SUMMER INTERNSHIP PROJECT REPORT

“Corporate Selling & Feedback” for HCL Infosystem

SUBMITTED TO:
CH institute of management & communication
(In the partial fulfillment of the requirements of Post Graduate Diploma in
Management)

SUBMITTED BY

Jyoti shahi
UNDER THE GUIDANCE OF

Mr. ram ajmera Mr.Kripa Shankar gautam

mentor
CHIMC INDORE COMPANY GUIDE
HCL infosis

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 TABLE OF CONTENTS:

S.N. Title Page No.

1 Company Profile 8
2 Executive Summary 26
3 Literature Review 28
4 Scope Of The Study 30
5 Objective Of The Study 31
6 Research Methodology 32
7 Data Analysis & Graphical Interpretation 35
8 Major Players In The Market 49
9 Competitors Of HCL 50
10 Role Of Advertisement 60
11 Marketing Strategies 62
12 Future Scope 64
13 Management Hierarchy 66
14 Key Partnership 67
15 Market Share 68
16 Marketing & Selling Strategies 70
17 Changing Trends 72
18 Decision Making Process 77
19 CRM 78

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 20 SWOT Analysis 81
21 Findings & Limitations 83
22 Suggestions & Recommendation 84
23 Conclusion 85
24 Bibliography 86
25 Annexure - Questionnaire

DECLARATION

I, herby declared to the best of my knowledge and belief that

the summer training report entitled as “Corporate Selling &
Feedback” for HCL Infosystem being submitted to the partial
fulfillment of CH INSTITUTE OF MANAGEMENT AND
COMMUNICATION, has not substantially the same one, which has
already been submitted for Post Graduate Diploma in
Management of any other academic qualification at any other
university or examination in India.

I, Jyoti shahi hereby declare that all this work purely done by
myself on a primary data and it is totally free from any
biasness to any individual or any group of people.

(JYOTI SHAHI)

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 ACKNOWLEDGEMENT

Industrial training is an integral part of any post graduate diploma

program and for that purpose I had joined a company what else can be
as good as HCL Infosystems Ltd, India’s premier information enabling
company .

I take the opportunity to express my gratitude to all of them who in

some or other way helped me to accomplish this challenging project in
HCL Infosystems Ltd . No amount of written expression is sufficient to
show this my deepest sense of gratitude to them.

I thank my Institute who has given me an opportunity to show my skills. I

also thank all my nearer and dearer ones without whose support this
project would not been possible.

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 I would like to thank Mr. kripa Shankar gautam, who allow me to do this project
in HCL.
I would like to thank Mr. Sumeet Maru CEO, CHIMC ,Indore , for providing
me the opportunity to have such a good experience of an internship program and
of course my faculty guide Prof. Ram ajmera the guiding source of light in this
vast journey of learning experience while doing the project that really made me
learn the real application and management principles of the project. His continuous
advice has really transformed me into a much mature personality. their everlasting
support and guidance on the ground of which I have acquired a new field of
knowledge. The course structure created for this curriculum has benefited with the
inclusion of recent development in the organizational and managerial aspects.

PREFACE

Modern organizations are highly complex and dynamic systems. They operate under
very turbulent social economic and political environment. They are required to reconcile
several incompatible goals. Conflicting roles and divergent interest they are also fraught
with the use risk and uncertainties, hence tactful management of such organization to
plan to execute guide, coordination and control the performance of people to achieve
predetermined goals. Management has to keep the organization vibrant moving and in
equilibrium. It has to achieve goal which themselves are changing it is therefore a problem
highly complex and ticklish.
The marketing research is the process which links to manufacture, dealers and
individuals through information in important part of curriculum of Post Graduate

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Diploma in Management, programme is project taken by the students in any business
organization, after completion of third trimester of the programme.The objective of this
project is to enable the students to understand the application of the academics in the
real business life. I am fully confident that this project will be extremely useful to the
management.

CEO’s certificate

This is to certify that Ms. Jyoti shahi is a bonafide student of

CHIMC Indore and is presently pursuing a Post Graduate
Program in Management.

Under my guidance, he has submitted his project report titled

“Corporate Selling & Feedback for HCL infosis ” in partial fulfillment

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 of the requirement for the summer internship project during
the Post Graduate Program in Management.

This report has not been previously submitted as part of any

other degree or diploma of another Business School or
University.

MR.SUMEET MARU
CEO, CHIMC INDORE

COMPANY PROFILE
The HCL Family

At HCL, people are not just employees but family. So, like an important
member of the family should, you get endless freedom to experiment, unlimited
empowerment to execute your dreams and the rare opportunity to be an
entrepreneur.

HCL Infosystems is the progenitor of the HCL Group and is known as the
‘Entrepreneurial Incubator’ in the Indian IT industry. We believe in empowering
people to help achieve their goals - goals that are achieved by the coming together of
talent and innovation, powered by ownership and freedom to experiment, leading

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 to tremendous growth and gains for the individual and the organization. We pride
ourselves in being a pioneer in creating the Indian IT Industry, by pioneering the
creation of the people for the industry.

Our HR philosophy is “beyond HR Practices and Systems”, where we are

ceaselessly creating the ‘HCL Family’, whose DNA is Pride, Passion, Performance and
People, with an inexhaustible Spirit of Entrepreneurship.

Who do we look for?

Our objective has always been to acquire quality people and groom them to become
entrepreneurial Leaders. HCLites are people who take pride in continually doing better
than their best; people with a passion to succeed; people who have a fire within to
perform and realize results….People who want to ‘WIN’ (W -Work hard, I- innovate
and N-never giver up).

Why HCL?
 Ranked Top 3 Best Employer Survey in IDC-DQ Survey 2006  Ranked Best
Employer in IDC-DQ Survey 2005 .

We are one of the few IT companies in India that provide a lifetime

comprehensive career plan. At HCL, we look at the strengths of a person and
accordingly assign future job roles to match those. People can chart their own
career options of Entrepreneur or Manager or Technocrat. HCL provides an open
canvas of opportunities for each individual, which is how 90% of our top
management is from campus (people who joined us as trainees straight from
campus).

 Be an Entrepreneur - An organization with a large number of recruitments

from campuses all across India, creating entrepreneurs from and for HCL.
 Endless growth opportunities in an open and entrepreneurial environment
where your team mates and manager become your best friends.
 A company where the diversity of 360+ locations, languages and cultures
blend seamlessly into a challenging work ethos of the HCL Culture that
fosters excellence, recognizing and rewarding performance.
 A career with diverse, rewarding & challenging assignments everyday...with
the freedom to create, articulate new ideas, collaborate with the sharpest
minds and truly realize your potential.

Learn
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  HCL training facility in the city of Hyderabad is spread over a sprawling 16 acres
with
 Residential facility to accommodate165 employees at the same time in training.
Equipped with class rooms, labs, canteen, a recreation centre and dedicated faculty
with vast experience in the IT industry, we conduct over 25000 man days of internal
classroom training every year.
 Classroom trainings are further complimented through Enable Leadership
Enrichment and Development - which provides a comprehensive automated
learning tool to each employee through various online learning options.
 360 Degree Feedback for a holistic quality improvement and individual
development plans.
 Learn from Leaders who have a three decade rich history of
inventions and innovations.

Grow
 ‘iPerform’, our online Performance Management System tracks
result achieved through daily to weekly to monthly to quarterly review system
for Career Planning and Position planning.
 Mindia TechXperts, a fast-track career growth programme identifies and
groom young engineers for leadership positions in a short period of 18 months.
 We continue to promote Indian traditions and recognize talent in
diverse areas, through he much acclaimed HCL Concert Series - a
tribute to excellence in human endeavor.
 80% of our top management today is people who joined straight
from campus

Own
 Pioneer in IT industry for ESOP started in 80’s.
 Profit Sharing Scheme since 1997 for all employees.
 ‘HCL One Quarterly Awards’ Night is a gala celebration every quarter when the
HCL family gets together to celebrate achievements of individual and team
performances.
 Bottom up communication channels providing opportunities for employee opinion.
 HCL Towers - Houses for our employees.

Culture at HCL
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 With our open and entrepreneurial environment, every HCLite is
synonymous with passion for performance, high need for achievement
and commitment to job. Our core value of high integrity with a Never-
Say-Die approach is ingrained and visible in all our people, practices and
processes.
(A)Diversity and Inclusion
HCL strives to attract and retain the best talent and provide an
environment where each individual is given the opportunity to build a
rewarding career. With offices in more than 300+ locations, we employ a
diverse group of people from different backgrounds, yet all connected by
a common sense of the HCL culture. We value the uniqueness of each
individual, relying on the diversity to drive our innovation, growth and
performance.
(B) HCL’s Community Involvement
Recognizing the important role of business in society, HCL supports and
encourages the active involvement of its people in community
volunteer initiatives. Employee volunteering programmes at HCL enable
you to do much more than routine work through active participation in
various causes.

Job Openings
HCL Infosystems - An ocean of possibilities! Want to explore the possibilities? Check
out the following profiles:

 Account Manager
 Account Executive

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Job oriented Trainings
Customized to the industry requirements our educational services are focused
towards technologies related to IT Infrastructure and IT Sales. The two offerings of
HCL Education are as follows:

1. HCL’s Job Oriented Training Program in IT Infrastructure Technologies

This one year programme for bright Engineering Graduates, provides hi-tech
training in the stream of Computer Networks, Network Operating Systems,
Security and other IT Infrastructure Services. The programme involves a classroom
training followed by On Job Training (with stipend as applicable) at various offices of
HCL. On successfully completion of the programme, candidate would receive
a certificate by HCL Training recognizing the candidate as a HCL Certified IT
Infrastructure Engineer- a rare breed of individuals who are accepted by the Indian IT
industry as trained professionals in their field of IT work.

2. HCL’s Sales & Marketing Training Program

A unique Program for fresh Engineering and Science Graduates who have a
passion to achieve. This is a year long program with 3-4 weeks of exhaustive
instructor led training conducted by experienced HCL professionals, followed by 11
months of Sales Experience (With Stipend as applicable) at any of HCL offices. The
focus is to groom candidates into a new breed of technocrats who are smart business
developers who have the right blend of technical know-how. Candidates also have the
advantage of being nominated for a company sponsored Executive Management
Programme with a reputed Management Institute

Meet our people

Take a look at some HCLites and read their experiences to get an "insider's view" of
your potential colleagues.

APS BEDI

A vivacious Punjabi at heart, Amanpreet Singh Bedi has spent 22 years in HCL

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and now is fondly known by all as APS. He remembers well the morning of 07 July
1986 when he began his journey with HCL as Customer Engineer trainee.
Today he feels satisfied that his efforts have been recognized and rewarded.

He feels content to be part of HCL and cherishes every moment he has spent here.
“HCL has given me the freedom to work, be creative and develop my
entrepreneurial skills.”

MILIND DESHPANDE

A very cool and calm person, Milind has handled diversified jobs with utmost
ease, in the last 23years with HCL. Comedy movies are his craze; he watches
any movie that can make him laugh and enjoys every moment. No wonder he is
considered jovial and approachable by his colleagues. His feel this 23years
old journey with HCL has changed his whole personality.

“The empowerment and independence to take decisions given by this company,

has instilled in me confidence and pride in calling myself an HCLite”

History
HCL Infosystems Ltd is one of the pioneers in the Indian IT market , with its origins
in 1976. For over quarter of a century, we have developed and implemented
solutions for multiple market segments, across a range of technologies in India. We
have been in the forefront in introducing new technologies and solutions. The
highlights of the HCL saga are summarized below:

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 Year Highlights

Foundation of the Company laid

1976
Introduces microcomputer-based programmable calculators
with wide acceptance in the scientific / education community

Launch of the first microcomputer -based computer with a

1977
ROM.
Based Basic interpreter.
Unavailability of programming skill with customer result in
HCL developing bespoke applications for their customers.

Initiation of application development in diverse segments such

1978
as textiles, sugar ,paper, cement, transport.

Formation of Far East Computers Ltd. a pioneer in the

1980
Singapore IT market, for SI(System Integration) solution.

Software Export Division formed at Chennai to support the

1981 bespoke application development needs of Singapore.

1983 HCL launches an aggressive advertisement campaign with the

theme `even a typist can operate` to make the usage of
computers popular in the SME (Small & Medium
Enterprises) segment. This proposition involved
menu-based application for the first time, to increase
ease of operations. The response to the advertisement
was phenomenal.
HCL develops special program generators to speed up the

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 development of application.

1985 Bank trade unions allow computerization in banks. However, a

computer can only run one application such as
Saving Bank, Current account, loans etc…
HCL sets up core team to develop the required software-
ALPM(Advanced Ledger Posting Machines). The team uses
reusable code to reduce development efforts and
produce more reliable code.
HCL designs and launches Unix -based computers and IBM
PC dons.
HCL promotes 3rd party PC application nationally.

1986 Zonal offices of banks and general insurance companies adpot

computerization.
Purchase specification demand the availability of RDBMS
products on the supplied (Unify,Orade).HCL arranges
for such products to be ported to its platform.
HCL assists customers to migrate from flat-file based systems
to RDBMS.

1991 HCL enters into a joint venture with Hewlett Packard

HP assists HCL to introduce new services:Systems
Integration ,IT consulting, packaged support services
(basisline, teamline)
HCL establishes a Response Centre for HP
products, which is connected to the HP Response
Centre in Singapore.

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 There is a vertical segment focus on Telecom
,Manufacturing and Financial Services.

1994 HCL acqires and exectes the first offshore project from IBM
Thailand
HCL sets up core group to define software development
methodolagies.

1995 Starts executinon of Information System Planning projects.

Execution projects for Germany and Australia.
Begins Help desk services.

1996 Sets up the STP (Software Technology Park) at Chennai to

execute software projects for international customers.
Becomes national integration partner for SAP.

1997
Chennai and Coimbatore development facilities get ISO 9001
Certification
1998 Kolkata and Noida STPs set up.
HCL buys back HP stake in HCL Hewlett Packard.

1999 Acquires and sets up fully owned subsidiaries in USAand UK.

Sets up fully owned subsidiary in Australia.
HCL ties up with Broadvision as an integration partner.

2000 Sets up fully owned subsidiary in Australia

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 Chennai and Coimbatore development facilities get SET level 4
certification.
Bags Award for Top PC Vendor In India.
Becomes the 1st IT Compnny to be recommended for latest
version of ISO 9001:2000.
Bags MAIT,s Award for Business Excellcnces.
Rated as No. 1 IT Group in India.

2001 Launched Pentium IV PCs at below Rs 40,000

IDC rated HCL Infosystems as No. 1 Desktop PC Company of
2001.

2002 Declared as Top PC Vendor by Dataquest.

HCL Infosystems & Sun Microsystems enters into a Enterprise
Distribution Agreement.

2003 Became the first vendor to register sales of 50.000 PCs in a

quarter.
First Indian company to be numero uno in the commercial PC
market.
Enters into partnershipn with AMD.
Launched Home PC for Rs 19.999
HCL Infosystems Info Structure Services Division received
ISO 9001:2000 certification.
Launches Infiniti mobile Desktps on Intel Platform.
Launched Infiniti PCs,Workstations & Servers on AMD
platform.

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 2004 1st to announce PC price cut in India ,post duty reduction ,offers
Ezeebee at Rs.17,990.
IDC India-DQ Customer Satisfaction Audit rates HCL as No.1
Brand in Desktop PCs.
Maintains No. 1 position in the Desktop PC segment for year
2003.
Enters into partnership with Port Wise to support & distribute
security& VPN solution in India.
Partners with Microsoft & Intel to launch Beanstalk Neo PC.
Becomes the 1st companyn to cross 1 lac unit milestone in the
India Desktop PC market.
Launched RP2 systems to overcome power problem for PC
users.
Registers a market share of 13.7% to become No.1 Desktop PC
company for year 2004.
Crosses the landmark of $1 billon in revenue in just month.

2005 Launch of HCL PC for India, a fully functional PC priced at

Rs.9,990.
Rated as the no.1 Desktop PC company by IDC India -
Dataquest.
Best Empolye 2005 with five star rating by IDC India -
Dataquest..
IT Hardware Category by The Economic Time -awata Global
Connect.
7th IETE -Corporate Award 2005’ for performance excellence

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 in the field of Company &Telecommunication Systems by
IETE.
Best Bhoomi Brand 2005’by 360 magazine:
1. In the PC category.
2. In the LCD Moitor categary.
India ,s No.1 vendor for sales of A3 size Toshiba Multi

2006 75,000+machines produced in a single month.

HCL Infosystem in partnership with Toshiba its retail presence
in India by unveiling shop Toshiba.
HCL Infosystem & Nokia announce a long teamdistribution
strategy.
IDBI selects HCL as SI partner for 100 branches ICT
infrastructure rollout
HCL Infosystems showcases computer Solution for the Rural
market in india.
HCL From a strategic Partnership with APPLE to provide
Sales &Services Support for IPods in India.
HCLr Infosystem sustains its commercial Desktop PC
leadership for the fifth consecutive year.
HCL Infosystem rated as number one Desktop PC Company by
IDC, Sixth year successively.
HCL launches “trusted ICT infrastructure platform” for the
BPO -IteS segment.
HCL launches India’s first High Performance Enterprise Server
Platforms Powered by dual core Intel inanium.
HCL completes 30 years in India.

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 HCL in association with The Music Academy, Madras brings
HCL Concert Series to Chennai City.
Enters into partnership with Casio.

2007 HCL introduces eco-efficient Notebook PCs Company with

RoHS directive.
HCL unveils initiative to create industry ready ICT
professionala- launcges HCL career development centers.
Kodak and HCL ink agreement to distribute digiter cameres in
india.
HCL LAUNCHS India’s first multilingual POS printers HCL
STAR-tsp700, Designed exclusively for thye needs of rural
retailers.
Launches a new range of eco-efficient desktop PCs, with RoHS
directive.
HCL launches NETMAX, suite of networking products and
solutions expands its portfolion for emergine enterprises.
HCL announces launch of its workstation 2008 series for
MCAD and DCC professionala.

2008 HCL unveils that e future of personal computer Launches next

generating, ultra portable, sub 14000/laptop Milled series for the
first time in India.
HCL strengthens its BPSI system Integration Portfolio-
Acquires a niche banging Software Product Company.

India's Most Preferred Personal Computer Brand by CNBC

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 AWAAZ Consumer Award 2007

India's 'No. 1 PC Vendor' consecutively for six

years.

HCL among the Top 3 IT companies for the last 3 years, DQ

& IDC,Best Employer Survey, 'Best employer 2005' with
Five Star Ratings

'Top 50 in ET Top 500 Companies' Listings for 2006

Top 21 companies in Business Standard 1000 Ranking 2006

'The Most Responsive Company 2005' - IT Hardware Category

byThe Economic Times - Avaya Global Connect

'7th IETE - Corporate Award 2005' for performance

excellence in the field of Computer & Telecommunications
Systems

EXECUTIVE SUMMARY

HCL Infosystems, India’s premier information enabling and integration has

received the ISO 9001:2000 certified specifies requirement for a quality management
system where an organization needs to demonstrate its ability provide
product and service that meets customer and applicable regulatory requirements.
ISO 9001:2000 also aims to enhance customer satisfaction through the effective
application of the system, including process for continual improvement of the
systems and the assurance of conformity to customer and applicable regulatory
requirements.

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The menu of HCL Infosys global services broadly covers IT consulting and professional
services in the area of vertical applications, technology, ERP implementation and
software development. This also includes a complete portfolio of systems and network
service for development. This also includes a compete portfolio of systems and network
service for facilities management, helpdesks, systems supports and network and internet
implementation.

HCL insys’ global customer include Samsung, Government of Singapore and AMAL
insurance Jurong port Singapore an d Malaysian’s BSN commercial bank, SIA, DBS bank,
May bank life assurance charted semiconductors.

HCL Insys’ chosen platform of total technology integration lends itself to some very
significant alliances with the global leaders. Among its partner are HP for high end
AISCE/UNIX services and workstation and HP open view network management solution;
Intel for PC and PC server building block Microsoft novell and SCOag SOLUTION. Red
hat, Linux, Samsung, Pivota for CRM solution and ORACLE Sys. base and Information for
RDBMS platform.
Today the company has aligned its operation into five entities that offer seamless linkage
for the customers seeking entry into the wired world through total the ‘Integration solution and
services.’
HCL Infosystems focuses on the ever-growing segment in imaging, Telecom and
Communication products solution and services. Now it has an exclusive sale and support
partnership with Toshiba Corporation, Japan for sales and services of its imaging and
photocopier products. HCL Infosystems products portfolio covers a range of other office
automation and communication products through alliances with world leaders. The
Management network service offering for corporate include VPNs, ASP
offering, CO Location hosting, CDNs, security corporate internet telephony
solution, technical and consumer help desks, 24/7 network operating centre monitoring
and a host of value added networking services. Consumer services include dialup
PSTN/ISDN Internet access, Valufon calling cards and Voip telephony devices.

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LITRATURE REVIEW
Doing training was really an opportunity before me when I could convert my
theoretical knowledge into practical and of real world type. Fortunately, the
company I got is a true follower of the various principle of management and also
one of the leading companies in its segment of the industry. The working
environment that I was being provided was extraordinary and helped me a lot in
delivering my work properly and with of mine. HCL Infosystems Ltd. Is one of the
renowned names in the Software and Hardware sector of computer industry?

The graph of sales of these respective product lines is the best in the industry as compared
to their competitors. I did my summer training project at HCL Infosystems Ltd.

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Noida where I found all the professionals are very much commited to their work as
well as they were all professionals enough. This helped me a lot in getting a good deal of
exposure. As I had to consult the channel partners, I felt in the beginning in a bit
problem. But the cooperation of my superiors at the work induced confidence in me
to deal with my problems whenever they came.

Born in1976,HCL has a 3 decade rich history of inventions and innovation. In 1978, HCL
developed the first indigenous micro-computer at the same time as Apple and 3 years before
IBM’s PC. During this period India was a black box to the Indian computer industry. The
80’s saw HCL developing know how in many other technologies. HCL’s in depth
knowledge of UNIX led to the development of a fine grained-processor UNIX in 1988, three
years ahead of Sun and HP.

HCL’s R&D was spun off as HCL Technologies in 1997 to mark their advent into the
software services arena. During the last eight years HCL has strengthened its processes
and applied its know how developed over 28 years into multiple practices- semi-conductor,
operating systems, automobile, avionics, biomedical engineering, wireless, telecom
technologies and many more.

Today, HCL sells more PCs in India than any other brand runs Northern Ireland’s largest
BPO operation and manages the network for Asia’s stock exchange network apart
from designing zero visibility landing systems to the world’s most popular airplane.

Today, HCL sells more PCs in India than any other brand runs Northern Irelands largest
BPO operation, and manages the network for Asia’s largest stock exchange network apart
from designing zero visibility landing systems to land the world’s most popular airplane.

HCL Infosystems Ltd. Is one of the pioneers in the Indian IT market, with its origin in 1976.
For over quarter of a century, we have developed and implemented solutions for multiple
markets, across a range of technologies in India. We have been in the forefront in
introducing new technologies and solutions.

In the early 70’s a group of young and ambitious technocrats embarked upon a venture that
would make their vision of IT revolution in India a reality. Shiv nadir and five of his
colleagues got together and 1875 set up a new company MICROCOMP to start with
they started to capitalize on their marketing skills. MICROCOMP marketed calculators and
with in a few month of starting operation the company was out selling its major competitors.

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 On11th August 1976 HINDUSTAN COMPUTERS LIMITED was incorporated as
joint venture between the entrepreneurs and UPOSCE, with an initial equity of Rs.1.83
lacks.

SCOPE OF THE STUDY

Vision Statement
“It is the most preferred employer and principal taking leading edge IT product and service
to the masses through sustained excellence.”

Mission Statement

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 “We shall increase the shareholder value by improving the PAT through free cash flow,
reducing the BR cycle, inventory levels, wastage.”
Quality Policy Statement

“We shall deliver defect- free products, services and solution to meet the
requirements of our external and internal customers the first time, every time’

Objective of The Study

Management Objective
To fuel initiative and foster activity by allowing individuals of action and innovation in
attaining defined objectives.

People Objective
To help HCL Infosystems people share in the company’s success, which they make
possible; to provide job security based on their performance; to recognize their individual
achievements and to help them gain of satisfaction and accomplishment from their work.
Core Values
 It is uphold the dignity of individual It is
 honor all commitments
 It is committed to quality, innovation and growth in every endeavor It is
 responsible corporate citizens

Research methodology
RESEARCH PROBLEM
HCL Corporate selling and feedback and market share of HCL and compared to other IT
companies.
The business of HCL and the company through its researchers wants to know the potential in
order to expand and retain its market share

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RESEARCH DESIGN
Determined the Information Sources: The researcher gathered data through secondary
sources
PRIMARY DATA is collected through questionnaire, search and research through place
where today's computer has been mostly used
SECONDARY DATA is being search sites like magazines, newspapers,
journals,websites and the data has been collected through other approaches

DATA COLLECTION
The researcher collected information through the official websites, magazines and
journals.

DEVELOPED THE RESEARCH FRAME:

This included deciding upon various aspects for the project on which the entire research is
based. The research frame included:

NATURE OF STUDY
The project on which the researcher worked is descriptive and inferential in nature.

DATA SOURCE:
The researcher took the help of both primary as well as secondary sources. Secondary
sources being interaction with various IT people of the selected and has been chosen for the
research by the researcher. Secondary sources being the internet as the medium and the
official sites of the companies of IT sectors and corporate selling and feedback of HCL.

INSTRUMENT USED
The researcher for the research used a Questionnaire cum Schedule for market research
for both the segments horizontal and vertical. The Questionnaire was prepared by the
researcher and Schedule was provided by the company in which the researcher did its
research report.

SAMPLE SIZE

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 Sample size for the research is fixed. It counts to55. That is the HCL companies and
corporate selling and feed of HCL in comparison between other IT sectors.

DATA AN ALYSIS & GRAPHICAL DATA

INTERPRETATIOIN
SAMPLE SIZE: 55

1. Whicht type of computers do you use?

a) Branded

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 b) Assembled

Branded 37

Assembled 18

24
Interested in demo
31 Not interested in
demo

It was observed that almost 67% of the people use branded computers or other gadgets for
their business purpose. Hence can be concluded that more people want branded products as
they are not ready to compromise with the quality and services being provided.

2. Which brand computers do you use?

a) HP
b) HCL
c) ACER
d) Others

Brand used Total Nos.

HP 7

HCL 14

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 Acer 13

Others 21

11 3
19

< 15
15-50
50-75
75-200

21

This observation showed that HCL is among the top used brands. Major part under the
pie-chart goes to HCL. So HCL should continue making efforts to attract new market and
sustain the existing market.

3. What is the number of installed desktops?

a)<15
b) 15-50
c)50-75
d) 75-200
e)200-500

Installed desktops Total Nos.

< 15 19

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 15-50 21

50-75 11

75-200 3

200-500 1

31
11 19

< 15
15-50
50-75
75-200
200-500
21

Most of the surveyed and found the use of computers within the 15-55 range.
So it can be inferred that the main target market is which lies in the middle
range. Thus we targeted mainly on SME (small and medium enterprise).

4. What is the number of used servers?

a. 1
b. 2
c. 3-5
d. >5

Servers used Total Nos.

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 1 10

2 11

3-5 21

>5 13

10
13

1
2
03-May
11 >5

21

From this observation, it was concluded that numbers of servers were directly
proportional to the number of desktops used.

5. What is the number of installed laptops?

a.) 1-5

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 b.) 5-15
c.) 15-30
d.) >30

Number of laptops Total Nos.

1-5 20

5-15 22

15-30 8

>30 5

24
Interested in demo
Not interested in demo
31

It was observed that maximum computers and laptop users ranging between 5-25. This
area can be focused.

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 6. What is the brand used for laptops?
e.) HCL
f.) Toshiba
g.) Lenovo
h.) Others

Laptops brand Total Nos.

HCL 11

Toshiba 19

Lenovo 13

Others 12

12 11

HCL
Toshiba
Lenovo
Others
13
19

Observation showed that Toshiba was the major brand used in laptops. Various other
brands like HP and Samsung etc. are also used. HCL has also a good market share.

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 7. Do you have AMC?
i.) Yes
j.) No

Total Nos.

Company place having AMC 30

Company place not having 25

AMC

24

Interested in demo
31 Not interested in demo

According to above graphical data interpretation, that is the most important places where
computer has been used and it has been observation and showed that less than 60%
hospitals have their AMCs. This area can also be considered.

11. How do you find the HCL products?

a.) OK

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b.) Good
c.) Satisfactory
d.) Outstanding
e.) Not tried yet

Reaction about HCL products Total Nos.

OK 3

Good 12

Satisfactory 19

Outstanding 7

Not tried yet 10

10
3
12

OK
Good
7 Satisfactory
Outstanding
Not tried yet
19

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According to above graph shows that the maximum of HCL user are satisfied with the
products and services provided. Very few have not tried yet HCL on a business scale, but most
of them have an experience about HCL.
12. Do you want to know more about HCL products?
a.)Yes
b.)No

Wanted knowledge about HCL Total Nos.

Yes 42

No 13

13

Yes
No

42

That the above graph shows that the observation and the most of the people are interested
in knowing more about the brand and have the urge to buy.

13. Do you require demo for any product?

a.)Yes
b.)No

Total Nos.

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 Interested in demo 24

Not interested in demo 31

24

Interested in demo
31 Not interested in demo

This observation showed that almost 42% of the sample was interested in demo

Major players in the market

Hcl
Accer
Lenovo
Sony
Dell
Tosiba
 Hp-compaq

ROLE OF ADVERTISEMENT
Advertisement plays an important impact on consumers to purchase destop pc’s of brands.
Now a day we see that each and every company endorsing brand ambassadors so that to

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attract customers and make their customer base more & more. IBM has signed Saif Ali
Khan to endorse his products Shahrukh khan was endorsed by compaq so that more & more
computes can be sold out.

Indian PC Market to Show Double Growth than the World

PC market in India will likely grow at 20%, almost double of global PC market this year,
as per Gartner, the research firm. However, the growth in Indian PC market will be five
percentage-points lower in comparison to what it was last year (2006).

Gartner forecasts that PC makers will ship 255.7 million units worldwide
this year, a 10.5% increase from 2006. Revenue, on the other hand, is projected to
increase only 4.6% to US$213.7 billion, as average selling prices continue to drop.

In 2007, worldwide shipments of PCs are expected to increase 10.5% from

last year to reach 255.7 Million units. On the other hand, the revenues are
anticipated to grow just 4.6% and reach US$ 213.7 Billion with continuous decline in
average selling prices. Emerging markets will play a key role in this growth.

“Emerging markets and mobile PCs will continue to provide growth.

However, falling average selling prices (ASPs), slowing replacement activity, and
further declines in mature market desk-based PC shipments will keep PC vendors
under pressure to rationalize their operations or exit the market,” as per George
Shiffler, research director with Client Platforms Markets Group of Gartner
Dataquest. The statement appeared in IndiaTimes Infotech on March 21, 2007.

As said by IDC, PC shipments in India increased 25% in 2006. “The consumer and
the SMB segments will be the major drivers of the Indian market. High demand for
mobile PCs bolstered the growth, overtaking sales in the deskbased segment. In addition,
with a greater focus given to e-governance, the government spend is expected to propel
the market further”, said Gartner India’s principal analyst, Diptarup Chakraborti while
commenting on Indian market. IndiaTimes Infotech published this statement on March 21,
2007.

As per the RNCOS report “Portable Electronics Market Worldwide (2006)” , ” a

fundamental move toward mobile computing going on in the market is Making significant
contribution to the top line growth.”

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Marketing Strategies of Each company to attract Customers
Now a day every companies playing strategies so as to attract customers and increase
revenues and also customer base.Pent-up demand, attractive price points and economic
stability propelled PC growth. PCs are acting as entertainment centers with TV
functionality, supported by the digital sound experience and large screen displays

Some of the Strategies They Are Playing

Vista and Office 2007 hit the market Microsoft has opened the doors for consumers to
Purchase its latest Operating System, Windows Vista and Office 2007 with a grand launch
across 70 countries. Microsoft released the latest version of its operating system Windows
Vista and Office 2007 for corporate customers in November 2006. Now it has
launched the software for the masses, i.e. non corporate consumers. The consumer
launch took place on 30th January across 70 countries. Windows Vista is the first major
Windows launch by Microsoft since the launch of Windows XP in 2001.

These products are launched to ‘wow’ customers with features like enhanced
security, better search, improved parental control and an all new interface.
According to Ravi Venkatesan, Chairman, Microsoft India, “This is the launch of
the decade for Microsoft and the biggest for us in India, with the design of this
product we have dealt with the security issues.” In India, OEMs including HCL,
HP, Lenovo, Sahara, Wipro and Zenith are launching Vista compatible PCs.

Windows Vista and Office 2007 will be made available to the public in several editions.
The consumer editions are Windows Vista Ultimate, Windows Vista Home Premium,
Windows Vista Home Basic and Windows Vista Starter. Vista is being shipped in 18
languages including Hindi. Extending the Indian language support, Microsoft will have
13 more Indian languages including Telugu and Marathi and support for these is expected by
early 2008. Office 2007 comes in two consumer editions-Office Home & Student 2007 and
Office Basic 2007.

Marketing & selling strategy

REVISITING THE LOW-COST PC MARKET
A computer at nearly one-third of current prices is a dream for most Indians. And yet,
buyers are not holding their breath for these devices. For experience has proved that
expectations are seldom met. However, this time around, those propagating low-cost
computing solutions have taken a different route. Chris Ann Fichardo elaborates on the
difference.

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The buzz is in the air again. PC manufacturers are excited. Users are expectant.
Even institutions like the IITs are enthusiastic. The reason: India’s dream of an
affordable PC (priced below Rs 10,000) is ready to hit the market. For nearly a decade this
dream has struggled to become a reality. India Inc. has made many noteworthy attempts in
the past to introduce low-cost computing solutions, but in vain. Be it Wipro’s Janata
PC, iNabling Technologies’ e-mail device, iStation, or the much-talked about handheld
device, the Simputer—all brilliant concepts that have not quite made it commercially yet.
The company netcore is doing groundbreaking work to make possible the Rs 5,000 PC
(5KPC), says that if the price point of a PC comes down between Rs 5,000 to 10,000 per
user, India has the ability to absorb 10-20 million PCs a year for the next several years.
This potential gains further significance when one realizes that the present market size is
just two million PCs a year! In the last 20 years the installed base has barely crossed six
million PCs in India.
According to Richard Brown, director for International Marketing at VIA attributes this
sudden interest by vendors to the "real growth potential" of the lowcost PC market."I
remember five to seven years ago when the first $1,000 PC appeared (introduced by
Compaq), people wondered if the price point was for real. And since then there has been a
continuous push down in the price points for PCs, which is a sign of commoditization of
the industry. For a long time the industry has resisted moving to lower price points, and
now they are actually seeing that there is demand in that space and they are buying into it,"
he says.

CHANGING TRENDS IN PC MARKET

 With prices of PCs being slashed, the education sector is expected to see a
high demand for personal computers.

 Consumers are shifting their focus of PC computing from an average system to

one that is closer to a high-end system and upwards.

 The need for the most powerful multimedia computers is increasing.

Linux might gain ground in the government and defence sectors.

 Customers, both in the consumer as well as in the commercial space will
demand better service levels from vendors.

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  Service and support is going to be a critical aspect of vendor strategy.

 Depreciation period of IT products should be reduced to further boost

growth.

 The desktop space will see more and more entertainment-oriented features
getting integrated into the normal PC.

 The enterprise space will witness more stress on security,TCO,

manageability and multiple levels of redundancy, among others

 Companies, which will offer affordable innovation will gain market share.

 Unicode will drive PC penetration into rural markets

 SME will continue to be a major segment.
 The industry has standardized on 80 GB HDDs.

Trends Expected In 2009

 In the future, with more duty cuts expected, analysts believe branded PC players
gain further against assembled players. Retail may get a renewed thrust.
Observes Raj Saraf, Chairman and Managing Director, Zenith Computers, “We
have1300 retail outlets today, which we hope to grow to 15000 by the end of 2009.”
 While vendors are bundling in Linux to bring down costs, analysts see desktop
Linux confined to the government and education sector. Linux on the desktop is
unlikely to make inroads in the enterprise. Prices of computers have been falling
rapidly, but vendors do not think prices of PCs will fall significantly in 2009.
 While 2007 saw strong demand emerging from select sectors such as the
government and BPO outfits, 2008 could be relatively flat as most BPO firms are in

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 the process of consolidation and not growth.

PC MARKET: TOP TRENDS

PC market revival may happen in second half of this year. Post-Budget PC
prices will remain constant or rise marginally. Indian brands will survive, but they
need to decide on an unambiguous competitive pitch. Thrust into the B & C class
towns will be aggressive, by Indian and MNC players alike. The notebook market
will show significant gains in 2002-03. If you want to know what the future holds
for the Indian PC industry, the one fact you cannot afford to ignore is the current
slowdown not just falling growth, or a gentle trough, but the horrible spectre of
negative growth.

WHAT IS CUSTOMER RELATIONSHIP MANAGEMENT (CRM)?

CRM is a term that is often referred to in marketing. However, there is no

complete agreement upon a single definition. This is because CRM can be
considered from a number of perspectives. In summary, the three perspectives are:
1. CRM from the Information Technology Perspective.
From the technology perspective, companies often buy into software that will help to
achieve their business goals. For many, CRM is far more than a new software package,
the renaming of traditional customer services, or an IT-based customer management
system to support sales people. However, IT is vital since it underpins CRM, and has the
payoffs associated with modern technology, such as speed, ease of use, power and memory,
and so on.
2. CRM from the Customer Life Cycle (CLC) Perspective.
The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle
(PLC). However, CLC focuses upon the creation of and delivery of lifetime value to
the customer i.e. looks at the products of services that customers need throughout their
lives. It is marketing orientated rather than product orientated. Essentially, CLC is
a summary of the key stages in a customer's relationship with an organization.
3. CRM from the Business Strategy Perspective.
The Business Strategy perspective has most in common with many of the lessons and
topics contained on this website, and indeed within the field of marketing itself. The
diagram below shows the Marketing Teacher Model of CRM and Business Strategy. Our
model contains three key phases - customer acquisition, customer retention and
customer extension, and three contextual factors - marketing orientation, value creation
and innovative IT.

Swot analysis of hcl

42 | P a g e
 STRENGTHS:
HCL’s strengths are many, to mention a few:

a)Global Presence:
 Its collaborations and joint ventures with international companies such as Perot
System, and partnership with world leaders like Ericsson, Toshiba, Nokia, Oracle
and Microsoft, enable it to bring the best technology available world wide to its
consumers.
24 locations in 16 countries.
b) Fast paced and flexible work culture which provides its employees autonomy to
accomplish the task without much pressure from the higher authorities. Thus,
employees are motivated to give their best to the organization.
c) The core strength of HCL is the talent and innovativeness of its people which enables it to
provide the “right solution at the right time.”
d) The mass markets handled through a chain of dealers, resellers and retailers which
helps bring technology usage closer to the individual. It has very strong distribution
network.
e) Its pool of competencies : Hardware, Software, Training, Networking, Telecom and
System Integration.
f) Ability to understand customer's business and offer right technology.
g) Long standing relationship with customers.
h) Pan India support & service infrastructure.
i) Best-value-for-money offerings.

WEAKNESSES:
a) After sales service.
b) Less promotional campaigns.

OPPORTUNITIES:
a) IT industry booming at a rate of 45% every year.
b) Increasing consumer awareness about IT and its use.
c) Tremendous untapped potential of IT products in India.
d) Increasing competition.
e) Tie ups with various MNCs enable to extract their core competencies.

THREATS:

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a) Local assemblers are biggest menace for the company.
B) Entry of MNCs i.e. IBM, Compaq giving direct competition.
c) Govt. instability has a long term repercussions affecting company’s policies & it growth.
d) Technological shift as a result of research & development. Daily new technologies
are emerging.

Concluding the S.W.O.T. analysis in words that prosperity lies ahead for HCL. In order
to retain its position as India’s No. 1 IT conglomerate, it has to come out with the state of
art as well as futuristic technologies to its consumers well before time

FINDINGS & LIMITATIONS

Every project has some limitations even the researcher came across some limitations
while working on the project which made the analysis a little inappropriate at times.
Some of the basic limitations faced during the research are listed below:
 Only limited number of authorized, companies and other areas where it has
been found 55 players was covered in the study.
 Most of the research was based on cold calls, so then visited many places i.e. authorized
and local areas and where it had not responded much.
 There was a bias on the part of the respondents.
 Companies that were contacted through telephone at times did not give
correct information to the researcher.
 The IT manager or the person heading the IT Department did not have the rights to
give the authorized official information to people other then the members of the
official itself and the high officials.
 At times there was a problem of non response from the hospitals, companies and other
authorized and unauthorized areas which affected the result of the project being done by
the researcher.

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Suggestion and recommendation
 HCL is having large number of channel partners but it is not supporting &
taking care all of them equally which results in increasing discontentment
among new channel partners because its not possible for company to support all
of them equally. Company should take some positive action against it.
 Company executive should visit dealers on regular basis.
 They should pay proper attention towards checking of various components of
PC before end user delivery. Otherwise it tends towards defame of brand name in
comparison to rivals.
 Need to expend customer care center as the consumer base of HCL Infosystem is
increasing with tremendously fast pace.
 Proper attention should be paid for advertisement planning otherwise it may
lead to problem for dealer as well as for company.
 Company should tie up with some event management company to organize
various promotional activities like canopy, Carnival.
 Company should make policy for fixed end user price for all dealers so that fair
game will be played & dealer would not to compromise on their margin.

Conclusion

Marketing is a very crucial activity in every business organization. Every product

produced within an industry has to be marketed other wise it will remain as unsold stock,
which will be of no value. I have realized this fact after completion of my summer
training project. Despite of various difficulties and limitations faced during my summer

45 | P a g e
training project on the topic “ Corporate Selling and Feedback ”. I have tried my level
best to find out the most relevant information for the organization to complete the assignment
that was given to me. After completion of my summer training project I have gained several
experiences in the field or sales marketing. I have got the opportunity to meet various
people, which fluctuate in different situation and time. This summer training project has
given me the opportunity to have first experience in the corporate world.

Theoretical knowledge of a person remains dormant until it is used and tested in the
practical life. The training has given to me the chance to apply my theoretical knowledge that
I have acquired in my classroom to the real business world. I have completed my summer
training project in which are involved in its successful completion. In spite of few
limitations and hindrance in the summer training project I found that the work was a
challenge and fruitful. It gives enough knowledge about the computers market and the
distribution process undertaken by an organization. This summer training project has enabled
my capability in order to manage business effectively and in my career in future.

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 CEO’s certificate

This is to certify that Ms. Rekha Mukherjee is a bonafide

student of CHIMC Indore and is presently pursuing a Post
Graduate Program in Management.

Under my guidance, he has submitted his project report titled

“study of effectiveness of distribution channel of TATA
AIG & Customer perception regarding insurance” in
partial fulfillment of the requirement for the summer

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internship project during the Post Graduate Program in
Management.

This report has not been previously submitted as part of any

other degree or diploma of another Business School or
University.

MR.SUMEET MARU
CEO, CHIMC INDORE

Mentor’s certificate

This is to certify that Ms.Rekha Mukherjee is a bonafide

student of CH institute of management &institute indore and
is presently pursuing a Post Graduate Program in
Management.

Under my guidance, he has submitted his project report

titled “Study of effectiveness of distribution channel of
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TATA AIG & Customer perception regarding insurance
in partial fulfillment of the requirement for the summer
internship project during the Post Graduate Program in
Management.

This report has not been previously submitted as part of

any other degree or diploma of another Business School or
University.

Prof. Niranjan Shastri

Mentor, CHIMC Indore

Student declaration

Ms. Rekha Mukherjee the undersigned, a student of

CH institute of management & communication declare that
this project report titled” Study of effectiveness of
distribution channel of TATA AIG & Customer
perception regarding insurance” is submitted in partial
fulfillment of the requirement for the Summer Internship
project during the Post Graduate diploma in Management,
a prestigious Post Graduate Diploma awarded by Indian
Business Academy, Bangalore.

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 This is my original work and has not been previously
submitted as a part of another degree or diploma of another
Business School or University.

The findings and conclusions of this report are based on

my personal study and experience, during the tenure of my
Summer Internship.

Ms. Rekha Mukherjee

PGDM, 2010-11

ACKNOWLEDGEMENT

It is not enough that we lay the super structure of the building, but the
most important part is the base of the building. Similarly, this project
would be incomplete without mentioning the real people who have
guided, supported, and me realize the corporate culture through which
the long cherished dream of implementing a quality program in this
esteemed organization could be realized.
First of all, I would like to express my gratitude to my project guide
Mr. Abhishek Dwivedi ……………………………………, who
supported and guided me throughout the project and gave me all

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necessary facilities and inputs to make this project a successful one
and also made me as energetic and enthusiastic like him.
I would like to thank Mr. Sumeet Maru CEO, CHIMC ,Indore , for
providing me the opportunity to have such a good experience of an
internship program and of course my faculty guide Prof. Niranjan
Shastri the guiding source of light in this vast journey of learning
experience while doing the project that really made me learn the real
application and management principles of the project. His continuous
advice has really transformed me into a much mature personality.

And last but not the least I would like to thank all the staffs of TATA-
AIG Life Insurance Co. Ltd. Indore branch, for helping me to
complete this project successfully.

WHAT IS INSURANCE

The business of insurance is related to the protection of the

ECONOMIC VALUES OF ASSETS. Every asset has a value.
The asset would have been created through the efforts of the
owner. The asset is valuable to the owner, because he expects
to get some benefits form it. It is a benefit because it meets
some of his needs. The benefit may be an income or in some
other form. In the case of a factory or a cow, the product
generated by it is sold and income is generated. In the case of a
motor car, it provides comfort and convenience in
transportation. There is no direct income. Both are assets and
provide benefits.

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Every asset is expected to last for a certain period of time
during which it will provide the benefits. After that, the
benefit may not be available. There is a life-time for a
machine in factory or a cow or a motor car. None of them will
last for ever. The owner is aware of this and he can so manage
his affairs that by the end of that period or life-time, a
substitute is made available. Thus he makes sure that the
benefit is not lost. However, the asset may get lost earlier. An
accident or some other unfortunate event may destroy it or
make it incapable of giving the benefits. An epidemic may kill
the cow suddenly. In that case, the owner and those enjoying
the benefits therefore, would be deprived of the benefits. The
planned substitute would not have been ready. There is an
adverse or unpleasant situation. Insurance is a mechanism that
helps to reduce the effects of such adverse situations. It
promises to pay to the owner or beneficiary of the asset, a
certain sum if the loss occurs

"Insurance is a contract between two parties whereby one party

called insurer undertakes in exchange for a fixed sum called
premiums, to pay the other party called insured a fixed amount
of money on the happening of a certain event." Insurance may
be described as a social device to reduce or eliminate risk of
life and property. Under the plan of insurance, a large number
of people associate themselves by sharing risk, attached to
individual. With the help of Insurance, large number of people
exposed to a similar risk makes contributions to a common
fund out of which the losses suffered by the unfortunate few,
due to accidental events, are made good. Insurance is a tool by
which fatalities of a small number are compensated out of
funds collected from plenteous. Gradually as competition
increased benefits given by industry to its customers increased

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by leaps and bounds. Insurance is a basic form of risk
management which provides protection against possible loss
to life or physical assets. Person who seeks protection against
such loss is termed as insured, and company that promises to
honor claim, in case such loss is actually incurred by insured,
is termed as Insurer. In order to get insurance, insured is
required to pay to insurance company a certain amount called
premium. Premium is collected by insurance companies which
acts as trustee to pool created through contributions made by
persons seeking to protect themselves from common risk. Any
loss to the insured in case of happening of an uncertain event
is paid out of this pool.

Insurance business is divided into four classes:

 Life Insurance
 Fire
 Marine
 Miscellaneous Insurance.
 Insurance provides:
 Protection to investor.
 Accumulation of savings.

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  Channeling these savings into sectors needing huge long
term investment.

FUNCTION OF INSURANCE:-
Provide protection: The primary function of insurance is to
provide protection against future risk, accidents and
uncertainty. Insurance cannot check the happening of the risk,
but can certainly provide for the losses of risk. Insurance is
actually a protection against economic loss, by sharing the risk
with others.
Collective bearing of risk: Insurance is an instrument to
share the financial loss of few among many others. Insurance is
a mean by which few losses are shared among larger number of
people. All the insured contribute the premiums towards a fund

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and out of which the persons exposed to a particular risk is
paid.
Assessment of risk: Insurance determines the probable volume
of risk by evaluating various factors that give rise to risk. Risk
is the basis for determining the premium rate also.
Provide certainty: Insurance is a device, which helps to
change from uncertainty to certainty. Insurance is device
whereby the uncertain risks may be made more certain.
Small capital to cover larger risk: Insurance relieves the
businessmen from security investments, by paying small amount
of premium against larger risks and uncertainty.

Contributes towards the development of industries

Insurance provides development opportunity to those larger
industries having more risks in their setting up. Even the
financial institutions may be prepared to give credit to sick
industrial units which have insured their assets including plant
and machinery.

Means of savings and investment: Insurance serves as

savings and investment, insurance is a compulsory way of
savings and it restricts the unnecessary expenses by the
insured's For the purpose of availing income-tax exemptions
also, people invest in insurance.

Source of earning foreign exchange:Insurance is an

international business. The country can earn foreign exchange
by way of issue of marine insurance policies and various other
ways.

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Risk free trade: Insurance promotes exports insurance, which
makes the foreign trade risk free with the help of different
types of policies under marine insurance cover.

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 LIFE INSURANCE:
Life insurance is a contract under which the insurer (Insurance
Company) in Consideration of a premium paid undertakes to
pay a fixed sum of money on The death of the insured or on
the expiry of a specified period of time Whichever is earlier.
In case of life insurance, the payment for life insurance policy
is certain. The Event insured against is sure to happen only the
time of its happening is not known. So life insurance is known
as Life Assurance. The subject matter of insurance is life of
human being. Life insurance provides risk coverage to the life
of a person. On death of the person insurance offers protection
against loss of income and compensate the titleholders of the
policy.

LIFE INSURANCE IS A BASIC NEED:-

Life insurance is a contract providing for payment of a sum of

money to the person assured or failing him to the person
entitled to receive the same on the happening of certain event.
A family is generally dependent for its food, clothing and
shelter on the income brought in at regular intervals by the
bread winner of the family. So long as the he lives and the
income is received steadily that family is secure but should
death suddenly intervene the family may be left in a very
difficult situation and sometimes in stark poverty.

Uncertainty of death is inherent in human life. It is this

uncertainty that is risk which gives rise to the necessity for
some form of protection against the financial loss arising from
death; insurance substitutes this uncertainty by certainty.

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 ROLES OF THE LIFE INSURANCE:-
Life insurance as an investment: -
Insurance products yield more than any other investment
instruments and it also provides added incentives or bonus
offered by insurance companies.
Life insurance as risk cover: -
Insurance is all about risk cover and protection of life.
Insurance provides a unique sense of security that no other
form of invest can provide.
Life insurance as tax planning: -
Insurance serves as an excellent tax saving mechanism

IMPORTANCE OF THE LIFE INSURANCE:-

Protection against untimely death: -
Life insurance provides protection to the dependents of the life
insured and the family of the assured in case of his untimely
death. The dependents or family members get a fixed sum of
money in case of death of the assured.
Saving for old age: -
After retirement the earning capacity of a person reduces. Life
insurance enables a person to enjoy peace of mind and a sense
of security in his/her old age.

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Promotion of savings: -
Life insurance encourages people to save money compulsorily.
When life policy is taken, the assured is to pay premiums
regularly to keep the policy in force and he cannot get back the
premiums, only surrender value can be returned to him. In
case of surrender of policy, the policyholder gets the
surrendered value only after the expiry of duration of the
policy.

Initiates investments: -
Life Insurance Corporation encourages and mobilizes the
public savings and canalizes the same in various investments
for the economic development of the country. Life insurance is
an important tool for the mobilization and investment of small
savings.
Credit worthiness: -
Life insurance policy can be used as a security to raise loans.
It improves the credit worthiness of business.
Social Security: -
Life insurance is important for the society as a whole also.
Life insurance enables a person to provide for education and
marriage of children and for construction of house. It helps a
person to make financial base for future.
Tax Benefit: -
Under the Income Tax Act, premium paid is allowed as a
deduction from the total income under section 80C.
ADVANTEGES OF LIFE INSURANCE
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It is superior to an ordinary savings plans:-

This is so because unlike other saving plans, it affords full

protection against risk of death. In case of death, the full sum
assured is made available under a life assurance policy;
whereas under other savings schemes the total accumulated
savings alone will be available. The latter will be considerably
less than the sum assured, if death occurs during early years

Insurance encourages and forces thrift:-

A savings deposit can be too easily withdrawn. Many may not

be able to resist the temptation of using the balance for some
less worthy purpose. On the other hand, the payment of life
insurance premiums becomes a habit and comes to be viewed
wit the same seriousness as the payment of interest on a
mortgage. Thus insurance, in effect brings about compulsory
saving.

Easy settlement and protection against creditors:-

The life assured can name a person or persons to whom the
policy moneys would be payable in the event of his death. The
proceeds of a life insurance policy can be protected against.
The claims of the creditors of the life assured by effecting a
valid assignment of the policy. A married women’s property
act policy constitutes a trust in favor of the wife and children
and no separate assignment is necessary. The beneficiaries are
fully protected from creditors except to the extent of any
interest in the policy retained by the assured

Administering the legacy for beneficiaries:-

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It often happens that a provision which a husband or father
has made through insurance is quickly lost through
speculative or unwise investment or by unnecessary
expenditure on luxuries. These contingencies can be provided
against in the case of insurance. The policyholder can arrange
that in the in the event of his death the beneficiary should
receive, instead of a single sum (a). payment of the net claim
amount by equal installments over a specified period of years,
or (b).payment of the claim amount by smaller monthly
installments over the selected period followed by a lump sum
at the end thereof.

Ready marketability and suitability for quick

borrowings:-

After an initial period, if the policy holder finds himself

unable to continue payment of premiums he can surrender the
policy for a cash sum. Alternatively he can tide over a
temporary difficulty by taking loan on the sole security of the
policy without delay. Further a life insurance policy is
sometimes acceptable as security for a commercial loan.

Tax relief:-
For computing income tax (especially in India the Indian
income tax act) follows deduction from income tax payable, a
certain percentage of a portion of the taxable income of
individuals which is diverted to payment of insurance
premiums. when this tax relief is taken into account it will be
found that the assured is n effect paying a lower premium for
his insurance.

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INSURANCE CYCLE:-

Policy Renewal/Change Options/Application:-

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The Insurance Cycle begins each year with the insurance offer.
Actuarial documents are published annually by the Risk
Management Agency (RMA). The actuarial documents list the
plan of insurance, crop, type, variety, and practice that may be
insured in a state and county, and show the amounts of
insurance, available insurance options, levels of coverage,
price elections, applicable premium rates, and subsidy
amounts. The Special Provisions of Insurance list program
calendar dates, and general and special statements which may
further define, limit, or modify coverage.
Sales Closing/Cancellation/Termination Dates:-
Insurance applications must be completed and signed no later
than the sales closing date specified in the crop actuarial
documents. Applications signed after the crop sales closing
date may be rejected by the insurance provider.
Insurance coverage is continuous and can be cancelled by
either the insurance provider or the policyholder for the
following crop year by providing a written notice to the other
party no later than the cancellation date specified in the crop
policy. For a policyholder insured previous crop year, any
changes he or she wishes to make to the policy coverage must
be made on or before the crop sales closing date. The policy
will automatically renew for the subsequent crop year unless
the policyholder cancels the policy in writing on or before the
crop cancellation date. Insurance coverage may be terminated
by the insurance provider for the following crop year for
nonpayment of outstanding debt by providing a written notice
to the policyholder no later than the termination date specified
in the crop policy. The insurance provider may terminate
coverage on a crop if no premium is earned for three
consecutive years.

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 Acceptance:-
Upon receipt of a properly completed and timely submitted
insurance application, the insurance provider will accept and
process the application, unless the applicant is determined to
be ineligible under the contract or Federal statute or
regulation. The insurance provider will issue a summary of
coverage and the appropriate policy documents to the
applicant. After the application is accepted, the policyholder
may not cancel the policy for the initial crop year.

Insurance Attaches: -
For annual crops, insurance attaches annually when planting
begins on the insurance unit. The crop must be planted on or
before the crop's published final planting date unless late or
prevented planting provisions apply. If prevented planting
provisions apply, and the crop cannot be timely planted due to
the causes specified in the crop provisions, such acreage may
be eligible for a prevented planting payment.
Acreage Reports:-
The policyholder must annually report for each insured crop
in the county the number of insurable and uninsurable acres
planted or prevented from being planted if prevented planting
is available for the crop, the date the acreage was planted,
share in the crop, the acreage location, farming practices used,
and types or varieties planted to the insurance provider on or
before the applicable acreage reporting date specified in the
crop actuarial documents.
Summary of Coverage:-

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The insurance provider will process a properly completed and
timely filed acreage report, and issue to the policyholder a
summary of coverage that specifies the insured crop, the
insured acres and amount of insurance or guarantee for each
insurance unit. The policyholder may make changes to the
filed acreage report, if permitted by the insurance provider.
Premium Billing:-
The annual premium is earned and payable at the time
insurance coverage begins. The insurance provider shall issue
a premium billing based upon the information contained in the
acreage report no earlier than the premium billing date
specified in the crop actuarial documents. The premium billing
will specify the amount of premium and any administrative
fees that may be due. If the premium or administrative fees are
not paid by the date specified in the actuarial documents or
policy, the insurance provider may assess interest on the
outstanding premium balance.
Notice of Damage or Loss: -
A written notice of damage or loss for each unit is to be filed
by the policyholder within 72 hours of the policyholder's
initial discovery of damage or loss but not later than 15 days
after the calendar date for the end of the insurance period
unless otherwise stated in the individual crop policy. The
policyholder should refer to the individual crop provisions for
additional requirements in the event of damage or loss. These
notifications provide the opportunity for the insurance
provider to inspect the crop and determine the extent of
damage or potential production before the crop is harvested or
otherwise disposed of.
Inspection:-

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After the insurance provider receives the written notice of
damage or loss, it will be processed and, if necessary, a loss
adjuster will be sent to inspect the damaged crop and gather
pertinent information concerning the damage. If the
policyholder wishes to destroy or not harvest the crop the loss
adjuster will gather the appropriate information, conduct an
appraisal to establish the crop's remaining value and complete
any forms needed. If the crop has been harvested or will not be
harvested by the end of the insurance period, and the
policyholder wishes to file a claim for indemnity, the loss
adjuster will gather the appropriate information and assist the
policyholder in filing the claim for indemnity. It is the
policyholder's responsibility to establish the time, location,
cause, and amount of any loss.
Indemnity Claim:-
After the claim for indemnity is processed by the insurance
provider, an indemnity check and a summary of indemnity
payment will be issued showing any deductions to the amount
of indemnity for outstanding premium, interest, or
administrative fees.
Contract Change Date:-
Changes to the insurance program may be made by RMA
from one year to the next. The insurance provider will notify
the policyholder in writing of any changes to the policy,
actuarial documents, or the Special Provisions of Insurance
prior to the calendar date for contract changes specified in the
crop policy. The policyholder will have the opportunity to
review the changes and, if he/she desires, continue the
insurance coverage for the following crop year, change the
policy coverage, or cancel the insurance coverage. Any
changes to the policy coverage that the policyholder makes

79 | P a g e
 must be made no later than the crop sales closing date. If the
policyholder wishes to cancel the policy, a written notice
must be submitted to the insurance provider on or before the
crop cancellation date.
HISTORY OF INSURANCE
Insurance has been known to exist in some form or other since
3000 BC. The Chinese traders traveling treacherous river
rapids would distribute their goods among several vessels so
that the loss form any one vessel being lost would be partial
and shared, and not total. The Babylonian traders would agree
to pay additional sums to lenders, as the price for writing off
the loans, in case of the shipment being stolen. The inhabitants
of Rhodes adopted the principle of general average of general
average, whereby, if goods are shipped together, the owners
would bear the losses in proportion, if loss occurs, due to
jettisoning during distress. {Captains of ships caught in
storms, would throw away some of the cargo to reduce the
weight and restore balance. Such throwing away is called
jettisoning} The Greeks had started
Benevolent societies in the late 7th century AD, to take care of
the funeral and families of members ho died. The great fire of
London in 1666,in which more than 13000 house were lost,
gave a boost to insurance and the first fire insurance company,
called the fire office, was started in 1680.

 The origins of insurance business as in vogue at present,

is traced to the Lloyds Coffee House in London. Traders,
who used to gather in the Lloyd’s coffee house in London,
agreed to share the losses to their goods while being carried
by ships. The losses used to occur because of pirates who
robbed on the high seas of because of bad weather spoiling

80 | P a g e
 the goods or sinking the ship. In India, insurance began in
1818 with life insurance being transacted by an English
company, the Oriental Life Insurance Co. in 1870 in
Mumbai. This was followed by the Bharat Insurance co. in
1896 in Delhi, the Empire of India in 1897 in Mumbai, The
United India in Chennai, the National, the National Indian
and Hindustan Cooperative in Kolkata.

 Later, were established the cooperative Assurance in

Lahore, the Bombay Life (Originally called the swadeshi
life), the India Mercantile, the new India and the Jupiter
in Mumbai and the Lakshmi in New Delhi. These were all
Indian companies started as a result of the swadeshi
movement in the early 1900s. By the year 1956, when life
insurance business was nationalized and the life Insurance
Corporation of India (LIC) was formed on1st September
1956, there were 170companies and 75 provident fund
societies transacting life business in India. After the
amendments to the relevant laws in 1999, the L.I.C. did not
have the exclusive privilege of doing life insurance
business in India. By 31.8.2007, sixteen new Life
insurance has been registered and were transacting life
insurance business in India.

THE HISTORY OF INSURANCE IN INDIA

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 Some of the important milestones in the life insurance
business in India are:

 1912 - The Indian Life Assurance Companies Act

enacted as the first statute to regulate the life insurance
business.

 1928 - The Indian Insurance Companies Act enacted to

enable the government to Collect statistical
information about both life and non-life insurance
businesses.

  1938 - Earlier legislation consolidated and amended to

by the Insurance Act with The objective of protecting
the interests of the insuring public.

  1956 - 245 Indian and foreign insurers and provident

societies taken over by the central government and
nationalized. 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

HOW INSURANCE WORKS

82 | P a g e
 The mechanism of insurance is very simple. People who
are exposed to the same risks come together and agree that, if
any one of the members suffers a loss, the others will share
the loss and make good to the person who lost. All people
who send goods by ship are exposed to the same risk related
to water damage, ship sinking, piracy, etc. those owning
factories are not exposed to these risks, but they are exposed
to different kinds of risks like, fire, hailstorms, earthquakes,
lightening, burglary, etc. like this, different kinds of risks can
be identified and separate groups, made including those
exposed to such risks. By this method, the risk is spread
among the community and the likely big impact on one is
reduced to smaller manageable impacts on all.

If a Jumbo Jet with more than 350 passengers’ crashes,

the loss would run into several cores of rupees. No airline
would be able to bear such a loss. It is unlikely that many
Jumbo Jets will crash at the same time. If 100 airline
companies flying Jumbo Jets, come together into an insurance
pool, whenever one of the jumbo jets in the pool crashes, the
loss to be borne by each airline would come down to a few
lacks of rupees. Thus, insurance is a business sharing

83 | P a g e
 ROLE OF INSURANCE IN ECONOMIC
DEVELOPMENT

For economic development, investments are necessary.

Investments are made out of savings. A life insurance
company is a major instrument for the mobilization of savings
of people, particularly from the middle and lower income
groups. These savings are channeled into investments for
economic growth.

 An insurance company’s strength lies in the fact that

huge amounts come by way of premiums. Every premium
represents a risk that is covered by that premium. In effect,
therefore, these vast amounts represent pooling of risks.
The funds are collected and held in trust for the benefit of
the policyholders.

  The management of insurance companies is required to

keep this aspect in mind and make all its decisions in ways
that benefit the community. This applies also to its
investments. This is why successful insurance companies
would not be found investing in speculative ventures. Their
investments benefit the society at large.

 The system of insurance provides numerous direct and

indirect benefits to the individual and his family as well as
to industry and commerce and to the community and the
nation as a whole. Those who insure, both individuals, are
directly benefited because they are protected from the
consequences of the loss that may be caused by the accident
or fortuitous event. Insurance, thus, in a sense protects the
capital in industry and releases the capital for further
expansion and development of business and industry.
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  The every existence of risk that is, uncertainty
concerning the future, is a severe handicaps in economic
activities. Insurance removes the fear, worry and anxiety
associated with this future uncertainty and thus
encourages free investment of capital in business
enterprises and promotes efficient use of existing
resources. Thus insurance encourages commercial and
industrial development and there by contributes to a
vigorous economy and increased national productivity.

 Present day organization of industry, commerce and

trade depend entirely on insurance for their operation,
banks and financial institutions lend money to industrial and
commercial undertakings only on the basis of the collateral
security of insurance. No bank or financial institution would
advance loans on property unless it is insured against loss or
damage by insurable perils.

 Insurers are closely associated with several agencies and

institutions engaged in fire loss prevention, cargo loss
prevention, cargo loss prevention, industrial safety and road
safety. Before acceptance of a risk, insurers arrange survey
and inspection of the property to be insured, by qualified
engineers and other experts.

 The object of these surveys is not only to assess the risk

for rating purposes but also to suggest and recommend to
the insured, various improvements in the risk, which will
attract lower rates of premium and what is more important ,
reduce the loss potential. For example, burglary surveyors

85 | P a g e
 make recommendation in regard to security measures such
as better locking system, appointment of Watchman, etc.
Engineering surveys play a most useful part in accident
prevention as valuable technical advice is provided in
respect of plant and machinery

 Insurance ranks with export trade, shipping and banking

services as earner of foreign exchange to the country. It
helps to earn foreign exchange and represent invisible
export.

86 | P a g e
 THE INSURANCE REGULATORY AND
DEVELOPMENT AUTHORITY (IRDA)

Earlier, the rules regarding the insurance sector were

made by a separate body known as LIFE INSURANCE
CORPORATION OF INDIA (LIC) but as more and more
companies were entering into the insurance sector the Indian
government decided to frame a separate body to regulate and
control the insurance sector in India. This regulatory body was
known as
INSURANCE REGULATORY DEVELOPMENT
AUTHORITY FRAMED IN 1999, this is a government body
which regulates the whole insurance sector in india. This body
frames rules and regulations on which the whole insurance
sector in India works
Reforms in the Insurance sector were initiated with the
passage of the IRDA Bill in Parliament in December 1999.
The IRDA since its incorporation as a statutory body in
April2000 has fastidiously stuck to its schedule of framing
regulations and registering the private sector insurance
companies.

The other decisions taken simultaneously to provide the

supporting systems to the insurance sector and in particular
the life insurance companies were the launch of the IRDA’s
online service for issue and renewal of licenses to agents.
The approval of institutions for imparting training to agents
has also ensured that the insurance companies would have a
trained workforce of insurance agents in place to sell their

87 | P a g e
products, which are expected to be introduced by early next
year.
Since being set up as an independent statutory body the IRDA
has put in a framework of globally compatible regulations. In
the private sector 12 life insurance and 6 general insurance
companies have been registered

Composition of Authority under IRDA Act, 1999

As per the section 4 of IRDA Act' 1999, Insurance
Regulatory and Development Authority (IRDA, which was
constituted by an act of parliament) specify the composition of
Authority 
The Authority is a ten member team consisting of
(a)    A Chairman;
(b)    Five whole-time members;
(c)   Four part-time members, (all appointed by the
Government of India)

The law of India has following expectations from IRDA

1. To protect the interest of and secure fair treatment to

policyholders.

2. To bring about speedy and orderly growth of the insurance

industry (including annuity and superannuation payments),
for the benefit of the common man, and to provide long
term funds for accelerating growth of the economy.

88 | P a g e
 3. To set, promote, monitor and enforce high standards of
integrity, financial soundness, fair dealing and competence
of those it regulates.

4. To ensure that insurance customers receive precise, clear

and correct information about products and services and
make them aware of their responsibilities and duties in this
regard.

5. To ensure speedy settlement of genuine claims, to prevent

insurance frauds and other malpractices and put in place
effective grievance redressed machinery.

6. To promote fairness, transparency and orderly conduct in

financial markets dealing with insurance and build a
reliable management information system to enforce high
standards of financial soundness amongst market players.

7. To take action where such standards are inadequate or

ineffectively enforced.

8. To bring about optimum amount of self-regulation in day

to day working of the industry consistent with the
requirements of prudential regulation.

89 | P a g e
Duties, Powers and Functions of IRDA:
Section 14 of HID an Act, 1999 lays down the duties, powers
and functions of IRDA
(1) Subject to the provisions of this Act and any other law for
the time being in force, the Authority shall have the duty
to regulate, promote and ensure orderly growth of the
insurance business and re-insurance business.
(2) Without prejudice to the generality of the provisions
contained in sub-section , the powers and functions of the
Authority shall include,
(a) issue to the applicant a certificate of registration, renew,
modify, withdraw, suspend or cancel such registration;
(b) Protection of the interests of the policy holders in matters
concerning assigning of policy, nomination by policy
holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions
of contracts of insurance;
(c) Specifying requisite qualifications, code of conduct and
practical training for
intermediary or insurance intermediaries and agents;
(d)specifying the code of conduct for surveyors and loss
assessors;
(e) promoting efficiency in the conduct of insurance business;
(f) Promoting and regulating professional organizations
connected with the insurance and re-insurance business;

90 | P a g e
(g) Levying fees and other charges for carrying out the purposes
of this Act;
(h) calling for information from, undertaking inspection of,
conducting enquiries and investigations including audit of
the insurers, be intermediaries, insurance intermediaries and
other organizations connected with the insurance business;
(i) control and regulation of the rates, advantages, .terms and
conditions that may be offered by insurers in respect of
general insurance business not so controlled and regulated by
the Tariff Advisory Committee under section 64U of the
Insurance Act, 1938 (4 of 1938);
j) Specifying the form and manner in which books of account
shall be maintained and statement of accounts shall be
rendered by insurers and other insurance intermediaries;
(k) Regulating investment of funds by insurance companies;
(l) Regulating maintenance of margin of solvency;
(m) Adjudication of disputes between insurers and
intermediaries or insurance intermediaries;
(n) Supervising the functioning of the Tariff Advisory
Committee.
(o) Specifying the percentage of premium income of the insurer
to finance schemes for promoting and regulating professional
organizations referred to in clause (f);
(p) Specifying the percentage of life insurance business and
general insurance business to be undertaken by the insurer in
the rural or social sector; and
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(q) Exercising such other powers as may prescribed

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 About the Tata Group

The Tata Group comprises 98 operating companies in seven

business sectors, information systems and communications,
engineering, materials, services, energy, consumer products,and
chemicals. The Group was founded by Jamsetji Tata in the mid
19th century, a period when India had just set out on the road to
gaining independence from British rule. Consequently, Jamsetji
Tata and those who followed him aligned business opportunities
with the objective of nation building. This approach remains
enshrined in the Group's ethos to this day.

The Tata Group is one of India's largest and most respected

business conglomerates, with revenues in 2006-07 of $28.8 billion
(Rs129,994 crore), the equivalent of about 3.2 per cent of the
country's GDP, and a market capitalization of $72.8 billion as on
January 10, 2008. Tata companies together employ some 289,500
people. The Group's 27 publicly listed enterprises among them
stand out names such as Tata Steel, Tata Consultancy Services,
Tata Motors and Tata Tea have a combined market capitalization
that is the highest among Indian business houses in the private
sector, and a shareholder base of over 2.9 million. The Tata Group
has operations in more than 85 countries across six continents, and
its companies export products and services to 80 countries.
The Tata family of companies shares a set of five core values
integrity, understanding, excellence, unity and responsibility.
These values which have been part of the Group's beliefs and
convictions from its earliest days continue to guide and drive the
business decisions of Tata companies. The Group and its
enterprises have been steadfast and distinctive in their adherence to
business ethics and their commitment to corporate social
responsibility. This is a legacy that has earned the Group the trust
of many millions of stakeholders in a measure few business houses
anywhere in the world can match.

About American International Group, Inc. (AIG)

American International Group Inc. (AIG) a world leader in

insurance and financial services, is the leading international
insurance organization with operations in more than 130 countries
and jurisdictions. AIG companies serve commercial, institutional
and individual customers through the most extensive worldwide
property-casualty and life insurance networks of any insurer. In
addition, AIG companies are leading providers of retirement
services, financial services and asset management around the
world. AIG's common stock is listed on the New York Stock
Exchange, as well as the stock exchanges in Paris, Switzerland and
Tokyo.

94
About Tata Aig Life Insurance Company Ltd

Tata AIG Life Insurance Company Limited, which is a joint

venture between Tata Group and American International Group,
Inc. (AIG) offers a number of standard and custom-made life
insurance policies. Tata is one of the oldest and leading business
groups of India. Tata Group has had a long association with India's
insurance sector being the largest insurance company in India prior
to the nationalization. American International Group, Inc (AIG) is
the leading U.S. based international insurance and financial
services organization. 

Tata AIG General Insurance Company Limited (Tata AIG General)

is a joint venture company, formed by the Tata Group and
American International Group, Inc. (AIG). Tata AIG General
combines the Tata Group’s pre-eminent leadership position in
India and AIG’s global presence as the world’s leading
international insurance and financial services organization. The
Tata Group holds 74 per cent stake in the insurance venture with
AIG holding the balance 26 percent. Tata AIG General Insurance
Company, which started its operations in India on January 22,
2001, offers complete range of general insurance for motor, home,
accident & health, travel, energy, marine, property and casualty,
liability as well as several specialized financial lines.

95
 The list is made on the basis of admiration, trust and good feeling
that consumers have towards a company. Other Indian companies
that are in the list of top 200 are Canara Bank, HPCL, Wipro,
Reliance, M&M, and Bharti Airtel, BPCL, Punjab National Bank.
The report revealed that corporate trust is higher in the emerging
markets, while companies in industrialized markets are trusted less.

Tata-AIG Life Insurance Company is a joint venture between the

Tata Group (74% equity stake) and American International Group
Inc. (AIG) (26% equity stake). The company offers a broad range
of life insurance products to individuals and groups. The products
offered to individuals are variations of term life with or without a
savings element, e.g., endowment policies and money back
policies. Tata-AIG Life has been in operation since April 2001
(incorporated on Aug 23, 2000). While the company itself is
relatively new, the Tata group is widely known in Indian
households.

The Tata Group is one of the oldest and largest industrial

conglomerates in India. Established in 1868, it has interests in
engineering, consumer products, chemicals, financial services,
hotels, information technology and telecommunications. With over
80 companies, and with revenues close to 1.8% of the country’s
GDP, the Tata brand is very well respected across the

96
socioeconomic classes. Most importantly, it manufactures a large
variety of goods that are highly visible to low-income households,
like consumer goods, trucks and automobiles that bear the Tata
logo. Having been around for over a century, the name Tata
introduces immediate credibility in its micro insurance operations.
Agents selling micro insurance products are able to assure potential
clients that such a large conglomerate would have little interest in
stealing their miniscule (in relative terms) premiums.

AIG is the one of the world’s largest insurers. Aside from its
massive pool of in-house technical capacity, it has experience
working on micro insurance in Uganda.7 Although Tata is the
largest shareholder in Tata-AIG; AIG manages the company with
strategic guidance from AIG’s Hong Kong office. Tata-AIG was
among the few private sector insurance players to have a well-
known, reputable local brand, but it did not have a strategic
banking alliance with domestic banks or branch presence in
smaller towns that could enable it to promote micro insurance
sales. As a result, its micro insurance strategy had to be developed
around other partner organizations to enable the insurer to
penetrate rural areas. Rural India comprises of over 650 000
villages with over half of them having a population of less than
500. Even the state relies on NGOs to provide services to remote
and poorly connected locations. For Tata-AIG’s rural programme,
it was evident that the main partners would need to be NGOs.
Fortunately, Tata has the reputation of having contributed to
community development over the years. Substantial parts of the

97
group’s profits go into a trust and several social organizations
across the country receive grants and assistance from these trusts.
The link with Tata helped to create a climate in which many NGOs
were favorably disposed towards Tata-AIG.

Although AIG was forced to find a local partner to get a license to

do business in India, the choice of
Tata, with its excellent reputation in the development community,
made it an invaluable partnership.
This was especially significant in India where many multinational
corporations have faced significant difficulties in entering the India
market.

Tata-AIG embraced micro insurance as an opportunity, rather than

purely as a cost of doing business in India. Ian Watts, the CEO,
envisioned a need for a separate rural and social strategy and
created a separate department, the de facto micro insurance
division. The importance of micro insurance is reflected in the
organizational chart. The CEO had the foresight to recognize that
micro insurance was not simply a matter of selling existing policies
cheaply, but required new products and distribution mechanisms.
Crucially the CEO approved of the distribution of resources
towards micro insurance and the hiring of a specialized micro
insurance team. He gave it space to think creatively about how the
sustainable promotion and servicing of micro insurance products

98
might work. The CEO has been supportive of the micro insurance
programme for a variety of reasons. Most obviously, the insurer is
compelled to meet the rural and social sector obligations. That said
many insurers have simply seen the obligations as a cost of doing
business in India. They have responded to the obligations by
essentially selling only the required quantity of policies, and there
are reports that those have been poorly serviced. Tata-AIG could
have responded in this way, but instead saw micro insurance as a
marketing opportunity. Although micro insurance would not make
much profit (if any) initially, it helps get Tata-AIG’s brand name
out into the market place. With India’s high growth rate, it is
possible that today’s micro insurance policyholder will be
tomorrow’s high value client. In particular, research by the
National Council of Applied Economic Research has predicted
rising levels of overall wealth in both the rural and urban areas of
India, The IRDA is very concerned with the promotion of micro
insurance. By engaging so positively with micro insurance, Tata-
AIG was able to strengthen its relationship with the regulator. Its
micro insurance programme has generated considerable publicity
for Tata-AIG because it is innovative. Much of the media in India
is hostile or at least suspicious of the multinational corporations.
The micro insurance activities helped promote a positive image of
Tata-AIG.

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Core Values:
Integrity: We must always conduct our business with fairness,
honesty and transparency, so that we can at all times stand public
scrutiny. We will never undermine the heritage of trust that comes
with the Tata brand.
Entrepreneurship: we would encourage innovative ideas for
individual and organizational development. This thinking would be
fostered, encouraged and recognized for enhancing business. We
would take delight in stretching our goals and each of us would
have a sense of ownership and responsibility for all our business
dealings.
Agility: We will encourage an organizational culture and structures
that has capacity for change. Flexibility and adaptability will be
critical to our operations. We will aim for nimble, flexible and
customized responses at all times to all our stakeholders.
Excellence: All our activities must be driven by a passion for
excellence. We must strive, uncompromisingly, to achieve the
highest standards in our daily work and in the quality of the goods
and services we offer. We would endeavor to achieve 'best in class'
status in all our processes and results.

100
Unity: We must work cohesively with our colleagues, customers
and partners around the world, leveraging synergies and building
strong networks based on collaboration and mutual cooperation.
Mission:
To be a competitive value provider in international business for
Group companies and all our partners.

Vision:

Become a globally networked enterprise seizing opportunities

worldwide to generate USD 25 million annual profits by.

Resources:
Besides company funds, the micro insurance team has been able to
harness external funds. In September 2002, DfID put out the
bidding process for its Financial Deepening Challenge Fund, a
matching grant for which the private sector could bid based on
innovative ideas to each the poor. Tata-AIG bid for an assistance of
£89 500 ($168 620) and committed matching funds to the tune of
£104 000 ($195 520). The FDCF grant is being used for product
development, capacity building, and physical and communication
infrastructure like vans and the Internet portal.

Profit allocation and distribution: Tata-AIG is private company

and all profits generated by the company go to its owners
(shareholders). The exception to this is with endowment policies

101
where regulations require that 90% of profits must be returned to
policyholders.

Partnerships:
Tata-AIG has NGO partnerships with over 50 NGOs. Over 40% of
its 35 000 social sector policies were sold through the partner-agent
model. In this model, the NGO/MFI partner performs the sales and
servicing functions, primarily for its current microfinance clients.

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TATA-AIG organizational chart:

103
SWOT analysis of insurance industry:

STRENGTHS WEAKNESS

 Premium rates are  Companies are slow respond

increasing and so are to changing needs
commissions  Increasing trend of financial
 The variety of products weakness among the
are increasing companies
 Customers expects more  More competitors for
services from their agencies to compete with
brokers banks & internet players
OPPORTUNITIES THREATS

 Ability to cross sell  Increasing cost and need for

financial services barely insurance might hit a point
being tapped where a backlash will occur
 Technology is improving  Increasing expenses and
to that point that lower profit margins can hit
paperless transactions smaller agencies and
are available insurance companies
 Client’s increasing need
for insurance consultant
can open new ways to
service the client and
generate income

104
Insurance Principles:

Main principles of Insurance:

 Utmost good faith
 Indemnity
 Subrogation
 Contribution
 Insurable Interest
 Proximate Cause
Utmost Good Faith
As a client it is your duty to disclose all material facts to the risk
being covered.  A material fact is a fact which would influence
the mind of a prudent underwriter in deciding whether to accept a
risk for insurance and on what terms. The duty to disclose
operates at the time of inception, at renewal and at any point mid
term.

Indemnity
On the happening of an event insured against, the Insured will be
placed in the same monetary position that he/she occupied
immediately before the event taking place.  In the event of a
claim the insured must:

105
 Prove that the event occurred
 Prove that a monetary loss has occurred
Transfer any rights which he/she may have for recovery from
another source to the Insurer, if he/she has been fully
indemnified.

Subrogation:-
The right of an insurer which has paid a claim under a policy to
step into the shoes of the insured so as to exercise in his name all
rights he might have with regard to the recovery of the loss
which was the subject of the relevant claim paid under the policy
up to the amount of that paid claim.
The insurer’s subrogation rights may be qualified in the policy.In
the context of insurance subrogation is a feature of the principle
of indemnity and therefore only applies to contracts of indemnity
so that it does not apply to life assurance or personal accident
policies. It is intended to prevent an insured recovering more
than the indemnity he receives under his insurance (where that
represents the full amount of his loss) and enables his insurer to
recover or reduce its loss. 

Contribution:-

The right of an insurer to call on other insurers similarly, but not

106
necessarily equally, liable to the same insured to share the loss of
an indemnity payment i.e. a travel policy may have overlapping
cover with the contents section of a household policy.  The
principle of contribution allows the insured to make a claim
against one insurer who then has the right to call on any other
insurers liable for the loss to share the claim payment.

Insurable Interest:-
If an insured wishes to enforce a contract of insurance before the
Courts he must have an insurable interest in the subject matter of
the insurance, which is to say that he stands to benefit from its
preservation and will suffer from its loss. 
In non-marine insurances, the insured must have insurable
interest when the policy is taken out and also at the date of loss
giving rise to a claim under the policy.
Proximate Cause:-
An insurer will only be liable to pay a claim under an insurance
contract if the loss that gives rise to the claim was proximately
caused by an insured peril. This means that the loss must be
directly attributed to an insured peril without any break in the
chain of causation.

107
NAME OF MAJOR INSURANCE COMPANY-

NAME OF INSURANCE LOGOS NATURE OF

COMPANIES HOLDINGS

Life insurance corporation Public

TATA AIG insurance Private

ICICI Prudentiel Private

Max Newyork Life Private

Insurance

HDFC Standard Insurance Private

Reliance Life Insurance Private

Kotek Life Insurance Private

Aviva Life Insurance Private

SBI life Inserance Private

Bajaj allienz Private

108
Above all the company they are having various types of insurance
plans. All the plans are giving a good rate of return after a certain
period of time. But all the plans do not get success in the market.
Many of the companies they are having almost same type of plan
but sometimes it happens one of them is successful and another is
not. Always it does not depend on the plan of the insurance
sometimes it depends on the marketing strategies, promotion of the
product, reputation of the company, employees of the company etc

Market share of different private players

market share private player

TATA AIG Metlife Aviva Life ING Vyasa
3% 3% 2% 2%
Other
3%
Kotek Mahindra
4%
Max Newyork Life ICICI Prudential
6% 22%
HDFC Standard
8%

SBI Life
15%
Birla Sunlife
8%

Relience Life
10% Bajaj Allianz
13%

If we see market share of different private players in the financial

year 2009 then from the above chart we can understand ICICI
Prudential is holding the maximum market share i.e. 21.6%. After
that SBI Life and Bajaj Allianz is holding 14.8% and 13.2%

109
respectively. Reliance Life Birla Sun life and HDFC Standard they
are also holding a good market share all over the India. Tata AIG is
holding 3.3% of market share all over the India
GROWTH OF PRIVATE PLAYER

400

350

300

250

200

150 Series 1
Series 2
100 Series 3

50

0
nz sa ce I G d l e e c k e
ll ie vya lien SB AI dar ntie nlif aLif ote yor Lif
k t
A ng Re TA tan ude Su viv w Ne
jaj i TA C S I Pr irla A Ne
Ba F C B ax
HD ICI M

If we see the growth rate of private players in Indian economy then

it will be seen that fastest growing insurance companies are
Reliance Life and Birla Sun Life, growing rate is 335% and152%
respectively. Next fastest growing companies are SBI Life, Met
Life, Kotak Old, ICICI Prudential, Bajaj Allianz and TATA AIG.
110
Their growing rate is 138%, 125%, 121%, 116%,105%, 100%
respectively. Less growing companies are HDFC Standard, ING
Vyaya, Aviva and Max New York Life respectively

DISTRIBUTION CHANNELS OF TATA AIG

The winds of liberalization initiated vast changes in the

functioning of the industry today. Increasing number of
multinational partnership with private insurers have paved the way
for a radical shift in insurance selling- through a number of new
distribution channels besides bringing about more awareness on the
need for insurance and also stressing on the important role
technology can play.

In the developed markets, many insurers have a

preferred mode of distribution. In India, many players are hedging
their bets because the need for scale outweighs considerations of
focus and because non-agency distribution, which is presently
operational for the last two years, forms a basis for study.

Tata AIG has a corporate agency channel, which handles its

corporate agents and has tie-ups with 38 corporate houses. Insurers
want to lower distribution costs by finding more efficient channels.
The new private players are developing multiple channel models;
many insurers use or plan to use several banks as distributors.
Because most banks have strong regional bias, in this regards Tata
AIG has agreement with HSBC (corporate agency distribution)

111
through that it is doing both life insurance and general insurance
business..Because most banks have a strong regional bias, Insurers
can use several banks without creating large overlap. Many larger
banks are sourcing products from several insurers acting
as manufacturers.

An important distribution challenge facing insurers is the need to

meet the rural and social sector legislative requirements stipulated
in terms of market opening. For Tata AIG, it takes rural insurance
as an opportunity and not an obligation. For achieving objective in
rural area it has also tie with NGOs (Bridge stone for Karnataka
and Kerala).In this project mainly focus is distribution channel of
Life Insurance of Tata AIG and little bit of distribution of General
Insurance of Tata AIG also. So as the whole topic of distribution
can be known for the both company of Tata AIG (Life and General
insurance). Gradually channels are incorporating day by day for the
growth of business

112
LIST OF PRODUCT OFFERED BY TATA AIG:-
The life insurance plan are generally divided in to two type
Traditional Plans and Unit linked insurance plan.
Traditional plans are basically insurance plus
savings whereas ULIPs are insurance plus investment. Furthur
they are classified in to pure protection, saving, investment, pension
and living benefits.The classifications are shown in the table
below-
Traditional Plan
Pure Savings Investmen Pension Living
Protection t Benefits
.
1.Maha _ 1.Health
life gold Easy Retire Protector
Riders
2. Rider

113
 unit Linked Insurance Plan (ULIP)
Pure Savings Investment Pension Benefits
Protection Living
1.Invest 1.Invest 1.Invest 1.Health
Assure Assure Assure Investor
- Gold Plus future
2.Invest 2.Invest
assure Assure
Flexi
PLANS OF TATA AIG LIFE INSURANCE:-

Maha life gold

This unique policy is an ideal planning vehicle to fund your
retirement. It provides a steady income and insurance coverage for
life. Premiums are payable only for the first 15 years, and can be
used to cover the future expenses of your children.

Key features include:

 A guaranteed annual coupon of 5% of the sum assured every
year for the rest of the insured’s term from the 10th policy
anniversary.
 Yearly cash dividends are available from the 6th policy
anniversary onwards (depending on Company performance).
 The entire sum assured is paid tax-free as per current Income
Tax Laws.
Tax Benefits, Riders and Age Eligibility

114
  The guaranteed 5% coupon and non-guaranteed cash
dividends are tax free as per current Income Tax Laws.
 Premiums paid under this plan are eligible for tax benefits
under Section 80C of the Income Tax Act, 1961. Any sum
received under this plan is exempt from tax under section
10(10D) of the Income Tax Act, 1961.
 Disability, Accident, Term and Critical Illness riders are
available for added protection at a nominal extra cost. (For
juveniles, only Payor Benefit Rider is available).
 Policy available for persons between 0 years and 60 years of
age.

Tata AIG Life ties up with Chennai Central Co-operative Bank

Limited
Mumbai, February 9, 2010: Tata AIG Life Insurance Company
Limited (Tata AIG Life) today announced its strategic tie-up with
Chennai Central Co-operative Bank Limited (CCCB), a part of the
Tamil Nadu State Apex Co-operative Bank
This tie up will be significant for both partners as it will facilitate Tata
AIG Life to penetrate deeper into the Tamil Nadu market through 64
branches of CCCB in Chennai.
Speaking on the occasion, Mr. M.Suresh, Managing Director, Tata
AIG Life Insurance Company Limited said, “We are extremely pleased
to partner with CCCB Limited in offering insurance solutions for its
customers. We believed that the banking channel has a key role in
spreading the concept of life insurance through their existing
distribution networks. Given CCCB’s strong presence in Chennai, we
are positive that the alliance will help us to cater to our present and

115
prospective customers in the region. It is Tata AIG Life’s constant
effort to maximize its reach and serve its customers better”.
Mr. S.Ponmani – Special Officer, Chennai Central Co-operative Bank
Limited added, “CCCB has entered into a strategic tie-up with Tata
AIG Life Insurance Company Limited to cater to the long-term savings
and protection needs of their customers. This is in line with the
principle objective of co-operative banks - inculcating a habit of
economy and savings.” Additionally he also shared that the focus of
CCCB would be more on offering suitable savings, protection &
children savings plans of Tata AIG Life to their salaried class of
customers, most of who rely on their monthly income for their living
and do not have any other financial support to come in handy in an
hour of crisis (NOTE: In a referral arrangement, the referral bank
cannot actually offer any product.).

Unit Linked Insurance Plan (ULIP):-

Provides for life insurance where the policy value at any time
varies according to the value of the underlying assets at the time.
ULIP is life insurance solution that provides for the benefits of
protection and flexibility in investment. The investment is denoted
as units and is represented by the value that it has attained called as
Net Asset Value (NAV).
ULIP came into play in the 1960s and is popular in many countries
in the world. As times progressed the plans were also successfully
mapped along with life insurance need to retirement planning. In
today's times, ULIP provides solutions for insurance planning,
financial needs, and many types of financial planning including
children’s marriage planning.

116
Unit Linked Insurance Plan is a financial product that offers you
life insurance as well as an investment like a mutual fund. Part of
the premium you pay goes towards the sum assured (amount you
get in a life insurance policy) and the balance will be invested in
whichever investments you desire - equity, fixed-return or a
mixture of bin India investments in ULIP are covered under
Section 80C of IT Act. However, the concept of having an
investment and insurance by the same instrument was challenged
by the market regulator SEBI which took up the matter to the
Supreme Court of India .The Indian government brought down
curtains on the two-month long tussle between the regulators by
ruling that Unit-linked Insurance Products (ULIP) will be governed
by the Insurance Regulatory and Development Authority (IRDA).

INDIAN INSURANCE INDUSTRY :-

India insurance is a flourishing industry, with several national and

international players competing and growing at rapid rates. Thanks
to reforms and the easing of policy regulations, the Indian
insurance sector been allowed to flourish, and as Indians become
more familiar with different insurance products, this growth can
only increase, with the period from 2010 - 2015 projected to be the
'Golden Age' for the Indian insurance industry.
India Insurance Policies at a Glance

117
Indian insurance companies offer a comprehensive range of
insurance plans, a range that is growing as the economy matures
and the wealth of the middle classes increases. The most common
types include: term life policies, endowment policies, joint life
policies, whole life policies, loan cover term assurance policies,
unit-linked insurance plans, group insurance policies, pension
plans, and annuities. General insurance plans are also available to
cover motor insurance, home insurance, travel insurance and health
insurance

118
DISTRIBUTION CHANNELS OF TATA AIG:-

The winds of liberalization initiated vast changes in the functioning

of the industry today. Increasing number of multinational
partnership with private insurers have paved the way for a radical
shift in insurance selling- through a number of new distribution
channels besides bringing about more awareness on the need for
insurance and also stressing on the important role technology can
play.
In the developed markets, many insurers have a
preferred mode of distribution. In India, many players are hedging
their bets because the need for scale outweighs considerations of
focus and because non-agency distribution, which is presently
operational for the last two years, forms a basis for study.

Tata AIG has a corporate agency channel, which handles its

corporate agents and has tie-ups with 38 corporate houses. Insurers
want to lower distribution costs by finding more efficient channels.
The new private players are developing multiple channel models
many insurers use or plan to use several banks as distributors.
Because most banks have strong regional bias, in this regards Tata
AIG has agreement with HSBC (corporate agency distribution)
through that it is doing both life insurance and general insurance
business. Because most banks have a strong regional bias, Insurers
can use several banks without creating large overlap. Many larger
banks are sourcing products from several insurers acting
as manufacturers.

An important distribution challenge facing insurers is the need to

meet the rural and social sector legislative requirements stipulated
in terms of market opening. For Tata AIG, it takes rural insurance

119
as an opportunity and not an obligation. For achieving objective in
rural area it has also tie with NGOs (Bridge stone for Karnataka
and Kerala).In this project mainly focus is distribution channel of
Life Insurance of Tata AIG and little bit of distribution of General
Insurance of Tata AIG also. So as the whole topic of distribution
can be known for the both company of Tata AIG (Life and General
insurance). Gradually channels are incorporating day by day for the
growth of business
Advisory Committee:-
IRDA has a Chairman and some permanent and some part time
members but the regulations are enacted under the guidance of a
statutory advisory committee. The advisory committee consists of
following individuals and ex-officio authorities:
Mr. C.S Rao is the second Chairman of IRDA after Mr. N
Rangachari as the first Chairman. Mr. K. K. Srinivasan is the Non
life Member of IRDA. There is provision for a panel of other
members and part time members. IRDA formed a high powered
Insurance Law Reforms Committee known as KPN Committee
with important insurance advisors like Mr. N. Govardhan and Dr K
C Miss lira as its members. There were also a few non-advisory
committee members like Mr. Liaqu. at Khan and Mr. T
Viswanathan etc. Full force and utility of various institutions like
Advisor}' Committee and self-regulatory organizations are not yet
realized as the regulator seems-to be m a long learning mode. Due
to over delegations, Individual incumbents decide the pace and
extent of utilization of prudential and statutory bodies. Research is
limited to opinion seeking through legacy channels. Market waits
for revision of insurance act and establishment meaningfully
functioning regulatory organs devoid of excess delegation and
subjective localization development agencies.

120
 Unlike other Indian administrative Regulatory Agencies IRDA is
perceived as a silent regulator with activities confined to its local
exist

Compensation Structure
Business Service Partner

Stepping towards a great earning

potential
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