in product quality. Second, brokers can express a client’s
case in language that insurers understand. Brokers bridge this gap. Thirdly, brokers bridge the
gap between insurer and insured.

IMPORTANT CONCEPTS
Customer Segmentation
Customer Segmentation Impacts Business Growth Segmentation in insurance marketing is of
critical importance as it is the key to matching the customer requirements with the company’s
products and services. In-depth knowledge of your customers helps in creating brand loyalty as
customers will be happier to purchase products specifically targeted to their needs.

Leveraging Social Media as a Distribution Channel

The emergence of social media has changed the way people share information, interact with
friends, family, and even businesses. Businesses today recognize that social media is essential to
drive marketing initiatives, and platforms like Facebook and Twitter provide a direct line with
prospective and current policy holders. As an extension, social media is also beginning to play a
significant role in the distribution strategy of insurance companies.

Employing the Right Technologies

Technology is an integral part of any distribution network and its efficient employment ensures a
multi-channel distribution ecosystem that is seamless and productive. There are five key
technologies that support multi-channel distribution today:
Mobility:
Insurance companies will adopt mobile technologies, particularly tools such as iPad for brokers
and underwriters for anytime, anywhere access to data. Adoption of this technology is expected
to rise in the commercial lines space.
Analytics:
Leveraging analytics for micro segmentation of customers will help insurers target the most
profitable customers and brokers. This will in turn increase their return on investment and help
retain customers and aid in cross sell and up sell initiatives.

21
Challenges Faced in Multi-Channel Distribution System
Dynamic customer behavior and market environments have forced organizations to set up a
wide-ranging multi-channel distribution system to improve customer interaction and experience.
Despite the best effort, setting up an effective distribution network is not without challenges.
Organizations striving to deliver the right products and services to customers via the right
channels at the right time are facing challenges on two main fronts:
1. Brand Dilution:
Brand dilution can happen when insurance companies choose inappropriate channels for
different customers.
2. Cannibalization:
This occurs when one service of a brand is marketed more than the others. As a result, the
market share of the latter product is negatively affected.

22
 Chapter 4: Data Analysis and Findings
A questionnaire was prepared to determine the results. To keep this in mind 100 respondents
have been examined in the present study which covers the characteristics like gender, age,
income, profession, sector of life insurance, industry and factors considered while selecting any
distribution channel. The collected data is tabulated and classified with the help of charts and
graphs. The collected data is analyzed and interpreted using statistical tool like t- test, pivot table
and hypothesis testing.
The following pages describe the tabulated data and their interpretations drawn from the
analysis.

1. Gender

Gender Number
Male 55
Female 46
Other 0
Prefer not to say 1

Table: 2

Figure: 14
Findings:

23
Out of 102 responses 55 were male and 46 were female. So, majority of male members were into
buying life insurance policies.
2. Age group

Age group Number

Below 30 35

30 to 40 34
Table: 3
40 to 50 22

50 to 60 8

above 60 3

Figure: 15
Findings:
According to my responses collected I found that people below 30 are more into buying life
insurance. The least people are of age group above 60. People of group 30 to 40 is par with
below 30. Age of the respondents is one of the most significant characteristics in perceptive
about the specific study or problem. It is expected that one should buy insurance when they are
young. Higher age indicates the level of maturity of individuals in that sense age becomes more
important to examine the responses. Hence it can be concluded that majority of the respondents

24
belong to the age group below 40 years. It may be due to greater awareness about the maximum
benefits of having insurance at an early age.

3. Occupation

Occupation Number

self employed 39

Govt. job 24

private job 20

Unemployed 14

Student 5

Table: 4

Figure 16

Findings:
From the above data provided self employed people are more into life insurance policies.

25
 4. Income

Income Number

below 3 lac 22

4-6 lac 43

8-12 lac 24

above 12 lac 7
Table: 5

Figure: 17

Findings:
From the above data it was observed that people of income between 4 to 6 lakhs were more into
the habit of buying life insurance policies. Monthly income of the respondent’s is the most
important in determining the demand for buying the insurance policy. Hence, it can be
interpreted that customers earning a good income are interested in buying insurance.

5. Which sector would you like to prefer to buy Life insurance policies?

Sector Number

26
LIC 39

Private 7

Industry 1

Table: 7

Figure: 19

Findings:
From the above data we can say that majority of people prefers LIC (life insurance corporation)
over industry and private.

6. If your answer to the previous question is industry then from which specific
industry/industries you buy Life insurance policies?

Specific industry Number

PNB MetLife 40
HDFC Life 33
ICICI Prudential 22
Aditya Birla sun life 6
Bharti AXA 6

27
Bajaj Allianz 4
Tata AIA 8
SBI Life 40
Max Life Insurance 9
Kotak Life Insurance 5

Figure: 20
Findings:
From the above data it is clear that among industry players SBI life, HDFC life and PNB MetLife are
the most favorable industries by the customer.

7. What is/are your potential distribution avenues for life insurance?

Distribution channels Number

Private agent 71
Broker 73
Direct marketing 16
Worksite marketing 11
Internet marketing 32

28
Corporate agency 12
Bancassurance 4

Table: 9

Figure: 21

Findings: From the above data it can be said that maximum number of buyers prefer broker to buy
policies. Private agent is following the broker in the most preferable distribution channel. Other than
that Internet marketing as a distribution channel is also preferred by the customer.

• Analysis of distribution channels according to the age group using pivot table.
Below 30:

29
 Figure: 22

Findings:
It was observed that age group below 30 people mostly preferred private agent, broker and
internet marketing.

30 to 40

Figure: 23

Findings:
It was observed that age group 30 to 40 people mostly preferred private agent and broker and only a
few of them preferred internet marketing and worksite marketing.

40 to 50

Figure: 24

30
Findings:
It was observed that age group 4o to 50 people mostly preferred private agent, broker and
internet marketing.

50 to 60

Figure: 25

Findings:
It was observed that age group 50 to 60 people mostly preferred private agent and broker.

Above 60

31
 Figure: 26

Findings:
It was observed that age group above 60 people only private agent and broker.

8. Factors considered before choosing a particular distribution channel

Nature of product Number

Nature of product 69
Nature of market 40
Nature of middlemen 51
Government regulations 27

Table: 10

32
 Figure: 27
Findings:
From the above data we can say that factors like nature of product and nature of middlemen are the
most favorable factors considered by the customers. Government regulations are the least favorable
factor is considered by the customer.

9. Factors influencing choice of distribution channels.

33
 Figure: 28

Findings:
The above data shows that while choosing a particular distribution channel certain factors are
considered by the customers.
o While choosing private agent policy clarity, documentation process and trust were the most
favorable factors.
o While choosing broker documentation process and policy clarity were the most favorable
factors.
o While choosing bancassurance policy clarity and documentation process were the most
favorable factors.
o While choosing direct marketing trust was the most favorable factor.
o While choosing worksite marketing policy clarity was the most favorable factor.
o While choosing internet marketing policy clarity and documentation process was the most
favorable factor.
o While choosing corporate agency policy clarity, documentation process and trust were the
most favorable factors
Hypothesis Testing 1
H0: There is no demand for multi-channel strategy for distribution of products in public (LIC),
industry and private insurance sector.
H1: There is demand for multi-channel strategy for distribution of products in public (LIC),
industry and private insurance sector.

t-Test: Two-Sample Assuming Unequal

Variances

71 39
Mean 24.66667 4
Variance 647.8667 18
Observations 6 2
Hypothesized Mean Difference 0
Df 6
t Stat 1.910815
P(T<=t) one-tail 0.052295
t Critical one-tail 1.94318

34
 P(T<=t) two-tail 0.10459
t Critical two-tail 2.446912

Table: 11
Findings:
Since p-value for the t-Test: Two-Sample Assuming Unequal Variances is greater than that of
0.05 indicates no significance of a difference between the average demand of the agent channel
and other channels. Hence, all the channels of distribution have equal demand.

Hypothesis Testing 2
H0: There is no relationship between age and distribution channel of Life insurance products.
H1: There is relationship between age and distribution channel of Life insurance products.

t-Test: Two-Sample Assuming Unequal

Variances

35 71

Mean 16.75 24.66667

Variance 196.9167 647.8667

Observations 4 6

Hypothesized Mean Difference 0

Df 8
t Stat -0.6314
P(T<=t) one-tail 0.272696
t Critical one-tail 1.859548
P(T<=t) two-tail 0.545391
t Critical two-tail 2.306004

Table: 12

35
Findings:
Since p-value for the t-test is greater than that of 0.05 indicates there is a relationship between
age and distribution channel of Life insurance products.

Hypothesis Testing 3:
H0: There is no relationship between income level and distribution channel of Life insurance
products.
H1: There is relationship between income level and distribution channel of Life insurance
products.

t-Test: Two-Sample Assuming Unequal

Variances

71 22
Mean 24.66667 24.66667
Variance 647.8667 324.3333
Observations 6 3
Hypothesized Mean Difference 0
df 6
t Stat 0
P(T<=t) one-tail 0.5
t Critical one-tail 1.94318
P(T<=t) two-tail 1
t Critical two-tail 2.446912

Table: 13
Findings:
Since p-value for the t-test is greater than that of 0.05 indicates there is a relationship between
Income level and distribution channel of Life insurance products.

Hypothesis Testing 4:
H0: There is no relationship between occupation and distribution channel of Life insurance
products.
H1: There is relationship between occupation and distribution channel of Life insurance
products.

36
 t-Test: Two-Sample Assuming Unequal
Variances

71 39

Mean 24.66667 15.75

Variance 647.8667 68.25

Observations 6 4

Hypothesized Mean Difference 0

Df 6
t Stat 0.797402
P(T<=t) one-tail 0.227803
t Critical one-tail 1.94318
P(T<=t) two-tail 0.455606
t Critical two-tail 2.446912

Table: 14
Findings:
Since p-value for the t-test is greater than that of 0.05 indicates there is a relationship between
occupation and distribution channel of Life insurance products.

37
 Chapter 5: Discussion and Conclusion
CONCLUSION of Hypothesis testing 1:
Since there is an equal demand for the agent and other channels and the mean score of the
demand is more for other channels indicates that one should reject the null hypothesis and
conclude that there is growing demand for the multi-channel strategy for distribution of products
in public and private companies.

CONCLUSION of Hypothesis testing 2:

Null hypothesis is rejected. So, we can conclude that there is a relationship between age of the
customer and selection of distribution channel for life insurance product. As younger generation
are more into buying of life insurance products.

CONCLUSION of Hypothesis testing 3:

Null hypothesis is rejected. So, we can conclude that there is a relationship between income level
and selection of distribution channel for life insurance product.

CONCLUSION of Hypothesis testing 4:

Null hypothesis is rejected. So, we can conclude that there is a relationship between occupation
and selection of distribution channel for life insurance product.

Distribution is a key determinant of success of all insurance companies. With new developments
in consumer behavior, evaluation of technology and deregulation, new distribution channels have
been developed successfully and rapidly in recent years. To maximize reach in the market place,
many insurers are aiming to derive channel advantage because each channel has unique
strengths.

Bancassurance
Bancassurance is still in infancy in India and it is too early to assess the exact position.
According to the survey bancassurance was one of the least preferred distribution channels. The

38
present IRDAI regulations restrict bankers to act as a corporate agent on behalf of more than one
life insurance company.

Brokers
It is observed brokers can attract the elite and the upper middle-class customer. Brokers represent
the customer and will sell the products of more than one company. They seek to determine the
best fit for the client and can effectively address the mind block faced by the public about the
various companies. Insurance brokers are professionals who assess risk on behalf of a client,
advice on mitigation of that risk, identify the optional insurance policy structure, bring together
the insured and insurers. In the survey done above brokers were the most favorable distribution
channel for life insurance.

Corporate agency
All life insurance companies have an agency-building distribution strategy under which they
recruit, train, finance, and supervise their agent/advisers. But in India, LIC is mostly preferred
that is why demand is less but when it comes to industry corporate agency are most favored one.

Internet marketing:
At present, most of the insurance companies have product information and illustrative tools
available on the web. But internet is not seen evolving into a means for direct selling of
insurance in the current scenario. In the Indian market, where insurance is sold after considerable
persuasion and face to face selling, selling over the net is a bit difficult. But younger generation
somewhere prefers to avail internet marketing as the distribution channel.

Worksite marketing:
This channel basically works for the person who is employed in private sector or government
sector. Self employed people are not able to avail this channel.

Private agents
According to the survey done above private agent were the most favored distribution channel
because they provide complete knowledge about the policy. A trust factor is also associated with

39
them. Not only that, it was observed that documentation process is hassle free with the help of
private agents.

Recent trends and demands for channel of distribution in Insurance sector is still limited to
private agents and broker. There is very less awareness when it comes to internet marketing or
any other distribution channels rather than private agents and broker.

40
 Chapter 6: Recommendations

• The impact of novel coronavirus has raised concern about health and life and the threat of
expenses rising up is a bit natural. There is huge impact on insurance sector due to the
regressing economy. Increase in the expenses and no income in this ongoing nationwide
lockdown people are not willing to invest in life insurance policies. So, there is a need to
come up with products to suit the demand with COVID-19 specific policies.

• But at the same time awareness of health has increased and so the willingness to get
oneself insured and covered with the help of life insurance. So, this is the positive point
for the company. They just need to identify the right set of customers and convince them
according to their needs. A well educated and a person with good communication as well
as interpersonal skills is required. Sometimes, which I have observed during my
internship period is that the private agents are not able to handle the customer properly
and due to lack of policy clarity, they might just back-out.

• Since the pandemic offtake of digital health products has seen a rise and with-it insurers
will need to develop paperless app/web based efficient process. It should ensure greater
productivity. The internet marketing can be a potential channel distribution for selling of
life insurance policies. But still majority of people in India specially the middle-class are
not much familiar with this internet marketing. So, the insurance companies should be
determined to provide seamless facility to their potential customer by understanding their
problems and helping them out in a proper manner.

• Sometimes the customer might get mislead because of brokers and private agent, so the
hiring done by insurance companies should be done according to the job role. They have
to be the right fit for the job because customer satisfaction is utmost important.

41
• Segmentation of these channels to match the market segmentation is something
indispensable that will help the companies to move towards the appropriate direction.
• The choice of right channel lies on the hands of insurance companies, to make sure that
they have fulfilled the demands of their customers.
• These channels are identified as the prime driver for growth of any organization.
Distribution channels are the enabling mechanism through which organizations ensure
that their products and services reach the market and it also decides the growth graph of
companies.

42
 Chapter 7: Learnings from Summer Internship

• Selling is not an easy task. In fact, it is more difficult when it comes to sell financial
products. During my internship period I was able to learn about some of the tips and
tricks. I learned how to approach customer, how to communicate with them.
• During my internship, frequency of my communication increased as I had to make
several calls to generate leader. This helped me in developing my personality by
increasing my confidence level.
• Patience is the key aspect required during selling. My experience in PNB MetLife taught
me to be more patient.
• Team management and time management skills also added to my personality in an
enhanced manner.
• Understanding financial products was challenging for me during my initial days of
internship. Gradually I learned how to read and analyze financial product (illustration of
any insurance plan).
• My area of interest also increased in the field of finance. I was able to understand the
financial terms, which I was not familial with them earlier.
• My internship was a great combination of two most important streams in business
management, which later on became my specialization for my PGDM program.

43
 Bibliography
https://www.pnbmetlife.com/news/press-release/2020/index.html
https://en.wikipedia.org/wiki/PNB_MetLife_India_Insurance_Company
https://www.pnbmetlife.com/
https://www.pnbindia.in/Insurance-Business.html
https://www.policybazaar.com/insurance-companies/pnb-metlife-life-insurance/
https://twitter.com/pnbmetlife1?lang=en
https://www.myinsuranceclub.com/life-insurance/companies/pnb-metlife
https://insurance.americanexpress.co.in/card-member/life/pnb-metlife/
https://en.wikipedia.org/wiki/List_of_insurance_companies_in_India
https://accountlearning.com/insurance-marketing-market-segmentation-significance/
https://www.acko.com/articles/general-info/types-of-insurance/

44
 Annexure
Survey on Life insurance's potential and distribution avenues in India.
*Required
Name *

Gender *
Male
Female
Other
Prefer not to say

Age Group *
Below 30
30 to 40
40 to 50
50 to 60
Above 60
Other:

Occupation *
Self employed
Government job
Private job
Unemployed
Other:

Income *
Below 3 lakhs per annum
4 lakhs to 6 lakhs per annum
8 lakhs to 12 lakhs per annum
Above 12 lakhs
Other:

Have you opted for Life insurance policy? *

Yes
No

If your answer to the previous question is yes then from which sector you buy Life
insurance policies?

45
LIC
Private
Industry

If your answer to the previous question is industry then from which specific
industry/industries you buy Life insurance policies?
PNB Metlife
HDFC Life
ICICI Prudential
Aditya Birla sun life
Bharti AXA
Bajaj Allianz
Tata AIA
SBI Life
Max Life Insurance
Kotak Life Insurance
Other:

What is/are your potential distribution avenues for life insurance ?

Private agent
Broker
Direct marketing
Worksite marketing
Internet marketing
Corporate agency
Bancassurance

Factors considered before choosing a particular distribution channels

Nature of product
Nature of market
Nature of middlemen
Government regulations

Factors influencing choice of distribution channels.

Policy Documentation Trust Reputation Past After

clarity process experience sales
service
• Private agent
• Bancassurance
• Direct marketing

46
• Broker
• Worksite
marketing
• Internet marketing

47