Development of Business Model in Insurance

Understanding and Development of Out location Business Model

Synopsis:

Previously insurance companies in India largely used to focus on the urban segment, largely ignoring rural areas, except where it was mandated by regulators. Now, however, they are warming to the potential of business in the villages. Today, financial institutions and insurance companies have begun to recognize India's villages as a genuine market segment worthy of its own product, pricing, branding and distribution strategy—and not merely a market they service because of government mandates.

This project aims at evaluating and understanding the business model pertaining to the out locations i.e. the rural areas. The main criterion for selection of this particular topic as my project was the tremendous potential available across the rural areas. Another important criterion for picking up this project was the fact that we have to design products exclusively for the rural market, keeping in mind that sector's need for low premiums and streamlined collections.

Ideally this project covers the following parameters

• Outline of the current insurance scenario in India.

• Understanding the need and scope of insurance in rural areas.

• Identifying the different tactics used by the competitors to gain market share.

• Identifying the issues faced by agents, imp's dealers related to out locations.

• Creating a plan such that there is an increase in the business coming from out locations while at the same time the existing business is carried forward smoothly without any obstructions.

• Portraying the future of Insurance Business in India

Objective:

• The main purpose for doing this project is to understand and identify ways so as to develop the insurance business being generated in out locations.

• At the same time this project also aims at developing and streamlining the process involved in carrying out the business in out locations.

• Further this project helps us in understanding the rural business module which in turn would help us in providing products and services which are better suited for rural areas.

• This project by far and large would help the company in achieving all the three parameters i.e. reducing costs by decreasing wastage and turnaround time, increasing premium by expanding our reach into the out locations and reducing claims by creating awareness among customers.

• This project on the whole seeks to achieve improvement in the business being generated in the out locations and thereby ensuring that the company remains to be the most preferred insurer in the out locations.

Scope:

• This project covers all the lines of motor i.e. 2wheeler, 4 wheeler and Commercial Vehicle segment through both dealers and direct customers.

• It also covers Health & Travel segment.

• This project is not limited to any Geographic area and depending on its success, can be applied across all the out locations in India.

• This project involves our IMD's, agents and also external institutions like dealers, showrooms etc.

Methodology:

• The information upon which this project is based has been derived from a wide range of primary and secondary resources. Most of this information originates from a series of interviews held with agents, dealers, IMD's etc regarding their line of business, market share, competitors, issues, problems being faced etc. This project is mainly quantitative in nature.

• Apart from the above research, previously published data in journals, magazines, past experience with agents, IMD's will also be taken into consideration while approaching the dealers, IMD's etc.

• Also the company annual records can also be taken into consideration to understand the percentage of business coming from out locations.

Limitations:

• The main limitations that might