final rlic report

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Summer Internship Project Report on Marketing at

Reliance Life Insurance Company Ltd.

Submitted By:-

Ankit KumarID No. :-

D1113SSISBEPGP10187 (PUN-4-CT-410)

Batch :- SS11-13Section :- SC4Email ID:-

[email protected]. No.:- 9650928722

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DECLARATION

I hereby declare that this project work entitled Survey of 50 prospective customers & 50existing customer write Reliance Life Insurance & TATA AIGis my work.

ACKNOWLEDGEMENT

It gives me immense pleasure to express my deep sense of gratitude to (PROF) Ranjan Paulfor his valuableguidance and consistent supervision throughout the course.I am also thankfulto Mr. Yogesh Aanad(Area manager),mr. Hari Mohan Kaushik(Business DevelopmentManager),Mr. Abhishek Ranjan(Manager sales),Mr. Rahul singhaniya(sales trainingmanager),Mrs. Asima siddiqui(Master Trainer) my Company Guide of Reliance Life InsuranceCompany LTD, New Delhi, for his valuable guidance for preparing the Final Report. I amindebted to our other faculty members, my friends who gave their full-fledged co-operation forsuccessful completion of my project. It was an indeed learning experience for me.

Ankit Kumar

CHAPTER No. 0107-08

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1.1. Abstract .. 071.2. Introduction ... 07-081.2.1. Insurance Industry ... 081.2.2. About the Project .. 081.2.3. Purpose of the Project .. 08

1.2.4. Scope of the Project .. 08

CHAPTER NO. 02 08-11

2. Review of Literature 082.1. About Insurance Industry in Brief 08-092.2. Logic of Insurance 092.3. Need of Insurance 092.4. Insurance in India 092.5 History of Insurance in India 09-112.6 Life Insurance Corporation Act. 1956 .. 11

2.7 General Insurance Business 11

CHAPTER NO. 03 11

3.1. Insurance Regulatory and Development Authority of India, Act 11


4.1. Different Insurance Companies .. 124.1.1. Top 10 Insurance Companies in India.. 124.2. Market share of Indian Insurance Companies ... 134.3. Booming Insurance Market .. 13-14


5.1. Advantage of Life Insurance . 14-15


6.1. Type of Insurance product .. 156.1.1. Term Insurance Plan .. 15

6.1.2. Endowment Assurance Plan ... 156.1.3. Money Back Policy. 166.1.4. Whole life Plan ... 166.1.5. Pension Plan ... 166.1.6. Child Plan ... 166.1.7. ULIP .. 16


7. 1. Marketing mix in Insurance Industry .. 167.1.1. Introduction .. 16-17

7.1.2. Insurance Marketing .. 177.1.3. Marketing mix for Insurance Company . 17

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7.1.3.1. Product. 17-187.1.3.2. Price . 187.1.3.3. Place . 18-197.1.3.4. Promotion .. 197.1.3.5. People .. 19

7.1.3.6. Process ... 19-207.1.3.7. Physical Distribution. 20


8.1. Customer For Reliance Insurance Company 20-21


9.1. Changing face of Indian Insurance industry 219.1.1. India The next Insurance Giant 22


10.1. Valuing the invaluable . 2310.1.2. Cover Insurance . 23-24


11.1. Profile of the Company . 24-2511.1.1. About Reliance Life Insurance Company Ltd.. 2511.1.2. Corporate Objective . 2511.1.3. Corporate Mission . 26-28


12.1. Other Player in Insurance Industry 2812.1.1. Birla Sun Life ... 2812.1.2. Life Insurance Corporation of India.. 2812.1.3. National Insurance Company Ltd. 28-2912.1.4. TATA AIG Life Insurance 29

CHAPTER NO. 13. 30-37

13.1. Research Methodology 2913.1.1. Source 2913.1.2. Primary Survey 2913.1.3. Secondary Survey 2913.1.4. Methodology 3013.1.5. Sample design . 3013.1.5.1. Sampling Frame 30.13.1.5.2. Sampling Technique . 3013.1.5.3. Sample Size . 30

13.1.6. Data Collection .. 3013.1.7. Finding and Interpretation .. 30-34

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13.1.8. Result .. 3413.1.9. Suggestion and Recommendation .. 3513.1.10. Conclusion ... 3513.1.11. Limitation 35

TABLE & CONTENT OF TATA AIG INSURANCE COMPAMY LTD.

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CHAPTER PREFACE

PAGE NO.

CHAPTER 1 INTRODUCTION TO INSURANCE 36-42

1.1 INTRODUCTION 36

1.4 FUNCTION OF LIFE INSURANCE 36

1.2 LIFE INSURANCE 36-37

1.3 TYPES OF LIFE INSURANCE 37-38

1.5 ROLE OF INSURANCE 39

1.6 IMPORTANCE OF INSURANCE 39-40

1.7 CONTROLING AUTHORITY 40-42CHAPTER 2 INTRODUCTION TO INDIAN INSURANCE INDUSTRY 42-46

2.1 INDIAN INSURANCE INDUSTRY 42

2.2 A BRIEF HISTORY OF INSURANCE SECTOR 42-43

2.3 MILESTONES IN THE INSURANCE SECTOR 43

2.4 LIST OF INSURANCE COMPANIES WORKS IN INDIA 44

2.5 HOW BIG IS THE INSURANCE MARKET? 44-45

2.6 INDIAN SCENERIO 45-46

CHAPTER 3 INTRODUCTION OF TATA AIG 46-58

3.1 TATA GROUP 46

3.2 TATA GROUP IN INSURANCE 46

3.3 AIG 47

3.4 THE JOINT VENTURE- TATA-AIG 47-49

3.5 HOW COMPANY WORKS 49-54

CHAPTER 4 LEARNINGS FROM THE PROJECT 55-58

BIBLIOGRAPHY . 59ANEXXURE . 60-61

Chapter No. 01

1.1. Abstract

Today every sector is very competitive sector and I find that insurance sector has the maximum

growth and potential as compared to other sectors. Insurance has the maximum growth rate of15-20% while as other sector has maximum 12-15% of growth rate. This growth potential

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attracts to enter in this sector and Reliance Life Insurance has given me the opportunity to workand get experience in highly competitive and enhancing sector. This project studies the existingmanagement practices in the channel development process and various benefits derived bythem in Reliance Life Insurance .The project is all about comparative analysis of differentinsurance products of different companies. The objective of the project was to check the

awareness level of Insurance and attitude of the people towards insurance in the current market.Survey was also done regarding the preference of insurance sector depending on the age group(whether they prefer private players or public companies) . In the beginning, we gain an insightabout the company and its values and inherit them in our life, and then studied different typesof insurance plans like ULIPs, term plan, endowment plan, and various other plans. Now, onto the statistical part, we designed a questionnaire that will provide a base for studying theawareness level and perception of the life insurance. The project helped me in developing mycommunication skill and interpersonal skills. During the tenure of my internship I learned a lotfrom my seniors, clique etc but above all I learned a lot from my own personal experience.

1.2. INTRODUCTION

1.2.1. INSURANCE INDUSTRY

The history of life insurance in India dates back to 1818 when it was conceived as a means toprovide for English Widows. Interestingly in those days a higher premium was charged forIndian lives than the non-Indian lives as Indian lives were considered more risky for coverage.The Bombay Mutual Life Insurance Society started its business in 1870. It was the firstcompany to charge same premium for both Indian and non-Indian lives. The OrientalAssurance Company was established in 1880. The General insurance business in India, on theother hand, can trace its roots to the Triton (Total) Insurance Company Limited, the firstgeneral insurance company established in the year 1850 in Calcutta by the British. Till the endof nineteenth century insurance business was almost entirely in the hands of overseascompanies .Insurance regulatation formally began in India with the passing of the LifeInsurance Companies Act of 1912 and the provident fund Act of 1912. Several frauds during20's and 30's sullied insurance business in India. By 1938 there were 176 insurance companies.The first comprehensive legislation was introduced with the Insurance Act of 1938 that

provided strict State Control over Insurance business. The insurance business grew at a fasterpace after independence. Indian companies strengthened their hold on this business but despitethe growth that was witnessed, insurance remained an urban phenomenon. The Government ofIndia in 1956, brought together over 240 private life insurers and provident societies under onenationalized monopoly corporation and Life Insurance Corporation (LIC) was born.

Nationalization was justified on the grounds that it would create much needed funds for rapidindustrialization. This was in conformity with the Government's chosen path of State leadplanning and development. The (non-life) insurance business continued to thrive with theprivate sector till 1972. Their operations were restricted to organized trade and industry in largecities. The general insurance Industry was nationalized in 1972. With this, nearly 107 insurerswere amalgamated and grouped into four companies- National Insurance Company, New IndiaAssurance Company, Oriental Insurance Company and United India Insurance Company.These were subsidiaries of the General Insurance Company (GIC).The general insurance

business was nationalized after the promulgation of General Insurance Business(Nationalizations) Act, 1972.The post-nationalization general insurance business wasundertaken by the Genera.

1.2.2. About the project

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The project deals with Survey of 50 prospective customers & 50 existing customer writeReliance Life Insurance & TATA AIGoffered by Insurance companies.

1.2.3. Purpose of the project

The main purpose of the project is to do Survey of 50 prospective customers & 50 existingcustomer write Reliance Life Insurance & TATA AIG. The project would also help inunderstanding preference of people regarding private and public insurance companies.The main objective of the research is:-i) Reliance life insurance with Tata AIG life insurance. finding out the features and benefits of these plans to find out the awareness level of insurance in Delhi. to determine customer preference towards private insurance. marketing of different insurance products.

1.2.4. Scope of the project

The entry of foreign MNCs and the conductive business environment fostered by thegovernment, it is no wonder that the re-entry of private insurance has marked a secondcomingfor the sector. In just five years, the sector has undergone a makeover, offeringmore choice,

better services, quicker settlement, tighter regulation and greater awareness s the environmentbecome more and more competitive and services andproducts become alike, creating adifferentiation is becoming extremely tough. Thus, themain objective of my project was to findout the preference of people regarding insurance companies, which would help R.L.I.employees to market their product. The study thengoes on to evaluate and analyze the findingsso as to present a clear picture of recenttrends in the Insurance sector.

Chapter No. 2

2. REVIEW OF LITERATURE

2.1. About Insurance Industry

"Insurance is a contract between two parties whereby one party called insurer undertakes inexchange for a fixed sum called premiums, to pay the other party called insured a fixed amountof money on the happening of a certain event."Insurance is a protection against financial loss

arising on the happening of an unexpected event. Insurance companies collect premiums toprovide for this protection. A loss is paid out of the premiums collected from the insuringpublic and the Insurance Companies act as trustees to the amount collected. For Example, in aLife Policy, by paying a premium to the Insurer, the family of the insured person receives afixed compensation on the death of the insured. Similarly, in a car insurance, in the event of thecar meeting with an accident, the insured receives the compensation to the extent of damage. Itis a system by which the losses suffered by a few are spread over many, exposed to similarrisks.

2.2. Logic of insurance

It is a system by which the losses suffered by a few are spread over many, exposed to similarrisks. Insurance is a protection against financial loss arising on the happening of an unexpected

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event. Insurance companies collect premiums to provide for this protection. A loss is paid outof the amount premiums collected from the insuring public and the Insurance Companies act astrustees to the collected.

2.3. Need of insurance

Insurance is desired to safeguard oneself and one's family against possible losses on account ofrisks and perils. It provides financial compensation for the losses suffered due to the happeningof any unforeseen events. By taking life insurance a person can have peace of mind and neednot worry about the financial consequences in case of any untimely death. Certain Insurancecontracts are also made compulsory by legislation. For example, Motor Vehicles Act 1988,stipulates that a person driving a vehicle in a public place should hold a valid insurance policycovering Act" risks. Another example of compulsory insurance pertains the EnvironmentalProtection Act, wherein a person using or to carrying hazardous substances (as defined in theAct) must hold a valid public liability (Act) policy.

2.4 Insurance in India

Insurance is a federal subject in India and has a history dating back to 1818. Life and generalinsurance in India is still a nascent sector with huge potential for various global players with thelife insurance premiums accounting to 2.5% of the country's GDP while general insurance

premiums to 0.65% of India's GDP. The Insurance sector in India has gone through a numberof phases and changes, particularly in the recent years when the Govt. of India in 1999 openedup the insurance sector by allowing private companies to solicit insurance and also allowingFDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market withevery other global insurance company wanting to have a lion's share. Currently, the largest lifeinsurance company in India is still owned by the government.

2.5. History of Insurance in India

In India, insurance has a deep-rooted history. It finds mention in the writings of Manu(Manusmrithi ), Yagnavalkya (Dharmasastra ) and Kautilya ( Arthasastra ). The writings talkin terms of pooling of resources that could be re-distributed in times of calamities such as fire,floods, epidemics and famine. This was probably a pre-cursor to modern day insurance.Ancient Indian history has preserved the earliest traces of insurance in the form of marine tradeloans and carriers contracts. Insurance in India has evolved over time heavily drawing from

other countries, England in particular. 1818 saw the advent of life insurance businessin India with the establishment of the Oriental Life Insurance Company in Calcutta. ThisCompany however failed in 1834. In 1829, the Madras Equitable had begun transacting lifeinsurance business in the Madras Presidency. 1870 saw the enactment of the British InsuranceAct 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 AlbertLife Assurance, Royal Insurance, Liverpool and London Globe Insurance and the Indian officeswere up for hard competition from the foreign companies. In 1914, the Government of Indiastarted publishing returns of Insurance Companies in India. The Indian Life AssuranceCompanies Act, 1912 was the first statutory measure to regulate life business. In 1928, the

Indian Insurance Companies Act was enacted to enable the Government to collect statisticalinformation about both life and non-life business transacted in India by Indian and foreign

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insurers including provident insurance societies. In 1938, with a view to protecting the interestof the Insurance public, the earlier legislation was consolidated and amended by the InsuranceAct, 1938 with comprehensive provisions for effective control over the activities of insurers.The Insurance Amendment Act of 1950 abolished Principal Agencies. However, there were alarge number of insurance companies and the level of competition was high. There were also

allegations of unfair trade practices. The Government of India, therefore, decided to nationalizeinsurance business. An Ordinance was issued on 19th January, 1956 nationalising the LifeInsurance sector and Life Insurance Corporation came into existence in the same year. The LICabsorbed 154 Indian, 16 non-Indian insurers as also 75 provident societies245 Indian andforeign insurers in all. The LIC had monopoly till the late 90s when the Insurance sector wasreopened to the private sector. The history of general insurance dates back to the IndustrialRevolution in the west and the consequent growth of sea-faring trade and commerce in the17th century. It came to India as a legacy of British occupation. General Insurance in India hasits roots in the establishment of Triton Insurance Company Ltd., in the year 1850 in Calcutta bythe British. In 1907, the Indian Mercantile Insurance Ltd, was set up. This was the firstcompany to transact all classes of general insurance business. 1957 saw the formation of the

General Insurance Council, a wing of the Insurance Association of India. The GeneralInsurance Council framed a code of conduct for ensuring fair conduct and sound business

practices. In 1968, the Insurance Act was amended to regulate investments and set minimumsolvency margins. The Tariff Advisory Committee was also set up then. In 1972 with the

passing of the General Insurance Business (Nationalisation) Act, general insurance businesswas nationalized with effect from 1st January, 1973. 107 insurers were amalgamated andgrouped into four companies, namely National Insurance Company Ltd., the New IndiaAssurance Company Ltd., the Oriental Insurance Company Ltd and the United India InsuranceCompany Ltd. The General Insurance Corporation of India was incorporated as a company in1971 and it commence business on January 1sst 1973. This millennium has seen insurancecome a full circle in a journey extending to nearly 200 years. The process of re-opening of thesectorhad begun in the early 1990s and the last decade and more has seen it been opened upsubstantially. In 1993, the Government set up a committee under the chairmanship of RNMalhotra, former Governor of RBI, to propose recommendations for reforms in the insurancesector. The objective was to complement the reforms initiated in the financial sector. Thecommittee submitted its report in 1994 where in , among other things, it recommended that the

private sector be permitted to enter the insurance industry. They stated that foreign companiesbe allowed to enter by floating Indian companies, preferably a joint venture with Indianpartners. Following the recommendations of the Malhotra Committee report, in 1999, theInsurance Regulatory and Development Authority (IRDA) was constituted as an autonomous

body to regulate and develop the insurance industry. The IRDA was incorporated as a statutory

body in April, 2000. The key objectives of the IRDA include promotion of competition so as toenhance customer satisfaction through increased consumer choice and lower premiums, whileensuring the financial security of the insurance market.The IRDA opened up the market in August 2000 with the invitation for application for

registrations. Foreign companies were allowed ownership of up to 26%. The Authority has thepower to frame regulations under Section 114A of the Insurance Act, 1938 and has from 2000onwards framed various regulations ranging from registration of companies for carrying oninsurance business to protection of policyholders interests. In December, 2000, the subsidiariesof the General Insurance Corporation of India were restructured as independent companies andat the same time GIC was converted into a national re-insurer. Parliament passed a bill de-linking the four subsidiaries from GIC in July, 2002. Today there are 24 general insurance

companies including the ECGC and Agriculture Insurance Corporation of India and 23 lifeinsurance companies operating in the country. The insurance sector is a colossal one and is

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enterprise. But nowadays the market opened up and there are many private players competingin the market. There are fifteen private life insurance companies has entered the industry. Afterthe entry of these private players, the market share of LIC has been considerably reduced. In thelast five years the private players is able to expand the market (growing at 30% per annum) andalso has improved their market share to 18%.For the past five years private players have

launched many innovations in the industry in terms of products, market channels andadvertisement of products, agent training and customer services etc. The various life insurersentered India:-

1. Bajaj Allianz Life Insurance Company Limited2. Birla Sun Life Insurance Co. Ltd3. HDFC Standard Life Insurance Co. Ltd4. ICICI Prudential Life Insurance Co. Ltd.5. ING Vysya Life Insurance Company Ltd.6. Life Insurance Corporation of India7. Max New York Life Insurance Co. Ltd

8. Met Life India Insurance Company Ltd.9. Kotak Mahindra Old Mutual Life Insurance Limited10. SBI Life Insurance Co. Ltd11. Tata AIG Life Insurance Company Limited12. Reliance Life Insurance Company Limited.13. Aviva Life Insurance Co. India Pvt. Ltd.14. Sahara India Life Insurance Co, Ltd.15. Shriram Life Insurance Co, Ltd.16. Bharti AXA Life Insurance Company Ltd.17. Future Generali Life Insurance Company Ltd.18. IDBI Fortis Life Insurance Company Ltd.19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd20. AEGON Religare Life Insurance Company Limited.21. DLF Pramerica Life Insurance Co. Ltd.22. Star Union Dai-ichi Life Insurance Comp. Ltd.23.India First Life Insurance Company Ltd.

The various other general Insurance Companies are as under:-

1. National Insurance Company Limited.2. Reliance General Insurance.

3. Star Health Plus Insurance.4. Oriental Insurance Company.5. United India Insurance Company Ltd.6. Bajaj Allianz General Insurance Company Ltd.7. Future General Insurance Company Ltd.8. ICICI Lombard General Insurance Ltd.

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4.2. Market Share of Indian Insurance Companies

_

S. No. Company Market share1 L.I.C. 48.10%2 ICICI Prudential 13.70%3 Bajaj Allianz 10.30%4 SBI Life 6.20%

5 HDFC Standard 4.10%6 Birla sun life 3.40%7 Reliance life insurance 3.40%8 Max Newyork 2.40%9 Om kotak 1.90%10 AVIVA 1.80%11 TATA AIG 1.50%12 MetLife 1.40%13 ING Vysya 1.20%14 Shriram Life 0.30%

4.3. BOOMING INSURANCE MARKET

With a huge population base and large untapped market, insurance industry is a big opportunityarea in India for national as well as foreign investors. India is the fifth largest life insurancemarket in the emerging insurance economies globally and is growing at 32-34% annually. Thisimpressive growth in the market has been driven by liberalization, with new playerssignificantly enhancing product awareness and promoting consumer education and information.The strong growth potential of the country has also made international players to look at theIndian insurance market. Moreover, saturation of insurance markets in many developedeconomies has made the Indian market more attractive for international insurance players. Thisresearch report will help the client to analyze the leading-edge opportunities critical to the

success of insurance industry in India. Based on this analysis, the report gives a future forecastof the market that is intended as a rough guide to the direction in which the market is likely to

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move. Total life insurance premium in India is projected to grow Rs 1,230,000 Crore by 2011-12.

Total non-life insurance premium is expected to increase at a CAGR of 25% for theperiod spanning from 2008-09 to 2011-12.

With the entry of several low-cost airlines, along with fleet expansion by existing onesand increasing corporate aircraft ownership, the Indian aviation insurance market is allset to boom in a big way in coming years.

Home insurance segment is set to achieve a 100% growth as financial institutions havemade home insurance obligatory for housing loan approvals

A booming life insurance market has propelled the Indian life insurance agents into the top 10country list in terms of membership to the Million Dollar Round Table (MDRT) an exclusiveclub for the highest performing life insurance agent.

Chapter No. 5

5.1 ADVANTAGES OF LIFE INSURANCE

5.1.1 Protection against risk of untimely death

Life insurance is a product, which offers protection against the risk of death. The full sumassured is made available under a life assurance policy, whereas under other savings schemes,the total accumulated savings alone will be available.

5.1.2. Educational requirements and charity

The object of insurance may be to serve as a security to educational funds in respect of loansadvanced for educational purpose or to provide donations to charitable institutions like hospitaland school.

5.2.3. Nomination and assignment

The life insured can name the person or persons to whom the policy money would be payablein the event of his death .the proceeds of a life insurance policy can be protected against theclaims of the creditors of the life insured by effecting a valid assignment of the policy. The

beneficiaries are fully protected from creditors expect to the extent of any interest in the policyretained by the insured.21Marketability and suitability for borrowing After 3 years, if thepolicyholder finds that he is unable to continue payment of premiums he can surrender a policyfor a cash sum. A life insurance policy is accepted as a security for a commercial loan.

5.2.4. Loans from the insurance company

A policy holder can take a loan from his insurance company against the Security Of his life

insurance policy provided the terms of the terms of his policy allow such a loan. This loan can

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be taken usually after a period of 3 years from Commencement of the policy and is apercentage of its surrender value.

5.2.5 Investment options

The unit link products gives comprehensive insurance solutions that cater to an Individualsdual need of earning potentially high returns as well as stay for life. Thus there is an option toinvest money in the products that combine the best Of insurance and investment. In a volatilemarket conditions it is possible to secure both as one can hedge the investment with saverinvestment vehicles that provide a diversified portfolio.

5.2.6 . Tax benefits

The Indian income tax act provides tax concessions to the policyholder both on payment ofpremium and on the maturity amount. Under sec 88 the tax benefits on premium paid by anindividual for life insurance policies on his own life\on the life of spouse \children minor or

major, including married daughters. Under sec 6 of the married womens property act if amarried man takes a policy of life insurance on his own life and expenses on the face of it to befor the benefit of his wife or of his wife and children or any of them, then it shall be deemed to

be a trust for the benefit of his wife and children or any of them, According to the interest soexpressed and shall not so long as any object of trust remains be subject to the control of thehusband or to his creditors or form part of his estate. An insurance policy taken by a marriedman in the above manner is ideal way to protect the interest of his wife and children, even afterhis untimely death.

Chapter No. 6

6.1 Types of insurance products

6.1.1. Term assurance plan-

In insurance language this is a pure risk cover and can be described as an insurance or riskmanagement product in its purest and simplest form. In case of your untimely death, yourdependents will receive the risk-cover amount or the sum assured. On the other hand, there isno survival benefits if you survive the policy term, and you also do not get back the premiums

paid.

6.1.2. Endowment assurance plans-

It is a traditional investment-cum-insurance plan. In other words, it provides both life cover (inthe event of death of life insured) or maturity benefits if he/she survives the policy term.Endowment plans are typically front-loaded. Therefore it makes sense for you to remain in the

policy for at least 12-15 years.

6.1.3. Money-back policy-

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It is a variant of the endowment assurance policy-the difference is that you get the survivalbenefits intermittently over the life of the policy. Thus taking care of his lump-sum monetaryrequirements to enable him to meet his financial goals and major commitments. The maturity

benefit is the sum assured value less the survival benefits already paid underthe policy, plusbonuses accrued, if any. In case of untimely death the nominee will receive the entire sum

assured without considering the payouts already made to you before the unfortunate death.

6.1.4. Whole life plan-

This policy provides the life assurance cover for almost the entire life. Most of the insurancecompanies provide protection up to the age of 100 years. The sum assured is paid to you onceyou reach this age, and the policy is terminated. In this payment of premium is for whole life,and the sum assured is paid to your nominee in the event of your death. In other words, this isequivalent to a term plan over your lifetime.

6.1.5. Pension plan-

A pension plan can be looked as more of an investment product offered by insurers to cater tothe golden retirement years of an individual. Also referred to as retirement plans, these aredesigned to ensure that you are financially independent during your retirement years. Most ofthe pension plans also provide an optional life assurance cover in them.

6.1.6. Child plan-

It basically aims at ensuring the achievement of life goals of your child. The goal can be highereducation, financial help in establishing a business or profession, or even marriage. In a child

plan, the life assured can be the parent or the child. The beneficiary for the policy, however, isthe child. As a child is a minor, the life insurance contract is between the parent and theinsurance company. In case of early death of the parent, the premium payment is waived off bythe insurance company and the policy continues as originally planned.

6.1.7. Unit Linked Insurance Plan-

ULIPs have been the darling of insurance companies, intermediaries and the insured populationalike over the last five years. The main reason for this popularity is the twin advantage of a purelife cover (insurance component) and a range of investment funds or options (savingscomponent) to match your risk profile. While the pure life cover provides the much needed

financial security to your dependents in the event of your untimely death, the savingscomponent allows you to participate in the capital markets and build wealth over the long-termtenure of the policy.

7.1. Marketing Mix in Insurance Industry (7 P's)

7.1.1. INTRODUCTION:

Wherever there is uncertainty there is risk. We do not have any control over uncertainties whichinvolves financial losses. The risks may be certain events like death, pension, retirement oruncertain events like theft, fire, accident, etc. Insurance is a financial service for collecting the

savings of the public and providing them with risk coverage. The main function of Insurance isto provide protection against the possible chances of generating losses. It eliminates worries

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and miseries of losses by destruction of property and death. It also provides capital to thesociety as the funds accumulated are invested in productive heads. Insurance comes under theservice sector and while marketing this service, due care is to be taken in quality product andcustomer satisfaction. While marketing the services, it is also pertinent that they think about theinnovative promotional measures. It is not sufficient that you perform well but it is also

important that you let others know about the quality of your positive contributions. Thecreativity in the promotional measures is the need of the hour. The advertisement, publicrelations, word of mouth communication needs due care and personal selling requires intensivecare.

7.1.2. INSURANCE MARKETING:

The term Insurance Marketing refers to the marketing of Insurance services with the aim tocreate customer and generate profit through customer satisfaction. The Insurance Marketingfocuses on the formulation of an ideal mix for Insurance business so that the Insuranceorganization survives and thrives in the right perspective.

7.1.3. MARKETING MIX FOR INSURANCE COMPANIES:

The marketing mix is the combination of marketing activities that an organization engages in soas to best meet the needs of its targeted market. The Insurance business deals in selling servicesand therefore due weightage in the formation of marketing mix for the Insurance business isneeded. The marketing mix includes sub-mixes of the 7 Ps of marketing i.e. the product, its

price, place, promotion, people, process & physical attraction. The above mentioned 7 Ps canbe used for Marketing of Insurance products, in the following manner:

7.1.3.1.PRODUCT:

A product means what we produce. If we produce goods, it means tangible product and whenwe produce or generate services, it means intangible service product. A product is both what aseller has to sell and a buyer has to buy. Thus, an Insurance company sells services andtherefore services are their product. In India, the Life Insurance Corporation of India (LIC) andthe General Insurance Corporation (GIC) are the two leading companies offering insuranceservices to the users. Apart from offering life insurance policies, they also offer underwritingand consulting services. When a person or an organization buys an Insurance policy from theinsurance company, he not only buys a policy, but along with it the assistance and advice of theagent, the prestige of the insurance company and the facilities of claims and compensation. It is

natural that the users expect a reasonable return for their investment and the insurancecompanies want to maximize their profitability. Hence, while deciding the product portfolio orthe product-mix, the services or the schemes should be motivational. The Group Insurancescheme is required to be promoted, the Crop Insurance is required to be expanded and the newschemes and policies for the villagers or the rural population are to be included. The LifeInsurance Corporation has intensified efforts to promote urban savings, but as far as ruralsavings are concerned, it is not that impressive. The introduction of Rural Career AgentsScheme has been found instrumental in inducing the rural prospects but the process is at infantstage requires more professional excellence. The policy makers are required to activate theefforts. It would be prudent that the LIC is allowed to pursue a policy of direct investment forrural development. Investment in Government securities should be stopped and the investment

should be channelized in private sector for maximizing profits. In short, the formulation ofproduct-mix should be in the face of innovative product strategy.

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7.1.3.2.PRICING:

In the insurance business the pricing decisions are concerned with:i) The premium charged against the policies,

ii) Interest charged for defaulting the payment of premium and credit facility, andiii) Commission charged for underwriting and consultancy activities.With a view of influencing the target market or prospects the formulation of pricing strategy

becomes significant. In a developing country like India where the disposable income in thehands of prospects is low, the pricing decision also governs the transformation of potential

policyholders into actual policyholders. The strategies may be high or low pricing keeping inview the level or standard of customers or the policyholders. The pricing in insurance is in theform of premium rates. The three main factors used for determining the premium rates under alife insurance plan are mortality, expense and interest. The premium rates are revisedif there are any significant changes in any of these factors.

Mortality(deaths in a particular area):

When deciding upon the pricing strategy the average rate of mortality is one of the mainconsiderations. In a country like South Africa the threat to life is very important as it is played

by host of diseases.

Expenses:

The cost of processing, commission to agents, reinsurance companies as well as registration areall incorporated into the cost of instalments and premium sum and forms the integral part of the

pricing strategy.

Interest:

The rate of interest is one of the major factors which determine peoples willingness to invest ininsurance. People would not be willing to put their funds to invest in insurance business if theinterest rates provided by the banks or other financial instruments are much greater than the

perceived returns from the insurance premiums.

7.1.3.3.PLACE:

This component of the marketing mix is related to two important facets i) Managing the insurance personnel, andii) Locating a branch.The management of agents and insurance personnel is found significant with the viewpoint ofmaintaining the norms for offering the services. This is also to process the services to theendures in such a way that a gap between the services- promised and services offered is

bridged over. In a majority of the service generating organizations, such a gap is found existentwhich has been instrumental in making worse the image problem. The transformation of

potential policyholders to the actual policyholders is a difficult task that depends upon theprofessional excellence of the personnel. The agents and the rural career agents acting as a link,lack professionalism. The front-line staff and the branch managers also are found not assigning

due weight age to the degeneration process. The insurance personnel if not managed properlywould make all efforts insensitive. Even if the policy makers make provision for the quality up

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gradation, the promised services hardly reach to the end users. It is also essential that they haverural orientation and are well aware of the lifestyles of the prospects or users. They are requiredto be given adequate incentives to show their excellence. While recruiting agents, the branchmanagers need to prefer local persons and provide them training and conduct seminars. Inaddition to the agents, the front-line staff also needs an intensive training programme to focus

mainly on behavioural management. Another important dimension to the Place Mix is related tothe location of the insurance branches. While locating branches, the branch manager needs toconsider a number of factors, such as smooth accessibility, availability of infrastructuralfacilities and the management of branch offices and premises. In addition it is also significant to

provide safety measures and also factors like office furnishing, civic amenities and facilities,parking facilities and interior office decoration should be given proper attention. Thus the placemanagement of insurance branch offices needs a new vision, distinct approach and aninnovative style. This is essential to make the work place conducive, attractive and proactivefor the generation of efficiency among employees. The branch managers need professionalexcellence to make place decisions productive.

7.1.3.4.PROMOTION:

The insurance services depend on effective promotional measures. In a country like India,theatre of illiteracy is very high and the rural economy has dominance in the national economy.It is essential to have both personal and impersonal promotion strategies. In promotinginsurance business, the agents and the rural career agents play an important role. Due attentionshould be given in selecting the promotional tools for agents and rural career agents and evenfor the branch managers and front line staff. They also have to be given proper training in orderto create impulse buying. Advertising and Publicity, organisation of conferences and seminars,incentive to policyholders are impersonal communication. Arranging Kittens, exhibitions,

participation in fairs and festivals, rural wall paintings and publicity drive through the mobilepublicity van units would be effective in creating the impulse buying and the rural prospectswould be easily transformed into actual policyholders.

7.1.3.5.PEOPLE:

Understanding the customer better allows to design appropriate products. Being a serviceindustry which involves a high level of people interaction, it is very important to use thisresource efficiently in order to satisfy customers. Training, development and strongrelationships with intermediaries are the key areas to be kept under consideration. Training theemployees, use of IT for efficiency, both at the staff and agent level, is one of the important

areas to look into._7.1.3.6.PROCESS:

The process should be customer friendly in insurance industry. The speed and accuracy ofpayment is of great importance. The processing method should be easy and convenient to thecustomers. Instalment schemes should be streamlined to cater to the ever growing demands ofthe customers. IT & Data Warehousing will smoothen the process flow. IT will help inservicing large no. of customers efficiently and bring down overheads. Technology can eithercomplement or supplement the channels of distribution cost effectively. It can also help toimprove customer service levels. The use of data warehousing management and mining will

help to find out the profitability and potential of various customers product segments.

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_7.1.3.7.PHYSICAL DISTRIBUTION:

Distribution is a key determinant of success for all insurance companies. Today, thenationalized insurers have a large reach and presence in India. Building a distribution networkis very expensive and time consuming. If the insurers are willing to take advantage of Indias

large population and reach a profitable mass of customers, then new distribution avenues andalliances will be necessary. Initially insurance was looked upon as a complex product with ahigh advice and service component. Buyers prefer a face-to-face interaction and they place ahigh premium on brand names and reliability. As the awareness increases, the product becomessimpler and they become off-the-shelf commodity products. Today, various intermediaries, notnecessarily insurance companies, are selling insurance. For example, in UK, retailer like Marks& Spencer sells insurance products. The financial services industries have successfully usedremote distribution channels such as telephone or internet so as to reach more customers, avoidintermediaries, bring down overheads and increase profitability. A good example is UK insurerDirect Line. It relied on telephone sales and low pricing. Today, it is one of the largest motorinsurance operators. Technology will not replace a distribution network though it will offer

advantages like better customer service. Finance companies and banks can emerge as anattractive distribution channel for insurance in India. In Netherlands, financial services firms

provide an entire range of products including bank accounts, motor, home and life insuranceand pensions. In France, half of the life insurance sales are made through banks. In India also,

banks hope to maximize expensive existing networks by selling a range of products. It isanticipated that rather than formal ownership arrangements, a loose network of alliance

between insurers and banks will emerge, popularly known as bancassurance. Anotherinnovative distribution channel that could be used are the non-financial organizations. For anexample, insurance for consumer items like fridge and TV can be offered at the point of sale.This increases the likelihood of insurance sales. Alliances with manufacturers or retailers ofconsumer goods will be possible and insurance can be one of the various incentives offered.

Chapter No. 8

8.1 Customer for Reliance Life Insurance

Life insurance is one of the best known insurance products today. People buy these products asinvestment tools and also as protection for themselves and their families. All the insurancecompanies the world over are looking at attracting the eye balls of customer and positioningtheir solutions innovatively to cater to niche and specific markets. One of the most criticalaspects both from the view point of the customer and the insurer is getting important and

relevant leads that can be beneficial for both. There is a big need for market intelligence,database of products and services and secondary data that can be converted in to leads for thecompanies to tap. The customer also needs to have relevant life insurance lead information on

products that give him the best value for his money. The Internet is the best repository for allrelevant information both for the potential customers as well as the insurance companies. Theinsurance companies can put up all kinds of data and information on their websites that a

potential customer can conveniently use to arrive at a decision. On the other end of thespectrum, a customer can use relevant keywords to search for information on the Internet to gethold of a good insurance product. So, the key lies to getting Search Engine Optimizationdone by the insurance companies so that every time an insurance specific keyword is used tosearch the Internet, their website is one of the first to be displayed. This assures a large internet

traffic that can help generate potential leads from the information and digital footprints left bythe visitors and can be later converted to paying customers. Various B2B and B2C portals offer

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a host of innovative services that can be used as leads by the insurance companies and also thepotential customers who are looking for a good deal in todays insurance jungle. Nowadays,banks have entered the insurance domain and since they have a variety of customers already intheir folds, they can use their readily available database as leads to contact potential customersfor their insurance products. For consultants and insurance agents, it is imperative that they get

associated for a symbiotic relationship with retail shops and chains via the internet as well asotherwise to gain maximum visibility and use tools such as advertisement, mailers, flyers andsales incentives to gather life insurance leads and convert them to potential customers. Thecustomer gets the best of everything in the present scenario. All that a prospective client has todo is log on to the internet, or call a toll free number or walk into an office to get the best deal.However, it is always good to use all the resources, leads and information available to ensurethat he decides on the best product available. There are many ways in which both the customerand the insurer can get access to all important life insurance lead. The trick lies in using theleads well to get the most out of a particular situation. The endeavour of a company is to

position itself favourably so that the customer chooses him over other similar products whilethe job of the client is to use the leads in such an effective way so that there is no reason for him

to repent later that he could have opted for a better deal.

Chapter No 9

9.1 Changing face of Indian insurance industry

Indian life-insurance market is the target market of all the companies who either want to extendor diversify their business. To tap the Indian market there has been tie-ups between the majorIndian companies with other International insurance companies to start up their business. Thegovernment of India has set up rules that no foreign insurance company can setup their businessindividually here and they have to tie up with an Indian company and this foreign insurancecompany can have an investment of only 24% of the total start-up investment. Indian insuranceindustry can be featured by:

Low market penetration Ever growing middle class component in population. Growth of customers interest with an increasing demand for better insurance

products. Application of information technology for business. Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private players, each of which are makingstrides in raising awareness levels, introducing innovative products and increasing thepenetration of life insurance in the vastly underinsured country. Several of private insurers haveintroduced attractive products to meet the needs of their target customers and in line with their

business objectives.

9.1.1. India: The Next Insurance Giant

Market Performance & Forecast: In 2000, Indian insurance market size was $21.71billion. Between 2000 and 2012, it had an increase of 120% and reached $47.89 billion.Between 2000 and 2012, total premiums maintained an average growth rate of 11.96% and the

CAGR growth during this time frame has been 11.96%. It was one of the most consistent

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macroeconomic factors like increase in literacy rate & per capita income, decrease in death rateand unemployment, better tax rebates, growing GDP etc., we estimate that the Indian insurancesector will grow by $28.65 billion and reach $76.54 billion by 2011 with a CAGR(compounded annual growth rate) of 12.44% and a growth of 59.82%.

Chapter No. 10

1.1.Valuing the invaluable

Both under insurance and over insurance can often be attributed to the lack of properunderstanding of the exact insurance needs for oneself and the family, and the failure to spotand cover all liabilities properly and adequately, or being over-conservative in this regard.

1.1.1. Under Insurance

Under insurance, typically occurs when the existing financial liabilities and insurance needs are

fully taken care of. In the event of the untimely death of the only (or the main earning) memberof the family, his financial liabilities would obviously fall on his dependents, leaving them in astate of financial distress that could threaten their need of sustenance.

1.1.2. Cover Insurance

Conversely, there are also instances where individuals indulge in life insurance covers that farexceed in value than what is actually required. This is a classic case of over insurance, whichleads to an unnecessarily higher premium payment, leaving you much poorer. It results inunnecessary expenditure that could otherwise be wisely invested Elsewhere. The need for anadequate insurance cover is never static and keeps on varying with changes in the life stagesand important events of an individual. The table below provides an insight into the various lifestages and events when life insurance cover usually requires a revision.

Busting some insurance myths

With a range of products flooding the market, people today are more confused about insurancethan ever. Here are a bagful of myths floating around and I have made an effort to bust a few ofthe significant ones.

1. I dont want to put my hard-earned money into a pure term assurance plan if I dont even get

back all the premiums paid on survival of the term.A pure term assurance plan is a risk mitigation tool and not an investment product. In the

event of your untimely death during the policy term, your dependents get a sum assured toenable them to continue living their existing lifestyle, repay loan liabilities and meet longtermfinancial goals. To achieve this, you only need to pay a premium amount that is a fraction of thesum assured. Moreover unlike investments, where it takes years to build a suitable corpus,the sum assured on your insurance policy is payable, in the event of your untimely death,from the date of its commencement.2. It would be enough if only the main breadwinner of the family takes life insurance.While the main breadwinner should take out a life insurance policy on a priority basis; theother members of the family should also be covered. If the wife is working, then she should be

covered to the extent of loss of income to the family in the event of her untimely death. On the

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other hand, even if she is not working, she should be covered, albeit for a smallersum, becauseher contribution to the family, in form of household services, has monetary value.3. I will get back all my premiums when I surrender my endowment policy prematurely.You couldnt be more wrong! You only get back the surrender value, which is based on the

paid-up value is a proportion of the original sum assured based on the number of years for

which premium was paid against the total premium-paying years. The paid-up value of thepolicy is also calculated and available as per the policy conditions.4. Insurance is primarily useful as a tax-saving instrument.Again, this is a huge misconception! While you do get attractive tax breaks, the primaryobjective of insurance is risk mitigations followed by wealth creation for the long term. Many

people end up taking this myth too seriously, particularly without considering the costs andbenefits involved.5. After three years, I can walk away from any ULIP, along with the accruedInvestment or the fund value.Sure, you can do that! However, you need to remember that a ULIP, at least in the initial

years, is very different from a mutual fund. While a mutual fund only charges o nominal fund

management charge every year, a ULIP is front loaded. That means a significant chunk of yourpremium is allocated across various charges in the initial years of the policy and only thebalance gets invested in a fund of your choice. As these charges taper off and average overtime, it makes sense to stay in a ULIP for at least 15 years. Therefore, if your investmenthorizon is just 3-5 years, you better off in a mutual fund, and you can take out a separate termassurance plan for the required risk cover.

Chapter No. 11

11.1. PROFILE OF ORGANIGATION RELIANCE LIFE INSURANCE

FOUNDER

Few men in history have made as dramatic a contribution to their countrys economic fortunesas did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left behind a legacythat is more enduring and timeless.As with all great pioneers, there is more than one unique way of describing the true genius ofDhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the leader ofmen, the architect of Indias capital markets, the champion of shareholder interest.But the role Dhirubhai cherished most was perhaps that of Indias greatest wealthCreator. In one lifetime, he built, starting from the proverbial scratch, Indias largest privatesector enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of barely US$300 (around Rs 14,000). Over the next three and a half decades, he converted this fledglingenterprise into a Rs 60,000 crore colossusan achievement which earned Reliance a place onthe global Fortune 500 list, the first ever Indian private company to do so.Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when RelianceTextile Industries Limited first went public, the Indian stock market was a place patronised by asmall club of elite investors which dabbled in a handful of stocks.Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to

participate in the unfolding Reliance story and put their hard-earned money in the RelianceTextile IPO, promising them, in exchange for their trust, substantial return on their investments.It was to be the start of one of great stories of mutual respect and reciprocal gain in the Indian

markets.

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Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the greatestgrowth stories in corporate history anywhere in the world, and went on to become Indiaslargest private sector enterprise.Through out this amazing journey, Dhirubhai always kept the interests of the ordinaryshareholder uppermost in mind, in the process making millionaires out of many of the initial

investors in the Reliance stock, and creating one of the worlds largest shareholder families.

11.1.1. About Reliance Life Insurance Industry

Reliance Life Insurance offers you products that fulfil your savings and protection needs. Ouraim is to emerge as a transnational Life Insurer of global scale and standard. Reliance LifeInsurance is a Reliance Capital Company and is part of Reliance Group. Reliance Capital is oneof Indias leading private sector financial services companies, and ranks among the top 3

private sector financial services and banking companies, in terms of net worth. Reliance Capitalhas interests in asset management and mutual funds, stock broking, life and general insurance,

proprietary investments, private equity and other activities in financial services. Reliance

Groupalso has presence in Communications, Energy, Natural Resources, Media,Entertainment, Healthcare and Infrastructure. Nippon Life Insurance Company acquired 26%interest in equity share capital of the Company effective October 7, 2011 subsequent to receiptof all regulatory approval. Nippon Life Insurance, also called Nissan, is Japan's largest privatelife insurer with revenues of Rs 346,834 crore (US$ 80 Billion) and profits of over Rs 12,199crore (US$ 3 billion). The Company has over 14 million policies in Japan, offers a wide rangeof products, including individual and group life and annuity policies through variousdistribution channels and mainly uses face-to-face sales channel for its traditional insurance

products. The company primarily operated in Japan , North America, Europe and Asia and isheadquartered in Osaka, Japan. It is ranked 81st in Global Fortune 500 firms in 2011.

11.1.2. CORPORATE OBJECTIVE

At R.L.I. we strongly believe that as is different at every stage, insurance must offer flexibilityand choice to go with that stage. We are fully prepared and committed to guide you oninsurance products and services through our well-trained advisors, backed by competentmarketing and customer services, in the best possible way.It is our aim to become one of the top private insurance companies in India and to

become a cornerstone of RLI integrated financial services business in India.

11.1.3. CORPORATE MISSION

To set the standard in helping our customers manage their financial future.

BELOW ARE FEW OF THE PLANS THAT ARE OFFERED BY R.L.I. INSURANCEPLANS AVAILABLE1. Products (Individual Plans) Savings (Endowment)

2. Reliance Endowment Plan (formerly Divya Shree)3. Reliance Special Endowment Plan (formerly Subha Shree)

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Undivided Family assesses.2. Eligible premiums: Premiums paid by assesses by any mode other than cash out of histaxable income to effect or to keep in force insurance on the health offollowing persons:

In case of individual assesses Himself/Herself, spouse, dependent children

and parent or parents. The condition of dependency of parent has beenremoved from FY 2008-09. In other words, even if the parent isindependent, the individual can pay the premium and claim the deduction.

In case of HUF assesses any member of HUF3. Deduction and upper limit: The qualifying amounts under Section 80D for self, spouse anddependent children is up to Rs. 15,000/- and additional deduction upto Rs. 15,000/- for the

parents. However, a higher amount of up to Rs 20,000/- is permitted if the person, for whosehealth insurance the premium was paid, was aged 65 years or more at any time during thefinancial year in which the premium was paid. Such amounts of premium paid would beallowed as deduction from the total income of the assesses.

Benefits under insurance policy - Section 10(10D)

As per Section 10(10D) of Income tax Act, 1961, any sum received under a life insurancepolicy, including the sum allocated by way of bonus on such policy is exempt from tax.However, this rule does not apply to following amounts:

sum received under Section 80DD(3), or

any sum received under a Key man Insurance Policy, or

any sum received other than as death benefit under an insurance policy which hasbeen issued on or after April 1 2003 and if the premium paid in any of the yearsduring the term of the policy is more than 20% of the sum assured.

Tax Rates for Individuals

The rates of income-tax for FY 2010-11Surcharge on Income Tax:

No surcharge on Income Tax for the Financial Year 2009-10 for Individuals.Education Cess on Income Tax

Education Cess @3% will be payable on the amount of income tax (includingsurcharge).Individual Female Senior citizen Rate

(except female/ senior citizen) (Below 65years) (Above 65 years)

0 160,000 0 190000 0 240000 Nil

Rs. 160,001 to Rs. 190,001 to Rs. 240,001 to 10%Rs. 500,000 Rs.500,000. Rs.500,000Rs. 500,001 to Rs. 500,001 to Rs. 500,001 to 20%Rs.800,000 Rs.800,000 Rs.800,000

> Rs. 800,000 > Rs. 800,000 > Rs. 800,000 30%

Secondary & Higher Education Cess on Income Tax

Additional Education Cess @1% will be payable on the amount of Income tax(Including surcharge).

Chapter No. 12

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12.1 OTHERS PLAYERS

12.1.1. Birla Sun Life Insurance

Birla sun life Insurance Company limited is a joint venture between the Aditya Birla group, one

of the largest business houses in India and Sun Life Financial Inc., as leading internationalfinancial services organization. The local knowledge of the Aditya Birla group combined withthe expertise of Sun Life Financial Inc., offer a formidable protection for your future. TheAditya Birla group has a turnover of Rs. 1,33,875 corers (as on 31st march 2008). It has over100,000 employees across all its units worldwide. It is led by its chairman Mr. KumarMangalam Birla. Some of its key companies are Hidalgo, Grasim and Aditya Birla Novo. SunLife Financial Inc. and its partners, have operations in key markets worldwide. These includeCanada, U.S, U.K, Hong Kong, the Philippines, Japan, Indonesia, India, china and Bermuda.Sun Life Financial Inc. has assets under management of over us$ 404.7 BILLION (as on 31stMarch, 2008). It is a leading performer in the life insurance market in Canada. Birla sun lifeinsurance (BSLI) has been operating for 7 years. It has contributed significantly to the growth

and development of the life insurance industry in India. It pioneered the launch of unit linkedlife insurance plans amongst the private player in India. It pioneered the launch of united linkedlife insurance plans amongst the private players in India. It was the first player in industry tosell its policies through the Bancassurance route and through the internet. It was the first privatesector player to introduce a pure term plan in the Indian market. BSLI has covered more than 2million lives since it commenced operations.

12.1.2. Life Insurance Corporation Of India

Mission

Create unmatched value for everyone through dependable, effective, transparent and profitablelife insurance and pension plans.

Vision

Empowering everyone live their dreams.

12.1.3. National Insurance Company Limited

National Insurance Company Limited was incorporated in 1906 with its registered office inKolkata. Consequent to passing of the General Insurance Business Nationalization Act in 1972,

21 Foreign and 11 Indian Companies were amalgamated with it and Nationalbecame asubsidiary of General Insurance Corporation of India (GIC) which is fully owned by theGovernment of India. After the notification of the General Insurance Business (Nationalisation)Amendment Act, on 7th August 2002, Nationalhas been de-linked from its holding companyGIC and presently operating as a Government of India undertaking. National InsuranceCompany Ltd (NIC) is one of the leading public sector insurance companies of India, carryingout non life insurance business. Headquartered in Kolkata, NIC's network of about 1000offices, manned by more than 16,000 skilled personnel, is spread over the length and breadth ofthe country covering remote rural areas, townships and metropolitan cities. NIC's foreignoperations are carried out from its branch offices in Nepal. Nationaltransacts general insurance

business of Fire, Marine and Miscellaneous insurance. The Company offers protection against awide range of risks to its customers. The Company is privileged to cater its services to almostevery sector or industry in the Indian Economy viz. Banking, Telecom, Aviation, Shipping,

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85%

15%Yes

No

Target population: The target population for the research would be people who are in theagegroup beyond 40 and age group between 25 to 40.We targeted this group of population becausethese populations are the potential customers of insurance.

13.1.5.1. Sampling Frame:

The research would be conducted in Varanasi. The survey has been conducted among thepotential customers of R.L.I. from different sectors as Reliance deals in many sectors ofbusiness.

13.1.5.2. Sampling Technique:

The sampling technique that is adopted is the simple random sampling wherein every elementin the target population has an equal chance or probability of getting selected in the sample.That means every unit of the population who is more is in the above mentioned age group, havean equal chance of getting selected.

13.1.5.3 Sample Size:

I did a survey among 100 people by taking two categories in consideration of 50 each; that is1.) Age group beyond 402) Age group between 25 to 40

13.1.6. Data Collection:

The research would be conducted from the source of primary data collection. Secondary datawould help us in knowing the trends prevailing in the insurance market and would help us inanalyzing and interpretation of the primary data.

13.1.7. Findings and Interpretations

We have presented below the findings and analysis of the questionnaire addressed to therespondents to gauge the attitude and perception of the people towards insurance.

Respondents having life Insurance

The question was asked to the respondents to know how many of the respondents had a lifeinsurance policy

Figure No. 1

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The finding which came out from the survey was that 40% of the respondents who have a lifeinsurance cover bought life insurance from Life Insurance Corporation of India (LIC). LIC isthe most preferred brand in the insurance industry because it is the onl government companywhich offers insurance. People prefer to buy insurance from LIC because of the security being

one of the prime factors. In the figure we can also see that nowadays people mindset havechanged towards insurance.

From whose suggestion have the respondents taken a policy?

It was asked to gain an insight from the respondents that on whose suggestion did they opt for alife insurance cover or policy.

After the survey it was found that most of the respondents took policy or life insurance coverfrom the suggestions of their friends or family. And only 23 respondents took policy on therecommendation of the agents.

Type of plan

The respondents were asked which type of plan they go in for when they take up insurancecover or policy.

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Pie Chart

Here we see that LIC have more number of market share. People believe more in LIC becausethis is public sector insurance company.LIC have 60% market share in insurance industry butother like private sector insurance companies have less number of market share comparisonthan LIC.

Rank of your insurance company

People who buy policy from TATA AIG that people give highest rank to their insurancecompany. Reliance have 10% share of their rank.

13.1.8. Results

After the survey it was found that still major portion of customers go for public insurancecompanies, but with the entry of more and more private companies the scenario is changingrapidly, people with a need of more and better returns are opting for private companies, and this

can be justified by the increasing market share of private companies in the Indian insurance

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CHAPTER 1

INTRODUCTION TO INSURANCE

1.1. INTRODUCTION:-

"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 called insured a fixed amount

of money on the happening of a certain event." Insurance may be described as a social device to

reduce or eliminate risk of life and property. Under the plan of insurance, a large number of

people associate themselves by sharing risk, attached to individual. With the help of Insurance,

large number of people exposed to a similar risk makes contributions to a common fund out of

which the losses suffered by the unfortunate few, due to accidental events, are made good.Insurance is a tool by which fatalities of a small number are compensated out of funds collected

from plenteous. Gradually as competition increased benefits given by industry to its customers

increased by leaps and bounds. Insurance is a basic form of risk management which provides

protection against possible loss to life or physical assets. Person who seeks protection against

such loss is termed as insured, and company that promises to honour claim, in case such loss is

actually incurred by insured, is termed as Insurer. In order to get insurance, insured is required

to pay to insurance company a certain amount called premium. Premium is collected by

insurance companies which acts as trustee to pool created through contributions made by

persons seeking to protect themselves from common risk. Any loss to the insured in case of

happening of an uncertain event is paid out of this pool. Insurance business is divided into

following parts:

Life Insurance

Property Insurance

Health Insurance

Auto Insurance

Travel Insurance etc.

1.2. LIFE INSURANCE:-

Life insurance is a contract under which the insurer (Insurance Company) in Consideration of a

premium paid undertakes to pay a fixed sum of money on The death of the insured or on the

expiry of a specified period of time Whichever is earlier. In case of life insurance, the payment

for life insurance policy is certain. The Event insured against is sure to happen only the time of

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its happening is not known. So life insurance is known as Life Assurance.The subject matter

of insurance is life of human being. Life insurance provides risk coverage to the life of a

person. On death of the person insurance offers protection against loss of income and

compensate the titleholders of the policy.

1.3. TYPES OF LIFE INSURANCE: -

Term Insurance Policy

Whole life Insurance Policy

Endowment Policy

Pure Endowment Policy

Money Back Policy

Most of the products offered by Indian life insurers are developed and structured around these"basic" policies and are usually an extension or a combination of these policies.

Term Insurance Policy:- A term insurance policy is a pure risk cover for a specified periodof time. What this means is that the sum assured is payable only if the policyholder dies withinthe policy term. For instance, if a person buys Rs 2 lakh policy for 15-years, his family isentitled to the money if he dies within that 15-year period. there is no element of savings orinvestment in such a policy. It is a 100 per cent risk cover. It simply means that a person pays acertain premium to protect his family against his sudden death. He forfeits the amount if he

outlives the period of the policy. This explains why the Term Insurance Policy comes at thelowest cost.

Whole life Insurance Policy:- As the name suggests, a Whole Life Policy is an insurance cover

against death, irrespective of when it happens. Under this plan, the policyholder pays regular

premiums until his death, following which the money is handed over to his family.

This policy, however, fails to fulfill the additional needs of the insured during his post-retirement

years. It doesn't take into account a person's increasing needs either. While the insured buys the

policy at a young age, his requirements increase over time. By the time he dies, the value of the

sum assured is too low to meet his family's needs. As a result of these drawbacks, insurance firms

now offer either a modified Whole Life Policy or combine in with another type of policy

Endowment Policy:- Combining risk cover with financial savings, endowment policies is the

most popular policies in the world of life insurance.

In an Endowment Policy, the sum assured is payable even if the insured survives thepolicy term.

If the insured dies during the tenure of the policy, the insurance firm has to pay the sumassured just as any other pure risk cover.

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Means of savings and investment:- Insurance serves as savings and investment, insurance

is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For

the purpose of availing income-tax exemptions also, people invest in insurance.

1.5. ROLE OF THE LIFE INSURANCE:-

Life insurance as an investment:- Insurance products yield more than any other investment

instruments and it also provides added incentives or bonus offered by insurance companies.

Life insurance as risk cover:- Insurance is all about risk cover and protection of life. Insurance

provides a unique sense of security that no other form of invest can provide.

Life insurance as tax planning:- Insurance serves as an excellent tax saving mechanism.

government gives tax relaxation on every life insurance policy.

1.6. IMPORTANCE OF THE LIFE INSURANCE:-

Protection against untimely death:- Life insurance provides protection to the dependents

of the life insured and the family of the assured in case of his untimely death. The dependents

or family members get a fixed sum of money in case of death of the assured.

Saving for old age:- After retirement the earning capacity of a person reduces. Life insurance

enables a person to enjoy peace of mind and a sense of security in his/her old age.

Promotion of savings:- Life insurance encourages people to save money compulsorily.

When life policy is taken, the assured is to pay premiums regularly to keep the policy in force

and he cannot get back the premiums, only surrender value can be returned to him. In case of

surrender of policy, the policyholder gets the surrendered value only, after the expiry of

duration of the policy.

Initiates investments:- Life Insurance Corporation encourages the public savings and

canalizes the same in various investments for the economic development of the country. Life

insurance is an important tool for the collection of small savings.

Credit worthiness:- Life insurance policy can be used as a security to raise loans. It

improves the credit worthiness of business.

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banking services, it adds about 7 per cent to the countrys GDP .In spite of all this growth the

statistics of the penetration of the insurance in the country is very poor. Nearly 80% of Indian

populations are without Life insurance cover and the Health insurance. This is an indicator that

growth potential for the insurance sector is immense in India. It was due to this immense growth

that the regulations were introduced in the insurance sector and in continuation Malhotra

Committee was constituted by the government in 1993 to examine the various aspects of the

industry. The key element of the reform process was Participation of overseas insurance

companies with 26% capital. Creating a more efficient and competitive financial system suitable

for the requirements of the economy was the main idea behind this reform. Since then the

insurance industry has gone through many sea changes .The competition LIC started facing from

these companies were threatening to the existence of LIC .since the liberalization of the industry

the insurance industry has never looked back and today stand as the one of the most competitive

and exploring industry in India. The entry of the private players and the increased use of the new

distribution are in the limelight today. The use of new distribution techniques and the IT tools has

increased the scope of the industry in the longer run.

2.2. A BRIEF HISTORY OF INDIAN INSURANCE MARKET:-

Insurance has a long history in India. In India, insurance has a deep-rooted history. It finds

mention in the writings of Manu (Manusmrithi ), Dharmasastra and Kautilya (Arthasastra ).

The writings talk in terms of pooling of resources that could be re-distributed in times of

calamities such as fire, floods, epidemics and famine. This was probably a pre-cursor to modern

day insurance. Life Insurance in its current form was introduced in 1818 when Oriental Life

Insurance Company began its operations in India. General Insurance was however a

comparatively late entrant in 1850 when Triton Insurance company set up its base in Kolkata.

History of Insurance in India can be broadly bifurcated into three eras:

a)- Pre Nationalization

b)- Nationalization and

c)- Post Nationalization.

Life Insurance was the first to be nationalized in 1956. Life Insurance Corporation of India was

formed by consolidating the operations of various insurance companies. General Insurance

followed suit and was nationalized in 1973. General Insurance Corporation of India was set up asthe controlling body with New India, United India, National and Oriental as its subsidiaries. The

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process of opening up the insurance sector was initiated against the background of Economic

Reform process which commenced from 1991. For this purpose Malhotra Committee was formed

during this year who submitted their report in 1994 and Insurance Regulatory Development Act

(IRDA) was passed in 999. Resultantly Indian Insurance was opened for private companies and

Private Insurance Company effectively started operations from 2001.

2.3. MILESTONES IN THE INSURANCE SECTOR:-

The business of life insurance in India in its existing form started in India in the year 1818

with the establishment of the Oriental Life Insurance Company in Calcutta. Some of the

important milestones in the life insurance business in India are given in the following table.

2.4. LIST OF INSURANCE COMPANIES WORKS IN INDIA:-

Following is the list of all life insurance company granted permission by IRDA.

1. Bajaj Allianz Life Insurance Company Limited

2. Birla Sun Life Insurance Co. Ltd

3. HDFC Standard Life Insurance Co. Ltd

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Years Important milestones in the Indian life insurance business

1912: The Indian Life Assurance Companies Act came into force for regulating the

life insurance business.

The Indian Insurance Companies Act was enacted for enabling the government

to collect statistical information on both life and non-life insurance businesses.

The earlier legislation consolidated the Insurance Act with the aim of

safeguarding the interests of the insuring public.

245 Indian and foreign insurers and provident societies were taken over by the

central government and they got nationalized. LIC was formed by an Act of

Parliament, viz. LIC Act, 1956. It started off with a capital of Rs. 5 crore and

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4. ICICI Prudential Life Insurance Co. Ltd.

5. ING Vysya Life Insurance Company Ltd.

6. Life Insurance Corporation of India

7. Max New York Life Insurance Co. Ltd

8. Met Life India Insurance Company Ltd.

9. Kotak Mahindra Old Mutual Life Insurance Limited

10. SBI Life Insurance Co. Ltd

11. Tata AIG Life Insurance Company Limited

12. Reliance Life Insurance Company Limited.

13. Aviva Life Insurance Co. India Pvt. Ltd.

14. Sahara India Life Insurance Co, Ltd.

15. Shriram Life Insurance Co, Ltd.

16. Bharti AXA Life Insurance Company Ltd.

17. Future Generali Life Insurance Company Ltd.

18. IDBI Fortis Life Insurance Company Ltd.

19. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd

20. AEGON Religare Life Insurance Company Limited.

21. DLF Pramerica Life Insurance Co. Ltd.

22. Star Union Dai-ichi Life Insurance Comp. Ltd.

23.India First Life Insurance Company Ltd.

2.5. HOW BIG IS THE INSURANCE MARKET?

The insurance sector was opened up for private participation four years ago. For years now, the

private players are active in the liberalized environment. The insurance market have witnessed

dynamic changes which includes presence of a fairly large number of insurers both life and non-

life segment. Most of the private insurance companies have formed joint venture partnering well

recognized foreign players across the globe. There are now 29 insurance companies operating in

the Indian market 14 private life insurers, nine private non-life insurers and six public sector

companies. With many more joint ventures in the offing, the insurance industry in India today

stands at a crossroads as competition intensifies and companies prepare survival strategies in a

detariffed scenario. There is pressure from both within the country and outside on the

Government to increase the foreign direct investment (FDI) limit from the current 26% to 49%,

which would help JV partners to bring in funds for expansion. There are opportunities in thepensions sector where regulations are being framed. Less than 10 % of Indians above the age of

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60 receive pensions. The IRDA has issued the first license for a standalone health company in the

country as many more players wait to enter. The health insurance sector has tremendous growth

potential, and as it matures and new players enter, product innovation and enhancement will

increase. The deepening of the health database over time will also allow players to develop and

price products for larger segments of society. Insurance is a Rs.400 billion business in India, and

together with banking services adds about 7% to India's Gap.

2.6. INDIAN SCENERIO:-

Indian economy is the 12th largest economy in the world, with a GDP of $1.25 trillion and

3rd largest in terms of purchasing power. With factors like a stable 8-9 per cent annual

growth, rising foreign exchange reserves, a booming capital market and a rapidly expanding

FDI inflows, it is on the hinge of an ever increasing growth curve. Indians have a tendency to

invest in properties and gold followed by bank deposits. They selectively invest in shares also

but the percentage is very small, 4-5%. This is itself is an indicator that growth potential for

the insurance sector is very high. Its a business growing at the rate of 15-20% per annum and

presently is of the order of $47.9 billion. India is a vast market for life insurance that is

directly proportional to the growth in premiums and an increase in life density. With the entry

of private sector players backed by foreign expertise, Indian insurance market has become

more vibrant. Competition in this market is increasing with companys continuous effort to

lure the customers with new product offerings. However, the market share of private

insurance companies remains very low, in the range of 10-15%. Even to this day, Life

Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy hand of

government still dominates the market, with price controls, limits on ownership, and other

restraints. The upward growth trend started from 2000 was mainly due to economic policies

adopted by the then Indian government. In this year everyone saw the initiation of an era of

economic liberalization and globalization in the Indian economy followed by several reforms

and long-term policies that created a perfect roadmap for the success of Indian financial

markets.

CHAPTER 3

INTRODUCTION TO TATA-AIGLIFE INSURANCE COMPANY

3.1. TATA GROUP:-

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Invest Assured Flexi Supreme (ULIP Plan)

Year Percentage

First year 6%

Second year 6%

Raksha (Term Plan)

10%

CHAPTER 4

Learning from the project

A project is an in-depth study of particular subject which is having a wide analysis of every

area of subject. When we talk about the project of in the field of marketing management in a

particular company, it will defiantly contain al

final rlic report

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