2. Bajaj Allianz Life Insurance Company Limited-Introduction
Joint venture between Bajaj Finserv Limited and Allianz SE
German based Allianz SE is one of the largest insurance companies in the world and India based Bajaj is one of the
biggest 2 & 3 Wheeler manufacturers in the world
Incorporated on 12th March 2001
Head office located at Pune
CEO is Mr. Anuj Agarwal
Total assets of Rs 42,995 Crore
Has 722 offices spread across India
Caters to all financial needs like Protection, Savings, Retirement & Investment of individual and groups
3. Need for a SWOT Analysis
An indicator of the health of a business
Helps forming strategies to tackle possible threats
Helps prepare to tap possible opportunities
Gives an overview of company’s strengths and weaknesses
Allows an outsider to quickly and effectively understand the company
4. (i)Strength
Global Exposure in Insurance Through Allianz SE and Strong Local Implementation by Bajaj
-Allianz SE in 125 years old and operates in over 70 countries. It is the largest insurance
company in the world
-Bajaj is a household name in India and is over 110 years old
Large Network
- 722 offices spread across India
Strong Financial Base
-Total assets of Rs 42,995 Crore
-Reported 40% jump in consolidated net profit on 20th October 2015
(source:moneycontrol.com)
Excellent Services
-Awarded “Best Life Insurance Company-Private Sector” by LOKMAT Banking, “Economic Times
Promising Brand for 2015”
Wide Product Range
- Covers Home, Health, Travel, Two-wheeler, Car and Life insurances
- Plans can be customized for various preferences
5. (ii)Weakness
Lot of Competitors with Better Premiums and Offerings
-Bajaj Allianz insurance premium of Rs 3,923 whereas Edelweiss Tokio offers premium of
Rs 2,923 for insurance of Rs 30 Lakhs, 30 years for a 22 year old male
(source:policybazar.com)
Unfavourable Public Perception Towards Private Sector Insurance Comapanies
-Total asset of LIC is Rs 1560482 Crores V/s Rs 42,995 Crores of Bajaj Allianz
-2,048 Offices of LIC V/s 722 offices of Bajaj Allianz
Low Rural Penetration
-Rural business of 6-7% only
(source: Economic Times, Sep 15,2013)
Long and Complicated Procedures for Getting Insured
-Customers have to undergo lengthy procedures before getting insured
6. (iii)Opportunities
Untapped Markets
-Vast amount of the insurance market is untapped
-27% of India’s health-insurance payouts comes from just 6 cities
(Source:Business standard,9/9/15)
Insurance Offers Security with High Returns
- In a conservative society like India, people are more inclined towards risk free investments (Bank
FDs) over high return investments (Share market). Insurance companies offer them both
India’s Large Population
-India is the second most populous country in the world, and has many children and people
reaching age of retirement
- This provides huge opportunities in health insurance, general insurance and retirement plans
Huge Automobile Sector
- India is one of the largest automobile markets in the world, with over 40 million vehicles
-This provides huge opportunities in two- wheeler as well as car insurance sector
7. (iv)Threats
Large Number of Competitors
-11 Private sector players in Life Insurance sector alone
Increasingly Strict Rules and Supervision by IRDA
-Insurance Regulatory and Development Authority brings in stricter rules everyday, which increases
burden on insurance companies
-Recently IRDA slapped Rs 55 lakh fine on Max Life for violation of rules
(source:livemint.com 22/12/2014)
Increased Capital Flow from Abroad
-Recently the government has cleared a higher FDI cap for insurance sector at 49%
-This might allow the competitors to get capital from abroad
Strong Presence of Traditional Public Sector Competitor
- General public continues to hold favorable view towards public sector companies like LIC over
private sector companies
8. Conclusion
The insurance market in India presents a lot of opportunities. Bajaj Allianz, being one of the largest players
in the field has immense potential in the field. Bajaj Alliance, being a conglomerate of two proven giants
has the right mix of financial power, brand image and experience for achieving growth despite the increase
in competition.
With the gradual change in people’s perception towards private insurance companies, the threat posed by
LIC is decreasing. This will allow Bajaj Allianz to secure a more strong position in India’s insurance market.