STRATEGIC MANAGEMENT

GROUP ASSIGNMENT

INDUSTRY NAME:-INSURANCE

COMPANY NAME:- MAX LIFE INSURANCE

GROUP MEMBERS NAME:-

Reema Chavan : 65

Nehal Chikane : 66

Hiral Upadhyay : 58

Pooja Mandhare :83

 Table of content

Introduction to Insurance

Industry Analysis

PESTLE Analysis

Value Chain Analysis

Company profile –MAX Life Insurance

SWOT analysis of MAX Life Insurance

Competitors Analysis

Competition Analysis

Porters Five Force Model

Strategy formulation

SPACE matrix

IE Matrix

Grand Strategy matrix

Ansoff matrix

Strategy Formulation
 Introduction to Insurance

Insurance began as a way of reducing the risk of traders, as early as 5000 BC in China and
4500 BC in Babylon. Life insurance dates only to ancient Rome , “burial clubs” covered the
cost of members funeral expenses and helped survivors monetarily. Modern life insurance
started in late17th century England, originally as insurance for traders merchants, ship owners
and underwriters met to discuss deals at Lloyd’s Coffee House, predecessor to the famous
Lloyd’s of London. The Indian insurance industry started in the early 19th century. Oriental
Life Insurance Company, the first insurance company in India was incorporated in 1818 by
Europeans in Kolkata to exclusively serve their community. The company charged premium
to Indians unfairly high categorizing their age unevenly. Indian policyholders of similar
profile compelled to pay reasonably high premium than their European counterparts. Due to
this colonial disparity, the absence of an Indian insurance company was being realized by
Indian policy seekers. Finally, in 1870, Bombay Mutual Life Assurance Society, the first
Indian insurance company was established to cover Indian lives. And, in 1850, Triton
Insurance Company Ltd was formed to provide general insurance solutions. Slowly but
steadily, the Indian insurance sector fledged into a huge sector contributing remarkable
contribution to the Indian economy. In early years of the 20th century new companies started
mushrooming in India. In order to regulate these insurance companies, Life Insurance
Companies Act and Provident Fund Act were passed in 1912. Evolution of insurance industry
has undergone three phases, Pre-Nationalization, Nationalization and Privatization.
Nationalization of insurance industry was happened after the passing of Life Insurance
Corporation Act – 1956. There were over 2,000 Indian and European insurance companies.
Public sector insurance companies, even after the nationalization, were loss making ventures;
and the need of privatization were being felt as an effective solution for distribution issues
and implementation of marketing strategies. Since the Indian insurance market was opened
for private players in 2000, the industry almost changed overnight. In order to tap the market
potentially, a competition among the companies started that forced providers to do campaign
and organize different insurance awareness programmes. As a result, policyholders are being
offered varieties of insurance products at competitive premium rates. The privatization of
Indian insurance sector has helped to increase efficiency of insurance business. Many new
private companies came up with attractive products. Some of the big names in the Indian
private insurance players are ICICI Prudential, HDFC Life, Bajaj Allianz Life Insurance,
Tata AIG life, max life insurance, Kotak Life Insurance, Reliance Life, Aviva Life, Apollo
Munich, Religare etc. Although, the Indian insurance sector is still under penetrated, the
scenario has totally changed after the private players entered the sector. Now, as the
Insurance (Amendment) Bill that approves FDI (foreign direct investment) limit in the Indian
insurance sector up to 49 per cent, got Parliamentary nod, a huge capital inflows is expected
in the sector. In the year 1997 Insurance regulatory and development authority IRDA) was
setup to regulate all insurance company. In 2002 banks were allowed to sell the insurance.
 Indian Insurance Industry Analysis

Over the years, share of private sector in life insurance segment has grown from around 2 per
cent in FY03 to 29.69 per cent in FY18*

Post liberalisation, the insurance industry in India has recorded significant growth. The Indian
insurance industry is expected to grow to US$ 280 billion by FY2020, owing to the solid
economic growth and higher personal disposable incomes in the country. Overall insurance
penetration in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001. Gross premium
in Indian insurance industry increased from Rs 3.2 trillion (US$ 49 billion) in FY12 to Rs 4.6
trillion (US$72 billion) in FY18 (up to December 2017).

The domestic life insurance industry registered 10.99 per cent y-o-y growth for new business
premium in 2017-18, generating a revenue of Rs 1.94 trillion (US$ 30.1 billion). In Q1 FY19,
premium from new life insurance business increased 10.78 per cent year-on-year to Rs
367.30 billion (US$ 5.48 billion).

Gross direct premiums of non-life insurers in India reached Rs 1.51 trillion (US$ 23.38
billion) in FY18. Over FY12-18, non-life insurance premiums (in Rs) increased at a CAGR
of 16.65 per cent. In April-May 2018, the gross direct premiums of non-life insurers reached
Rs 24,397.09 crore (US$ 3.79 billion), showing a year-on-year growth rate of 11.96 per cent.

There are 24 life insurance and 33 non-life insurance companies in the Indian market who
compete on price and services to attract customers. There are two reinsurance companies.
The industry has been spurred by product innovation, vibrant distribution channels, coupled
with targeted publicity and promotional campaigns by the insurers. Private sector companies
hold 48.01 per cent market share in the general insurance segment and 28.93 per cent market
share in the life insurance segment.

Government has approved the ordinance to increase Foreign Direct Investment (FDI) limit in
Insurance sector from 26 per cent to 49 per cent which would further help attract investments
in the sector.

In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$
903 million. Enrolments under the PradhanMantriSurakshaBimaYojana (PMSBY) reached
130.41 million in 2017-18. National National Health Protection Scheme was announced
under Budget 2018-19 as a part of Ayushman Bharat. The scheme will provide insurance
cover of up to Rs 500,000 (US$ 7,723) to more than 100 million vulnerable families in India.

Going forward, increasing life expectancy, favourable savings and greater employment in the
private sector is expected to fuel demand for pension plans. Likewise, strong growth in the
automotive industry over the next decade would be a key driver for the motor insurance
market.
GROWTH DERIVE FROM INSURANCE IN INDIA

• Overall growth in the financial industry; increasing working population with higher
disposable income.
GROWTH IN
FINANCIAL • Increasing awareness about financial products including insurance
INDUSTRY

Increase in potential insurance customers – individuals and companies across different

industries, small and
Innovation and
• medium enterprises, multinational companies
Efficiency • Expansion due of insurance universe due to professionalization of companies

• Increasing number of insurance providers with various sophisticated products at competitive

prices.
Competition • Regulations which are conducive for growth of the industry.

• Increase in micro insurance due to increased focus of government on financial inclusion.

• Increase in demand of motor insurance as a by-product of rapidly expanding auto industry.
Growth in specific • Increase in health insurance due to focus on improvement in healthcare.
segments
Making of an insurance giant: Government plans to merge three of its unlisted
insurance firms

The government plans to merge three of its unlisted general insurance companies to create a
behemoth that will control a third of the non-life insurance market and be listed on stock
exchanges to fetch better valuation.

National Insurance Company, United India Insurance Company and Oriental India Insurance
Company will be merged, an entity that could be a dominant player in the Rs 1.5-lakh-crorea-
year motor, health and industrial insurance industry, which is seeing intense competition from
private players.

The listed state-run New India Assurance is the largest with a market share of 15%.
“The merger will lead to higher retention capacity,” said G Srinivasan, chairman, New India
Assurance. “Subsequent listing and raising of capital will make them stronger. It will reduce
the competitive intensity and will lead to better pricing and better underwriting profitability.”

Increased competition has eroded solvency margins of general insurers. Every insurer has to
maintain an asset value.at 150% of liabilities. But, Oriental and United have reported
solvency ratio of 1.11 and 1.15, respectively, falling below the regulatory mandate.

In 2016-17, the Insurance Regulatory and Development Authority of India (Irda) asked the
three insurers to amortise motor third-party liability for three years from FY17 and to
consider 30% of fair value change account to appear solvent. Oriental India and United India
had reported a loss last fiscal.
 PESTLE ANALYSIS

 POLITICAL FACTORS AFFECTING LIFE INSURANCEINDUSTRY:

Within India political ambitions and rise of communalism, fissiparous tendencies are on the
rise and may well continue for quite some time to time. Therefore, it expected that the
insurance companies might consider offering political risk coverage also. The only area
where Indian insurers consider giving cover is with regard to customs duty change under
certain conditions. Certain type of political risk at the international level has serious
implications for exporters. The term ‘political risk’ has a wider connotation than commonly
understood or assumed. It covers events arising not just from politics, but risks in the course
of international transactions. In this connection, it may be noted that export credit insurance
has evolved out of uncertainties relating to international trade, particularly due to problems
arising out of foreign legal jurisdiction, political changes and currency exchange difficulties
faced by many developing countries.

The funds of policyholders are prohibited from being directly / indirectly invested outside
India as per section 27 – C.
Manner and conditions of investment
Subject to the above provisions contained in Section 27 -/ 27- A / 27 B, the IRDA may,
 In the interest of the policyholders, specify the time, manner and other conditions of
investment by insurer.
 Give specific directions applicable to all insurers for the time, manner and other
conditions subject to which the policyholder’s funds should be invested in the
infrastructure and social sectors.
 After taking into account the nature of business and to protect the interest of the
policyholders, issue directions to insurers relating to time, manner and other
conditions of the investments provided the latter are given a reasonable opportunity of
being heard.
Insurance business in rural / social sector: -
All insurers are required to undertake such percentage of their insurance business, including
insurance for crops, in the rural social sector as specified by the IRDA. They should
discharge their obligations to providing life insurance policies to persons residing in the rural
sector, workers in the unorganized sector or to economically vulnerable classes of society and
other categories of persons as specified by the IRDA.
Capital requirement: -
The paid up equity of an insurance company applying for registration to carryon life
insurance business should be Rs 100 Crores.
Renewal of registration: -
An insurer, who has been granted a certificate of registration, should have the registration
renewed annually with each year ending on March 31 after the commencement of the IRDA
Act. The application for renewal should be accompanied by a fee as determined by IRDA
regulations, not exceeding one forth of one percent of the total gross premium income in
India in the preceding year or Rs 5 Crores or whichever is less, but not less than Rs 50000 for
each class of business as per Section3-A.
Requirements as to Capital: -
The minimum paid up equity capital, excluding required deposits with the RBIand any
preliminary expenses in the formation of the country, requirement of an insurer would be Rs

100 crore to carry on life insurance business and Rs 200 crore to exclusively do reinsurance
business as per Section 6.
Investment of funds outside India: -
Insurers outside India as per Section 27-C cannot invest the funds of policyholders
Insurance business in Rural Sector: -
After the commencement of the IRDA Act, 1999, every insurer would have to undertake such
percentage of life insurance business in the rural sector as may be specified by the IRDA in
this behalf. It is mandatory for the new companies to meet the obligations relating to the rural
and unorganized sector as per section 32-B.
Power to investigation or inspection: -
The IRDA may, at any time, order in writing a person as investigating authority to investigate
the affairs of any insurer and report to it.Government has power to change the tax policy
against life insurance industry.

 Health insurance rebate,

 Pension saving rebate,
 Mede claim premium rebate,
 P.P.F., E.P.F., NSC all are tax exempted saving,
 All life insurance policy are tax exempted saving ,
 Agricultural income is tax exempted,
 House rent allowances,
 Post office saving,
 Expenses on dreaded diseases are tax exempted.
 Recently there is issue to increase FDI level from 26% to 49%.
Role of the government: -
As insurance is an important service sector, hence it is highly regulated by government. Since
1956 insurance sector was highly regulated by government of India. On March 16, 1999, the
Indian cabinet approved on Insurance Regulatory Authority Bills that was designed to
liberalize the insurance sector.
Strategic Analysis of Indian Life Insurance Industry
64Two governments in India have fallen over the issue of liberalization of the insurance
sector (which was nationalized in 1971). But the government of A.B.Vajpayee as gone ahead
to announce the liberalization of this sector announcement was made in November 1998.
Government’s objectives for liberalization of insurance: -
The main objective of opening of insurance sector to the private insurers is asunder:1. To
provide better coverage to the Indian citizens.2.To augment the flow of long-term financial
resources to finance the growth of infrastructure. Important government guidelines for private
players for entering into Indian life insurance market:1. Private companies with a minimum
paid-up capital of Rs. 1bn should be allowed to enter the industry.2. No company should deal
in both life and general insurance through a singleentity.3. Foreign companies may be
allowed to enter the industry in collaboration with the domestic companies.4. Postal life
insurance should be allowed to operate in the rural market.5. Only one state level life
insurance company should be allowed to operate in each state.6. Foreign investors can invest
up to 26% of the equity of their joint venture with Indian firms. Government will prevail on
grounds that the Rs. 4.5 billion India needs for infrastructure development in the five years
from 1997-98, cannot materialize if the insurance sector is not opened up.

BODIES THATREGULATE THESECTOR:

For better regulation purpose of the insurance sector the government has established
following bodies;1. IRA: Insurance Regulatory Authority.2. IRDA: Insurance Regulatory and
Development Authority.3. TAC: Tariff Advisory Committee.1.
IRA: Insurance Regulatory Authority:
The IRA, under the chairmanship of Rang chary, was set-up in January 1996. TheIRA Bill
has to be passed by parliament to make the IRA a statutory body. Comprehensive legislation
aimed at reviewing the insurance Act of 1938 and repealing the life insurance corporation Act
of 1956 have to be passed. The IRA is also preparing an internal rating system to screen all
applications, as entry will be in phases. The joint venture status of life insurance
companies(with majority holding of the domestic partner) is likely to be approved by
the parliament. Consensus also seems to be emerging on the minimum of Rs. 1 bicipital
stipulations for new insurance companies. The IRA has stipulated a minimum rural presence
for all companies. The exhaustive guidelines have been issued for the appointment of
intermediaries(brokers, agents, surveyors and actuaries).
Feature of IRA:
1. The Bill allowed for up to 26% foreign equity participation in the insurancesector.2. The
current India monopoly companies were required to bring down their equity holding to
26% within a period of 10 years.

Government pronouncement:
1. IRA will be sole Authority, which will be responsible for awarding of, licenses. little or no
government or political interference in licensing process.2. No restriction on the number of
licenses.3. No composite license for life insurance business.4. Licensing to be only on
national basis (no city by city approach)5. IRA allowed for up to 26% foreign equity
participation in the life insurancesector.6. The current Indian monopolies companies are
required to bring down their equity holding to 26% within a period of 10 years.

IRA proposals:
1. New player should start their business within 15-18 months.
2. Trafficking of licenses not to be permitted.
3.IRA to seek business plan with 5-year protection for all applicants.
4.A system of direct brokers to be introduced.
5. IRA to vet top management appointments.

IRDA: Insurance Regulatory and Development Authority:-

The Insurance Regulatory and Development Authority, constituted under the IRDA Act,
1999, provide for the establishment of an authority to protect the interest policyholders, to
regulate, promote and ensure orderly growth of the life insurance industry.
Business Requirement:-
A company will not be issued a license unless the IRDA is satisfied with the sound financial
condition, the general character of management, the volume of business, the capital
structure, earning prospects for the insurers and that the interests of the general public will be
served if registration is granted to the insurer.
Foreign insurance companies have been allowed to have a maximum 26% shareholding. No
life insurance company can be registered under the Act unless they have a paid up capital of
Rs. 100 crores. Every life insurer shall deposit with the reserve bank of India one percent of
the total gross premium written in India in any financial year, not exceeding Rs. 10 crores.
This amount would not be susceptible to any assignment or charge nor would it be available
for the discharge of any liabilities other than liabilities arising out of policies issued, so long
as any such liabilities remain undercharged.

Investment of Assets:-
Every insurer is required to invest, and keep invested, assets equivalent to not less than the
net liabilities as follows: (a) 25 % in government securities, (b) a least25% of the said sum in
government securities or other approved securities and (c) the balance in any approved
investment rated as “very strong” or more by reputed rating agencies, which include various
debt instruments on which dividend on its ordinary shared for the five years immediately
preceding or for at least five out of the six or seven years immediately preceding have been
paid and which have priority in payment over ordinary shares of the company in winding up.
The IRDA may in the interest of the policyholder’s directions relation the time, manner and
other conditions and investments of assets to be held by an insurer. The IRDA may also
direct the insurer to realize the investment, if it sees the investments to be unsuitable or
undesirable. The Act prohibits an insurer from directly or indirectly investing policyholder
funds outside India. Further, every insurer has to always maintain an excess of the value of
his assets over the amount of his liabilities of not less than Rs. 50 crores in the case of an
insurer carrying of life insurance business. If at any time an insurer does not maintain the
required solvency margin, he is required to submit a financial plan, as per directions issued
by the IRDA, indicating a plan of action to correct the deficiency within three months.
In order to ensure that the company does not risk the money of the policyholder’s, the Act
provides that an insurer who does not comply with theaforesaid provisions may be deemed to
be insolvent and may be would up by thecourt.Insurers are required to get an actuary to
investigate the financial conditions of the life insurance business including a valuation of
liabilities every year in order to ensure continual compliance .In order to maintain
transparency in its dealings, insurers would have to keep separate account relating to funds of
shareholders and policyholders.

Consequences of non-compliance: -
A company failing to comply with the act shall be liable for panel action. Further, IRDA is
empowered to investigate into the affairs of the company. Failure toc comply with the
directions may lead to cancellation of the license for the company .Also, if the IRDA has
reason to believe that a company is doing business in a manner likely to be prejudicial to the
interest of policyholders, it is required to report to the central government .The central
government may base on the report, appoint an administrator to manage the affairs of the
company. This would act as a further assurance to the consumers, as their interests would at
all times be a priority and that in the event that the company acts in the manner prejudicial to
their interests, than an administrator would be appointed to serve their needs.T he court may
also wind up the company if it fails to deposit or keep deposits as per the requirements of the
act or if the continuance of the company is prejudicial to the interest of the policyholders or
public interest. But an insurance company cannot be wound up voluntarily or on the grounds
that by reasons o its liabilities it cannot continue its business, except for the purpose of
affecting an amalgamation or a
reconstruction of the company. Therefore, a company after issuing a policy cannot escape
liability by seeking voluntary winding up. The four amendments, made in the life insurance
Bill by the LokSabha, are asunder:1. The Insurance Regulatory and Development Authority
should give priority to health insurance.2. Policyholder’s fund will be invested in the social
sector and infrastructure. The percent may be specified by the IRDA and such regulations
will apply to all insurers operating in the country.3. Insurers will be expected to undertake a
certain percent of business in rural areas, and cover workers in the unorganized and informal
sectors and economically backward classes.4. In the event of insurers failing to fulfill the
social sector obligations, a fine of Rs. 25 lakh would be imposed the first time. Subsequent
failures would result in cancellation of licenses.
3. TARIFF ADVISORY COMMITTEE:
The tariff advisory committee established under the Act is empowered to control and regulate
the rates, terms, and etc. that may be offered by insurers in respect of any risk or of any
category of risks. It is provided that in fixing, amending or modifying such rates etc. the
committee shall try to ensure as far as possible that there is noun fair discrimination between
risk of essentially the same hazard and also that consideration is given to past and
prospective loss experience. Every insurer is required to make payment to the TAC of the
prescribed annual fees.

TAX POLICY AND INSURANCESECTOR:

Another factor, which affects the insurance sector, is the tax policy. The tax reforms in India
are such that it encourages the citizens to invest in the insurance sector.
The tax policy of the government is particular relevant for life insurance which is a long-
term contract and inculcates among the policyholders the habit of saving. Taxation of returns
on investment influences, investment decisions and high rates of taxation will discourage the
desire to save. Already in India there are complaints that the rates of return on life policies are
not what they could be. Therefore tax incentives play a vital role in determining the
attractiveness of such policies. Such tax breaks area available in many countries and have
helped in the development of their life sector. In western countries the gain from the proceeds
of a life insurance policy is paid free of tax. Provided the policy satisfies certain qualifying
conditions. Non-qualifying policies get basic rate tax relief, though higher rate taxpayers may
still have to pay taxon the gain, although at a reduced rate. The insurance companies can use
such tax concessions rate. The insurance companies can use such tax concessions to
design products for different categories of taxpayers .The other factors, which affect the
insurance sector, are the employment law, and government stability. These are the factors,
which affect the insurance industry.
INVESTMENT DECISIONSMANDATEDBYGOVERNMENT:
Insurers are required to fulfill certain social commitments as well. As many of the social
welfare measures companies are not just regulated, but have been mandated to hand over a
portion of their funds to the state for investment in infrastructure and for social development
through government bonds and securities. In India, the pattern was, accordingly, prescribed in
great detail by the government. This was not in the form of guidelines, but as a legal
obligation under the insurance Act, 1938.

Pattern of investment specified for life insurance:

Type of investment Percentage(1) Government Securities 25%(2) Government securities or
other approved securities Not less than 50%(3) Approved investments(a) Infrastructure and
social sector (b) Other govern by exposure norms Not less than 15% Not exceeding 35%

ECONOMIC FACTORS AFFECTING LIFE INSURANCE INDUSTRY

Interest rate at bank and interest rate of P.F variation very much affect to lifeinsurance
industry, because people always attract by higher return. Therefore, they do not prefer lower
return policy. Unemployment also affects insurance industry, because the unemployment
people will not have earning, so saving also affect to life insurance sector Life insurance
industry will directly affected by Earthquake, Monsoon, and Natural calamity. Because of
these events turns into lots of death, so the life insurance companies have to pay claim against
policy. Infant mortality rate and maternity mortality rate are also affecting to life insurance.
Typical Indian want luxurious product against low income, so that they prefer installment or
annuity (EMI), so that they may not have extra saving to invest in life insurance.

Adequacy of capital:
Capital adequacy is a matter of attention in view of the nature of the life insurance business,
where in the case a contingency arises, the insurers should be in a position to meet its long-
term contractual obligations and pay up the dues or claims. In that sense, life insurance is a
capital-intensive business and must be backed by an adequate capital base on the part of the
owners and the companies should not be running their business purely on other people’s
money. So minimum start up amounts and long running capital adequacy norms are
absolutely essential, in consideration of this, the Malhotra committee suggested and
subsequently the IRDA stipulated a minimum capital base of Rs 1 bn for any entity wanting
to enter the life insurance business.

Increased Economical Activity:

Although economic activity has slowed down since 1996, sooner or later there will bean
upswing. The increase in the growth rate in various sectors accompanied by thegrowth in
trade in the context of fulfilling of commitments to the WTO will signal a growth in the
demand for insurance covers of new types. For example, aviation insurance cover will be on
an increasing scale in view of the need for more frequent
air travel for men and for transporting materials. This would necessitate substantial property,
liability and personal insurance. As far as cover against business interruption is concerned,
the pace of business and of change today is so fast that even the most careful assessment of
exposure time, and the most liberal coverage cannot protect the insured adequate in the event
of a loss be on the increase and insurance companies cannot afford to ignore the vast potential
in this business.
 Interest Rates: -
During the last years the government has rationalized interest rate creates better business
opportunities for the life insurance sector because the substitute products are graded lower by
the customers. On the other hand the value of the holdings of the insurance companies will
increase. Rationalized of the interest rates is still expected, and it is an opportunity for
thecompany.Low interested rates mean low investment return for reinsures causing negative
impact on their overall net profitability as pricing is to a certain extent sensitive to interest
rate fluctuations. The negative impact therefore, lead to higher pricing level for reinsures in
order to sustain their profitability. But, in reinsurance market, which is characterized by over
capitalization a resulting intense competition. The opportunity for such rate increases
practically remains very slim and even non-existent. As a result, reinsures are under
tremendous pressure to cut their operational cost to safeguard profitability. Furthermore, low
interest rates discourage and even prevent any outflow of capital from reinsurance business to
capital markets, causing current over capitalization in reinsurance market to continue. A
positive outcome is that low inflation rates, if sustained for a considerable period, usually
bring some relief to reinsures from the resulting lower than forecast claims payment. Also,
this can lead stability to reinsures administrative cost.
As interest rates fall, bond value rise, and insurers feel richer. On the liability side, reserves
are not explicitly discounted so lower interest rates do not increase reserves, lower inflation
means lower expected future claims payments which lowers required reserves. This in turn
increase surplus, again allowing insurers to feel richer. Therefore, low interest rates and low
inflation result in higher assets, lower liabilities, hence greater surplus and greater risk
capacity resulting in less demand for, and greater surplus of reinsurance. Low interest rates
and low inflation reduce the ability of reinsures to off set technical losses by using financial
products and should, as a consequences, force market competition downloads. However, this
will also serve to weaken the balance sheets of insurers and create an increase in the demand
for balance sheet protections. Lastly, these conditions move risk from the liability side of the
balance sheet to the asset side while actually generating new needs for cover.
 Inflation rate: - Inflation can also be one of the causes to change the scenario of the
insurance sector. High inflation for instance, would tend to reduce the insurance
business, particularly life, because the real value of the money paid back to the
policyholder on maturity of the policy would go down and would, therefore, lose its
attraction for the investor. At the most, the insuring public may prefer pure risk plans
(terms insurance),which have a low premium outlay. The response to an inflationary
situation will depend on what benefit the insureds looking for. In a situation of high
inflation, clients would prefer policies where the savings portion is periodically
returned while the risk portion is maintain for the duration of the contract. Those who
prefer risk protection are likely to opt for long-term policies, which may also be
preferred because they are likely to be low premium policies. A flexible system, under
which the sum insured, is increased from time to time so that the real value of the
cover is maintained, and could give a boost to the market under conditions of high
inflation. Fortunately, the rate of inflation in India
has been contained to less than 5 percent for a fairly long time and unless it goes out of hand,
it is not likely to dampen the market.

 Market related factors: These are the factors, which governs the entire life insurance
sector. This includes internal as well as the external factors. We have seen the various
factors like technological, economical and will see the political and government
 factors, environmental factors and competitive analysis of insurance sector in the next
session. These all factors have changed the trend of life insurance sector, Stage 1
Stage 2 Stage 3 Stage 4Closed market, Entry is controlled by state. Barriers to entry
are high expertise to operate is essential, license can be obtained. Barriers to entry
reduced systems expertise can be brought. Entry costs are low and capital
requirements Ares same for that now day’s strength of brand is very important aspect
for the success in this sector. Of course you should have strong distribution channel
without which growth is not possible. Scarce resource is Permission from is
expertise Scarce resource is capital Scarce resource is brand
 Customer satisfaction: - Since the customer is the focus of any service industry, every
such industry continuously strives for greater variety and better quality of products,
improvement in its delivery system, cost effectiveness, easy access, and quick
response to perceived needs – in short qualitatively superior service. Indian life
insurance companies already have a sizable line up of the products. The difference
between them and the foreign operators perhaps lies in the service provided, because
there is still not enough concern on the part of the Indian companies, with customer
satisfaction, on time renewals, claims settlements, etc. if high standards have been
achieved else where, it is not impossible to attain the same in India too. The concept
of “sales” is now redefined as a long – standing relationship. The relationship does
not end with the conclusion of the transaction, but has to be durable and of a long
term nature. Hence, improved in performance of the company will not be synonymous
with only basic cost reduction or larger business, but the new measure of performance
will be set in terms of service to the customer. One can anticipate greater insistence
from pressure groups like customer forums to keep customer satisfaction at the top of
the list of priorities of the insurers.

SOCIO-CULTURAL FACTORS AFFECTING LIFEINSURANCE INDUSTRY:

The basic social factors that affect the life insurance sector are as under: -
 Population
 Life style
 Educational level
 Level of earning
  Societal benefits These are the major social factors, which affect the life insurance
sector. We will discuss all of them in brief

 Population: Growth in the population is a major factor pushing up the demand. It is

also going to exert a special influence on the life insurance market in other ways.
Apart from exerting pressure on demand for goods and services, and through that, ill
effects of uncontrolled growth of population also could spur the growth of demand.
For example, overcrowding in public places of entertainment, public support, or too
many vehicles on the road can result in hazards like stampedes and pollution, which
require covers and still are not sold on a large scale today. Thus the positive as well as
the negative aspects of population growth are going to spur demand.

 Life style: The peculiar lifestyle of a country or an age also influences the
insurance business. Change therein produces different demands for life insurance. For
e.g. Allover the world, family size is shrinking and the fact that in decades to come,
both presents are more frequently likely to work outside the home will mean that there
could be a greater possibility of property loss. Similarly, a larger number of vehicles
on the roads for people commuting to their jobs or business would mean larger incidence of
accidents. This will increase the demand for life insurance products. Of course, there is also
the other possibility that wherever it is possible, some people will try to spend a part of their
time working at home either because they would like to be with their families or because they
find it more convenient. Activities like life insurance and financial services are particularly
well suited for such arrangements. With time becoming scarcer for most people who pack in
a full day, there is a higher demand for convenience and service. Companies will respond by
trying to shorten the transaction time for the delivery of products and services and creating
distribution systems that can reach clients wherever they are and whenever they want to use
them, so as to ensure convenient access to service providers .In recent times, there has been a
surge in the high end business of the LIC. For instance, as against 90 policies each worth
more than Rs 10 million in 1999-2000, the number was as high as 900 policies in the next
year. Or again, the number of jeevanshri policies jumped from 88,000 to a total of 2,33,000
policies in the same period. However, consumers’ behaviour cannot be adequately and
accurately predicted. The younger generation is overwhelmingly influenced by consumerism.
If this trend continues or increases with increasing income, there will be fewer propensities to
save or insure, as a result of which the increasing purchasing poser may not be reflected inthe
life insurance market. Crumbling social values, the deteriorating law and order situation, the
growing incidence of crime, extortion, abduction, etc., are posing a new category of risks
which need to be covered through suitably designed policies. Thus these are how changing
life style of the citizens is affecting the life insurance industry.
 Level of education: India is one of the developing countries: the level of education is
very low here. The literacy rate is very poor. More than 50% of the population is still
uneducated or more or less not educated. Thus the people are not able to understand
the concept of the life insurance. Among the educated people the quality of the
education is still a big question mark. Thus the awareness is not created and it has
become a big challenge for the industry. Thus one of the factors, which affect the life
insurance sector, is low level of education.
 Level of earning: Another factor, which affects the life insurance sector, is the level of
earning. In India the rule of 80-20 is working. The 80% of the total population is
having the 20%of the wealth and the 20% of the total population is having 80% of
total wealth. Thus the richer are richer and poorer are poorer. Due to this the life
insurance sector is affected very much.

 Societal benefits: In view of the fact that large sections of India have inadequate life
insurance cover, an important social responsibility of the government relates to
spreading it far and wide. In addition, the government attempts to extent life insurance
with certain social obligations in view in both urban and the rural areas through such
means special schemes for the weaker sections, and by tilting of the life insurance
companies’ investments in favour of social developments. the social changes
emerging in the country provide opportunities for insurers to sell financial services
products such as family health care programmed, retirement plans disability
insurance, long-term care for senior citizens and different employee benefit plans. It is
not the total population but the insurable population which is material for the
conclusion of potential. Apart from the usual demographic and other well known
factors such as age group, income level, sex-wise distribution, and literacy level, realistic
assessment of this potential has to be based on several other relevant factors. Many invisible
factors like religious faiths and social values too need to be considered. As such, there is
considerable difficulty in accurately estimating the potential and crude estimates can be
misleading. The estimate will also vary according to the criteria used to measure if. In
principal, every individual is a potential candidate for life insurance. In reality, financial
status limits this potential, not only because of the practical consideration of the insurable
worth of a person to the insurer in financial terms, but more so due to the prospect’s capacity
to pay life insurance premium after meeting other pressing needs. Again, there are many
practical factor affecting ‘ insurability” such as old age, past and present illness, and physical
and mental impairments. In addition, the cost of reaching out to a very large number of
customers, if they are dispersed, becomes important. In that sense, the cost and profitability
of exploiting the potential, which is otherwise attractive, limit the opportunity. The sheer size
of the numbers, there fore is not crucial itself. For assessing the practical business potential of
life insurance, the eligible population needs to be “Qualified” in relation to other factors
including those mentioned above. Thus, in the opinion of some experts, out of the population
in the insurable age group, Only the main workers (i.e., excluding marginal workers) with
adequate income may be considered as the actual insurable population. The population in the
age group 15-55 is usually regarded as the insurable population, since this can be considered
as the main “active” age group ( in the sense of working, earning. And supporting others),
and beyond this range life risk may be considered to be not worth insuring.
There is one opinion, which suggests that in our country the age group 15-55 as the base is
not totally suitable. Due to various factors including the unemployment problem, real earning
starts from around the age of 25 for salaried persons. For others, particularly small
entrepreneurs, traders and businessman, the starting age is a little higher. Only in the affluent
sector of society life insurance can be taken before personal earning starts. Thus, number
wise life insurance below the age of 25 is not so significant (although amount wise it need not
be so). On the other hand, people over the age of 50 rarely apply for fresh life insurance,
mainly because in India the normal retirement age is around 60 years. Also, a high percentage
of the population in the lower income group does not remain “insurable” after the age of 50.
thus, in our country the practical age range for insurable population actually narrows down to
25to 50.

TECNOLOGICAL FACTORS AFFECTING LIFEINSURANCE INDUSTRY:

Internet as an intermediary in the current Indian market customer is not aware about the
intrinsic value of insurance. He thinks of insurance only in the mount of March as a tax
saving measure. The security provide by an insurance cover is rarely thought about. In such a
scenario Internet can be an effective medium for educating the consumers about insurance. It
serves as a single window for disseminating product, process and procedural information to
the consumers. Product development and target marketing through the Internet: with increase
in the number of insurance companies there will be a need for market segmentation and
subsequently product designed for each of them. In such a scenario Internet can be aeffective
channel for pushing product specific information to a particular market segment. Consumer
feedback about a particular product as well as suggestions for different types or covers can
also be generated through the Internet. Retail marketing is a commonly expected concept and
the providers of the retail products and service will try out for larger market and market
share. There would be cut through competition and the real benefit would be to the customers
in terms of better products, distribution, pricing, post transaction service and technology.
Technology will perhaps be the single largest driver of the retail thrust. The entire strategy
will evolve around the absolute ability of the organization. The customer will demand for
greater convenience of excess to the product/ service and all at low cost of delivery. There
fore the use of technology and specifically the Internet with realigned strategies would be one
of the key factors to success. Constraints of locations, timing and accessibility would not be a
hurdle for either customers or businesses.

 Maintaining the database The most important facto that is affecting the insurance
industry is the marinating the database of the customers. The insurance industry
having a huge list of the customers. In order to maintain it in manual format it is really
the work of stupidity. With the change in time the computers has taken the work of
this things. Thus with the development of the technology it has becoming possible to
maintain such huge database very easily. A person can switch over to the computer
and get the details of the customer very easily. Thus maintaining the database has
really become easy due to the development in technology.

 E-business insurance in India: -The Internet has played a vital role in transforming the
business of the 21st century. Computers are now being used extensively for creating a
storing data ,information with the help of complex and sophisticated technological
tools in every kind of business. This change having been widely accepted, the
advantages are numerous such as fast processing improved. Efficiency, cost reduction
among several other benefits. However, with every positive change, there is an evil
 attached and technology is no exception. In technical is an evil attached and
technology is no exception. In technical terms, increased sophistications of
technology brings with it, an increased factor of risk involved. The risk can be of
various attributes, for example ,the risk of data being lost due to a virus attack, the
theft of important and confidential information and so on, which ultimately results in
losses for the business entity. With this change in the business process, insurers have
to devise new methods for assessing, underwriting and servicing claims for the so-
called e-business insurance. Insurers face challenges to ascertain risks, in order to
quantify them because such risks don’t have any past data, which makes it all the
more difficult for actuaries. Moreover, what financial impact a particular risk can
have is very difficult to be determined. For example, if some hackers obtain credit
card information of few customers, it’s a loss for banks, their credibility, customers
and also their brand. Will an insurance policy cover all of this is million dollar
question hence; the difficulty is to design a cover first of all, which really answers the
needs of customers. But even after designing and pricing such products with
difficulty, the challenge to underwrite and handle claims for such policies remains
existent.

 Impact on distribution channels: -Distribution channels are the most important part of
the insurance industry. The scenario is continuously changing in this industry. In
future the customers are expected to be more technology – oriented, better informed,
more knowledgeable and more demanding. The insurers will have to offer all types of
channel to customer and it is the customer who will have the right to choose the
channel suiting him/ her. Dual income families with young children, singles with long
working days and flexi-timers all demand high level of sophistication and ease when
it comes to service. Hence the companies have to be very careful and cautious in
catering to the needs of these customers who provides a good amount of business to
the insurers. Thanks to the technological advancement and increased de regulation
and sophistication, the carriers and producers can now reach the customers in
different ways as has been proved in the US market and other developed nations the
web is extensively used for the access of information but when it comes to the
purchase of policy, the offline mode is preferred. The private players in India seems
to have identified this and have put substantial information on there websites
regarding policies, quotes and contact information among other routine stuff.
LEGAL FACTORS AFFECTING LIFE INSURANCE INDUSTRY

In number of countries, the legal framework and institutions are not robust enough to protect the
intellectual property rights of an organization. A firm should carefully evaluate before entering such
markets as it can lead to theft of organization’s secret sauce thus the overall competitive edge. Some
of the legal factors that Life Insurance Company Limited leadership should consider while entering a
new market are -

 IRDA law
 Anti-trust law in Life Insurance industry and overall in the country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection

ENVIRONMENT FACTOR AFFECTING LIFE INSURANCE INDUSTRY

Different markets have different norms or environmental standards which can impact the profitability
of an organization in those markets. Even within a country often states can have different
environmental laws and liability laws. For example in United States – Texas and Florida have
different liability clauses in case of mishaps or environmental disaster. Similarly a lot of European
countries give healthy tax breaks to companies that operate in the renewable sector.

Before entering new markets or starting a new business in existing market the firm should carefully
evaluate the environmental standards that are required to operate in those markets. Some of the
environmental factors that a firm should consider beforehand are -

 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Life Insurance industry
 Recycling
 Waste management in Financial sector
 Attitudes toward “green” or ecological
 Value chain analysis (VCA)

Is a process where a firm identifies its primary and support activities that add value to its final
product and then analyze these activities to reduce costs or increase differentiation.

Value chain represents the internal activities a firm engages in when transforming inputs into
outputs.

Value chain analysis is a strategy tool used to analyze internal firm activities. Its goal is to
recognize, which activities are the most valuable (i.e. are the source of cost or differentiation
advantage) to the firm and which ones could be improved to provide competitive advantage

M. Porter introduced the generic value chain model in 1985. Value chain represents all the
internal activities a firm engages in to produce goods and services. VC is formed of primary
activities that add value to the final product directly and support activities that add value

tly.
Value Chain analysis for MAXLIFE insurance

MAXLIFE insurance is getting digitized for adding value to their products and services.

1) Technology: They are leveraging a number of modern technologies to accelerate the

business change. These include building Cloud native, mobile first and
conversational UX based apps using Adobe Stack and API enabled Micro-services
architecture to digitise the end to end processes of the business value chain. The
digital footprint is designed to ask less and deduce more by leveraging the India Stack
and other external sources of information. Additionally, they are utilising the power of
user behaviour Analytics to create further differentiation and enable Cross Sell/Up
Sell and targeted marketing and chase with continuous customer engagement using
platforms like Netcore. Implementing Davos has certainly brought value by enabling
us to go to market frequently The technology has helped the business in increasing the
conversion rates, ability to launch new products and features faster than ever before
and continuously engage with the customer. Our approach has enabled the last mile to
provide on-the-go solutions to customers. To service our customers in an instant,
accurate and efficient manner, they are also leveraging Artificial Intelligence
technologies. Our website offers a live chat supported by a bot that is constantly
learning and providing more and more information to customers in a timely and
precise manner.

2 Online Form: While traditionally life insurance has been sold with a high degree of
human intervention, I don’t see this as a challenge but more of an opportunity. Today
they are seamlessly integrating the online and offline experience for a customer, without
him even realizing it. When a customer for example, has generated a quote online from
our website, they have already captured his details like date of birth. Now when our
agent goes to follow up on this request, he already has these details pre-filled in our
online application form, thereby reducing time and increasing accuracy.
3) Empower: empower is a virtual servicing capability that creates engagement
opportunities for deep relationships. They believe that digital interventions enable
our agents with the necessary information at their fingertips, to sell smart. For
instance, if a customer wants to know about a new product that our agent is
unfamiliar with, he would have in the past, had to wither call a helpline and wait
for a response, or have to get back to the customer at a later date. Now with the
help of empower, he has access to a chat option to solve queries, a library of audio
and visual content for a quick understanding of products. What this does is that it
enables the agent to spend more time with the customer, and doing a thorough
need-analysis, rather than doing administrative tasks.

4) Artificial intelligence: artificial intelligence (AI) tools to discover customer need

at various life stages and offer appropriate products at each step. A lot of
experiments are being done on OCR to reduce manual interventions and enable
straight-through processing of our applications. They have launched a chatbot live
on our website for instant and efficient redressed of customer queries. For our
employees as well, they have taken engagement to the next level with an easy-to-use
interactive employee app that uses a bot to answer any queries related to HR policies or
function-specific relevant information on the business
 Company Profile

Max life insurance company was established in 2000 and it is one of the most admired private
insurance company in India. Max life insurance company ltd is a joint venture between max
India ltd and Indian multi-business corporate and mitsuisumitomo insurance co.ltd a member
of MS& AD Insurance group, a general insurer. The company has started its commercial
operation in 2001. Max Life Insurance Company Limited provides life insurance products in
India. The company offers participating, non-participating, and linked products covering life
insurance, pension, annuity, benefits. Its products include individual and group life insurance
products, such as protection, child, retirement, growth, savings, and group plans. Max Life
Insurance Company Limited distributes its products through individual agents, corporate
agents, banks, brokers, and other channels. The company was formerly known as Max New
York Life Insurance Company Limited and changed its name to Max Life Insurance
Company Limited. Max Life Insurance offers comprehensive long term savings, protection
and retirement solutions through its high quality agency distribution and multi-channel

distribution partners. A financially stable company with a strong track record over the last 18
years, Max Life Insurance offers superior investment expertise. Max Life Insurance has the
vision 'To be the most admired life insurance company by securing the financial future of our
customers'. The company has a strong customer-centric approach focused on advice-based
sales and quality service delivered through its superior human capital. Max Life Insurance is
a business with strong social relevance and contributes to the society by supporting causes in
health and well-being. Max Life Products are available across 1453 locations ensuring ease of
reach anywhere across the country Max Life Insurance has the vision 'To be the most
admired life insurance company by securing the financial future for their customers'. The
company has a good customer- centric approach focused on advice-based sales and quality
service. In the financial year 2017- 2018, Max Life recorded sum assured of Rs.5,11,541crore
and Asset Under Management of Rs. 52,237 crore in financial year 2017-2018. The claim
paid ratio of max life company is 98.26% in FY2017-2018. As per the report of FY2016-
2017 they have 210 offices present. The company has crossed 10,000 crores mark in Gross
written premium for the first time. It is one of the largest non-banking private life insurance
company in India. The company also have a tie up with Axis bank.
Max Life Insurance Company has been awarded

a. Great place to work (GPTW) 2018

b. IAMAI( Best email marketing Campaign at 2018- India Digital Award

c. EFFIE Award ( Communication Effectiveness) 2018

Vision

Max Life envisions to be the most admired life insurance company in India by securing the
financial future of our customers.

Mission

They are an honest life insurance company, committed to doing what is right. They serve
our customers through Long-Term Savings, Protection and Retirement Solutions, delivered
by our high-quality Agency and Multi-Channel Distribution Partners They are a business
with strong social relevance and contribute to society by supporting causes in health and well-
being
 SWOT Analysis

Strength

i. Strong brand name and good financial position

ii. Major life-insurance provider
iii. Stable and growing revenue
iv. Rise in per capita income
v. Emerging Middle Income Group
vi. New product

Weakness

vii. Direct access to equity-capital lacking

viii. Lacking extensive global services
ix. Limited global operations as compared to competitors

x. Less number of branches compare to other competitors

xi. Many people are not aware about max life insurance in rural areas
xii. High administration and management expense

Opportunity

xiii. Expansion in other countries

xiv. Diversifying portfolios for customers
xv. Asset management sector
xvi. New emerging markets
xvii. Strong future growth
xviii. Creation of strong demand
xix. Health Insurance

Threat
xx. The political environment is not conducive to constructive change
xxi. Changing govt regulations and financial crisis like recessions
xxii. Increase in insurance frauds
xxiii. Stiff competition in the market
xxiv. The dominance of entrenched player who make industry stagnate
xxv. The legal framework, bureaucracy and financial infrastructure
worsen the insurance business environment
 Competitors of Max life insurance

1. HDFC life insurance: HDFC Standard Life Insurance Company Limited ('HDFC
Life' / ‘Company’) is a joint venture between HDFC Ltd., one of India’s leading
housing finance institution and Standard Life Aberdeen, a global investment
company. Established in 2000, HDFC Life is a leading long-term life insurance
solutions provider in India, offering a range of individual and group insurance
solutions that meet various customer needs such as Protection, Pension, Savings,
Investment and Health. As on Jun 30, 2018, the Company had 34 individual and 11
group products in its portfolio, along with 8 optional rider benefits, catering to a
diverse range of customer needs. HDFC Life continues to benefit from its increased
presence across the country having a wide reach with 413 branches and additional
distribution touch-points through several new tie-ups and partnerships comprising 163
bancassurance partners including NBFCs, MFIs, SFBs, etc and 26 partnerships within
non-traditional ecosystems. The Company has a strong base of financial consultants
.In Fiscal 2012, The Company established a wholly-owned subsidiary, HDFC Pension
Management Company Ltd., to operate its pension fund business under the National
Pension Scheme (NPS). And in Fiscal 2016, the Company established its first
international wholly-owned subsidiary in the UAE, HDFC International Life and Re
Company Ltd., to operate its reinsurance business.

Vision & Values

Values are the most critical elements that reflect the conduct of an organisation. Below is our
vision and our values, the pillars that support the success of HDFC Life.

Vision
One of the most successful and admired life insurance company, which means that we are the
one of the most trusted company, the easiest to deal with, offer the best value for money and
set the standards in the industry.
 Values
Our vision and values that we observe at work

1. Excellence
2. People Engagement
3. Integrity
4. Customer Centricity
5. Collaboration

Strengths in the SWOT analysis of HDFC Life Insurance :

1. Customized Packages– The business offers its customers with customized insurance
plans based on the needs of the customer. This is an interesting feature because
everyone needs an insurance plan according to their requirements and offering that
clearly creates a differentiating factor in the market.

2. Brand Image – HDFC life insurance has a very well established domestic image in
the Indian market. Supported by the international image of Standard Life insurance
which further ads up to the credibility of the brand.
3. Well established Networks – The business has a well-established network in the
country who further sells the policies to customers. It has a network of over 500
branches in over 700 cities.
4. The base is Strong – HDFC insurance has a very strong base in capital and reserve.
5. Customer Service is Best in the market – The customer service offered by the
business is exceptionally good and hence it helps in building brand reputation
 Weaknesses in the SWOT analysis of HDFC Life Insurance :

1. High Cost of operations – The business involves high administration cost and
management expenses. As selling needs some investment and hence there is a
continuous cash flow going out in order to do business development.
2. Retention of the network is poor – Thought the business has a well-established
network but there is a high churn in the network and hence it further adds to the cost
of operations.

Opportunities in the SWOT analysis of HDFC Life Insurance :

1. Population – the population of India is increasing at a rapid pace and also the
insurable population is too high and not yet covered completely and hence there is a
huge potential for the business in Indian market.
2. Liberalization in Laws – The liberalization of the insurance laws in India will help
the business to further expand the new avenues which were earlier restricted due to
the stringent policies and laws of the insurance sector.

Threats in the SWOT analysis of HDFC Life Insurance

1. Instability in Economy – There is a high instability in the economy which impacts

the business to great extent. Global crisis inhibits people from investing in
suchpolicies as the guarantee of getting the returns or even the principal amount is not
known
2. NBFC’s Entry in the industry – There is a high competition in the market owing to
the fact that many new players are entering the market and biggest threat is from
NBFC’s
3. Movement of Employees – The industry experiences high churn ratio and hence the
employees who are successful in the industry keeps on moving from one company to
another which puts a lot of pressure on hiring and also the candidates who are driven
for sales and increasing the business in terms of new insurances issued for the brand
2. Bharati AXA life insurance

Bharti AXA Life is a life Insurance player that was started in 2006. It brings together strong
financial expertise of the Paris-headquartered AXA Group and Bharti Enterprises - one of
India's leading business groups with interests in telecom, agricultural business, financial
services, and retail. The joint venture has a 51% stake from Bharti and 49% stake from AXA
.The company launched national operations in December 2006. Today, Bharti AXA Life has
a national footprint of distributors trained to provide quality financial advice and insurance
solutions to the large Indian customer base.
Bharti AXA Life offers a range of innovative products and services that cater to specific
insurance and wealth management needs of customers

Vision

To be the Preferred General Insurance Company for our Customers, Employees,

Shareholders, Business Partners & Society"

At Bharti AXA GI, we live by the simple truth; insurance plays an important role in
protecting organizations and individual aspirations. Through comprehensive and innovative
insurance solutions, we seek to redefine industry standards by offering unparalleled and
empathetic service to every Indian. This ropes in our collective vision “to be the preferred
General Insurance Company for our Customers, Employees, Shareholders, Business partners
& Society”.Backed by our constant endeavor to find new and improved ways to add value to
our customers through our innovative product and service offerings, we always seek to make
a difference through our professional and pragmatic approach. Working as a team with
utmost integrity we strive to maintain best in class standards. We assure you to be by your
side in your hour of need. We do this on the strengths of our vision, purpose and values
SWOT Analysis of Bharti AXA Life Insurance

Strengths:

Integrated approach to seek innovative solutions

policies for various age and economic groups

International expertise of AXA group

Strong marketing campaign

The joint venture has a 74% stake from Bharti and 26% stake from AXA Asia Pacific
Holdings Ltd.

Bharti enterprise serves over 110 million customers

Weakness

Less penetration in rural India

Small agent base

Insurance companies have a poor image when it comes to payment of dues

Opportunities

Growing rural market.

Awareness among urban youth.

Cross selling through financial services such as banking

Threats

Stringent Economic measures by Government and RBI

Entry of new NBFCs in the sector

3. ICICI Prudential Life Insurance Company Limited

(ICICI Prudential Life) is promoted by ICICI Bank Limited and Prudential Corporation
Holdings Limited. ICICI Prudential Life began its operations in fiscal year 2001 and has
consistently been amongst the top players* in the Indian life insurance sector. Our Assets
Under Management (AUM) as on 31st March 2018 were `1,395.3 billion. At ICICI Prudential
Life, we operate on the core philosophy of customer centricity. We offer long term savings
and protection products to meet different life stage requirements of our customers. We have
developed and implemented various initiatives to provide cost-effective products, superior
quality services, consistent fund performance and a hassle-free claim settlement experience to
our customers. In FY2015 ICICI Prudential Life became the first private life insurer to attain
assets under management of `1 trillion. ICICI Prudential Life is also the first insurance
company in India to be listed on NSE and BSE.

Vision:

To be the leading provider of financial services in India and a major global bank.

Mission:

We will leverage our people, technology, speed and financial capital to:

 be the banker of first choice for our customers by delivering high quality, world-class
products and services.
 expand the frontiers of our business globally.
 play a proactive role in the full realisation of India's potential.
  maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
 maintain high standards of governance and ethics.
 contribute positively to the various countries and markets in which we operate.
 create value for our stakeholders.

STRENGHTS:
1) Online Services: ICICI Bank provides online services of all it’sbanking facilities. It
also provides D-Mart account facilities on-line, soa person can access his account
from anywhere he is.[D-Mart is a dematerialized account opened by a salaried person
for purchase & sale of shares of different companies.]

2) Advanced Infrastructure: Branches of ICICI Bank are well equipped with advanced
technology to provide the customers with taster banking services. All the
computerized machines are located in suitable manner & are very useful to the
customers & staff of the bank.

3) Friendly Staff: The staff of ICICI Bank in all branches is very friendly & help the
customers in all cases. They provide faster services along with bonding & personal
relationship with the customers.

4) 12 hrs. Banking services: Compared to other bank ICICI bank provides long hrs. of
services i.e. 8-8 services to the customers. This service is one of it’s kind & is very
helpful for the customers who are in urgent need of money.

5) Other Facilities to the Customers & Employees: ICICI Bank also provides other
facilities like drinking water facilities, proper sitting arrangements to the customers.
And there are also proper Ventilation& sanitary facilities for the employees of the
bank.
6) Late night ATM services: ICICI bank provides late night ATM services to the customers.
The ATM centres of ICICI bank work seven after 11:00pm. at night in certain branches.

Weakness:
1) High Bank Service Charges: ICICI bank charges highly to customers for the
services provided by them when compared to other bank & that is why it is only
in the reach of higher class of society.
2) Less Credit Period: ICICI bank provides credit facilities but only up to
limited period. Even when the credit period is not over it sends reminder letters
to the customers which may annoy them.

OPPORTUNITIES:
1) Bank –Insurance services: The bank should also provideinsurance services.
That means the bank can have a tie-up with ainsurance company. The bank will
advertise & promote the different policies introduced by the insurance company
& convince their customers to buy insurance policies.
2) Increase in percentage of Returns on increase: The bank should provide
higher returns on deposits in comparison of the present situation. This will also
up to large extent help the bank earn profits &popularity.
3) Recruit professionally guided students: Bank & Insurance is a special non-aid
course where the students specialize in the functioning & services of the bank &
also are knowledge about various tax policies. The bank can recruit these
students through tie-ups with colleges. Such students will surely prove as an
asset to the bank.
4) Associate with social cause: The bank can also associate itself with social
causes like providing relief aid patients, funding towards natural calamities. But
this falls in the 4Thquadrant so the bank should neglect it.
THREATS
1) Competition: ICICI Bank is facing tight competition locally as well as
internationally. Bank like CITI Bank, HSBC, ABM, Standered Chartered,
HDFC also provide equivalent facilities like ICICI do and also ICICI do not
have consistency in its international operation.2) Net Services: ICICI Bank
provides all kind of services on-line. There can be easy access to the e-mail ids
of the customers through wrong people. The confidential information of the
customers can be leaked easily through the e-mail ids.3) Decentralized
Management: Each branch manager is given the authority of taking decisions in
their respective branches. The decisions made by different managers are diverse
and any one wrong decision can laid to heavy losses to the bank.4) No Proper
Facilities To Uneducated customers: ICICI Bank provides all services through
electronic computerized machines.

Porter's Five Forces

Insurance is one of those dry, best-avoided subjects isn't it? Usually in major corporates the
domain of the CFO, Company Secretariat or even other functions such as Procurement: it's
not glamorous, but is a must-have necessity for a variety of reasons including compliance,
contractual and prudential factors. It's often a big expense line as well, especially when the
cost of premiums, claims excesses, in-house resources, uninsured losses and professional fees
are totted up on the one hand and compared to what claims recoveries are on the other hand.
Does it really represent value for money (VFM) is the sector ripe for change and will
technology bring benefits? Read on and you'll see that changes are already happening.

I remember once asking the CFO of a large multi-national bank if their corporate insurance
arrangements represented VFM. His response, also in the context of said bank being far
bigger and better capitalised than most of the insurers it was transferring its risks to, was to
the effect that "being insured" gave a certain comfort to key stakeholders - i.e. shareholders,
regulators and customers. True, those key stakeholders didn't usually scratch below the
surface, or look beyond the odd bland statement in an annual report and accounts at how
effective the insurance would be if called upon, but they took comfort from something
alright. That something is probably because insurance being a mature product line, having
been around in recognisable form since Edward Lloyd's coffee-shop days, is in the psyche -
we've all got some of it somewhere - and it takes away problems, doesn't it? It takes away the
financial uncertainty if something bad happens - yes, there are provisos - utmost good faith,
fair disclosure and co-operation with insurers etc..., but even those onerous requirements are
slowly being drawn in, with balance of power gradually shifted by our friends and law-
makers the EEC, to the consumers.

So what's Porter's Five Forces got to do with corporate insurance? It's just any other
commodity really, even though at the corporate level, supply is controlled by intermediaries
(brokers) who dominate the market and add complexity by intervening in all stages of
transactions and even syndicating single-company risks among many insurers - e unum
pluribus, as it were.

Market domination, even in the face of complexity won't necessarily continue for ever
without change or innovation. Just look at how the retail insurance market has very quickly
transformed - firstly to a telephone service pioneered by Direct Line in the 1980s and latterly
an internet-only service dominated by price comparison sites, making it very easy to shop
around for the best deal - that's transformed the retail insurance market very quickly in real
terms for both buyers and sellers.

Let's take a quick canter through Porter, so hopefully you'll see what I mean about change
being inevitable. Porter says that there are five forces that apply to any market and its
competitiveness, operating between willing buyers and willing sellers of goods or services
and no market dominance lasts for ever, because inevitable market and technological changes
happen. The five are:

1) Suppliers' Bargaining Power - a supplier can dominate a market, provided:

 the market consists of a few large suppliers

 the product or service is unique
 customers are fragmented and not organised into buyer groups
  switching costs are high
 the buyers are under threat - low entry costs to their market and the risk of being
swallowed up by big suppliers is present

2) Buyers' Bargaining Power - a buyer can impose increased pressure when the following
holds true:

 they buy large volumes and there is a concentration of buyers

 there's a small number of suppliers
 the product being supplied is undifferentiated and has high fixed costs of delivery
 switching costs are generally low
 buyers are price sensitive
 buyers can gear-up to produce the product in-house, or acquire the suppliers

3) Threat of New Entrants - this depends upon the barriers to entry, such as:

 initial investments required and fixed costs of operating

 minimum size requirements to achieve profitability
 licencing requirements
 existing players control of the market, or key resources
 high switching costs

4) Threat of Substitutes - this is determined by:

 brand loyalty of customers

 switching costs
 belief in the effectiveness of new products/services

5) Competition Between Suppliers - this is likely to be high when:

 there are many suppliers

 competing firms have similar strategies
 barriers for exiting the market are high
 products and services are undifferentiated leading to focus on price over service
 low market growth, so growth is usually only achieved by taking market share from
another firm
So what's happening in the corporate insurance market? Well, there are good examples of
developments with most of Porter's Five. Here are a few of the more interesting ones:

1. Buyers getting together in a buying-club - for example major South African

corporates (not part of the same Group) getting together in a buying consortium to
drive down insurance costs. This consortium also uses a substitute product as well, so
that's two of Porter's factors at once, giving an innovative solution that lowers cost
and widens available coverage.

2. Suppliers controlling the market and prices - major broking firms earmarking
capacity sourced from new entrants backed by non-traditional capital and placing a
percentage of all business into these facilities. This technique isn't new, but the
potential scale of it is, as is the source of new capital acting as a substitute to
traditional capacity - so again at least two of Porter's five at work here as well.

3. Buyers being able to cut out the middle man - sourcing capacity direct from the
web - this alternative source is developing and is currently available in a limited way
for smaller businesses, or specific niche products, but it will no doubt increase in
order to reduce transaction costs, complexity and speed up the process of getting
cover. The proposed Insurance Bill will help this direct channel develop, focusing as
it does on modernising disclosure requirements and moving the pendulum towards the
corporate buyer.

In summary, corporate insurance isn't always the dry and dusty world that it is sometimes
painted as, there are innovations and innovators out there in both buyers and suppliers and it's
just a matter of time before wholesale change and modernisation will arrive in this complex
market to
SPACE MATRIX

The researcher evaluates different variables and assigns them their weight based on how
important they are for the company. It is a matching tool which is an hour quadrant
framework that indicates whether aggressive, conservative, defensive, or competitive
1
strategies are the most appropriate for a give organization. It analyzes four area; two
internals and two externals which will represent the quadrants in the graphic. The purpose of
SPACE matrix is to position the company in one of these quadrants to determine which type
of strategies is advisable for them.
 FS

Conservative 9 Aggressive

Market Penetration 7 Backward, forward, horizontal int.

Max life
Market Development 6 Market Penetration
insurance
Product Development 5 Market Development

Related Diversification 4 Product Development

3 Diversification (related/unrelated)

CA IS

-7 -6 -5 -4 -3 -2 -1 0

-1

Retrenchment -2 Backward, forward, horizontal int.

Divestiture -3 Market Penetration

Liquidation -4 Market Development

-5 Product Development

Defensive -9 Competitive

ES

X Axis: 3.0 Y Axis: 1.4

According to the results from SPACE matrix, the company is in the agressive quadrant.
Thus, the organization is in an excellent position to use its internal strengths to take
advantage of external opportunities, overcome internal weaknesses, and avoid external
threats. Diversification is feasible depending on the specific circumstances that face the firm;
forward, backward and horizontal integration; market penetration; market development; and
product development are appropriate strategies for these divisions to consider for the
company has in a very ideal status.

Financial Position (FP)

Return on Investment (ROI)
(6)
The ROI increased by 58%.

Net Income
(7)
The net income increased by 248.39%

Liquidity
(3)
The liquidity ratio increased by 0.6 .

Working Capital
(6)
The working capital increased by 192.20%

Cash Flow
(6)
The cash flow increased by 338.60%.

Financial Position Average 5.4

Industry Position (IP)

Growth Potential
(5)
The growth potential increased by 23.31%

Financial Stability
(6)
The financial stability increased by 48.39%.

Ease of Entry into Market (7)

Resource Utilization
(6)
The resource utilization increased by 155.57%

Profit Potential
(6)
The profit potential increased by 23.32%
Industry Position Average 6.0

Competitive Position (CP)

Market Share (-2)

Product Quality (-2)

Customer Loyalty (-4)

Technological Know – How (-5)

Control over Suppliers and Distributors (-2)

Competitive Position Average (-3.0)

Stability Position (SP)

Rate of Inflation (-4)

Technological Changes (-5)

Price Elasticity of Demand (-5)

Competitive Pressure (-2)

Barriers to Entry into Market (-5)

Stability Position Average (-4)

SPACE Matrix Axes Conclusion

Financial Position (FP) Average: 5.4

Industry Position (IP) Average: 6.0

Stability Position (SP) Average: (-4.0)

Competitive Position (CP) Average: (-3.0

IE Matrix

This is a strategic management matching tool used to analyze working conditions and
strategic position of a business. It is based on an analysis of internal and external business
factors which are combined into one suggestive model.

TOTAL IFE WEIGHTED SCORE

EFE Rating Strong Average Weak

3.40 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
IFE Rating
3.60
High I II III
3.0 to 4.0 Max life
TOTAL
insurance
EFE
WEIGHTED
Medium IV V VI
SCORE
2.0 to 2.99

Low VII VIII IX

1.0 to 1.99
 BCG Matrix

Star: The products which are already in star to maintain it Max life insurance should recall
and create and innovative adds for that same product in a new way so as to maintain in the
same category.

Dogs: the product falls in dogs category it should be present and it should be renovated with
new terms an conditions and new policy should be present with the adds on the same and
then to present it with clients in a new we ways with maximum profits for the insurer due to
which it can fall in this category.

Cash cow: The product should be again come u with the newer terms and conditions. Wiith
the higher commission rates for the agents. So that the agents can sell more products and then
automatically the revenue will be increasing.

Question mark. The rapid growing products comes under this category. But those product
have low market share they don’t generate much commission to the agent. The product lies
under this category have the potential to grow and become star when market goes up and
eventually cash cow if market goes down.

RELATIVE MARKET SHARE

HIGH LOW
HIGH

Stars Question marks

 MIAP  ULIP
MARKET  Pension plan  Max Life Fast
 Life Gain Premium
GROWT

Cash cow DOG

 Money Back Plan  Endowment Plan

 Term Plan  Child Career Plan

LOW

Online Term Plan

Grand Strategy Matrix
Market Growth( Rapid or Slow)-Rapid : Max Life Insurance Co. Ltd., a leading Indian
life insurance company, recorded Individual adjusted first year premium of Rs. 3,215 crore
achieving growth of 22 percent in the Financial Year 2017-18 (FY18). During this period the
Gross Written Premium of the company grew by 16 percent to Rs. 12,501 crore, while the
renewal premium recorded growth of 15 percent to Rs. 8,152 crore. The Company recorded
shareholder profit (Post Tax) of Rs. 528 crore.

Max Life Insurance Co. Ltd. performed well on other key business parameters for
FY18:

 -New Business Premium (Individual + Group) at Rs. 4,349 crore, recorded growth of
19 percent while retaining private market share at 9 percent.
 -Solvency Ratio of 263 percent, significantly higher than the regulatory requirement
of 150 percent, indicating the Company's strong and stable financial position.
 -Conservation ratio was at 90 percent as compared to 89 percent in the previous year
 -Claims paid ratio grew to 98.26 percent in FY18 from 97.81 percent in FY17
"I am delighted to share yet another year of strong financial performance of the company in
FY18. Max Life Insurance actively leveraged growing household interest in financial savings
and digitisation in India. During the year Max Life Insurance not only recorded increase in
case size but also covered more lives than in past years which resulted in a robust growth in
new business. Max Life Insurance continued its leadership position in online term plans as
well as claims management. The increase in embedded value reflects high quality of our
business. Our strong business performance has resulted in superior returns for both our
policyholders in form of bonus and investment return in ULIPs fund and shareholders in form
of dividend. At Max Life, we believe that engaged employees create happy customers which
leads to great shareholder outcomes," said executive vice chairman and managing director,
Max Life Insurance, Rajesh Sud.

FY 2017-18 (April 2017 - March 2018) compared with FY 2016-17 (April 2016 - March
2017)
Revenue

The Gross Written Premium for FY18 increased by 16 percent to Rs. 12,501 crore with 19
percent increase in new business premium to Rs. 4,349 crore and the renewal premium
recording a growth of 15 percent to Rs. 8,152 crore. The adjusted individual first year
premium increased by 22 percent to Rs. 3,215 crore and retained market share of 9 percent
amongst the private players. A growth of 4 percent in the number of policies has been
recorded, taking it to 40.8 lakhs for FY18, in comparison to 39.1 lakhs in FY17.

Cost Management

The Company continued to remain focused on providing greater value to its policyholders
through improvement in efficiency. The operating expenses (policyholders) to gross premium
ratio improved from 14.8 percent in FY17 to 12.9 percent in FY18 and the cost (Commission
plus policyholders operating expenses) to gross premium ratio improved from 23.5 percent
FY17 to 20 percent in FY18.

Policyholder Bonus

Considering the surplus that arose over the financial year in the participating fund, Max Life
Insurance announced policyholder bonus. The total bonus estimated to be paid out in the 12
months in financial year 2018-19 is Rs. 1084 Crore, an increase of Rs. 230 crore from the
previous year figure of Rs. 854 crore.

Assets Under Management

The Company's Assets under Management (AUM) of Rs. 52,237 crore recorded a growth of
18 percent over the last year. As on March 31, 2018 Rs. 35,139 of the AUM was in controlled
fund and Rs. 17,098 in ULIP funds.

Embedded Value

The Embedded Value(EV), post final shareholder dividend, as at 31st March 2018 is Rs.
7,509 Cr. The operating return on EV of 20.6 percent is mainly driven by new business
growth and healthy experience on persistency & mortality.
Service Parameters

Customer retention is the best proof of not just selling right product solutions but also the
quality of service a company provides to its customers which leads to better engagement.
During FY18, the renewal premium grew by 15 percent to Rs. 8,152 Crore and Max Life
Insurance continued its leadership in conservation ratio at 89.6 percent. The 13th Month
persistency has been 80.49 percent with an improvement of 9 bps. The 61st month
persistency has been 52.5 percent this year.

Payment of death claim is the biggest moment of truth in a life insurance contract. Max Life
continued its leadership journey on that front with Claim Paid Ratio improving to 98.26
percent. The company paid 10,152 death claims worth Rs. 353 Crore during the Financial
Year 2017-18. Since inception, Max Life Insurance has paid Rs. 2,223 Crore towards death
claim to 81,253 families. Customer Experience Index, a cumulative index of customer
experience across key policyholder transactions, witnessed an increase in Top 2 box score to
81 percent with 5 out of 10 touch points having score of about 80 percent which is in line
with global standard results. The surrender to gross written premium has also improved from
21% in FY17 to 20 percent in FY18. In addition, the Customer Confidence Index improved
to 80 percent due to significant increase in Treating Customer Fairly culture to 91 percent.

Competitive Position of Your Firm (Strong or Weak)-Weak

The share of private life insurers in the new business jumped in June as they continue to
gradually eat into the share of Life Insurance Corporation of India. Private players now have
a 55.7 percent share in the new business premium compared with 50 percent in May. India’s
largest life insurer LIC’s share declined from 49.1 percent to 44.3 percent during the period,
according to data available with the Insurance Development and Regulatory Authority of
India. The overall growth seems to be moderating partially due to base effect, said the
brokerage Edelweiss. “We maintain that predisposition towards financial savings will persist
and the industry will regain momentum.” Brokerages said the shares of private insurers will
lead the rally in the sector, riding on tie-ups with banks. Nomura said growth has been led by
higher ticket sizes .Most bank-based private life insurers witnessed muted premium growth,
given their strong base, said Morgan Stanley. ICICI Prudential Life Insurance Company Ltd.,
for instance, which has the highest market share 20.7 percent among private players as on
June 2017, saw a yearly contraction of 5 percent, compared with a 30 percent decline in May.
In terms of premium received, SBI Life Insurance Company Ltd. and HDFC Standard Life
Insurance Company Ltd. posted a growth of 8 and 4 percent, respectively. Agency-led
insurers such as TATA AIA Life Insurance Co. Ltd. and Aditya Birla Sun Life Insurance Co.
Ltd. grew at an annualized rate of 40 percent, while Bajaj Allianz Life Insurance and
Reliance Life Insurance Co. grew by over 16 percent each in June. Life Insurance
Corporation Ltd. share in the overall life insurance market reduced for the fifth straight year,
staying below 50 percent for the second year in a row, according to data with the Insurance
Regulatory and Development Authority of India.

Max life insurance falls within QUADRANT II because of the rapid market growth and
weak competitive position of the firm. The recommended strategies are market development,
market penetration, product development, horizontal integration, divestiture, and liquidation.
Ansoff matrix
Ansoff matrix is a marketing planning model that helps a business determine its product and
market growth strategy.

The four main categories

Market Penetration (existing markets, existing products):

Here we market our existing products to our existing customers. This means
increasing our revenue by, for example, promoting the product, repositioning
the brand, and so on. However, the product is not altered and we do not seek
any new customers.

Market penetration seeks to achieve four main objectives:

 Maintain or increase the market share of current products – this can be

achieved by a combination of competitive pricing strategies, advertising,
sales promotion and perhaps more resources dedicated to personal selling
 Secure dominance of growth markets
 Restructure a mature market by driving out competitors; this would require
a much more aggressive promotional campaign, supported by a pricing
strategy designed to make the market unattractive for competitors
 Increase usage by existing customers. For example by introducing loyalty
schemes.

A market penetration marketing strategy is very much about “business as

usual”. The business is focusing on markets and products it knows well. It is
likely to have good information on competitors and on customer needs. It is
unlikely, therefore, that this strategy will require much investment in new
market research.

Market Development (new markets, existing products):

Here we market our existing product range in a new market. This means that the
product remains the same, but it is marketed to a new audience. Exporting the
product, or marketing it in a new region, are examples of market development.
Market development is the name given to a growth strategy where the business
seeks to sell its existing products into new markets.

There are many possible ways of approaching this strategy, including:

 New geographical markets; for example exporting the product to a new

country
 New product dimensions or packaging: for example
o New distribution channels
o Different pricing policies to attract different customers or create new
market segments
Product Development (existing markets, new products):

This is a new product to be marketed to our existing customers. Here we

develop and innovate new product offerings to replace existing ones. Such
products are then marketed to our existing customers. This often happens with
the auto markets where existing models are updated or replaced and then
marketed to existing customers.

Business Diversification (new markets, new products):

This is where we market completely new products to new customers. There are
two types of diversification, namely related and unrelated diversification.
Related diversification means that we remain in a market or industry with which
we are familiar.
 Strategy Formulation
According to various matrix analysis, Max Life insurance Ltd. Follows
aggressive strategy. So the following are the various means of
implementing aggressive strategy through which company can increase
their sale and profits also it will help to increase their penetration in the
market.

Market Penetration
Go Grassroots
Most agencies seek to capture the market close to the office. It's easier to build
relationships with customers when you can meet with them. There are a lot of ways
to become known and visible within the community that surrounds your insurance
agency.
Look at broad marketing strategies such as billboards, bus benches and grocery
store advertising as a way to get your agency name and your image out in the
world. This develops general credibility but really, it's a shotgun approach.
More active approaches to marketing will build community goodwill and have a
more targeted approach to drive the leads in. Visit local high schools to speak to
students about the dangers of drunk or distracted driving. Hold workshops that
discuss the benefits of life insurance at a local church. Get a booth at the local
chamber of commerce event.

Build a Referral Network

A referral network is one of the best ways insurance agencies grow the business.
Strategic partners for insurance agencies include real estate agents, mortgage
lenders, estate planning attorneys and even other insurance agents. If your agency
specializes in a specific type of insurance -- for example, worker's compensation --
many other agencies are instead focused on auto and home insurance, and they can
refer business clients to you.
When it comes to building strategic partners, plan it out and be consistent.
Take a box of donuts to a mortgage lender's office once a week with a stack of
your cards and a note thanking them for thinking of you. Offer to sit in open
houses with real estate agents. Add value and partners will emerge to provide you
with solid referrals.

Advertising
Spend Ad Money In Local Social Media
Social media ads allow the insurance agency owner to target specific clients. It also
gets them in front of Millennial in ways other traditional advertising might not. Use
the tools social media provides to set demographics for certain products. For
example, target young families with small children for life insurance prospects