Marketing of PLI/RPLI To sell the PLI/RPLI we should know about our products. You have studied the PLI/RPLI reading material, We shall do an activity on PLI/RPLI. The object of the activity is to reinforce our knowledge about PLI/RPLI. Each one should ask one question on above topic to class and get the answer from them.

HOW TO SELL THE PLI/RPLI Let us understand the features and benefits of PLI/RPLI through the quiz.

SWOT Knowledge about products makes easy to market the products. For more effective marketing we need to do “SWOT Analysis” S – STRENGTHS W – WEAKNESSES O- OPPORTUNITIES T- THREATS

The SWOT Framework SWOT Analysis Framework Environmental Scan / \ / \            Internal Analysis      External Analysis / \                  / \ Strengths Weaknesses      Opportunities   Threats SWOT Matrix

STRENGTHS Low rate of premium High rate of bonus More beneficial Sponsored by Central Government. Goodwill of the products Wide network in Rural Area New Technology

WEAKNESSES Lack of marketing skill Lack of product knowledge Lack of planning Lack of knowledge about competitors Lack of knowledge about insurance sector

WEAKNESSES . Limited customers. Barrier of maximum limit. Lack of awareness about the products. Poor after sale service.

OPPORTUNITIES Among top insurance markets- India is ranked 10th among 156 countries in the life insurance business with share of 2.3 percent during FY 12. Life Insurance Premium Market expanded at a CAGR OF 20.1 per cent from USD 11.5 billion in FY 03 to USD 59.9 billion in FY 12. Source from IRDA,McKinsey

OPPORTUNITIES The annual income growth rate in rural area expected to increase to 3.6 percent over 2010-30 from 2.8 per cent during 1990-2010. About 5 million people currently have microinsurance,while the entire market is expected to be in the range of 140-130 million. Increase in FDI limit to 49 percent from 26 percent as proposed in 2012,will further fuel investments. Source from IRDA,McKinsey

OPPORTUNITIES Growing interest in insurance among the people the insurance market size USD 72 billion FYE 12 to USD 139 billion in FYE 15. The total premium collected for life insurance in India was Rs 2.87 lakh crore during 2012-13 ( IRDA annual report 2012-13) Whereas Total premium collection in PLI was 4557. 29 crores and in RPLI was 1703.17 crores only during the same period Our total collection of premium of 6260.00 crore was only 2.18 % of total premium collection India during 2012-13 Source from IRDA,McKinsey

Low penetration of PLI and RPLI in respective customer segments Penetration in PLI (number of policies as % of total PSU employees) Target market size for PLI Total Number of Employees: 2.86 crore Source: India Stat, India Post MIS reports on customer category wise data Target market size and Penetration in RPLI (number of policies as % of rural population) Total Rural Population: ~80 crores Source: Provisional Census 2011, India Post MIS reports on RPLI state wise data

While RPLI has seen significant growth in the past few years, it covers <3% of India’s rural population Business growth in RPLI RPLI penetration in different states CAGR 21% Channel wise contribution to number of policies sold in FY 12 ( in %) * Others includes Anganwadi workers, mail guard, ex life advisors, direct agents, ex servicemen, retired teachers, ASPO’S, IM’S

THREATS Different types of attractive policies are not available. NO Salary deduction facility. Number of competitors are increasing.

Exercise-2

SIMPLE STEP FOR SUCCESS HOW TO TAP PLI/RPLI BUSINESS. PLANNING. Analyzing the Target.

PLANNING To understand the market demand for our products we need to understand “THREE Ps” P1=Population Pattern The customer who are buying and where they are located. P2= Purchasing Power Ability to purchase. This is based on income. P3=purchasing Pattern or buying behaviour. This is influenced by the life style , attitudes and sociological factors.

PLANNING Step 1: Prospecting :- Find the prospective customers, the customer who can buy and where they are located. List all Central and State government, aided institutions, banks, Railway, Telecom. Identify eligible customers in these institutions.

PLANNING Step 2: Qualifying Customer assesses whether PLI meets his needs salesman to show professionalism – Offer the product to meet the needs of customers Develop skill to discover customers true needs. Customer to evaluate our solution in depth Convince the decision maker to purchase

PLANNING Step 3: Overcoming Objections To handle objections the sales person has to have A positive approach, Ask the buyer to clarify the objection, Question the buyer in such a way that the buyer has an answer to his own objection, or turns the objection into the reason for buying….

PLANNING Step 4: Closing the sales There are hundreds of closing techniques, and tricks, but the most important thing to remember is that closing a sale is not a stand-alone event but just a step in a process or starting of a relationship with the organisation.

PLANNING Step 5: Repeat business Salesman has to focus on building a long-term, profitable business relationship . S/he has to take ownership and follow up with the customer. The Satisfied customers are more likely to buy new policies, They may be willing to act as referrals for new customers.

Analyzing Target Analyze the Target given properly For example if allotted target is 1 crore sum assured in PLI How to reach this Target? 1 crore divided by 12 months = 8,34,000 . To get 8,34,000 minimum of atleast 5 prospective customers are required every month. easily you can find prospective customers through your customer data base.

Postal Life Insurance Global Insurance for the year 2011 was USD 4,597 billion ( 6% increase over 2010) Indian Life Insurance industry mobilized a first year premium of Rs.2.87 lakh crore in 2012-13 . The market share of private players reduced from 31.3% to 28.6%. Market : Around 62.3% of the eligible clientele currently do not hold a PLI Policy but instead have a LIC/other vendors in market. Source : IMRB Survey

Competition scenario There were only 4 private players in 2001. Number has increased to 23 in 2012. Of the 23 private players, 21 are in joint venture with foreign partners. LIC is the only public sector company apart from India Post in the Life Insurance business. These are the two players have been in the business for the longest period of time. Source : IMRB Survey

Market Penetration (PLI) Customers : Central Govt- -26% Defense Services -29.7% CG PSUs -20.7% State Governments -32.5% SG PSUs -14.4% Local Bodies -14.2% Source : IMRB Survey

Market Penetration Non Customers: CG -66.5% DS -61.5% CGPSUs -68.6% SG -53.8% SGPSUs -71.3% Local bodies -76.9%

Profile of Major Players Source : IMRB Survey

Market Share PLI has a market share of 21% among the addressable in the market. LIC has a market share of 66% and All other private players together have a market share of 13%. Source : IMRB Survey

Type of policies Indiapost customer hold Source : IMRB Survey

1.Agent /GDS/India Post Employees Non known to them Three main reasons indicated for not buying a policy among non-PLI policy holders 1.Agent /GDS/India Post Employees Non known to them 2.Products not suited for them 3.PO is not located close to the residence/Office Source : IMRB Survey

Hope 20% of existing Customers and 27% non- Postal Life Insurance customers indicated willingness to consider Post Life insurance in the future. Among non-PLI policy holders key reason for willingness to buy PLI policy are safety of money and Association of India Post ( ie Central Govt ) Source : IMRB Survey

Planning and Analyzing Planning and Analyzing Targets play important key Role. Let us study the data collected from the Mysore Division as part of the project preparation by PA Induction trainees.

CATEGORY WISE BUSINESS PROCURED IN MYSORE DIVISION 2009-2010 Type of Policy No.of Proposals Total Sum Assured (lakhs) Premia Collected AEA 26 44.70 27459 CWLA 05 13.50 4543 EA 668 1189.00 629732 WLA 01 5.00 1475 YS 43 84.50 45119

CATEGORY WISE BUSINESS PROCURED IN MYSORE DIVISION 2010-2011 Type of Policy No. of Proposals Total Sum Assured (lakhs) Premia Collected AEA 24 50.50 31689 CWLA 03 11.00 2285 EA 856 1631.20 844965 WLA 2.50 668 YS 29 60.20 31207

Category wise business procured in mysore division 2011-2012 Type of Policy No. of Policies Total Sum Assured (lakhs) Premia Collected AEA 31 54.80 34269 CWLA 03 11.00 3345 EA 1526 2586.40 1382256 WLA 02 2.30 745 YS 41 105.50 53688

THE CONSOLIDATED STUDY OF CATEGORY WISE REPORT In all the three years under study, Mysore Division has procured maximum policies under Endowment Assurance only Whole Life Assurance even though is more beneficial in terms of high bonus & low premium, the business procured under this catogory was very less. In Yugal Suraksha, risk of both lives covered to the extent of sum assured with accrued bonus with a single premium. Though the scheme has additional features, the business procured was comparatively very low. Not even single children policy was procured for the last three financial years.

Analysis If the division would have analysed their existing policy composition, they would have tried to market other type policies to the existing customers itself Discuss with the available data regarding other options for better marketing strategy of PLI/RPLI

Consolidated report on PLI business procured from various departments 2009-10 2010-11 2011-12 Category No. of Policies Sum Assured (Lacs) Banks 14 24.50 41.00 10 23.00 CC 133 326.30 105 209.80 162 229.10 CS 301 542.30 421 970.50 950 1899.10 P 226 284.60 311 373.60 380 403.30 R 08 22.50 21 52.80 09 22.00 T 13.00 21.50 --- UC 41.50 17 51.00 89 176.50 US 39 82.00 35.20 03 07.00 CC: Central, CS: State, P: Postal, R: Railway, T: Telecom, UC: Under Central, US: Under State

ANALYSIS Mysore Division has more opportunities for procuring the business through various departments. The business was concentrated more on Postal and State Government Employees only. As per the data the number of policies procured from Banks, Railways, Telecom is comparatively very low.

A COMPREHENSIVE MARKETING STRATEGY FOR PLI/RPLI

Location based marketing initiatives for PLI 1 Marketing in townships Central and state PSUs have setup townships with necessary facilities such as housing, schools, shopping complex, banks, hospital, playgrounds, club houses etc. Residents of such large townships spend most of their time within township and have limited interaction with outside areas PLI can carry out focused marketing campaigns in such townships to effectively reach out to large number of government employees 2 Marketing at training centers Training centers of PSUs, nationalized banks, police, railway, post and armed forces provide induction training to new employees as well as refresher courses to existing employees on a regular basis PLI can conduct awareness and publicity campaigns at these institutes especially to target new joining employees 3 Marketing at office clusters Metro and urban areas have central business districts with clusters of Government and PSU offices. Examples include Churchgate in Mumbai, Dalhousie in Kolkata, Chanakyapuri in Delhi etc. Marketing Executive should conduct marketing activities in such areas to improve brand awareness and visibility to government employees working in such office clusters

Marketing initiatives for RPLI 1 Marketing in villages In rural areas, people spend their time at locations such as tea shop, primary health centers, gram panchayat, village choupals and post offices RPLI should tailor its marketing initiatives (e.g. pamphlet distribution at tea shops, awareness campaign at village choupals) to target people residing in rural areas 2 Marketing at yatras and Melas Yatras and Melas in rural India provide a great opportunity for marketing RPLI as people congregate in large numbers from nearby as well as far flung villages Large scale marketing campaigns at these Yatras and Melas would provide with better visibility and increase brand awareness of RPLI among rural population 3 Marketing through industry initiatives Corporates (ITC e-choupal, Tata Group’ Kisaan Kendras, DCM Sriram’s Hariyali Bazaar) have established a strong presence in villages by providing products and services such as agricultural advisory, retail stores, financial services and public welfare Leveraging these institutions would allow RPLI to leverage trust and infrastructure built by these institutions in rural areas 4 Marketing through Co-operative societies Local level co-operative societies fulfill the financial services requirements of farmers. Primary agricultural credit societies are important channel in providing short term and medium term credit to farmers. Apart from PACS, co- operative societies have been formed to fulfill farmer needs such as buying fertilizers, selling agri/dairy outputs etc. RPLI can target rural populace in particular farmer community by marketing through co-operative societies Yatras, choupals, NeGP 5 Government initiatives such as NeGP and MGNREGA have been launched to provide social infrastructure and employment in rural areas These are typically managed and monitored by the educated people in the village. RPLI should target these initiatives to market RPLI products Marketing through government development programs 6 Marketing through NGOs, SHGs and MFIs NGOs, SHGs and MFIs have strong connection with communities staying in rural areas. This can be used as nodal agencies to issue group policies to community members

“ENJOY THE SELLING AND HIT THE TARGET” Marketing Planning and adopting the different Marketing Strategies make success in reaching the new height in selling the products. “ENJOY THE SELLING AND HIT THE TARGET”

Incentive for PLI Development Officer: Sl Amount of sum assured Departmental Officials viz ASPOs/IPs/PAs/SAs/SPM/Postman/Mailguard/Gp D/GDS BPM/GDS DA/GDS MC etc Sl Amount of sum assured Incentive payable i. Up to Rs 9 Crores of sum assured. Nil. ii. Above Rs 9 crores and up to Rs 11 crores of sum assured. Rs 25/- per Rs ten thousands of sum assured. iii. Above Rs 11 crores of sum assured. Rs 20/- per Rs ten thousands of sum assured. Sl Amount of sum assured Incentive payable i. Up to Rs 2 crores of sum assured. Rs 25/- per Rs ten thousands of sum assured. ii. Above Rs 2 crores of sum assured. Rs 20/- per Rs ten thousands of sum assured.

Incentive for RPLI ASP, IP/SDI, Postmen/PA/SA/Mail Guard, F.O (retirees), D.O. (PLI) , GDS etc and other RPLI Sales Force : 10% of First year premium towards the RPLI policies procured by them with effect from 01.10.2009 10% of total procurement incentive paid to GDS to SDI/ASP - in first year only. 2.5% of renewal premium income in respect of those policies procured on or after 01.10.2009 . 1% of renewal incentive payable to GDS employees towards the policies procured before 01.10.2009. Additional Commission of 1.5% of premium shall be paid to the Group Leaders /entrustees for collecting premium towards 1000 or more such RPLI policies procured on or after 01.10.2009

Activity Based on the above information and on the assumption that the policy were procured for 30 year old, work out average incentive earned by each of these officials

Benefit to the official Incentive earned by few category of officials for the financial year 2011-12 is as under Sl Name Business procured in crores Circle Incentive earned 01 R Venkadesan (D.O.) 132.75 Tamilnadu 24,85,000/- 02 C Krishnamurthy (D.O.) 57.61 --do-- 9,20,000/- 03 V Lakshmi Narain (D.O.) 49.99 8,29,800/- 04 Raj Kumar Thakur (GDS) 15.41 Jharkhand 3,18,200/- 05 G Satyanarayan Reddy (GDS) 4.73 Andhra Pradesh 1,04,600/- 06 Shambhu Kumar Gupta (GDS) 4.01 90,200/-

TOP PERFORMERS IN RPLI 2011-12 Category Name Business procured (crores) Circle Departmental Officials Santhosh Kumar Jha 13.70 MH S B Bhandari 13.24 S S Joshi 10.24 GDS Bipin Bihari Patnaik 50.5 Orissa Golak ch Jena 31.3 Sangam Keshari Mahapatra 27.40

Revenue to the Department from PLI FRR is the fixed rate of return PLI dte pays to the dept for PLI realted activities. This is component of the revenue of the department. YEAR FRR (Rs. in Cr.) 2007-08 (Actuals) 200.46 2008-09 (Actuals) 194.96 2009-10 (Actuals) 297.83 2010-11 (Actuals) 381.60 2011-12 (Actuals) 389.62 2012-13 (Actuals) 598.22 2013-14 (SY-I) 532.99 2014-15 (Estimates) 571.69 2015-16 (Projections) 697.66 2016-17 (Projections) 767.93 2017-18 (Projections) 844.17

Group activity Make team of six members and list out marketing strategy for procuring PLI or RPLI Another team to make a shopping list for the items on which they are going to spend the incentive earned from PLI if they secure the first position for PLI marketing in the country Amount of premia cllection Incentive earned Shopping list

Thank You