new lic mba

1

CHAPTER I1.1 Information about the Study

Life has always been an uncertain thing. To be secure against unpleasant possibilities, always requires the utmost resourcefulness and foresight on the part of man. To pray or to pay for protection is the spirit of the humanity. Man has been accustomed to pray God for protection and security from time immemorial. In modern days Insurance Companies want him to pay for protection and security. The insurance man says "God helps those who help themselves"; probably he is correct. Too many people in this country are not in employment; and work for too many no longer guarantees income security. Several millions are part-time, self employed and low-earning workers living under pitiable circumstances where there is no security cover against risk. Further the inherent changing employment risks, the prospect of continual change in the work place with its attendant threats of unemployment and low pay especially after the adoption of New Economic Policy and the imminent life cycle risks - a new source of insecurity which includes the changing demands of family life, separation, divorce and elderly dependents are tormenting the society. Risk has become central to one's life. It is within this background life insurance policy has been introduced by the insurance companies covering risks at various levels. Life insurance coverage is against disablement or in the event of death of the insured, economic support for the dependents. It is a measure of social security to livelihood for the insured or dependents. This is to make the right to life meaningful, worth living and right to livelihood a means for sustenance. Therefore, it goes without saying that an appropriate life insurance policy within the paying capacity and means of the insured to pay premium is one of the social security measures envisaged under the Indian Constitution. Hence, right to social security, protection of the family, economic empowerment to the poor and disadvantaged are integral part of the right to life and dignity of the person guaranteed in the constitution. Man finds his security in income (money) which enables him to buy food, clothing, shelter and other necessities of life. A person has to earn income not only for himself but also for his dependents, viz., wife and children. He has to provide legally for his family needs, and so he has to keep aside something regularly for a rainy day and for his old age. This fundamental need for security for self and dependents proved to be the mother of invention of the institution of life insurance. What is Insurance

The business of insurance is related to the protection of the economic values of assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefit from it. The benefit may be an income or some thing else. It is a benefit because it meets some of his needs. In the case of a factory or a cow, the product generated by is sold and income generated. In the case of a motor car, it provides comfort and convenience in transportation. There is no direct income. Every asset is expected to last for a certain period of time during which it will perform. After that, the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the value or income is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it non-functional. In that case, the owner and those deriving benefits from there, would be deprived of the benefit and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situations. Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

1.2 Industry Profile

Thanjavur District lies in the East Coastal region of Tamil Nadu. It is situated between 9 50 and 11 25 of the northern latitude and 78 45 and 70 25 of the Eastern longitude. It extends to an area of 3396.57 sq.kms. The District is bounded on the north by the Coloroon which separate it from Perambalur and Tiruchirappalli district, and on the East it is bounded by the Thiruvarur and Nagapattinam districts, and on the South by the Palk Strait and Pudukottai district and on the West by Pudukkottai and Thiruchirappalli districts. The district can be divided into two distinct division, viz., the deltaic region, the upland area or non-deltaic region. The deltatic region covers the whole northern and eastern portions of the district where the river Cauvery with its wide network of branches irrigate more than half of the district. It comprises the whole of Kumbakonam taluk and parts of Thanjavur, Papanasam taluks. The rest of the southern and western areas of the district are non-deltaic or upland region. A good portion of upland regions which was dry has now been brought under irrigation with the help of Grand Anaicut canal, fed by the Cauvery-Mettur Project and by extension of the Vadavar river. Non-deltaic region is also devoid of hills and slopes gradually seawards. Agriculture is the main activity in the District. Paddy, Sugarcane, Coconut, Plantain are the major crops in the District.

There are a number of ancient temples in the district and most of them are located on the banks of river Cauvery and its tributaries. The existence of about 75 ancient temples in the district have been recorded in the Thevaram sung by Nayanmar and were discovered from Chidambaram temple by the Chola King-Raja Raja I and only a part of it could be traced out. Of 108 Vaishnavite Thivyaadesams (Holy Places sung by Vaishnavite Saints-Alwars) 12 places are situated in the district. The Brahadeeswarar Temple at Thanjavur and the Siva temples at Darasuram and Thirubuvanam are typical landmarks of Chola architecture. Raja Rajeswaram temple at Thanjavur built by Raja Raja I show the expertise and skill of Tamil architecture. This temple is remarkable for its stupendous proportions and bold simplicity of designs and continuing a historical movement of glory and spiritual solace. During 1987, the temple was inscribed on the world heritage list concerning the protection of world cultural and natural heritage.

1.3 Company Profile

Introduction to Life Insurance Corporation (LIC) The Life Insurance Corporation of India popularly known as LIC of India was incorporated on September 1, 1956 by nationalizing 245 Indian as well as foreign companies. It was established 52 years ago with a view to provide an insurance cover against various risk in life. The luminaries who spearheaded this move at that time visualized an entity that will provide life insurance to Indians, especially the vast rural people, at an economical cost and channel the savings for the betterment of the nation. It is the largest life insurance company in India and also the countries largest investor. It is fully owned by the Government of India and headquarter is Mumbai. Today LIC function with 2048 fully computerized branch offices, 100 divisional offices, 7 Zonal offices and the corporate office. LICs wide area Network cover 100 divisional offices and connects all the branches through a Metro area network. LIC has tied up with some Banks and service providers to offer on- line premium collection facility in selected cities. LICs ECS and ATM premium payment facility is an addition to customer convenience. Apart from on-line kiosks and IVRS, info centers have been commissioned at Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi,

Pune and many other cities. With vision of providing easy access to its policyholders, LIC has launched its SATELLITE SAMPARK offices. The digitalized record of the satellite offices will facilitate anywhere to serve and other convenience in the future. LIC has crossed many milestones and has set unprecedented performance records in various aspect of life insurance business. The same motives which inspired our forefathers to bring insurance into existence in this country inspire us at LIC to take this message of protection to light the lamps of security in as many homes as possible and to help the people in providing security to their families. The subsidiary companies of LIC.

LIC of India, International A joint venture offshore company promoted by LIC, commenced its operation in july1989. The primary objective is to the US-dollar denominated policies which cater to the insurance needs of non-resident in Indians. It provides insurance services to policyholders who residing in Gulf. The LIC International operates in all Gulf Cooperation Council (GCC) countries. LIC Nepal a joint venture company formed in September 2001 with the Vishal Group of Industries with a capital base of Rs.250mn. It is one of the largest capitalized insurance companies of Nepal. It has joint share between LIC of India (55%) Vishal Group (25%) and has a public participation to the extent 20%.

Life Insurance Corporation Lanka Limited (LICL) A joint venture company formed in 2003 with the Bartleet Group of Companies, it is one of the oldest and reliable institutions in Sri Lanka. The combined strengths of these two formidable companies has enabled LICL to emerge as the premier provider of Life Insurance in Sri Lanka. The Indian-based bluechip also has offices in UK, Mauritius, Fiji, and in all Middle East countries. LIC Housing Finance Incorporated on June 19, 1989; its main objective is to provide long term finance for construction or purchase of houses or apartments. The company provides long terms finance to individuals for purchase, construction, repair and renovation of new \ existing flats \ houses. It also provides finance on existing property for business, personal needs and gives loans to professionals for purchase or construction of clinics \ nursing homes \ diagnostic centers \ office space and also for purchase of equipments. It has set up a representative office in Dubai and Kuwait to cater to the non- resident Indians in countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia. It has client group of over 9,40,000 prudent house owners who enjoy the companys financial assistance. LIC Housing Finance Limited Care Homes It is a Wholly-owned subsidiary of LIC Housing Finance. It builds and operates Assisted Community Living Center for senior citizens. It operates a network of approximately 6 regional offices, 13 back offices, and 127 marketing offices.

Important operational terms of LIC (i) What Is Life Insurance? Life insurance is a contract that pledges payment of an amount to the person assured (or his nominee) on the happening of the event insured against. The contract is valid for payment of the insured amount during i. The date of maturity, or ii. Specified dates at periodic intervals, or iii. Unfortunate death, if it occurs earlier. (ii) Why We Need Insurance Life insurance is a contact by which you can protect yourself against specific uncertainties by paying a premium over a period. Since each of us during our life faces with numerous risks-falling health, financial losses, accident and even fatalities. (iii) Protection You need life insurance to be there and protect the people you love, making sure that your family has a means to look after itself after you are gone. It is a thoughtful business concept designed to protect the economic value of a human life for the benefit of those financially dependent on him. (iv) Retirement Life insurance makes sure that you have regular income after you retire and helps you maintain standard of living. It can ensure that your postretirement years are spent in peace and comfort.

(v) Savings and Investments Insurance is a means to Save and Invest. Your periodic premiums are like Savings and you are assured of a lump sum amount on maturity. A policy can come in handy at the time of your childs education or marriage! Besides, it can be used as supplemental retirement income. (vi) Tax Benefits Life insurance is one of the best tax saving options today. Your tax can be saved twice on a life insurance policy-once when you pay your premiums and once when you receive maturity benefits. Money saved is money earned. (vii) Myths of Insurance i) Insurance is just meant for saving tax. ii) Insurance does not give good returns iii) Insurance products are not flexible (viii) Indemnity Legal principle that specifies an insured should not collect more than the actual cash value of a loss but should be restored to approximately the same financial position as existed before the loss. (ix) Premium Premium is the consideration that the policyholder has to pay in order to secure the benefits offered by the insurance policy. It can be looked upon as the price of the insurance policy. It may be a one-time payment or periodical payment (Monthly Quarterly, Half yearly, Yearly). A default in premium can endanger the continuance of the policy. If that happens, the policy will be treated as lapsed and the expected benefits.

(x) Claims A claim is the demand that the insurer should redeem the promise made in the contract. The insurer has then to perform his part of the contract i.e. settle the claims, after satisfying himself that all the conditions and requirements for settlement of claim have been complied with. (xi) Agent An insurance company representative licensed by the state, who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer. Assurance is the coverage of risk on the happening of an event, which will happen during the period of insurance. Insurer is the company, which covers the risk under a policy of insurance. Insured is the person on whose life the risk is covered. Proposer is the person who seeks the insurance on the life proposed for insurance Proposal is the offer document filled and signed by the proposer indicting interalia the past & present health of the life to be assured, the amount for which he desires to have the life to be insured, the period for which he wants to have the insurance and the specified plan.

Plan of insurance is the scheme offering specified benefits. Different plans are offered by the insurer to suit the varying need of the insuring public. Term is the period (no. of years) for which the risk on the risk on the life assured will be covered. Sum assured is the amount payable on the happening of the even specified in the policy during the term of the policy. Survival benefit is the amount (a fixed percentage of sum assured) payable under certain plans on the life assured surviving the period specified in the policy. Policy is the document issued by the insurer specifying the sum assured, plan, term, the benefits payable under the policy and the conditions and privileges of the policy. It is an evidence of the contract of life insurance. Tabular premium is the amount of premium per thousand sum assured indicated in the table of rates for various plans and for different ages and terms. Maturity claim is the payment of amount by the insurer on the life assured surviving the term specified in the policy. First Premium Receipt is the document issued by the insurer, as a prelude to the issue of the policy to indicate that he has accepted the risk on the life proposed for insurance. Date of commencement (DOC) is the date month and year from which the risk commences under a policy.

Days Of Grace is Policy holders are expected to pay premium on due dates. a period is 15-30 days is allowed as grace to make payment of premium; such period is days of grace. Due date is the date on which the installment premium to be paid under the policy falls due. Nomination is the facility available under a life insurance policy to enable the insurer to pay the benefits available under the policy to the nominated person on the death of the life assured. Assignment is the transfer of rights under the policy. Non- Medical scheme proposals submitted for life insurance will be considered for acceptance without medical examination by the authorized medical examiner. Medical Scheme proposals submitted for life insurance will be considered only on the strength of the Medical Report submitted by the authorized medical examiner of the insurer. Bonus is additions made to the sum assured under with profit policies as at the end of each financial year as a result of an investigation made by an actuary into the working of the life insurance company. With profit policies; is which are entitled to have a share of the surplus arrived at as a result of the investigation mentioned above. Without profit policies; is which are not entitled to have a share of the surplus.

Surrender; premature termination of the contract of life insurance by the life assured. A policy can be surrendered if there full years premiums have been paid. The amount paid on surrender is called surrender value. Rider; is additional benefits granted by insurers under a standard plan of insurance by payment of additional premium by the insured. Insures offer rider such as increased death cover (term insurance), Medical insurance (providing relief for certain serious aliments or for undergoing certain major operation) and accident cover. IRDA has stipulated that the premium collected for these extra benefits (riders) should not exceeds 30% of the tabular premium. Types of Policies

Introduction The Researcher, found the different types of Life Insurance Plans in the market. As we know that Life Insurance is important for everyone to protect family incase of their demise the insured money will save their family for educating their children and marriage etc. According to your needs, one can choose Life Insurance Scheme of any form.

Term Insurance Policy This policy is pure risk cover with the insured amount will be paid only if the policy holder dies in the period of policy time. The intention of this policy is to protect the policy holders family incase of death. For example, a person who takes term policy of Rs.500000 for 20 years, if he dies before 20 years then his family will get the insured amount. If he survive after 20 years then he will not get any amount from the insurance company. It is the reason why term policies are very low cost. So, this type of policy is not suitable for savings or investment.

Whole Life Policy As the name itself says, the policy holder has to pay the premium for whole life till his death. This policy doesnt address any other needs of the policy holder. Because of these reasons this kind of policy is not very popular or insurance company not suggesting to take this policy.

Endowment Policy It is the most popular Life Insurance Plans among other types of policies. This policy combines risk cover with the savings and investment. If the policy holder dies during the policy time, he will get the assured amount. Even if he survives he will receive the assured amount. The advantage of this policy is if the policy holder survives after the completion of policy tenure, he receives assured amount plus additional benefits like Bonus, etc. In this kind of policy, policy holder receives huge amount while completing the tenure. In addition to the basic policy, insurers offer various benefits such as double endowment and marriage/ education endowment plans. The cost of such a policy is slightly higher but worth its value.

Money Back Policy Money Back Policy is to provide money on the occasions when the policy holder needs for his personal life. The occasions may be marriage, education, etc. Money will be paid back to the policy holder with the specified duration. If the policy holder dies before the policy term, the sum assured will be given to his family. A portion of the sum assured is payable at regular intervals. On survival the remainder of the sum assured is payable

Annuities and Pension An annuity is a series of periodic payments. An annuity contract is an insurance policy, under which the annuity provider (insurer) agrees to pay the purchaser of annuity (annuitant) a series of regular periodical payments for a fixed period or during someone's life time. In an annuity, the insurer agrees to pay the insured a stipulated sum of money periodically. The purpose of an annuity is to protect against risk as well as provide money in the form of pension at regular intervals. Over the years, insurers have added various features to basic insurance policies in order to address specific needs of a cross section of people.

Departmental details in LIC The organization having a such a huge size has to have a well defined hierarchical structure and LIC is not an exception to this fact. A well defined proper organization structure with officials with exact knowledge of their duties is a must for an organization to prosper. LIC has a vast network offices across the country and abroad so it has defined and maintained its organizational structure in the following way. LIC has its main central head office at Yogaakshema Jeevan bima marg at Mumbai. Then it is followed by eight zonal offices namely central zone, eastern zone, east central zone, northern zone, north central zone, southern zone, south central zone, western zone respectively. CHAPTER - II

2.1 Review of Literature

REVIEW OF LITERATURE NEED AND IMPORTANCE

Basically research is of two types one is primary and second is secondary. Primary research is the data that does not already exist. It is totally based on survey, questionnaire, interview and observation on the other hand secondary research is looks at existing data. It may be a summary, collation or synthesis of information.

It has been universally acknowledged that no work can be meaningfully conceived and soundly accomplished without critically studying what already exists in relation to it, in the form general literature. It is the study of already established knowledge pertaining to the area that enables us to perceive clearly what is already lighted up in that area and what still remains enveloped in darkness. Emphasizing the importance of survey of related literature, C.V. Good pointed out- the survey of related literature may provide guiding hypothesis, suggestive methods of investigation and comparative data for interpretative purposes. The author further suggests that it would be useful in exploring the way, how the previous studies are comparable with the present study. It helps to expand the present problem to enable us to see its importance and to relate it to many other studies.

The planning and execution of any research study should be preceded by thorough review of literature in the related field since it helps the research worker to get better insight into the work done in the related field. Apart from the above consideration, the review of literature goes way in building up and accumulating knowledge over a period of time through the reflection of primarily empirical studies. Whatever may be the mode of building up knowledge, it is invariably realized that no one can embark upon a new venture in any area of life without critically acquainting himself with-what already exists in the form of knowledge in that area.

The study of related literature goes a long way in equipping the research with these understandings and knowledge which is necessarily needed to put ones own problem in a proper perspective and which are essential for a valid interpretation of the findings of ones own research efforts.

The relevant literature reviewed for the present study is described as under: Lawrence A. Gosby and Nancy Stephens (1987) updated those complexes, highly intangible a service such as life insurance consists largely of credence properties. Insurance providers engage in relationship-building activities that emphasize buyer-seller interaction and communication. Economists contend consumers are prone to make quality generalization based on the strength of these relationships, perhaps to the detriment of price competition. The authors report contrary result suggesting that, though relationship marketing adds value to the service package, up-to-date core services1 .

Zeithaml (1988) defines value as the consumers overall assessment of the utility of a product, based on the perceptions of what is received and what is given. He conjectured that there must be different stages involved in developing a new product, they are- need identification, product development, product testing, and finally product launch. Price strategies must be according to the needs of the customers because what we are producing, doing it for a customer. Branding strategies are increasing to enhance market share of product. It is the name and mark which can increase profits by enhancing the perception of quality.

In the case of LIC of India v/s Dr. Sampooran Singh (1993), it was decided that policy became inoperative due to the act of the state and there was no deficiency on the part of the appellant. Service under an insurance policy can arise only after the occurrence of the contingency viz, the death of the insured in this case-as, however, the purpose of the policy became inoperative due to the act of the state, and there should be no deficiency of service on the part of the appellant insurance company. Faulkner and Bowman (1997) defined perceived use value as the satisfaction experienced by a buyer in purchasing and using a product or service. They adjudged that intermediaries who are sincere and keen in selling the products should also be keen in educating and updating the knowledge of customers. They must be ready to be brain stormed by the customers, equipped with clear and specific solutions. Zero gaps also insure flexibility and adjustment to the changing expectations of the customer by decreasing the cost of organization and increasing the consumer satisfaction.

Ananth (1998) in his study on life Insurance Corporation of India highlighted the spectrum of corporate finance during 1975-90. He pointed out different problems faced by the organisation in handling the corporate finance such as the time of procurement and investment of funds. He suggested that the organisation must relate itself with the needs of changing environment by taking good decisions through professionally trained people.

Shrivastva (1999) critically analyzed the housing finance aspect of the LIC of India and suggested that the corporation must evaluate the needs of houses and the required finance thereof in a particular area on the need based system and its decisions should not be affected politically so that it may prove itself more compatible and effective.

The insurance companies Specially LIC must acquire and maintain a competitive edge in the market by following the concept of competitive market intelligence and to anticipate the pattern of operations and the game plan. It is necessary to find out what new products and policies others are likely to offer and then suitability design their own strategies. But study pointed out as how is suffering from faulty selection and training methods. The political interference adds more to the problem. He suggested that corporation must adopt the professionally tested modern techniques of selection and training of its employees to make work force more competent.

Livingstone (1999) urged the need of framing effective human resource policies by the LlC of India to retain the competent and motivated staff as the new entrants will be eying them by offering lucrative salaries and other benefits. According to him, management has a great role to play in shaping subordinates 'attitude towards the jobs and themselves. They will behave as they will be treated. Samar, Deb (1999) Investment policies of the LIC of India in special context to North- East India was analyzed. The focus of the study was to see the investment patterns of the funds of the corporation in different fields of activities in the region. He observed an imbalance in investment pattern for infrastructure. Development in the region as compared to other parts of the country and suggested that more and more funds must be invested by the corporation to build a strong infrastructure base in the region, instead of making the investment in housing finance to remove the prevailing poverty in the masses.

He also observed that a majority of the insurance business is performed by agents of different companies and most of the time they sell the products which suits them the most from the view point of commission and they even dont disclose the negative points of the products. To avoid this lacuna, and to save the interest of the investors insurance sector should emphasize more on direct selling and banc assurance and stop the exploitation of the customers and give them the maximum benefits.

Mookerji (2000) cited weaknesses of marketing policies pertaining to outdated products and technology used by LIC and GIC of India. She forecasted that in the light of new and upgraded technology, the LIC of India would strengthen the network of agents and intermediaries. Most of the products of LIC of India were bundled ones having no flexibility. Only twenty percent agents of the 31 corporation were really professional in their approach. The corporation must adopt some new channels of distribution like banks, village head, post office or the cooperative societies to improve its performance.

Singh, S.S and Chadah, Sapna (2000) the committee framed the new Competition Policy which proposed repeal of Monopolies and Restrictive trade Practices Act, 1969 and enactment of a new Competition Law and establishment of a regulatory authority Competition Commission for implementation of Competition Act. On recommendation of the Committee the Competition Act was passed and the Monopolies and Restrictive Trade Practices Act, 1969 has been repealed.

Mundra (2000) expressed, through his article, the fear in the minds of the competitors and the possible strategies to face them. The main concern of the public sector companies, according to him, is that the private players, especially foreign ones, will swamp the market and grab a large share of it. They can create demand in some neglected and new areas. The possible strategies for combating the situation can be the adoption of latest information technology, use of data warehousing management, implementation of high level training and development programmes and practices of alliances and tie-ups.

Murthy (2000) emphasized the need of undertaking three functions viz. risk taking, asset management and serving the customers by the life insurance companies for providing comfort to the society in an organized manner.

Suthanan (2000) brought to light the drawbacks of insurance sector, especially of the LIC of India, in the form of low supply of investment, pension 32 and health care products in comparison to their demand. The pace of penetration of the Corporation is low in comparison to its competitor's. Non-availability of customer friendly products, high premium, miss-management of assets; low investment yield and low consumer satisfaction are the main factors causing inefficiency in the Corporation which must be eradicated to face the challenges of liberalization.

Mittal, S.K. and Sharma, KC. (2001) deduced that the competition increases in the field of insurance sector with the entry of private players. As the foreign dominance in collaboration in life insurance might lead to replication of the products prevalent in industrial countries and they may not properly be matched with the typical requirements of Indian customers. Liberalization of insurance sector may prove boon for the Indian economy by providing ample opportunities of growth in the shape of challenges, if they are regulated and promoted properly.

Parera (2001) feels the insurance as the hottest business in India and other Asian countries. He exhibited that the Indian insurance market has registered the highest growth of over twenty percent in Asia, though its share in global market is about 0.5 percent. The total Indian population was 1.05 billion in july, 2000, consisting of 72.22 percent of rural population and 27.78 percent of urban population. But the penetration level of the life insurance was just twenty percent.

Chuganee (2001) assumed distribution as a very important and critical factor for the life insurance products of private players; its a bottle neck to be 33 navigated by them. The new insurance players are hawking their products through the ready distribution channels of banks and non banking finance companies, but they may expose to quality control issues if not making the judicious use of them.

Singh, Daleep (2001) underlined that the competition will increase in the field of life insurance with the entry of more private players. Foreign players will bring in their management, financial and technical strength in the market, which would ensure better products and services. And, thus to be more competitive the Indian players, both public and private should go for mental revolution to design the competitive plans, and strategies for effective execution.

Gupta (2001) expressed that the transition of insurance industry from a public monopoly to a competitive environment presents interesting challenges to competitors and consumers. The new players shall have an opportunity to test their various hypothesis and experiences from overseas markets. On the other hand, the LIC of India has to prove its worthiness in the competitive market. As a result of that the consumers shall have greater choices for the fulfilment of their needs.

N. Vittal, Central Vigilance Commissioner (2001) expressed that today Indian Insurance sector is facing an exiting time. While competition is coming and Indian insurance industry will have to come up to global standards. It also provides opportunity for bringing in high degree of innovation and imagination in the insurance sector.

Rehman (2002) concluded that the steady deregulation of the insurance market, the emergence of new technologies, increasing competition among the life 34 insurers are resulting into a new paradigm centered on the customers. The new situation will induce many pressures on insurers in the form of capital, volumes (market share), margins, services, reinsurance, retaining quality people, intermediaries and regulatory authority.

Singh (2002) corroborated that the life insurance companies are exposed to colossal losses, which is evident from the World Trade Centre disaster. These companies can limit their exposure by spreading the risk through the processes such as geographical diversification.

Krzysztof Ostaszewski (2003) added Life and disability insurance, as well as annuities, traditionally has been analyzed as products providing protection against random losses. He proposed that these products can be viewed as derivative instruments created to address the uncertainties and inadequacies of an individual's human capital, if human capital is viewed as a financial instrument. In short, life insurance (including disability insurance and annuities) is the business of human capital securitization.

Jawaharlal (2003) elucidated that historically, distribution of insurance policies in India has been totally agent based. The agents were always driven by motive of selling a product and not in really marketing it. They were compelled to sell products that were best suited to them rather than the proposer. Most of the products of LIC of India were bundled ones having no flexibility. Only twenty percent agents of the Corporation were really professional in their approach. The Corporation must adopt some new channels of distribution like banks, village 35 head, post office or the cooperative societies to improve its performance. The total Indian population was 1.05 billion in July 2003, consisting of 72.22 percent of rural population and 27.78 percent urban population. But the penetration level of the life insurance was just twenty percent.

IRDA report revealed (2003) revealed that the maximum business activities of private life insurers are limited in the urban areas where a fairly good market network of public sector insurance companies already exists. The ratio of agents of urban and rural agents was 100:76 in public company where it was 100:39 only in case of private companies.

Dublin and Andrew (2004) looks at the various insurance business processes that are being outsourced and how outsourcing is moving up the value chain. It examines the key drivers and inhibitors impacting the growth of outsourcing and off shoring in the insurance vertical. They examine global trends, with an overview of recent outsourcing deals by some of the world's largest insurers. Their study examines key trends in the outsourcing industry and provides insights into issues like the insurance outsourcing value chain, domain specialization of vendors and off shoring versus near shoring. They highlight the state of the insurance off shoring industry in India, market shares and prospects for growth, with estimates and forecasts till 2007.

Shobhit and Shukla(2004) concluded that there is a significant requirement of change in products, services and marketing strategy of private life insurers. The policies with low premium, easy payment schedule, specifically rural 36 designed products, and loan against policies can help the increase in share of private life insurers.

In Donoghue v/s Stevension27 (2005) Lord Atkin laid down a very important principle of determining duty of a manufacturer. Lord Atkin, in this case laid down the principle of duty to take reasonable care to the consumer where products results in an injury to the consumers life or property.28 Kumar (2005) corroborated that rural penetration remains a haunting challenge the most life insurers due to high poverty levels prevailing in the area. The other problems faced the insurers in rural India are; poor general awareness about life insurance, investment in land and gold by the villagers, non-availability of certificates regarding proof of age and death lack of innovative products made for rural people, lapse of policies due to seasonal and irregular income and permanent health problems.

S.Ganesan and Jayaprakash (2005) cautioned against the lapses of life policies by saying that it adversely affect the policyholders, the company, the agent and the industry in terms of forfeiture of premiums paid, cost of acquisition not fully covered, loss of renewal commissions, and wastage of scarce resources. It can be controlled by good training to agents, control over the activities of agents by the companies and regular after sale services of agents to the policyholder.

B.V. Rao (2005) indicated that the performance the LIC of India depends purely on the performance of its agents. The number of agents has increased from 533133 in 1996-97 to 1003241 in 2003-04; the average business per agent has 37 increased from Rs, 1064284 to 2197675 during the same period. The study also revealed that 15 percent of the agents of the LIC of India are highly productive and the remaining 85 percent are less productive. In nut shell the former agents brought 61 percent of the new business while the remaining 85 percent contributed the balance 39 percent.

Kishore, R.B (2006) laid down in his article that market data, sources, methodology, need for professionalism to systematically target these affluent segment by becoming crorepathis and MDRT achievers. The article also help sharpens the style of salesmanship to be leaders and champions in the profession.

Jason Cunningham (2007) observed that buying life insurance has been reduced to an afterthought. Total 200 people were surveyed as part of this study and researcher found that many of the peoples are uncomfortable with facing their own mortality. Yet others do not see the value of life insurance because they are single, or will not live to receive the tangible benefit of having this coverage, unlike health insurance. Maybe they have been turned down for coverage because of a health condition, but most still can qualify for a graded death benefit policy.

R. Masilamani (2007) attempted to identify the ways in which the safety of an insurance policy can be ensured. In his article he concluded that the government of India intends to bring in a comprehensive legislation relating to insurance matters. There is an upbeat mood among all the insurance companies over the growth in their premium income through life insurance policies. The article intends to codify the possible extent that the laws, rules and regulations available in our 38 country can provide a safety net for funds invested by the policyholders in a life insurance policy.Joy Chakraborty (2007) a research associate identified that the Indian insurance industry underwent a drastic transformation with the entry of private players who captured a significant market share (26.6%) during 2005-2006, the proposal to increase the FDI limit from 26% to 49% will further enthuse the foreign companies to infuse fresh capital into the Indian insurance sector, thereby fuelling more growth. He clearly traces the challenges faced by the private players while marketing their products and the measures they have taken for overcoming them.

CHAPTER - III3.1 Research and Methodology Definition

RESEARCH:-

Research is an organized and systematic way of finding answers to question.

Research is an enquiry or examination to discover new information or relationship and to extent and to verify existing knowledge.

Redman & Mory define research as a systematized effort to gain new knowledge.

Methodology is define as

1. The analysis of the principle of methods, rules, and postulates employed by a discipline or

2. The development of methods, to be applied within a discipline

3. A particular procedure or set of procedure.

3.2 Research Design

The framework of conducting research is known as research design.

Research design is the plan, structure, and strategy of investigation conceived so as to obtain answers to research question and to control variance.

Types of research Design:-

There are three types of Research Design:-

1. Exploratory Research Design: - The major emphasis in exploratory Research Design is on discovery of ideas and insights.

2. Descriptive Research Design: - The descriptive Research Design study is typically concerned with determining the frequency with which something occurs or the relationship between two variables.

3. Causal Research Design: - A Causal Research Design is concerned with determining cause and effect relationship.

4. For the study, Descriptive Research Design was undertaken as it draws the opinion of employees/workers on specific aspect.

3.3 Sources of Data Collection

TYPES OF DATA USED:

Both primary and secondary data is used in the research.

Data Collection Methods

To conduct the market research the data is collected by two sources.

3.3.1 Primary Data

The primary sources of data refer to the first hand Information. Primary data is collected during the survey with the help of Questionnaires

3.3.2 Secondary Data

Secondary data is one which already exists and is collected from the published sources. The sources from which secondary data was collected are:

Newspapers and Magazines like Economic Times, Insurance Times, and Insurance Post.

Internet.3.4 Sampling Process and Techniques

To be the dominant Life, Health and Pensions player built on trust by worldclass people and service.

This we hope to achieve by:

Understanding the needs of customers and offering them superior products and service.

Leveraging technology to service customers quickly, efficiently and conveniently.

Developing and implementing superior risk management and investment strategies to offer sustainable and stable returns to our policyholders.

Providing an enabling environment to foster growth and learning for our employees. And above all, building transparency in all our dealings.

The success of the company will be founded in its unflinching commitment to 5 core values -- Integrity, Customer First, Boundary less, Ownership and Passion. Each of the values describes what the company stands for, the qualities of our people and the way we work.

We do believe that we are on the threshold of an exciting new opportunity, where we can play a significant role in redefining and reshaping the sector. Given the quality of our parentage and the commitment of our team, there are no limits to our growth.3.5 Objective of the Study

1. To compare the performance of LIC and private insurance companies in India.

2. To find out the performances of LIC and private insurance companies in each category (size. growth, productivity and efficiency)

3. To compare grievance management of LIC and private insurance companies. RESEARCH DESIGNa. Type of research design : Analytical Research

b. Data collection

: Secondary Sources

c. Statistical Tools

: Ratio Analysis Bar Graph

3.6 Statement of the Problem

The functions to be performed by a public relations department may vary from organization to organization depending upon the nature and activities of a particular organization. However, certain standard functions have emerged as common in most balanced departments. They are discussed below:

Policy:

Public relations policy is required for every organization. A policy is a statement of guidelines to be followed in the company. The department has to develop and recommend corporate public relations policies. It has to contribute the public relations view point which helps in the formulation of decision. Its function is not merely to provide the policy mainly to the top management but also to the other sections and divisions.

Publicity:

Corporate publicity is necessary to interact with the public. The department has to undertake the development and issuance of announcements of corporate activities to external communication media. It has to handle inquiries from the press. It is a part of the functions of the department to develop and place promotional and publicity about the company as a whole or any of its units.

Product Publicity:

Corporate publicity is different from the product publicity. In this, focus is on the products and how to popularize the product. This includes both new products as well as existing ones. It includes the announcement of new products through the editorial channels of the communication media. The department has to develop and execute the promotional product publicity campaigns.

Relations with the Government:

Relations with the government cannot be overlooked. In all spheres of activities the government interferes, regulates, controls and supervises. It is necessary to maintain liaison with appropriate governmental departments. This liaison covers both the local level, state level and national level. Besides, governmental relations include: Advise action as needed Report trends in government affecting the company Help in preparing and directing corporate appearances before investigating bodies of legislative hearings. Direct programmes designed to promote the companys point of view in legislative or regulatory matters.

Community Relations:

Community contacts should be planned. It is the performance and or coordination of corporate good neighbour activities, including compliance with environmental protection standards, fostering equal employment opportunity, cooperating in urban improvement programmes, and developing community understanding of a companys problems and needs. Shareholders relations:

Relations with the corporate stockholders are more important to attract public money. This takes the form of communication between the company and the shareholders in particular and also the investment community in general. It is necessary for the development and acceptance of the company among the investors by broadening the exposure of the companys policy and financial results in the investment community. This function includes preparation of annual reports, quarterly reports, dividend cheque inserts etc. It has to plan and stage the annual meetings of stockholders and appearances before meetings of security analysis.

Promotion Programmes:

Public relations promotion programmes should be formulated and implemented. This may broadly cover institutional advertising, public relations literature and special events.

Donations:

A corporate donation policy should be developed for company contributions. Various aspects involved in this function are processing requests for donations, administering companys foundation, and the conduct of employees solicitations for approved drives.

Employee Publications:

The public relations department has to prepare and publish employee magazines, newspapers, bulletins, management communication etc

Guest relations:

The department must undertake guest reception activities. Coordinating activities. Conveying and Interpretation. Advisory function. Public relations education programme.

3.7 Tools Used

The projects requirements for funding, facilities, resources, office space, computer equipment, office equipment, unique security requirements, and support tools should be identified. As they say in Hollywood, Show me the money. You should include your tentative budget here so the organization can plan, prioritize, and provide your project with sufficient funding for success. Other areas such as training, quality assurance, and documentation should also be considered. Responsibilities for coordination and resolution of these issues should be clearly assigned. Any service-level agreement or support arrangement should be documented.

3.8 Period of the Study

If you are not satisfied with the Terms and Conditions of the policy, you may return the policy to us within 15 days. The amount to be refunded in case the policy is returned within the cooling-off period shall be determined as under:Value of units in the Policyholders Fund Plusunallocated premium PlusPolicyAdministration charge deducted Less charges@ Rs.0.20per thousand Sum Assured under Basic planLessActual cost of medical examination and special reports, if any.Loan:

No loan will be available under this plan.

Assignment:

No assignment will be allowed under this plan.

Exclusions:

In case the Life Assured commits suicide at any time within one year, the Corporation will not entertain any claim by virtue of the policy except to the extent of the Policyholders Fund Value on death.

3.9 Limitation of the Study

1. Could reach to a limited number of documents of different insurance companies in regard to the management and other policies and resultant figures so as to identify the exact cause of their lag in performance.

2. Due to the limited time could not study all the insurance companies original documents individually.

3. Non-Proficiency in technical aspects of insurance companies might have hindered the best analysis of the findings.

3.10 Chapterization Schemes

INTRODUCTION TO THE STUDY

REVIEW OF LITERATURE

RESEARCH METHODOLOGY

DATA ANALYSIS AND INTERPRETATION

FINDING, SUGGESTION AND CONCLUSION

Findings

Suggestions

Conclusion

APPENDIX

ANNEXURE

BIBLIOGRAPHY

CHAPTER - IVData Analysis and Interpretation

(A) TOTAL PREMIUM : (Rs. In crores)FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC635337512790792127822149789

Private31207727150832825351561

Insurers

TOTAL6665382854105875156075201350

160000PREMIUM OF LIC149789

140000127822

120000

10000090792

75127

80000

63533

60000

40000

20000

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

PREMIUM OF PVT INSURERS6000051561

50000

40000

3000028253

2000015083

1000031207727

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

points after

Avg. Premiummultiplying by

weightage

( In Crores)Rankpoints(7.5%)

LIC101412.20117.5

Private Insurance Co.21148.80

20.53.75

Average premium of LIC is much more than that of all insurance companies altogether. LIC s average premium of the last five years is nearly five times the average premium of the all other private insurance companies.It can be said that up to that time their were less number of private players in the field of insurance but then also undoubtedly LIC is the king.(B) TOTAL INCOME :(Rs. In crores)

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC93089112393132147174425206363

Private43239049188632424252648

Insurers

TOTAL97412121442151010198667259011

250000INCOME OF LIC

206363

200000174425

150000132147

93089112393

100000

50000

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

INCOME OF PVT INSURERS600005156150000400003000024242

188632000090491000043230FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08points after

Avg. Incomemultiplying by

weightage

( In Crores)Rankpoints(7.5%)

LIC143683.40117.5


20.53.75

All over income of LIC is much more than than of private players. It is due to the fact that LIC being a government agency is being trusted by lot of companies and has large number of shares in big corporates.

(C) SIZE OF BALANCE SHEET :(Rs. In crores)FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC346022416910531390625956776904

Private6585136532891053048100774

Insurers

TOTAL352607430563560300679004877678

BALANCE SHEET SIZE OF LIC1000000776904800000625956600000531390

4169104000003460222000000FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

BALANCE SHEET SIZE OF PVTINSURERS120000100774

100000

80000

6000053048

4000028910

20000658513653

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

Avg. Balance Sheetpoints after

Sizemultiplying by

( In Crores)Rankpointsweightage (7.5%)

117.5

LIC539436.40

Private Insurance co.40594.00

20.53.75

Total average size of balance sheet of LIC in the last five years is certainly higher than that of private insurance companies. There is a huge gap in this value. It is obvious that LIC has bigger balance sheet as being working in the insurance field for quite large time. As compared to average balance sheet size of 40,594 crores of private insurance companies, LIC s average balance sheet size goes to much high as that of 5,39,436.4 crores.(D) TOTAL NUMBER OF POLICIES :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC2696806923978123315905153822929237612599

Private165884722330753871410792229413261558

Insurers

TOTAL2862691626211198354621174615158650874157

TOTAL NUMBER OF POLICIES60000000

50874157

5000000046151586

4000000035462117

300000002862691626211198LIC

PVT.INSURERS

20000000INDUSTRY

100000000FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07-08

points after

Avg. number ofmultiplying by

weightage

policiesRankpoints(7.5%)

LIC31675670117.5

Private Insurance Co.578943720.53.75

LIC is an undoubted leader in the field of average number of policies per year in the last five years. It is seen that private insurance companies are gaining momentum and are trying to defeat LIC in case of new insurances. Main reason behind LIC having such a large number of policies is the trust of a common man. LIC being a government agency has got a faith of indian mass. People are not yet prepared to give their savings in the hands of private players.

(E) NUMBER OF BRANCHES :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC21962197222023012522

Private416804164530726391

Insurers

TOTAL26123001386553738913

100008913

9000

8000

70006391

60005373LIC

5000

PVT INSURERS

400038653072

3001INDUSTRY

300026122522

219722202301

2196

20001645

1000416804

0

FY 03-04FY 04-05 FY 05-06FY 06-07FY 07-08

%growth inpoints after

multiplying by

number ofweightage

branchesRankpoints(7.5%)

LIC14.820.53.75


When the matter of total number of branches comes its very much obvious that LIC, being the oldest existing insurance company in India, has the large number of offices in the countryby any single insurance company. Since the number of private insurance companies is increasing, with continuous expansion in their business, now the number of branches of all private players has crossed the number of branches of LIC.o 2. GROWTH : (A) FIRST PREMIUM : (Rs. In crores)FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC1734720653285155593459996

Private24405564102701942533715

Insurers

TOTAL1978726217387857535993711

FIRST PREMIUM OF LIC

7000059996

6000055934

50000

40000

3000028515

2000017347100000

20653FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

FIRST PREMIUM OF PVTINSURERS4000033715

35000

30000

2500019425

20000

1500010270

10000

24405564

5000

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

Growth inGrowth in Firstpoints after

Premiummultiplying

First Premium(in Absouteby

(in PercentageTerms) (inweightage

Terms)crores)Rankpoints(10%)

LIC245.854264920.55


1110

Though LIC has attained more growth in absolute terms i.e. Rs.42649 crores but private players being so less in number five years back has achieved a dream come true growth of 1281.76 % which is certainly a matter of pride for them.(B) GROWTH IN INCOME :(Rs. In crores)FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC1210119303197544227731988

Private269247259814537928406

Insurers

TOTAL1479324028295684765660394

% GROWTH IN INCOME :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC14.920.717.53218.3

Private165109.3108.428.5117

Insurers

TOTAL17.824.624.331.530.3

180165

160

140117

120109.3108.4

100LIC

80PVT INSURERS

603231.530.3INDUSTRY

40

17.820.724.617.524.328.518.3

2014.9

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

Growth inGrowth inpoints after

Incomemultiplying

Income(in Absouteby

(in PercentageTerms) (inweightage

Terms)crores)Rankpoints(10%)

LIC164.341988720.55


1110

Here LIC has neither attained more growth in absolute terms i.e. Rs.19887 crores as compared to 25714 crores of private players nor has got more growth in terms of percentage.this shows that private players are doing great job in enhancing their business.(C) INCREASE IN NUMBER OF POLICIES :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC1475992-298994676325846638585-616693

Private804696574228163833540508845339264

Insurers

TOTAL2280688-9270919106894694722571

2415718

% INCREASE IN NUMBER OF POLICIES :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC5.79-11.0931.7521.01-1.6

Private94.2134.6273.37104.6467.4

Insurers

TOTAL8.6-8.435.330.110.2

% GROWTH IN NO. OF POLICIES

120104.64

10094.21

8073.3767.4

60LIC

4034.6231.75 35.3PVT INSURERS

30.1INDUSTRY

21.01

208.610.2

5.79

0

FY 03-04 FY 04-05FY 05-06-1.6

FY 06-07 FY 07-08

-20-11.09 -8.4

Growth inGrowth inpoints after

number ofnumber ofmultiplying

policiespoliciesby

(in Percentage(in Absouteweightage

Terms)Terms)Rankpoints(10%)

LIC39.471064453020.55


1110

Private players are doing extremely well as they are increasing their customer base rapidly.

(D) MARKET SHARE :

26.1FY 07-0873.9

FY 06-0725.8

74.2

FY 05-0626.5PVT. INSURERS

73.5

LIC

FY 04-0521.2

78.8

FY 03-0412.387.7

020406080100

LIC is still the market leader in insurance industry with 73.9 % share. But we cannot forget that in last five years market share of LIC has decreased. It was 87.7 % in year 2003-04 which came down to 73.9 % in 2007-08.3. PRODUCTIVITY :

(A) BUSINESS PER BRANCH : (Rs. In crores)FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC28.9334.2040.955.5559.20

Private7.59.619.179.28.07

Insurers

BUSINESS PER BRANCH

7059.2

6055.55

50

40.9

4034.2

LIC

3028.93

PVT INSURERS

20

107.59.619.179.28.07

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

Avg. Businesspoints after

multiplying by

Per Branch (Inweightage

crores)Rankpoints(5%)

LIC43.756115

Private Insurance

Co.8.7120.52.5

Avg business per branch of LIC is much higher than that of whole private insurance companies.

(B) INCOME PER BRANCH :(Rs. In crores)

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC42.3951.1659.5275.8081.80

Private10.4111.2511.477.898.23

Insurers

INCOME PER BRANCH

9081.8

8075.8

70

6059.52

51.16

5042.39

40LIC

PVT INSURERS

30

2010.4111.2511.47

8.23

107.89

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

Avg. Income Perpoints after

Branch (Inmultiplying by

crores)Rankpointsweightage (5%)

LIC62.134115


20.52.5

Average income per branch of LIC is much more than that of private insurance companies. Its almost six times the total value of all the private companies.

(C) NEW PREMIUM PER BRANCH :(Rs.in crores)

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC7.909.4012.8424.3023.78

Private5.866.926.246.325.28

Insurers

NEW PREMIUM PER BRANCH3024.323.78

25

20

1512.84LIC

109.4PVT INSURERS

7.9

6.926.246.32

5.865.28

5

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

Avg. New

Premium Perpoints after

Branch (Inmultiplying by

crores)Rankpointsweightage (5%)

LIC15.644115


20.52.5

This value tells us about increase in the business of an insurance company in a period. Here we see that LIC is ahead of private insurance companies in case of increasing their business.

4. GRIEVANCE HANDLING :TOTAL NUMBER OF GRIEVANCES :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC474704851354651

Private451955405071406

Insurers

NUMBER OF GRIEVANCES RESOLVED :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC3912321531380

Private26832164501103

Insurers

% OF GRIEVANCES RESOLVED :FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

LIC8.217.525.388.412.2

Private57.742.640.088.778.4

Insurers

GRIEVANCES IN LIC800704651

700

540

600507

500474450

400TOTAL

300216RESOLVED

20012380

10039

0

FY 03-04 FY 04-05 FY 05-06FY 06-07 FY 07-08

GRIEVANCES IN PVT. COMPANIES16001406

1400

12001103

1000

800540507TOTAL

600

450RESOLVED

400195216

20045 2683

0

FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08

% OF GRIEVANCES RESOLVED10088.884.7

90

78.4

80

70

6057.7

5042.640LIC

40

25.3PVT INSURERS

30

2017.512.2

8.2

10

0

FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07-08

points after

% Grievancesmultiplying by

weightage

resolvedRankpoints(7.5%)

LIC25.3720.53.75


117.5

Grievance Handling is one of the major issues in any organization. It plays an important role in Insurance sector. People do attract towards companies who handles their grievances.Here we see that private players are much ahead of LIC when the matter comes to grievance management. In the last five years LIC has resolved only 25.37 % of cases brought in front of them while the percentage of cases resolved in case of private players is 69.7 %.This shows that private players are very serious about their image and are working hard to provide the solution of the problems of the people as early as possible.

TOTAL POINTS TABLE:Private

Insurance

FactorsLICCompanies

Size

A. Total Premium7.53.75

7.53.75

B. Total Income

7.53.75

C. Balance Sheet Size

7.53.75

D. Total No. of Policies

3.757.5

E. Total No. of Branches

Growth

A. First Premium510

510

B. Growth in Income

510

C. Increase in No. of Policies

105

D. Market Share

Productivity

A. Business per Branch52.5

52.5

B. Income Per Branch

52.5

C. First Premium per Branch

Grievance Handling3.757.5

Total Score77.7572.75

CHAPTER - V5.1 Findings

LIC is the giant of the insurance sector. The overall size of LIC is much more than that of all private insurance companies. Private insurers are in expansion mode and are increasing their size but are still much behind LIC. Total premium deposits in LIC is much higher than the private insurance companies. Total premium of LIC in FY 07-08 was 149789 crores which three times more than that of private insurance companies.

Income of LIC is much greater than private insurance companies. Last year total income from investments of LIC was 48244.14 crores which was nearly equal to the total income of the all private insurance companies. By this we can imagine how big the LIC is.

Size of balance sheet of private insurance companies are lagging much behind LIC. Balance sheet of LIC is seven times bigger than that of private insurance companies.

If we see the total number of policies issued by LIC and private insurance companies, we find that there is a huge gap between them. No doubt that LIC is a well established player in the field of insurance and many private companies have just started their business. Hence it is obvious that LIC is having large number of policyholders.

Number of branches of private insurance companies is increasing as the new players are entering in this market. Also the established players are in expansion phase and hence are expanding there business. There are many private insurance companies and hence there total number of branches has gone past LIC in the last financial year. But offices of private insurance companies are mostly in urban areas and still it is LIC which covers most of the area.

Hence we see that LIC is leading when it comes to size. It is giant in insurance sector having huge network and customer base.

We see that due to excellent service quality and attractive offers private insurance companies have started getting a number of customers. They are growing rapidly. Though LIC is also increasing its customer base but private insurance companies are moving at a fast pace.

Though the income of private insurance companies is negligible when compared with LIC but then also the pace with which they are increasing their income is tremendous. Private insurance companies are expanding their business and will certainly going to give a tough competition to LIC in the coming days.

LIC is certainly having a large customer base. Private insurance companies are not having that much number of customer base but they are increasing it rapidly. They have registered a decent growth of 104.64 % in number of new policies in the year 2006-07. Last year also their growth rate was 67.4 %.

LIC, being the oldest player in the existing insurance market, has the biggest market share of 73.9 % which was 87.3% five years earlier. We see that private insurance companies are penetrating in the customer base of LIC.

Overall we can see that private insurance companies are giving a tough competition to the LIC and will certainly create a good business for themselves in the coming days.

There are many new entrants in this sector. There are many private insurance companies who have reported loss in this and previous years. This is the main reason why private insurance companies lag behind LIC in case of business per branch. There is a big difference between them.

Same is the case when it comes to income per branch. LIC is much ahead of private insurance companies in this field. They are undoubted champions in insurance when it comes to profit earning.

New business is increasingly going towards private insurance companies but still the customer base of LIC is very strong. In issuing new policies per branch also, they are ahead of private insurance companies though not by very large margin.

LIC has not shown their good concern when the matter of grievance handling comes. Private insurance companies are far ahead in this matter. LIC has just resolved 25% cases in the last five years while private insurance companies have resolved nearly 70% cases. This is a matter from where customer shift starts. We have seen the rapid increase in customer base of private insurance companies which can be very much affected by this factor. 5.2 Suggestions We need to make people aware about the pension plan in rural and semi urban area about the pension plan and its benefits.

Insurance agent and advisors need to give only those plan which are fulfilling the requirement and needs in a best way

Both LIC and ICICI PRUDENTIAL should make some pension plan for those who are nit economically sound, so they can also secure their future.

Insurance company should have some more plan in Pension category as they have in other category like Health and General insurance.

Pension plan should be more convenient; with the pension plan health plan should be provided because in the old age expenses on health related is increased.

5.3 Conclusion

Overall we have seen that still LIC is very famous but private insurance companies are growing at exceptionally fast pace. Private companies show due concern in grievance management and brings innovative schemes to attract the customers. Right now they are giving good competition to LIC and very soon they will give very tough competition to Life Corporation of India.

ANNEXUREI. Bibliography

Websites:-

LIC india.com

ICICI Prulife.com

ICICI prudential life insurance

wikipedia.com.

India housing.com.

Book Referred

Research Methodology - C.R. Kothari II. References

Data on Indian Insurance from http://www.irdaindia.org

Different statistics from http://www.rbi.org.in

Journals published by Insurance Regulatory & Development Authority.

Management of financial institutions by R.M. Srivastava

http://www.businesstoday.com

http://www.businessworld.com

http://www.economictimes.com

Different Survey on Insurance sector conducted by IIRC.

Profile of Indian Insurance Companies by IRDA.

www.licindia.co.in

www.sbilife.co.in/

www.tata-aig-life.com

www.bharti-axalife.com/

www.hdfcinsurance.com/

www.reliancelife.co.in/

www.bajajallianz.com/

www.metlife.co.in/

www.birlasunlife.com/

http://www.finance.indiamart.com

new lic mba

Documents