TRAINING REPORT ON THE CUSTOMER BEHAVIOUR AND CUSTOMER

SATISFACTION (In AVIVA LIFE INSURNACE)

Submitted to MAHARSHI DAYANAND UNIVERSITY, ROTHAK in partial fulfillment of the requirements for the award of the degree of BACHELOR OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED) (III SEMISTER) Submitted by Name: SUCHARITA DAS Regn.No: 1073900591 Roll No: 1090110591

JAGANNATH INSTITUTE OF MANAGEMENT SCIENCES (ELC CODE: 331012066) Jagannath Institute of Management Sciences 34, Ring Road, Lajpat Nagar-IV New Delhi – 110024 JAN 2012

CERTIFICATE This is to certify that SUCHARITA DAS, a student of the Maharshi Dayanand University, Rothak, has prepared her Training Report entitled “CUSTOMER BEHAVIOUR & CUSTOMER SATISFACTION” at Aviva Life Insurance Company India Ltd , under my guidance . She has fulfilled requirements leading to award of the degree of BBA (Industry Integrated). This report is the record of bonafide training undertaken by her and no part of it has been submitted to any other University or Educational Institution for award of any other degree / diploma / fellowship or similar titles or prizes. I wish her all success in life. <Signature of Faculty Guide> < Name of Faculty Guide> < Designation > <Qualification> <Seal of ELC >

STUDENT DECLARATION I hereby declare that the Training Report conducted at

B-5 Ethnic town , 2nd flr Model town-II , new Delhi -110009 Under the guidance of <FACULTY GUIDE > Submitted in partial fulfillment of the requirements for the Degree of BACHELOR OF BUSINESS ADMINISTRATION (Industry Integrated) TO MAHARSHI DAYANAND UNIVERSITY,ROTHAK Is my original work and the same has not been submitted for the award of any other Degree / Diploma / fellowship or other similar titles or prizes.

Student’s signature Place: New Delhi <Sucharita das > Date: 31st dec 2011 Regn.No: 1073900591 Roll No: 1090110591

Certificate

This is to certify that Ms. Sucharita das who is pursuing BBA (Industry Integrated) course of Maharshi Dayanand University, Rothak, at Jagannath Institute of Management Sciences, has undergone management training at our Organization from 5th nov2011 to 5th jan 2012. Her performance during the training period was found to be praise-worthy. We wish her success for her future endeavors ISHAN TANEJA TERRITORY MANAGER

ACKNOWLEDGEMENT Talent & capabilities are of course necessary but opportunities and good guidance are two very important things without which no persons can climb those infant ladders towards progress. First of all I am very much indebted and thankful to my parents and God for giving me strength for completion of my Internship.

I am really thankful to AVIVA LIFE INSURANCE. For giving me the permission to carry out my summer internship in their esteemed organization. I wish to express my deep sense of gratitude to the management and staff of AVIVA , especially to MR. ISHAN TANEJA for the guidance support , cooperation , and briefings he provided during internship to make it a success. I would like to thank my faculty guide nishi mam(JIMS LAJPAT NAGAR) for her guidance and taruna mam (NIAM)

CHAPTER -1 INTRODUCTION GENERAL INTRODUCTION ABOUT THE SECTOR Insurance business is divided into four classes:

1) Life Insurance business

2) Fire

3) Marine

4) Miscellaneous Insurance.

Life Insurers transact life insurance business; the rest is transacted by General Insurers. No composites

are permitted as per law. The business of Insurance essentially means defraying risks attached to any

activity over time (including life) and sharing the risks between various entities, both persons and

organizations. Insurance companies (ICs) are important players in financial markets as they collect and

invest large amounts of premium. Insurance Products are multipurpose and offer the following benefits:

1. Protection to the investors

2. Accumulate savings

3. Channel savings into sectors needing huge long term investments.

ICs receive, without much default, a steady cash stream of premium or contributions to pension plans.

Various actuary studies and models enable them to predict, relatively accurately, their expected cash

outflows. Liabilities of ICs being long-term or contingent in

nature, liquidity is excellent and their investments are also long-term in nature. Since they offer more

than the return on savings in the shape of life-cover to the investors, the rate of return guaranteed in

their insurance policies is relatively low. Consequently, the need to seek high rates of returns on their

investments is also low. The risk-return trade off is heavily tilted in favor of risk. As a combined result

of all this, investments of insurance companies have been largely in bonds floated by GOI, PSUs, state

governments, local bodies, corporate bodies and mortgages of long term nature. The last place where

Insurance companies are expected to be over-active is bourses. Lately ICs have ventured into pension schemes and mutual funds also.

Life Insurance depends upon the laws of mortality and there lies the difference between life and general insurance businesses

Life has to extinguish sooner or later and the claim in respect of life is certain. In case of general

insurance, however, there may never be a claim and the amount can never be ascertained in advance.

Hence, Life Insurance includes, besides covering the risk of early happening of an event, an element of savings also for the beneficiaries. Pension business also derives from life insurance in as much as the pension outgo again depends upon the laws of mortality. The forays made by insurance

Companies in this area are, therefore, natural corollary of their business.

What is Insurance?

Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party happening of a certain event.

Insurance is a protection against a financial loss arising on the happening of an unexpected event. Insurance Companies collect premium to provide for this protection. A loss is paid out of this premium collected from the insuring public.

The insurance Company act as a trustee to the amount collected through premium.

Insurance is generally classified in three main categories, (i) Life Insurance, (ii)

Health insurance and (iii) General Insurance

To get insurance an individual or an organization can approach to an insurance Company

directly, through Insurance Agent of the concerned company or through Intermediaries.

Benefits of Insurance

Insurance is the instrument of Security, saving and peace of mind. It provides several benefits

by paying a small amount of premium to an insurance company as: It is gratifying to see

insurance market players and practitioners coming together

on an occasion like this to reinforce a common vision to create a progressive and dynamic insurance industry where each one of us have an important role to play.

PURPOSE & NEED OF INSURANCE

Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, flood, breakdown, lightening, earthquake, etc. are perils. If such perils can cause damage to the assets, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or damages. The risk to an owner of a building, because of the peril of earthquake, may be a few crores of rupees, depending on the cost of the building and the contents in it.

Insurance does not protect the asset. It does not prevent its loss due to the peril.

The peril cannot be avoided through insurance. The peril can sometimes be avoided, through better safety and damage control management. Insurance only tries to reduce the impact of risk on the owner of the asset and those who depend on that asset. It only compensates the losses- and that too, not fully. Only economic consequences can be insured.

If the loss is not financial, insurance may not be possible.

Examples of noneconomic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc.

Life Insurance Life Insurance is a commonly used term, yet it is seldom understood and not many are confident about choosing the best

life insurance policy for themselves and their families. There are many life insurance companies and innumerable plans available, but before you opt for the perfect life insurance policy, you need to evaluate the pros and cons. Evaluate life insurance as an investment option and think about whether you really need it. And if you do, should you choose a cheap life insurance policy or opt for the best life cover available. Which insurance company should you select? And if you already have a policy, should you buy another? The questions that pop up are mind boggling; so to help you plan your life better, we have provided answers to a few basic ones. This will equip you choose the best life insurance company and plan for you and your family What is life insurance? Simply put, life insurance is a medium of providing a financial backup for your family even after you pass on. Life insurance is an important part of a sound financial planning. Different types of life insurance plans will not only financially protect you and your loved ones incase of unfortunate event but, also help you save in a planned manner for important goals. How Does Life Insurance Work? Life insurance companies charge you a regular premium for the cover it provides for chosen time period. Whereas, incase of ULIPs (Unit Linked Insurance Plans) part of the premium post deductions of charges is invested to earn returns Do I Need Life Insurance? Whether or not you need life insurance and how much, depends on whether or not you have dependent family members. But practical wisdom suggests that even if nobody relies on your income for daily living, you should still buy at least one life insurance plan which serves as a means of personal investment and tax savings instrument. On the other hand if your income is important to your family members and your salary contributes to paying bills and loans, then you must choose the best life insurance option that you can afford. Of all plans available, Term Plan is the pure protection plan and will be cheap life insurance as well. Be sure to compare life insurance companies and the plans they offer well before settling for one. Regulators

Insurance is a federal subject in India. The primary legislation that deals with insurance business in India is: Insurance Act, 1938, and Insurance Regulatory & Development Authority Act, 1999. Insurance Industry has ombudsmen in 12 cities. Each ombudsman is empowered to redress customer grievances

in respect of insurance contracts on personal lines where the insured amount is less than Rs. 20 lakhs,

in accordance with the Ombudsmen Scheme.

Insurance Regulatory & Development Authority

(IRDA)

On the recommendation of Malhotra Committee, an Insurance Regulatory Development Act

(IRDA) passed by Indian Parliament in 1993. Its main aim is to activate an insurance regulatory

apparatus essential for proper monitoring and

Control of the Insurance industry. Due to this Act several Indian private companies have

entered into the insurance market, and some companies have joined with foreign partners.

INDUSTRY PROFILE

Many may not be aware that the life insurance industry of India is as old as it is in any other part of the world. The first Indian life insurance company was the Oriental Life Insurance Company, which was started in India in

1818 at Kolkata.

This Company however failed in 1834. In 1829, the Madras Equitable had begun transacting life insurance business in the Madras Presidency. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century, the Bombay Mutual (1871), Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. This era, however, was dominated by foreign insurance offices which did good business in India, namely

Albert Life Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies.

A number of players (over 250 in life and about 100 in non-life) mainly with regional focus flourished all across the country. However the government of India, concerned by the unethical standard adopted by some player against

the consumers, nationalized the industry in two phases in 1956(life) and in 1972(non-life).The insurance business of the country was then brought under two public sector companies, Life Insurance Corporation of India (LIC) and General insurance Corporation of India (GIC).

In line with the economic reforms that were ushered in India in early nineties, the Government set up a committee on reforms (popularly called the Malhotra Committee) in April 1993 to suggest reforms in the insurance sector. The Committee recommended throwing open the sector to private player to usher in competition and bring more choice of the consumers. The objective of the insurance to penetration of insurance as a percentage of GDP, which remains low in India even compared to Insurance Regulatory and Development Authority (IRDA) Bill in 1999. IRDA was set up as an independent regulatory, which has put in place regulations in line with global norms. So far it is not made public.

Sector reopened An Ordinance was issued on 19th January, 1956 nationalizing the Life Insurance sector and Life Insurance Corporation came into existence in the same year. The LIC absorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies-245 Indian and foreign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector

This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. In 1993, the Government set up a committee under the chairmanship of RN Malhotra, former Governor of RBI, to propose recommendations for reforms in the insurance sector

CONISTITUTION

India had the nineteenth largest insurance market in the world in 2003. Strong economic growth in the last decade combined with a population of over a billion makes it one of the potentially largest markets in the future. Insurance in India has gone through two radical transformations. Before 1956, insurance was private with minimal government intervention. In 1956, life insurance was nationalized and a monopoly was created. In 1972, general insurance was nationalized as well But, unlike life insurance, a different structure was created for the industry. One holding company was formed with four subsidiaries. As a part of the general opening up of the economy after 1992, a Government appointed committee recommended that private companies should be allowed to operate. It took six years to implement the recommendation. Private sector was allowed into insurance business in 2000. However, foreign ownership was restricted. No more than 26% of any company can be foreign-owned.

In what follows, we examine the insurance industry in India through different regulatory regimes. A totally regulation free regime ended in 1912 with the introduction of regulation of life insurance. A comprehensive regulatory scheme came into place in 1938. This was disabled through nationalization. But, the Insurance Act of 1938 became relevant again in 2000 with deregulation. With a strong hint of sustained growth of the economy in the recent past, the Indian market is likely to grow substantially over the next few decades.

First, we study the evolution of insurance business before nationalization. This is important because the denationalized structure brought back to play important legal rules from 1938. Next we analyze the nationalized era separately for life and property casualty business as they were not nationalized simultaneously. Much of post-independence history of insurance in India was the history of nationalized insurance. In the following section, we examine the new legal structure introduced after the industry was denationalized in 2000. In the penultimate section, we examine the current state of play and projected future of the industry. The final section sets out conclusions.

Insurance in the Colonial Era.

Life insurance in the modern form was first set up in India through a British company called the Oriental Life Insurance Company in 1818 followed by the Bombay Assurance Company in 1823 and the Madras Equitable Life Insurance Society in 1829. All of these companies operated in India but did not insure the lives of Indians. They were insuring the lives of Europeans living in India

The first general insurance company, Triton Insurance Company Ltd., was established in 1850. It was owned and operated by the British. The first indigenous general insurance company was the Indian Mercantile Insurance Company Limited set up in Bombay in 1907.

Insurance business was conducted in India without any specific regulation for the insurance business. They were subject to

Indian Companies Act (1866). After the start of the “Be Indian Buy Indian Movement” (called Swadeshi Movement) in 1905, indigenous enterprises sprang up in many industries. Not surprisingly, the Movement also touched the insurance industry leading

to the formation of dozens of life insurance companies along with provident fund companies (provident fund companies are

Pension funds). In 1912, two sets of legislation were passed: the Indian Life Assurance Companies Act and the Provident Insurance Societies Act. There are several striking features of these legislations. First, they were the first legislations in India that particularly targeted the insurance sector. Second, they left general insurance business out of it. The government did not feel the necessity to regulate general insurance. Third, they restricted activities of the Indian insurers but not the foreign insurers even though the model used was the British Act of 1909.

Comprehensive insurance legislation covering both life and non-life business did not materialize for the next twenty-six years. During the first phase of these years, Great Britain entered World War I. This event disrupted all legislative initiatives. Later, Indians demanded freedom from the British. As a concession, India was granted “home rule” through the Government of India Act of 1935. It provided for Legislative Assemblies for provincial governments as well as for the central government. But supreme authority of promulgated laws still stayed with the British Crown.

The only significant legislative change before the Insurance Act of 1938, was Act XX of 1928. It enabled the Government of India to collect information of (1) Indian insurance companies operating in India, (2) Foreign insurance companies operating in India

and (3) Indian insurance companies operating in foreign countries. The last two elements were missing from the 1912 Insurance Act. Information thus collected allows us to compare the average size face value of Indian insurance companies against their

foreign counterparts. In 1928, the average policy value of an Indian company was 619 US dollars against 1,150 US dollars for foreign companies The Birth of the Insurance Act, 1938. In 1937, the Government of India set up a consultative committee. Mr. Sushil C. Sen, a

well known solicitor of Calcutta, was appointed the chair of the committee. He consulted a wide range of interested parties

including the industry. It was debated in the Legislative Assembly. Finally, in 1938, the Insurance Act was passed. This piece of legislation was the first comprehensive one in India. It covered both life and general insurance companies. It clearly defined what would come under the life insurance business, the fire insurance business and so on . It covered deposits, supervision of insurance companies, investments, commissions of agents, directors appointed by the policyholders among others. This piece of legislation lost significance after nationalization. Life insurance was nationalized in 1956 and general insurance in 1972 respectively. With

the privatization in the late Twentieth Century, it has returned as the backbone of the current legislation of insurance companies

Milestones of Insurance Regulations in the 20th Century

Year Significant Regulatory Event

1912 The Indian Life Insurance Company Act

1928 Indian Insurance Companies Act

1938 The Insurance Act: Comprehensive Act to regulate insurance business in India

1956 Nationalization of life insurance business in India with a monopoly awarded to the Life Insurance

Corporation of India

1972 Nationalization of general insurance business in India with the formation of a holding company

General Insurance Corporation

1993 Setting up of Malhotra Committee

1994 Recommendations of Malhotra Committee published

1995 Setting up of Mukherjee Committee

1996 Setting up of (interim) Insurance Regulatory Authority (IRA) Recommendations of the IRA

1997 Mukherjee Committee Report submitted but not made public

1997 The Government gives greater autonomy to Life Insurance Corporation, General Insurance

Corporation and its subsidiaries with regard to the restructuring of boards and flexibility in

investment norms aimed at channeling funds to the infrastructure sector

1998 The cabinet decides to allow 40% foreign equity in private insurance companies-26% to foreign

companies and 14% to Non-resident Indians and Foreign Institutional Investors

1999 The Standing Committee headed by Murali Deora decides that foreign equity in private insurance

should be limited to 26%. The IRA bill is renamed the Insurance Regulatory and Development

Authority Bill

1999 Cabinet clears Insurance Regulatory and Development Authority Bill

2000

President gives Assent to the Insurance Regulatory and Development Authority Bill

DOMINANT POSITION IN RELEVANT MARKET

Traditionally, dominance is defined in terms of the market of the enterprise, but besides that

there are other factors which determine dominance and these are market share of the enterprise,

size and resources of the enterprise, size and importance of competitors, economic power of the enterprise, vertical integration, dependence of consumer on the enterprise, monopoly or dominant

position whether acquired as a result of any statute or by virtue of being a Government company or a public sector undertaking, entry and exit barriers in the market, countervailing buying power, market structure and size of the market, social obligations and contribution of enterprise towards economic development.7 Dominance is defined under section 4 of the Act and such a dominance has to be seen under section 19(4).

As mentioned earlier, to claim abuse of dominance through any of the known forms of abuse, dominance of that enterprise in the relevant market has to be proven.

In United Brands and United Brands Continental BV v Commission of the European

Communities8 the Courts examined the market share of United Brands, the market share of its nearest competitors, extent of vertical integration of the enterprise, its technological advantages and its resources. After examining all of the above mentioned criteria the court concluded that United Brands was dominant in the market. It is also necessary to examine entry barriers and entry costs.

Once the relevant market has been defined, establishing whether a firm occupies a dominant position depends on the market share of the firm and entry conditions. It is difficult to set limits at which the firms can be deemed to have market power. It is unlikely that a firm having a market share of less than 35% would have the ability to affect competition in the market. On the other hand a firm having market share of more than 70%, such a firm could be in a position to exercise market power, like in the case of Microsoft which is a dominant firm in the software industry having major market share. LIC has undoubtedly a market share of more than 70%.

LIFE INSURANCE INDUSTRY-PAST, PRESENT

& THE FUTURE

In recent times, there has been growing awareness about life insurance products and the various benefits they offer to individuals. Offerings like unit linked insurance plans (ULIPs) have done their bit to draw individuals towards the insurance segment. Also tax benefits, presently under Section 80C of the Income Tax Act, have contributed to their allure and helped in popularizing insurance products. Conversely, there are products like medical insurance or mediclaim as it is commonly referred to, which can add value to an individual’s insurance portfolio, but are relatively lesser known.

Let’s start off with why people need Life Insurance in the first place. An insurance policy is primarily meant to protect the income of the family’s breadwinners. The idea is if any one or both die, their dependents may hereto continue to live comfortably. The circle of life begins at birth, followed by education, marriage and eventually, after a lifetime of work, we look forward to a life of retirement. Our finances too tend to change as we go through the various phases of our life. In the first twenty years of our life, we are financially and emotionally dependent on our parents and there are no financial commitments to be met. In the next twenty years, we gain financial independence and provide for our

families. This is also the stage when our income may be insufficient to meet the growing expenses of a young household. In the following twenty years, as our children grow and become financially independent, we see our savings grow, a nest egg put away for life after retirement. The final twenty years of life, post retirement is the time to reap the rewards of our hard work. It is important to remember that with time, our needs and aspirations tend to change and we have to ensure that we have a suitably dynamic financial plan.

Insurance through the ages The need to protect individuals against changes in fortune is as old as civilisation. People throughout the world and throughout history have developed different organisations and structures, such as the Roman colleges and Anglo Saxon gilds, to guarantee mutual protection in wealth and adversity.

This brief history of the modern business of insurance focuses on how the industry developed beyond these early protective organisations by examining the growth of specific insurance organisations and the different forms of insurance they provided.

Marine insurance

The earliest identifiable class of insurance as a business was marine insurance. Early forms of modern marine policies have been traced back as far as the Italian city states of Genoa and Palermo in the 13th century. According to contemporary sources, marine insurance was available in France, Spain, Italy, Flanders and England by 1500, and early forms of marine policies are found in the records of the High Court of the Admiralty of England from 1547.

By 1574, there were 30 sworn brokers in London who produced policies underwritten by London merchants. Although this developing insurance market in London was subject to competition in the 17th century from Antwerp, Amsterdam and Hamburg, from the early 18th century it began to attract substantial international business. In 1719, it was calculated that the City of London’s overseas commitments in marine risks, which were underwritten by over 150 subscribers, amounted to several million pounds a year.

The first corporate marine insurers in Europe, as distinct from the individual marine underwriters, were the Royal Exchange Assurance and the London Assurance, both established in London in 1720. From this date until 1824 no other English corporate bodies were permitted to write marine insurance. This fostered the growth in London of individual underwriters who, by 1712, had adopted the name of Lloyds as a business address from the coffee house of Edward Lloyd, where such marine information was exchanged.

The first UK company to undertake marine business after the ending of the monopoly of the Royal

Exchange and London Assurance was the Indemnity Mutual Marine Assurance Company.

Fire insurance

Although pre-dated by marine business, fire insurance was the first to achieve corporate status. Municipal or state-funded fire insurance originated in Germany in 1623, with the establishment of the Great Werder Fire Fund in Prussia, but the first fire insurance companies were established in England. Around 1681, the Fire Office was established in London by Dr Nicholas Barbon, followed by the Friendly Society in 1683 and the Hand-in-Hand Fire & Life Insurance Society (also known as the Contributors for insuring houses, chambers, or rooms, from loss by fire by amicable contribution) in 1720.

All of the early British fire insurance companies restricted their business to London and initially to buildings, only extending to include contents around 1708 and to accept business outside London from 1710. Some companies, such as the Phoenix Fire Office, were also exploiting business overseas before the end of the century, but most had to wait until the mid-19th century when the opportunity arose to expand overseas and establish agencies in the British colonies.

In the new world, the development of towns and cities and the appearance of European companies lead to the establishment of local insurance companies such as the New Zealand Insurance Company, the first underwriting company in New Zealand, which was established in 1859.

Life assurance

Policies offering insurance on lives were available from the late 16th century. The earliest recorded example in the UK dates from 1588 but, in other countries, such as the Netherlands and France, insurance of lives was prohibited until much later. Life assurance as a corporate business did not really develop until 1799 with the establishment in England of the Society of Assurance for Widows and Orphans, followed a year later by the Second Society of Assurance for Widows and Orphans, followed in 1706 by the Amicable Society.

The early societies insured a limited number of people, charging the same premium for each member and fixing them within a narrow age range, typically between 12 and 45. Having been turned down because his age fell outside this range, James Dodson developed a scientific selection rating that based premiums on age and life expectation. This lead, in 1762, to the foundation of the Society for Equitable Assurances on Lives and Survivorships, which allowed all types of lives to be insured.

Although some were prudently making provision for dependants on their death, it is estimated that in the 1830s and 1840s between 30% and 50% of lives in the UK were assured by a third party either as business indemnities, partners protecting their interests or as a speculation. This form of betting on lives was outlawed in 1774, after which time anyone insuring the life of another person had to prove that they had an interest in the life or death of the person insured.

In the mid-19th century, the percentage of those with life assurance was still relatively small – the majority came from the landed, professional and commercial classes. The first UK group life

assurance scheme was established by the Provident Clerks’ Mutual Benefit Association in 1846. This served to open up the market, allowing companies to pay the premiums for providing life assurance to their employees as a benefit of employment.

In 1852, industrial policies were introduced by the Family Friendly Society that provided life cover in exchange for small weekly payments and made life insurance accessible to all.

Pensions and annuities

The 1706 charter of the Amicable Society permitted the company to grant annuities, although these were not used in the way annuities are today. Starting in the first quarter of the 18th century, annuity societies such as Beech Oil Annuities and the Brotherly Society of Annuitants operated schemes intended to allow provision of an income for dependants. These schemes were particularly recommended to those whose income was purely based on their profession rather than on an estate or a business, which could be passed on through inheritance.

Annuity experts consider it likely that even in the early stages of their development annuities were used by some as a form of pension provision as we understand it today. The earliest references advising people to take out an annuity to guard against old age and infirmity date from the 1830s, but investigations into the sex and average age of annuitants of the Norwich Union Society for Insurances on Lives and Survivorships in 1822 suggest that, by this date, about one third of annuities were being used to provide what we would now think of as pensions.

Occupational pension schemes existed by the 1880s when the Norwich Union Fire Insurance Society first instituted a superannuation scheme for its own staff. However, these schemes only really became popular in the 1920s and 1930s.

Accident Insurance

The term accident insurance is used to describe all types of commercial insurance other than marine, aviation, fire and life. Specialist companies developed to answer the changing needs of everyday lives and almost all were later absorbed into the more established fire and life companies to form the great composite offices which appeared in the first quarter of the 20th century.

Hailstorms

Among the earliest accident insurers were those established to insure against damage caused by hailstorms, a form of insurance pioneered by the Mecklenburg Hail Insurance Association, established in Germany in 1797. This form of insurance began in France in 1822 and came into the UK in the 1840s with the establishment of the Farmers’ and Gardeners’ Hailstorm Insurance Company in 1842.

Livestock

Livestock insurance, the protection of farmers from loss caused by disease in their animals,

originated in northern Germany in the 1720s. It existed in Denmark by 1774 but was only successfully introduced in Britain in the mid-19th century with the establishment of firms such as the Farmers’ and Graziers' Cattle Insurance Company in 1844 and the Norfolk Farmers’ Cattle Insurance Society in 1849.

Plate glass

Plate glass insurance, particularly intended to protect shopkeepers from the high expense of repairing large shop windows, originated in France in 1829 with the establishment of La Parisienne. Its development in the UK was inhibited by the window tax levied until 1851. The first UK plate glass insurer, the Plate Glass Universal Insurance Company was not established until 1852.

Fidelity

Fidelity insurance was the earliest form of accident insurance successfully offered by corporate bodies in the UK. It was instituted in 1840 by the Guarantee Society, which was established to protect employers from fraud or embezzlement by staff. The society appears to precede the foundation of fidelity insurers elsewhere in Europe.

Personal accident

Personal accident insurance – the insurance against death or injury caused by accidents – developed during the railway age and originated in England with the successful establishment of the Universal Railway Casualty Compensation Company in 1848. It was followed a year later by the first Accidental Death Insurance Company, which insured against death and injury caused by accidents of all kinds, not limiting itself to those caused by railway travel.

The idea was taken to the United States by James G Batterson who established the Travellers in 1863 having got the idea after buying a Railway Passengers journey ticket in 1859. Three years later, personal accident insurance was introduced into Australia and France.

Steam boilers

The insurance of steam boilers, or more accurately the insurance of their owners against loss of life or damage caused by boiler explosions, was another popular class of accident insurance. It appears to have originated in the UK, which, in the 1850s, contained the largest concentration of steam boilers in the world. The Steam Boiler Assurance Company, established in 1858, pioneered this class of insurance, followed by the Midland Steam Boiler Inspection and Assurance Company in 1862.

Employers’ liability

Employers’ liability insurance also appears to have originated in the UK. In 1880, in response to the Employers Liability Act, the Employers Liability Assurance Corporation was established to insure

employers against losses caused by claims from employees injured at work. The company introduced this form of insurance to America six years later.

Burglary

Burglary insurance originated at Lloyds in London in 1887. The first company to issue policies was the Mercantile Accident & Guarantee Company of Glasgow in 1889.

Motor

The fastest growing sector of accident insurance in the 20th century was motor insurance. It was introduced into the UK around 1896. Both the Scottish Employers’ Liability and Accident Assurance Company and the General Accident Fire & Life Assurance Corporation claim to have been the first in the field, although neither can provide evidence of policies issued at this date.

Early motor policies were based on those previously used for horse-drawn vehicles and the first motor insurance based on variable premiums depending on the horse power, age and type of vehicle was introduced by the Red Cross Indemnity Assurance Company in 1906.

WHY LIFE INSURANCE?

Very often it is said that before you let the worry get into your head, buy Life Insurance. Why? Life Insurance provides protection to your family - your family gets a specified sum in a lump sum when they need it the most i.e. when you are not around. While the emotional loss cannot be mitigated, the lump sum received from an insurance company can help take care of your family’s financial future. Life Insurance policies also offer tax benefits though tax saving should not be the primary reason an individual should look at a Life Insurance policy. Finally, Life Insurance contracts allow an individual to save money in a tax efficient manner and allow savings to grow to help meet our future financial obligations. The most important question is what is the value of your life? Heard of this Yaksha question: What is the greatest mystery on earth? Yudhisthir answers, “Every one has to die. But no one thinks that for himself. This is the greatest mystery. That is the paradox that makes people avoid life insurance! That also makes agents take the wrong line of selling Insurance as a tax saving and/or Investment product (ULIP). So what should we do?

Start with calculating the Human Life Value (HLV). A very simple way of looking at it is as following: Imagine a monthly income of Rs 10000 and the net income provided to the family is Rs./- 8000 after

deducting Rs 2000 for personal expenses. Thus the annual income provided to your family is Rs 96000. The amount of money that will earn Rs 96000 p.a. at 8% interest rate is Rs 12, 00,000. This is only a representation of the value of HLV. It is not the exact way of calculating your HLV.

The future income growth, your income generating assets, liabilities, spouse income, children’s education, etc are also to be factored in. Various private insurers like Bajaj Allianz, Met Life etc. have placed on their websites the HLV calculators to make you understand the HLV and your life insurance needs better. Indian consumers have bought life insurance for reasons of tax saving rather than the core need of providing for one’s family in case of death of breadwinner. With largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It is a business growing at the rate of 15-20 percent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP

MYTHS ABOUT LIFE INSURANCE

Nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continue to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense. Life insurance is not bought in India. General insurance is often bought because there are compulsions under the law (motor vehicles, public liability, workmen etc.) or from the financiers asking for insurance as collateral security. In the case of life insurance, there is very little compulsion. The tendency is to defer the decision. The possibility of death is either ignored or not considered imminent. Most people never do believe that they can succumb to destiny and they think, they will live a long and healthy life. Sadly, that is not always true. A prudent financial plan needs to build in the risk of dying too early to ensure that our family’s financial future is protected. There are financial tools that help us determine the “risk of dying early” leading to the quantum of Life Insurance required. While the algorithms may be different, conceptually, all that these tools try and determine is the present value of your future earnings keeping in mind your future goals and aspirations. It is important that each one of us put some thought into the potential exposure of our family to the risk of the primary wage earners risk of dying too early and arrive at the level of protection required.

Before we get into the recommended approach to Life Insurance, let us delve on some of the myths surrounding Life Insurance in India. These myths will help explain why the number of individuals insured

and the average amount of insurance cover per individual is so low in our country. Life insurance protects you and your loved ones in the event that you meet with an untimely demise. You are accustomed to a certain standard of living, and you would like to sustain the same standard of living for your wife in your absence. Maybe you would like your grandchildren to receive some money from you as well, even in your absence. Life insurance can help you achieve such goals.

TAX SAVING CONCEPT

The question that we should ask ourselves is - do we believe that destiny will announce its arrival in our lives? Will destiny always allow you to complete your tax planning for the year and then strike? The answer is a resounding ‘no’. However, lack of education has made customers believe that insurance is a tax-planning tool and the protection element is only a marketing strategy. Sad, but true; this is the way Life Insurance has been largely sold in this country. Individuals buy “enough” Life Insurance to get tax breaks just before the financial year ends. The moot question is - are we buying Life Insurance to save taxes or are we buying it to protect our family’s financial future? Since people believe that nothing ever can happen to them, the decision on quantum of insurance cover and timing is made just before the financial year ends. Tax benefits have been driving LIC’s business over the years and the same will drive private player’s too, since the same incentives are available to all insurance companies. There is a large potential in rural India. As stipulated by the Insurance Regulatory Development Authority, five per cent of our new business must cover rural India and the figure must reach 15 per cent by the fifth year. All of this is very encouraging for the life insurance sector. Innovative products, smart marketing and aggressive distribution, that’s the triple whammy combination that has enabled fledgling private insurance companies to sign up

Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

GUARANTEED RETURNS

The question we need to ask is - how much is the guaranteed return that a Life Insurance contract can give. The answer is, “I do not know.” Unfortunately, individuals expect life insurance companies to give “high guaranteed” returns. What most individuals fail to understand is that life insurance contracts are long-term contracts. The way in which the contract works is that the premium that each of us pays gets invested after deducting for the cost of mortality and other administrative expenses of the insurance company. Since the premium is paid over a period of time, the investment return that the insurance company can generate on our savings depends upon the prevailing investment opportunities at the time when the premium is paid. With volatility in interest rates and capital markets, the level of investment return that an insurance company can generate can vary substantially. In such a scenario, where is the scope for the insurance company to offer a fixed return to their policyholders but have an earning stream that is highly volatile and variable? Interest rates on Government of India securities have fallen by over three hundred basis points in the last three years. Given such an economic environment, it is foolhardy to expect that the “high guaranteed return” policies can continue for very long. The classic example is Japan where with interest rates at sub zero levels, insurance companies that offered guaranteed return policies to their policyholders are going down. Again, if you are buying Life Insurance for the “high guaranteed return” the policy offers; please examine the company and the product again. Your insurance company may not be able to pay you the promised return when your family needs the money most.

SELECTION OF RIGHT PRODUCT

Almost all the insurance companies offer what is called an “illustration” to customers the illustration is designed to help the customer understand the policy values better. From a customer point of view, it is imperative that each customer understands and is able to determine the benefits of the product. Given the long-term nature of the Life Insurance contract, it is important to look at the profile of the life insurance company that is underwriting the risk.

Given that all the private sector insurance players are new to the business, it would help to look at the past record of the foreign partner in the joint venture and the ability of the Indian partner to continue to

infuse capital, given the capital-intensive nature of the business. Again, it is very simple to compare the product with other company products because almost all insurers have their web portals with their product details. Even cost comparisons can be made through premium calculators. What is needed most is the guaranteed return and wider risk coverage. Riders are very economical and one should always choose the desired riders along with the basic life insurance policy.

THE STIFF COMPETITION

The competition is stiff and, besides, there’s a behemoth to contend with. Private players realize what they are up against and are, consequently, tailoring their strategy to suit the circumstances. There is no question of competing with LIC. It already has about 10 lakh agents and that number is likely to go up to 11 lakh by the end of the current fiscal. No company is allowed to poach on another’s agents, least of all on LIC’s. Private players only select freshers and, five years down the line, they hope to have about 1-lakh agents. Right now most of them have about 5000 to 8,000 agents, either undergoing training or already on the streets. Unlike the non-life segment, selling life insurance requires a more personal touch, which is why-

Good agents are important in this business. In life insurance, policies are ‘sold’ not ‘bought’. As of now about 60 per cent of the agents work on a part-time basis, but the ratio will come down to 50 per cent by the end of their 10th year in operation. All insurance agents’ earnings are commission-based. They make a 40 per cent commission in the first year on new business and 7.5 per cent in the next two years on renewable business. The commission rate declines to 5 per cent in the fourth year. All insurers are careful about selecting and training their agents. They want them to remain committed. Insurers know that there is enough business for everybody. Even if an insurer gets 1 to 2 per cent of the 250 to 300 million insurable Indians, it would have covered a lot of ground. The growing popularity of the private insurers shows in other ways. They are coining money in new niches that they have introduced. The state owned company still dominates segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes, they have a virtual monopoly with over 90 percent of the customers.

FEW PROMINENT REASONS OF FAILURE

1. Beneficiary: The most prominent feature of a life insurance policy is the beneficiary clause, which facilitates the easy transfer of your money to your successors. However, you need to be aware of the different kinds of beneficiaries in life insurance. You can have your children as multiple beneficiaries. All you have to do is to indicate the names of these recipients and the amount of proceeds that they are going to get. Naming a contingent beneficiary is always practical. Suppose that your first beneficiary dies near the time of your own death. In that case, your children will qualify for your insurance money if you nominate them as contingent or secondary beneficiaries. A contingent beneficiary can get life insurance proceeds if the primary beneficiary dies before he or she can receive the assets. If you have named your minor child as

a beneficiary, you will have to appoint a guardian/appointee who will administer the insurance proceeds upon your death. As revocable beneficiary, the recipient can be changed any time during the policy. While

in irrevocable beneficiary clause as in the case of absolute assignments, you cannot change your assignee’s name unless they consent to it. With an irrevocable assignee, creditors cannot touch the policy proceeds, as these monies are not considered to be a part of your assets.

2. Lapsation of policy: It can happen that due to certain circumstances you forget to pay your premiums, even in the specified grace period. Unfortunately, because you have missed the deadline your policy will lapse. Consequently, your insurance company can stop covering you or may provide you reduced insurance coverage equivalent to the total premiums paid formerly (also called paid-up policies). Nonetheless, a lapsed policy may be renewed in some plans, although the exact renewal procedure varies among different insurers. Revival of policy is not simple. Other than payment of interest the life insured has to undergo the medical examination and accordingly the policy terms may be revised.

3. Cash Surrender Value: Permanent life insurance policies like universal life insurance, whole life

insurance and variable life insurance are more attractive because of the presence of built-in cash value. Term life insurance policies do not offer cash values.

The interesting aspect of these policies is that you can surrender your policy and get the accrued cash value in your hands provided you have a substantial amount of cash value. Cash Value is a part of your premium is put in savings or another investment account according to the type of policy you purchase. As a result, the ongoing interest you receive from your investment account gradually increases your cash value.

4. Non-Forfeiture Options: In permanent life insurance policies, if you fail to pay the premiums in the grace period, you won’t lose your life insurance - your accumulated cash value will come to your rescue with the following options. The above non-forfeiture options may differ from one insurance company to another.

5. Surrender: It is always easy to terminate (surrender) your policy and get the entire cash surrender value, which will solve your liquidity problems. However, you need to consider many factors before surrendering your policy, such as the increase in the cash surrender value if your policy is maintained for the full term. Consult your insurance advisor to about the full consequences of these issues before deciding whether the policy should be cashed or kept.

6. Policy Loan: Another positive characteristic of a life insurance policy is that you can take out a policy loan against your policy to cater to your emergency needs. The interest is relatively low and the policy loan can be repaid in a lump sum or installments.

If you are incapable of repaying your policy loan, your insurance company will use your cash value to settle the loan.

7. Dividends: Dividends are the earnings paid out by the insurer to its shareholders and/ or policyholders. You are entitled to enjoy the fruits of your insurance company’s labor, for example, dividends if you own a participating policy.

THE INDIAN PSYCHE

Traditionally, the psyche of the Indian insurance seeker has been such that they have been averse to term insurance plans. Term plans require regular premium payments to be made throughout the tenure of the policy; the sum assured is paid only upon the unfortunate death of the policyholder during the policy tenure. If the policyholder survives the tenure, he is paid nothing; in other words, there are no survival benefits. The absence of survival benefits makes these plans rather unpopular among policyholders, as they like to receive a return as a reward for investing. They fail to appreciate that insurance is about ‘insuring’ and not ‘investing’, so typically there should not be any expectations of a return. A mediclaim policy or car insurance or home insurance or factory/warehouse insurance doesn’t offer returns. Similarly, there are no returns from a term plan. To worsen matters, insurance advisors weren’t interested in educating insurance seekers about why term plans are a must-have for every individual regardless of age. This gave a fillip to endowment plans not only because they pay the sum assured on the unfortunate death of the policyholder during the policy term, but also because they pay a survival benefit if the policy holder survives the term. Jeevan Anand, given the ‘LIC tag’, has always been among the preferred plans, since it is a combination of both endowment term insurance. It provides financial protection against the death of the policyholder, throughout his lifetime. However, now some private players have introduced the ‘Term Plans’ where the proceeds are also paid on maturity of the policy if the insured survives.

MONOPOLY REGIME AND OPENING UP

The life insurance sector was nationalized and consolidated into one entity viz. LIC in 1956.

Since then, the LIC has been a monopoly operator, charged with the tasks of making life insurance available throughout the country, particularly in rural areas, and mobilizing savings by providing attractive insurance products. On the first count, LIC has been fairly successful having built up a large regional distribution network comprising 2,048 branches, rural areas now account for over 25 percent of new policies. However, the Indian insurance market, with an estimated $5 in annual premiums paid per capita, has not made a significant contribution to savings mobilization. Like other long-term saving instruments, life insurance has experienced a relative decline recently, mainly owing to the comparatively low interest rate paid on life insurance funds. The LIC is subject to similar, although somewhat less restrictive portfolio allocation constraints as pension funds, some 75 percent of annual portfolio investments must be allocated to Central/State government securities or socially oriented purposes, while the remaining 25 percent can be invested in private sector, cooperative sector as per IRDA regulation. Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999. The IRDA since its incorporation as a statutory body in

April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. Since being set up as an independent statutory body, the

IRDA has put in a framework of globally compatible regulations. The opening up of the sector is likely to lead to greater spread and deepening of insurance in India and this may also include restructuring and revitalizing of the public sector companies. In the private sector, 15 life insurance companies have been registered. A host of private Insurance companies operating in both life and non-life segments have started selling their insurance policies since 2001.

POTENTIAL OF LIFE INSURANCE BUSINESS IN INDIA

India’s life insurance market has grown rapidly over the past six years, with new business premiums growing at over 40% per year. The premium income of India’s life insurance market is set to double by 2012 on better penetration and higher incomes. Insurance penetration in India is currently about 4% of its GDP, much lower than the developed market level of 6-

9%. In several segments of the population, the penetration is lower than potential. For example, in urban areas, the penetration of life insurance in the mass market is about 65%, and it’s considerably less in the low-income unbanked segment. In rural areas, life insurance penetration in the banked segment is estimated to be about 40%, while it is marginal at best in the unbanked segment. The total premium could go up to $80-100 billion by 2012 from the present

$40 billion as higher per capita income increases per capita insurance intensity. The average household premium will rise to Rs 3,000-4,100 from the current Rs 1,300 as will penetration by the existing and new players. India’s ratio of life insurance premium to its GDP is around 4 per cent against 6-9 per cent in the developed world. It could rise to 5.1-6.2 by 2012 in tandem with the country’s demographic profile. India has 17 life insurers and the state owned

Life Insurance Corp. of India dominates the industry with over 70 percent market share, though private players have been growing aggressively.

Considering the world’s largest population and an annual growth rate of nearly 7 per cent, India offers great opportunities for insurers. US based online insurance company ebix.com plans to enter the Indian market following deregulation of its insurance sector. Online insurer ebix.com’s expansion into India is a major step for the company to become a global supplier of internet-based insurance tools for consumers and insurance professionals. In a diverse country such as India it is imperative that a universal insurance infrastructure be created to maximize efficiency in the insurance industry. Online insurer ebix.com can offer the Indian market a business-to-consumer internet portal where consumers have more choice while purchasing insurance and an internet-based agency management system that will help agents work more efficiently with multiple carriers. Foreign holding in Indian insurance companies is limited to 26 per cent. The government wants to increase the cap to 49 percent, but its communist allies oppose such a move. The market is moving beyond single-premium policies and unit linked insurance products which are easier to sell. The agency model is the dominant sales channel accounting for more than 85 per cent of fresh premiums but overall inactivity and attrition is much higher at 50-55 per cent than the global average of 25 per cent.

Opportunities include health insurance and pensions, the report said, adding only 1.5-2 percent of total

healthcare expenditure in India was currently covered by insurance.

A life insurance policy covers one’s personal self. Unlike with general insurance, it is not like insuring a vehicle. Having said that, if we consider that India’s population is over one billion and growing, we get a picture of the true potential of the life insurance sector in India. LIC has been in business for 50 years now and has not covered the entire population base yet.

About 250 to 300 million Indians are still insurable. LIC has issued about 120 million policies till now, with new premium income of US$ 1 billion. Its assets have been estimated at $37billion and in the last quarter it reported a 60 per cent growth in new business. LIC’s business is growing at the rate of 20 per cent every year. That is the kind of potential one is talking about in life insurance in India. It would not be wrong to say that a lot of the advantage of advertising by new private sector insurance companies has by default gone to LIC. While they have created a lot of awareness through private insurer’s advertisements, LIC has benefited. Why? Because LIC has a much wider branch network, and buyers are surer of LIC because it has been in existence for long; they are more comfortable about its safety.

Life Insurance Companies in India

1. Life Insurance Corporation of India – Life Insurance Corporation of India (LIC) is a Government of India enterprise, and is the largest life insurance company . LIC had been established in 1956, after the Life Insurance Corporation Act had been passed by the Parliament of India in the same year. It also provides savings features along with various insurance policies. LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance.LIC with its massive corpus is also the largest investor in the Indian market. LIC continues to be the best insurance company in India just because of its track record and the high trust it is held in. Private life insurance companies in India like the Car Insurance Companies are held in low trust and it is true considering the harassment and the low claims percentage that these companies give out. Even if LIC can’t manage to give the polish of the private insurers, its scores on delivery which the only thing that matters.

2. TATA AIG - Tata AIG Life Insurance Company Limited is a joint venture between the Tata Group and American International Group, Inc. The Tata Group holds 74 per cent stake in the insurance venture with AIG holding the balance 26 percent. Tata AIG General Insurance Company, which started its operations in India in 2001, provides insurance solutions to individuals and corporates. It also offers a complete range of general insurance products including insurance for automobile, home, personal accident, travel as well as several specialized financial lines.

3. Bajaj Allianz – Bajaj Allianz life Insurance Company Limited is a joint venture between Bajaj Finserv

Limited (recently demerged from Bajaj Auto Limited) and Allianz SE. Bajaj Allianz has made a profit before tax of Rs. 180 crores and has become the only private insurer to cross the Rs.100 crore mark in profit before tax in the last four years. Today, Bajaj Allianz is one of India’s leading and fastest growing insurance companies.

4. Reliance Life Insurance Ltd. -It is a part of Reliance Capital Ltd (ADAG Group) which one of India’s leading private sector financial services companies. In just 2 years, the Company has crossed the mark of 1.7 Million policies. It is one of India’s leading private insurance companies with over 94 customized insurance products catering to the corporate, SME and individual customers. Reliance Life Insurance is not only one of India’s fastest growing life insurance companies, but also counts among the top 4 private sector insurers.

5. Birla Sunlife Insurance .- Birla Sun Life Insurance Co. Ltd. is a joint venture between Aditya Birla Group and Sun Life Financial Inc. This insurance company has pioneered the unique Unit Linked Life Insurance Solutions in India. Within 4 years of its launch, BSLI became one of the leading players in the industry of Private Life Insurance.

6. HDFC Standard Life Insurance It is a joint venture between HDFC Limited and a Group Company of the Standard Life Plc, UK. The Company is one of leading private insurance companies, offering a range of individual and group insurance solutions, in India. Being a joint venture of top financial services groups, HDFC Standard Life has adequate financial expertise to manage long-term investments safely and resourcefully. The Company’s business premium income stood at Rs. 1,839.70 Crores in 2008; it has covered over 812,811 lives so far.

7. ICICI Prudential Life Insurance - It is a joint venture between ICICI Bank and Prudential plc, which is a leading international financial services. ICICI Prudential began the operations in December 2000. It has been voted as India’s Most Trusted Private Life Insurer for three consecutive years. ICICI Prudential Life Insurance Company has various insurance plans that have been designed for different individuals, as every individual has different insurance needs

8. ING Vysya Life Insurance – It is a joint venture between Vysya Bank, which is one of the largest private sector banks in India, and ING Insurance Co., which is the world’s second largest life insurance company. It presently has around 4.5 lakh customers.

9. Max New York Life Insurance -It is a joint venture between Max India Limited, which is a multi-business corporate, and New York Life International, which is a Fortune 100 company . Max New York Life offers a variety of flexible products covering both life and health insurance including 8 riders that can be customized to over 800 combination

10. Met Life India Insurance Co. Pvt. Ltd. – It is a joint venture between MetLife Group and its Indian partners, are J&K Bank, Dhanalakshmi Bank, Karnataka Bank, Karvy Consultants, Geojit Securities, Way2Wealth, and Mini Muthoothu. MetLife is 88 of the top one-hundred FORTUNE 500 companies. MetLife entered Indian insurance sector in 2001.

11. Kotak Mahindra Old Mutual Life Insurance Ltd. – joint venture between Kotak Mahindra Bank Ltd. (KMBL), and Old Mutual plc. Kotak Mahindra Old Mutual Life Insurance Ltd. is a company which offers Life Insurance products. It is one of India’s most rapidly growing insurance companies.

12. SBI Life insurance Co. Ltd. 13. Aviva Life Insurance- It is a private insurance company, formed by a joint venture between the Aviva insurance group of UK and the Dabur group of India. Aviva holds 26 percent stake and the Dabur group holds the balance 74 percent share in the joint venture. Aviva is also known as the fifth largest insurance group in the world. At the time of nationalization, Aviva was the largest foreign insurer in India in terms of the compensation paid by the Government of India.

14. Shriram Life Insurance - IT is a joint venture of the Shriram Group of India and SANLAM of South Africa. The group offers several policies catering to various needs of the policy holders. Along with life insurance, distinct policies cover subjects like child education, retirement funds, marriage of children, expectation of high returns etc

15. Sahara India Life Insurance Company Ltd. – Was granted license by IRDA in 2004. It is the first wholly Indian-owned company in the Indian life insurance market without any collaboration with the organizations abroad. The paid up capital of the insurance company at the time of its commencement was Rs 157 Crore. TThe company offers both individual and group insurance products.

16. Bharti AXA Life Insurance - It is a joint venture between Bharti and AXA – global leader in financial

protection and wealth management. Bharti AXA Life Insurance has a 74% stake from Bharti and 26% stake of AXA in the joint venture. The Company launched its operations in India in 2006.With the continuous expansion, Bharti AXA Life Insurance is making itself proactive to cater to insurance and wealth management needs of people.

17. Future Generali India Life Insurance. – It is one of the rapidly growing Insurance companies in India. The Company is a joint venture between the India-based Future Group and the Italy-based Generali Group. Future Generali group is present in both the Life and Non-Life businesses in India.

18. IDBI Fortis Life Insurance - It is a joint venture of IDBI Bank, Federal Bank (India) and Fortis Insurance International. IDBI has a 48% stake in the venture, while Fortis and Federal Bank 26% stake each. While IDBI and Federal Bank are major Indian banks, Fortis has the expertise of banc assurance across global markets. IDBI Fortis Life Insurance has become 18th life insurer in India.

19. Canara HSBC Oriental Bank of Commerce Life Insurance – Canara Bank, HSBC Insurance (Asia-Pacific) Holdings Limited and Oriental Bank of Commerce (OBC), together established an insurance company. Canara Bank holds 51% equity while the holdings of HSBC and OBC are 26% and 23%, respectively.

20. AEGON Religare Life Insurance Company . - It is a joint venture of AEGON, Religare and Bennett, Coleman & Company. One of the pioneers in offering low cost term plans online.

21. DLF Pramerica Life Insurance Company -It has been formed by the collaboration between DLF Limited and Prudential International Insurance Holdings, Ltd. (a fully owned subsidiary of Prudential Financial, Inc.). The insurance company aspires to become a significant player in the growing Indian life insurance market.

22. Star Union Dai-ichi Life Insurance – It is a joint endeavor of Bank of India and Union Bank of India (two major Public Sector Banks in India) and Dai-ichi Mutual Life Insurance Company. It has an initial capital of Rs. 250 crores, of which Bank of India has a 51% stake, Union Bank of India has 23% and Dai-ichi Life holds 26% stake. The company is expected to be a strong contender in the insurance sector, taking into consideration its insurance, IT, finance and investment resources. The enterprise offers various products to serve all sections of the society.

COMPANY PROFILE ABOUT AVIVA

Aviva is UKs largest and the world¶s fifth largest insurance Group. It is one of

the leading providers of life and pensions products to Europe and has substantial

businesses elsewhere around the world. With a history dating back to 1696,

Aviva has a 40 million-customer base worldwide. It has more than 364 billion of

assets under management.

In India, Aviva has a long history dating back to 1834. At the time of

nationalization it was the largest foreign insurer in India in terms of the

compensation paid by the Government of India. Aviva was also the first foreign

insurance company in India to set up its representative office in 1995.

In India, Aviva has a joint venture with Dabur, one of India's oldest, and largest

Group of companies. A professionally managed company, Dab ur is the country's

leading producer of traditional healthcare products.

In accordance with the government regulations Aviva holds a 26 per cent stake in the joint venture and the Dabur group holds the balance 74 per cent share.

With a strong sales force of over 27,000 Financial Planning Advisers (FPAs),

Aviva has initiated an innovative and differentiated sales approach to the

business. Through the Financial Health Check (FHC) Aviva¶s sales force has

been able to establish its credibility in the market. The FHC is a free service

administered by the FPAs for a need-based analysis of the customer¶s long-term

savings and insurance needs. Depending on the life stage and earnings of the

customer, the FHC assesses and recommends the right insurance product for

them.

Aviva pioneered the concept of Ban assurance in India, and has leveraged its

global expertise in Ban assurance successfully in India. Currently, Aviva has Ban

assurance tie-ups with ABN Amro Bank, American Express Bank, Canara Bank,

Centurion Bank of Punjab, The Lakshmi Vilas Bank Ltd. and Punjab & Sind

Bank, Co-operative Banks in Gujarat, Rajasthan, DELHI & Kashmir, Bihar,

West Bengal, Andhra Pradesh and Maharashtra and regional Banks.

History Aviva can trace its heritage back over 300 years. The group was formed as CGNU in 2000 following the merger of CGU and Norwich Union. CGU was itself the result of an earlier merger, between Commercial Union and General Accident in 1998. Key dates in the company history are as follows:

1696

The Hand-in-Hand was formed at Tom's coffee house, in London. It is the oldest

of the many companies that have been absorbed into

what is now Aviva. 1797

Norwich Union was founded as a mutual fire insurance society by Thomas

Bignold in Norwich, Norfolk. 1808

A particularly severe winter involving widespread suffering and loss of life

prompted Thomas Bignold to establish the Norwich Union Life Insurance

Society, again on the mutual principle. 1824

Norwich Union's first overseas agency was opened, in Portugal. Eventua lly the

Norwich Union name spread across mainland Europe to the Middle East, Africa,

India, the Far East, Australia, New Zealand, the United States, Canada and South

America. 1863

Commercial Union continued its overseas expansion and within two years had

agencies in India, South Africa, the Caribbean. 1994

Commercial Union acquired French asset manager Groupe Victoire. 1997

In the year of its bicentenary, Norwich Union demutualised and floated as

2004 Aviva sells its general insurance businesses in Asia, its Your Move estate agency

and e.surv surveying businesses in the UK. It also acquires HPI Group Holdings

Ltd, the UK¶s leading provider of vehicle status checks for used -car purchasers,

and closes UK broker subsidiary Hill House Hammond.

2005

Aviva brings together Norwich Union Insurance and RAC in the UK for about

£1.1 billion. Aviva appoints new chairman. In Ireland, Hibernian enters a

bancassurance joint venture with AIB.

2006

Aviva announces changes to group organization to create Aviva UK and Aviva

International. Aviva partners with Centurion Bank of Punjab in India and

announces an acquistion and bancassurance deal in Sri Lanka. Aviva receives a

licence in Russia and acquires AmerUs in the US.

2009

Aviva Australia is acquired by National Australia Bank (NAB), one of

Australia¶s major banks. Together with Aviva, MLC and NAB Wealth (the

wealth management division of the NAB) will have the largest combined life

insurance book in Australia with market leading individual and group insurance

offers and will be the largest investment platform provider in Australia.

Aviva’s Presence

1861

1885

1797

1696

1998May 2000

2001Exit US GIAnd London Markets

July 2002

London & Edinburgh1998

1905Hand in Hand

NU Floatation1997

May 2005

Feb 2006

INDIAN FORAY

1696 –World’s oldest insurance company Hand in Hand formed in London

1797 –Norwich Union (Norwich)

1861– Commercial Union (London)

1885 –General Accident (Perth)

1998 –CGU formed with merger of Commercial Union & General Accident

2000 –CGNU formed with merger of CGU & Norwich Union

2002 –CGNU re-branded as Aviva

Aviva -Journey So Far

LargestinsuranceservicesproviderinUK

5thlargestinsurancecompanyintheWorld

No.1intheUK;Oneofthetop5playersinUK,Ireland,Netherlands,Poland,Spain,TurkeyandSingapore

AndrewMossistheGroupCEOofAviva

Worldwidepremiumincome&investmentsalesof£49.2billion

Over£359billionassetsundermanagement

Our International Presence Cont…

Our International Presence Cont…

OperatingProfitbeforeTaxof£3,245million

MarketcapitalizationofUS$25billion

Over90exclusiveBancassurancepartnershipsworldwide

50millioncustomersworldwideand54,000employeesworldwide

Aviva Headquarter-London,

United Kingdom

Titanic (Ship)

Queen Victoria (1901)Agatha Christie (Famous Author)

Famous People & Companies Insured By Aviva Group

The list goes on…

Winston Churchill (Prime Minister of U.K., 1940)

Freddie Mercury (Lead Singer–“Queen” Rock Band)

Sydney Opera House Concorde

The FA Cup (Soccer)

Agatha Christie (Famous Author)

Queen Victoria (1901)

Freddie Mercury (Lead Singer–“Queen” Rock Band)

Winston Churchill (Prime Minister of U.K., 1940)

Titanic (Ship)

Sydney Opera House

Concorde

The FA Cup (Soccer)

Aviva India’s Vision, Mission & Values

“Aviva…whereexceedingexpectationsthroughinnovativesolutionsis“our”wayoflife.”

Vision

“TobeamongstIndia’sleadinglifeinsurerswithqualitybusinessmodelfocusedonsustainablegrowth”.

Mission

Customer centricity

Passion for winning

Empowered team InnovationIntegrity

Values

Dabur a trusted Indian business house with strong presence …

Dabur & Aviva-A Successful Joint Venture

Joint venture, 199526% stake

74% stake

223 Branches (including rural branches)

Dabur

Foundedin1884.

India’soldest&largestgroupofcompanies.

ConsolidatedannualturnoverinexcessofRs.2,396cr.

Country’sleadingproduceroftraditionalhealthcareproduct.

MarketCapitalization:$2bn+(FY’06)

Started operations on 6th June, 2002.

Pioneered the concept of indexation.

Pioneered the concept of unitization.

Pioneered the concept of Bancassurance.

Our Journey So Far Cont…

LeadersinBancassuranceinIndia–30+Bancassurancetieups.

Reachingoutcloseto3,000towns&citiesacrossIndia.

NewBusinessAnnualizedPremium Equivalent(APE)ofRs.1,221croresforthefiscalyear2007-08,withagrowthof61.5%.

PaidupcapitalofRs.1,348.8crores.

Our Journey So Far

Aviva India-The Leadership Team

MD & CEODirector, Corporate Initiatives Appointed Actuary

Director, MarketingDirector, Strategy and CIO

Sales Director

Associate Director, HR

Director, Distribution

Director, Internal Audit

Director, DSF Director, Bancassurance

Company Secretary& Associate Director

Head Legal & Compliance

Director, Finance & Actuarial

COO

Different Functions At Aviva

Direct Sales Force

Bancassurance

Aviva Direct

Telemarketing Partners

Business Service Associates

Human Resource

Aviva’s Sales Training &

Recruitment Academy (ASTRA)

Strategic Initiative & Business Change (SIBC)

Finance & Actuarial

Information Technology

Business Risk & Internal Audit

Operations

Marketing

Legal & Compliance

Aviva India’s Work Philosophy

Innovate to offer unique customer

benefits

Customise Offerings

Focus on Unique Customer needs

Integrate to establish segment ownership

Integrate business plans

across channels

Channels to takefull ownership

Focus on growth

Focus by Top Management

Hire expertise and dedicated teams

Our Success Is Built on Three Core Pillars

Organizational structure The following chart shows, in simplified form, the organisational structure of the Group as at 31 December 2010. Aviva plc, is the holding company of the Group.

* Incorporated in England and Wales ** Incorporated in People’s Republic of China. Aviva plc has a 50% interest in the joint venture *** Incorporated in Scotland **** Includes other UK general insurance subsidiaries and certain investment management businesses

Organizational chart of Aviva INDia

Linked Insurance plans

Unit linked Insurance plans (ULIP) is life insurance solution that provides for

the benefits of protection and flexibility in investment. The

investment is denoted as units and is represented by the value

that it has attained called as Net Asset Value (NAV). The

policy value at any time varies according to the value of the

underlying assets at the time. ULIP provides multiple benefits to the consumer.

The benefits include:

Life protection

Investment Options

Transparency

Adjustable Life Cover

Flexibility

Liquidity Tax planning

Investment and Savings

Options to take additional cover against- Death due to accident,

Disability, Critical Illness, Surgeries etc.

In a ULIP, the insurer deducts charges towards life insurance (mortality charges),

administration charges and fund management charges. The rest of the premium is

used to invest in a fund that invests money in stocks or bonds. The policyholder’s

share in the fund is represented by the number of units. The value of the unit is

determined by the total value of all the investments made by the fund divided by

the number of units. If the insurance company offers a range of funds, the insured

can direct the company to invest in the fund of his choice. Insurers usually offer four choices: Bond fund, Secured Fund, Balanced Fund, Growth Fund

So, in ULIPS is that the investor knows exactly what is happening to his money

and two, it allows the investor to choose the assets into which he wants his funds

invested.

Unit plans are investment plans for those who realize the worth of hard -earned

money. These plans help you see your savings yield rich benefits and help you

save tax even if you don't have consistent income.

Unit-linked insurance plans, ULIPs, are distinct from the more familiar µwith

Profits¶ policies sold for decades by the Life Insurance Corporation. µWith

Profits¶ policies are called so because investment gains (profits) are distributed to

policyholders in the form of a bonus announced every year.

Strong operating performance

03 November, 2011

Nine months 2011

Good momentum in general insurance

General insurance and health net written premiums of £7.0 billion, up 9%. Group combined operating ratio improved to 96%. UK general insurance sales up 12%: 318,000 new personal motor customers this year, now more than two million in total.

Strong profitability in life insurance

New business internal rate of return increased to 14%. Long term savings sales of £23.6 billion, 8% lower, driven mainly by actions to write less capital-intensive business, but also due to current market conditions

UK life and pension sales up 6% to £8.1 billion.

Focused on balance sheet in a tough economic environment

IFRS net asset value per share increased by 23 pence to 448 pence (HY2011: 425p). IGD solvency surplus £2.7 billion and central liquidity £2.3 billion at 30 September 2011. On track to meet net operational capital generation target of between £1.5 billion and £1.8 billion.

Minimal impairment on our high-quality long-term asset portfolio. Strengthened equity and euro currency hedging providing additional downside protection.

Further delivery of our strategy in the third quarter

On course to meet our financial targets in 2011. Market share gains in key UK markets - in individual annuities, protection and personal motor*. Completed sale of RAC for £1.0 billion. Sale of Aviva Investors business in Australia. Sale of Delta Lloyd's loss-making German business.

* UK market share data is latest available information based on HY11.

All figures in this statement exclude Delta Lloyd except for net asset value, IGD solvency surplus and net operational capital generation. All comparatives are for the first nine months 2010 unless otherwise stated.

Andrew Moss, group chief executive, commented:

“Markets have been exceptionally volatile but we have delivered a strong operating performance in the first nine months and we remain on track to meet our financial targets this year. Focusing on capital generation and our capital and liquidity position will continue to be priorities.”

“Aviva is fitter and leaner today. Whilst the market environment is likely to remain challenging in the near term, we continue to make good strategic progress and are strengthening customer franchises in key markets, notably the UK.”

IRR and life new business margin (excluding Delta Lloyd)

9M 2011

9M 2010

Regional IRR

United Kingdom 15% 15%

Aviva Europe 13% 12%

9M 2011

9M 2010

North America 14% 14%

Asia Pacific 14% 10%

Group IRR 13.8% 13.1%

Group life new business margin 2.3% 2.7%

General insurance combined operating ratio (excluding Delta Lloyd)

9M 2011

9M 2010

Group 96% 97%

United Kingdom 95% 96%

Aviva Europe 99% 103%

North America 96% 98%

World-wide total sales (excluding Delta Lloyd)

9M 2011

9M 2010

Sterling % change on 9M2010

Local currency % change on 9M2010

Total long-term savings sales 23,630 25,648 (8)% (8)%

General insurance and health net written premiums 6,967 6,410 9% 8%

World-wide total sales 30,597 32,058 (5)% (5)%

Capital position

30 SeptemberM

2011 30 June 2011

IFRS net asset value per share 448p 425p

MCEV net asset value per share 479p 554p

30 SeptemberM

2011 30 June 2011

IGD solvency surplus £2.7bn £4.0bn

Contacts

Investor contacts

Andrew Moss +44 (0)20 7662 2286

Pat Regan +44 (0)20 7662 2228

Charles Barrows +44 (0)20 7662 8115

David Elliot +44 (0)20 7662 8048

Media contacts

Nigel Prideaux +44 (0)20 7662 7654

Andrew Reid +44 (0)20 7662 3131

Sue Winston +44 (0)20 7662 8221

Conor McClafferty +44 (0)20 7251 3801

Timings

Real-time media conference call 0800 hrs (GMT)

Analyst conference call 0930hrs (GMT)

on +44 (0)207 162 0025

(access code 905723)

CONTACTS

Aviva India Aviva Tower 1F, Sector Road Opposite Golf Course Sec - 43, Gurgaon 122003 Telephone +91 (0)124 2709000

Phone SMS “ASK AVIVA” to 5676737

Toll-free number: 1800-180-22-66 For Non MTNL/BSNL phone users: 0124-2709046

*Our Customer Service executives are available to assist you from 8am-8pm from Monday to Saturday.

Email

If you prefer to send us an e-mail, please write to customerservices@avivaindia.com

WEBSITE Aviva Life Insurance www.avivaindia.com

Awards and Recognition

We believe that our employees are our greatest strength and the only asset that can be replicated. It is the passion of our people which continues to help us achieve the 'impossible' and make Aviva India great place to work.

Aviva Great Wall of Education has been recognized yet again for the outstanding work that it has been doing towards the education of underprivileged children. The Bookwall won a Silver at Effies 2011 ( Effective Advertising Awards) where it collected more than 9,50,000 books impacting the lives of close to 500,000 children across the country. This is the second consecutive time that the mega book donation drive has won an Effies- one of the top award platforms for the advertising community in India and worldwide.

We hope to continue the winning streak next year, and bring many more underprivileged children closer to education through our initiatives.Aviva India won a Bronze at the Effies 2010 for the Aviva Great Wall of Education, part of Aviva's Street to School Program. The Effies are

among the top award platforms for the advertising community in India and worldwide. Aviva Great Wall of Education was awarded this elite recognition for the marketing effectiveness displayed during this campaign.

Aviva India has won a Gold at the SPIKES Asia Awards, 2010 for the 'Aviva Great Wall of Education' which is part of the Street to School programme. The SPIKES Awards is one the most prestigious awards for creative advertising across the Asia Pacific region. Aviva Great Wall of Education was awarded this elite recognition for the category- 'Best use of Ambient Media'.

Aviva India has won the "Corporate Social Responsibility Award" at the prestigious Asia Insurance Industry Awards 2010 for its corporate social responsibility programme – 'Street to School' for demonstrating how corporate social responsibility can be closely and successfully tied with business strategy. Aviva Life Insurance India was selected from a number of high profile companies competing for the honour of receiving the award.

Aviva India has won two major awards, at the ‘CMO Asia Awards’ held in Singapore– ‘Excellence in Branding and Marketing’ in Banking and Financial services, and Social Marketing. Aviva India was selected for the two prestigious awards from among more than 200 nominations from across Asia.

Aviva has been felicitated with the "Bronze Award for Excellence in People Management" by Grow Talent Company Limited and Businessworld. This honour was given based on our ranking amonst the top 25 companies as per the Grate Place to Work survery in the last four years.

Aviva was ranked 4th in the Best Workplaces in India study for the year 2008 by the Great Place to Work Institute. We were the only Insurance company in the top 10 ranking that year.

Aviva India won the coveted Award for Talent Management during the national round of Asia Pacific HRM Congress

Aviva India was also felicitated by the HR Excellence Award by Amity Business School

AVIVA PLC SWOT Analysis AV.

Strengths

Aviva is the fifth largest insurance provider in the world and has a global presence Aviva's strong brand will appeal to consumers, who are increasingly risk averse as far as financial institutions and products are concerned

The company's diversified business mix has resulted in it's ability to remain profitable and stable at a time when other financial institutions have required emergency funding

Weaknesses

The size of Aviva can be a weakness in terms of its ability to adapt to market changes and the speed at which it can get new products to market

Mortgage protection and unit bond sales have weakened

Opportunities

The ageing populations of the regions in which Aviva is active offer the opportunity for the sale of products geared towards funding retirement

Significant population growth in the US will generate demand for insurance products and the opportunity for organic growth

The level of insurance penetration in the Asia Pacific region is low, providing an opportunity for further organic growth

Threats

The global economic crisis and economic downturn have resulted in reduced consumer appetite for savings, as living costs increase and disposable income is reduced

Business volumes are likely to be slow as consumers adjust their spending in the current economic climate

Share Price 297.5 Change 1.7 Volume 1,543,562 Dividend 26

EPS 50 Shares 2,147.5m Offer 297.6 Bid 297.4 Avg. Vol 11,834,007 Yield 6.49 P/E 6 Mkt Cap 8,642.6m

RESEARCH METHODOLOGY;-

Research is a careful investigation or enquiry especially a search for new facts in

any branch of knowledge and a systematized effort to gain new knowledge.

Marketing research is the systematic and objective identification, collection,

analysis dissemination and use of information for the purpose of improving

decision making related to the identification and solution of problems and

opportunities in marketing. We define or identify the marketing research problem

or opportunity and then determine what information is needed to investigate it.

The research was conducted for improving the walk-in and knowing customer

awareness towards AVIVA LIFE INSURANCE CO. services and customer

satisfaction.

RESEARCH TYPE ;-

1. A TYPE OF ACADEMIC RESEARCH

This project has been done mainly for the fulfillment of academic requirements.

RESEARCH DESIGN

A research design is the arrangement of conditions for collection and analysis of

data in a manner that aims to combine relevance to the research purpose with

economy in procedure. Research designs are of following types;

DESCRIPTIVE

DIAGNOSTIC

EXPERIMENTAL

CAUSAL

EXPLORATORY

In this project, exploratory type of research design has been used.

RESEARCH TYPE -: EXPLORATORY RESEARCH.

This method is undertaken when researcher is interested in knowledge about

characteristics of certain group. As in this particular case I wanted information regarding a particular

group i.e. customer Hence I selected ³ Exploratory

research as the type of research.

RESEARCH TYPE -: EXPLORATORY RESEARCH.

This method is undertaken when researcher is interested in knowledge about

characteristics of certain group. As in this particular case I wanted information

regarding a particular group i.e. customer. Hence I selected ³ Exploratory

RESEARCH DURATION:-

The research was conducted over duration of 4 weeks.

DATA COLLECTION:-

For this project work I collected data from both the Secondary and Primary data

sources.

SECONDARY DATA SOURCE :-

Data is mainly collected mainly from company web-sites and other related

websites, Newspapers, Journals, magazines etc.

PRIMARY DATA SOURCE :-

The survey done to collect the data from the customers is mainly by

questionnaires, observations and interviews were the major sources of

primary data.

Reason for selecting primary data :-

In terms of primary data structure questionnaire was prepared to interview the

professional, unemployed students, housewives, investment consultant, post

office agent and other in Delhi location. Analysis clearly reflected the views

and preference regarding the perception of the people towards AVIVA

life.

There are two types of mode to collect the data: -

Observation method.

Survey method.

As for as the data collection method for this project is concerned, designing

the data collection forms or survey forms is applicable to the project. The

method selected survey method.

A survey can be conducted by:- Personal interview. Telephonic interview.

SAMPLING ;-

Sampling is one of the most fundamental concepts underlying any research work.

Most research studies attempt to make generalization or draw inferences

regarding the population, based on their study of a part of the population that is

the sample. METHOD OF SAMPLING ;-

Sampling is one of the most fundamental concepts underlying any research work.

The sampling method used for project was simple Random and purposive

sampling. The sample size is selected randomly with a purpose to cover

maximum possible customer.

SAMPLE SIZE :-

The sample size taken for analysis was 200 customers.

Sometimes customers were not cooperative in providing personal or secretive

data, figures or information. But an effort has been made to collect data as much correct as possible to make the study more effective and I have tried to compile

each and every detail to the study to make it more meaningful.

STEPS FOR RESEARCH METHODOLOGY« Research methodology has following steps:

Step: 1 To decide the objective of the study

Step: 2 To frame the research design.

Step: 3 To determine the source of data.

Step: 4 To design data collection form.

Step: 5 To determine sample size and sample design

Step: 6 To organize and conduct fieldwork.

Step: 7 To process and analyze the collected data.

Step: 8 To prepare the research report.

OBJECTIVES OF THE STUDY:-

1. To study the customer behavior and customer satisfaction level of the

concern.

2. To determine the level of customer satisfaction, their requirements,

expectations and interest towards various company policies.

3. To study the extent of customer awareness regarding the available policies

and the services that the company are marketing presently.

4. To conduct an analysis of the services provided by the company and

customers perception, knowledge, satisfaction towards the services

provided by the concern.

5. To review the various policies available in the concern.

6. To examine whether the promotional activities conducted by the concern

are effective or not.

7. To know the new Policies and strategies adopted by the concern.

8. To suggest some Pragmatic steps in order to make improvements in the

concern. 9. To find out the various policies/services been used by customers

in DELHI and NCR region.

LIMITATIONS

I)Sample size is small and may not be representative of the universe of

study i.e. DELHI and NCR city. II)Some times no exact data is found as customers doesn¶t

provide exact information. II)Efforts for the marketing of company products are less and

hence there is less awareness an d usage of most of the

³AVIVA policies.

IV)Some question carry multiple response and percentage have not been

computed for them.

V)The analysis is based entirely on responses of individuals and may vary

with future changing trends.

VI)Time constraint.

VII)As the data is collected in the month of NOV TO JAN, the result could not

be considered consistent for the whole year.

Data Analysis and Interpretation

1) PERCEPTION ABOUT AVIVA ULIP¶S ;-

1.Heading: perception of respondent about AVIVA ULIP¶S Plans

VIII)I faced problem of avoidance towards giving information the

customer thinks it to be Useless and wastage of time.

…

4.Interpretation:

Perception of most of the respondents i.e., 42% is good, 32% is very good,

19% excellent and only 7% have a poor perception about AVIVA ULIP.

2) INFORMATION OF AVIVA¶S ULIP PLANS :-

1. Heading: Respondent get information of AVIVA ULIP¶S Plans from which

sources.

4. Interpretation:

33% the respondents came to know about AVIVA ULIP¶s Plans from friends,

29% from various Agents, 21% from family members and 17% from other

sources.

3) INFORMATION OF AVIVA¶S ULIP SERVICES TO CUSTOMERS:-

1. Heading: AVIVA ULIP¶s service to its customers .

4. Interpretation: Majority of the customers are satisfied with the service of the company. 39% say the service is very good, 32% say its good, 17% say its

excellent and only 12 are not satisfied.

4) AVIVA ULIP¶S PLANS BENEFITS SCHEMES TO ITS CUSTOMERS:- 1. Heading: Whether AVIVA ULIP gives beneficial schemes to its existing

customers .

4. Interpretation: Majority of the customers are satisfied with the beneficial

schemes the company. 67% say that AVIVA ULIP is giving beneficial schemes

to its customers, 24% they are not getting any such schemes and 9% cant say

about these things.

5) AVIVA ULIP¶S CHARGES AND FEES:- 1. Heading: Reasonability of maintenance charges & fees.

4. Interpretation: 83% of respondents say that the charges are reasonable and

only 17% are not happy with the service charges.

6) PAYMENT FOR PAYING ULIP PREMIUM:-

1. Heading: Mode of payment for paying premium

4. Interpretation: 93% of respondents prefer to pay by cheque, 7% by draft and

none of the respondents prefer cash for paying premium.

CONCLUSION

CONCLUSION

Working with AVIVA Life Insurance for two months was a very nice and a good

learning experience. It has helped me a lot learning about different kinds of

investments and the pros-corns of its. It has also helped me to know about how

works in a corporate world is done.

Though we had a very nice experience but we had to face some

problems even, like we were not given any identity card by the company so

sometime it became very difficult for us to convince people that we are from the

company and not an agent. Mostly small investors are not satisfied with the

charges of the AVIVA ULIP.

1. Customers are much more relying upon AVIVAULIP¶S Plans.

2. People donµt rely upon private insurance sector.

3. All products are not attractive to the customers so that kind o f products are

very hard to sale.

4. Less number of traditional plans that¶s why people who really need

traditional plans are still not satisfied.

5. Majority of the customers are satisfied with the beneficial schemes the

company.

6. Majority of the customers are satisfied with the service of the company.

Suggestions and Recommendations ;-

Following are a few suggestions;

like the company should carry out market research on a regular basis. This will

facilitate indication of customer groups, analysis of the customer needs and

requirements. It will be helped in engendering valuable feed back to the

officers to assess the level of customer satisfaction, which in turn could be used

in upgrading the service levels;

It is recommended to the concern that it should try to differentiate their policies and establish

exclusive brand names for them

Company should use more modern information devices to inform the

customer about its products and policies.

Company should use the E- banking concept, to compete in modern banking

environment with the private banks.

It is suggested to increase its branches at different areas to provide

convenience for customers.

It is suggested that concern should also provide regular training to their

employees. Proper training will keep the employees knowledge up to -date and

they will be able to serve customer in a better way. It will help them in

promoting the company Good will among the customer;

And In the end, the concern is suggested to concentrate more on building

relationship; their efforts should be directed towards ultimate customer

satisfaction.

ANNEXURE

Questionnaire

1) What do you think about AVIVA ULIP¶s Plans?

A)Excellent

B)Very Good

C)Good

D)Poor

2) From where did you got information of AVIVA ULIP¶s Plans ?

A)Friends

B)Family members

C)Advertisements

D)Others

3) Whether AVIVA giving efficient service to its customers ?

A)Excellent

B)Very Good

C)Good

D)Poor

4) Whether AVIVA ULIP Plans gives beneficial schemes to its existing

customers ?

A)Yes

B)No

C)Cant say

5) Is the maintenance charges & fees are reasonable?

A)Yes

B)No