Bajaj Allianz's big success story....can they survive in the lomg run???????

It's not the way most insurance companies in India have grown, but small towns and local recruits are the major planks of Bajaj Allianz's distribution strategy. Having discovered that even the smallest towns can prove rich catchment areas, the insurance company is spreading out rapidly into the interiors.

In just about five years, it has rolled out one of the biggest networks in the industry: at present, Bajaj Allianz has around 900 offices across the country, compared with around 330 for market leader ICICI Prudential.
Before the year is out, it will have more than 1,000 offices covering 586 districts, up from the current 450. Bajaj Allianz will be the first private sector insurance player to have a presence in towns like Akola in Chhattisgarh and Uluberia in West Bengal.

The strategy seems to be paying off. For the first time, in FY05-06, Bajaj Allianz notched up a first year premium of Rs 2,715.62 crore (Rs 27.16 billion), overtaking market leader ICICI Prudential, which earned Rs 2,637.48 crore (Rs 26.37 billion) as premium during the same period.

However, agents remain the biggest selling channel and so the company ensures that commissions are competitive - the industry average is around 25-30 per cent. Bajaj today has 125,000 agents, way behind LIC's 1 million but ahead of ICICI Prudential's 100,000.

However, in some of the towns, Bajaj has also used local financial advisors, since it believes the comfort level of the customer may be higher with them than with agents.