A REPORT ON

Insurance Industry
AT

SECURE YOUR DREAM TODAY.

SUBMITTED TO
Prof .Jyotsna Arya

SUBMITTED BY
Abhishekh Rungta

CONTENT
S.NO. TOPICS PAGE NO.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Insurance Industry Effect of Globalization, privatization & Liberalization

3 7 10 12 12 12 13 14 14 24 25 27 29 30 30 32

Current trends & Market Scenario

Company Analysis Background Promoters Market Scenario Range of products Policy offered Future Plans Why Life Insurance Product analysis

SWOT Analysis Pricing Suggestion

Recommendations

History of Life Insurance in India

Life Insurance in its present form came to India from United Kingdom (UK) with the establishment of the British firm, ORIENTAL LIFE INSURANCE CO. in Calcutta in 1818, followed by Bombay Life Insurance Co. in 1823; Madras Equitable Life Insurance Society in 1829 & Oriental Government Security Life Insurance Co. in 1874. Prior to 1871, Indian lives were treated substandard & charged an extra premium of 15 20 %. Bombay Mutual Life assurance Society, an Indian insurer, which came into existence in 1871, was the first one to cover Indian lives at standard rates. Later in 1928, the Indian Insurance Companies Act was enacted to enable the government to collect statistical information about both life & non life insurance business transacted in India by the foreign & Indian insurers, including the provident insurance societies. BY 1956, 154 Indian insurers, 16 non-Indian insurers & 75 provident societies were carrying on life insurance business in India. was taken over by the Central Government & then nationalized on 1st September 1956, when the LIFE INSURANCE CORPORATION came into existence. Insurance in India can be traced back to the Vedas. For instance, yogakshema, the name of Life Insurance Corporation of India's corporate headquarters, is derived from the Rig Veda. The term suggests that a form of "community insurance" was prevalent around 1000 BC and practiced by the Aryans. It was during the Swedishi movement in the early 20th century that insurance witnessed a big boom in India with several more companies being set up. As these companies grew, the government began to exercise control on them. The Insurance Act was passed in 1912, followed by a detailed and amended Insurance Act of 1938 that looked into investments, expenditure and management of these companies' funds.
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By the mid-1950s, there were around 170 insurance companies and 80 provident fund societies in the country's life insurance scene. However, in the absence of regulatory systems, scams and irregularities were almost a way of life at most of these companies. As a result, the government decided nationalizes the life assurance business in India. The Life Insurance Corporation of India was set up in 1956 to take over around 250 life companies.

When IRDA came into the Existence:Life Insurance in India was nationalized by incorporating Life Insurance Corporation (LIC) in 1956. All private life insurance companies at that time were taken over by LIC. In 1993 the Government of Republic of India appointed RN Malhotra Committee to lay down a road map for privatization of the life insurance sector. While the committee submitted its report in 1994, it took another six years before the enabling legislation was passed in the year 2000, legislation amending the Insurance Act of 1938 and legislating the Insurance Regulatory and Development Authority Act of 2000.The same year that the newly appointed insurance regulator - Insurance Regulatory and Development Authority IRDA -- started issuing licenses to private life insurers. The Insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%.Life and general insurance in India is still a nascent sector with huge potential for various global players with the life insurance premiums accounting to 2.5% of the country's GDP while general insurance premiums to 0.65% of India's GDP As per the current (Mar 06) FDI norms, foreign participation in an Indian insurance company is restricted to 26.0% of its equity / ordinary share capital. The Union Budget for fiscal 2005 had recommended that the ceiling on foreign holding be increased to 49.0%.

Registered Life Insurance Companies India

S.N o. 1 2 3 4 5 6 7 8 9 10 11 Registrati Date on Reg. Number 101 104 105 107 109 110 111 114 116 117 133 of Name of the Company

23.10.20 HDFC Standard Life Insurance Company Ltd. 00 15.11.20 Max New York Life Insurance Co. Ltd. 00 24.11.20 ICICI Prudential Life Insurance Company Ltd. 00 10.01.20 Kotak Mahindra Old Mutual Life Insurance 01 Limited 31.01.20 Birla Sun Life Insurance Company Ltd. 01 12.02.20 Tata AIG Life Insurance Company Ltd. 01 30.03.20 SBI Life Insurance Company Limited . 01 02.08.20 ING Vysya Life Insurance Company Private 01 Limited 03.08.20 Bajaj Allianz Life Insurance Company Limited 01 06.08.20 Metlife India Insurance Company Pvt. Ltd. 01 04.09.20 Future Generali 07 Company Limited India Life Insurance

List of Life Insurers (as of Sept, 2006)

Apart from Life Insurance Corporation, the public sector life insurer, there are 14 other private sector life insurers, most of them joint ventures between Indian groups and global insurance giants.

Life Insurer in Public Sector

1.

Life Insurance Corporation of India

Life Insurers in Private Sector 1. 2. 3. 4. 5. 6. 7. 8. Bajaj Allianz Life Tata AIG Life ICICI Prudential Life Insurance HDFC Standard Life Birla Sunlife SBI Life Insurance Kotak Mahindra Old Mutual Life Insurance Aviva Life Insurance 9. Reliance Life Insurance Company Limited 10. MetLife India Life Insurance 11. ING Vysya Life Insurance 12. Max Newyork Life Insurance 13. Sahara Life Insurance - Now they are not into business 14. Shriram Life Insurance 15. Bharti AXA Life Insurance Co Ltd

Effect of Globalization, Liberalization, Privatization

Has globalization helped or hurt the insurance industry? "Globalization has provided a host of benefits for the life insurance industry," says Benanav. "Over the years weve seen a dramatic increase in professionalism throughout the industry as companies apply best practices developed by innovators in one market to other markets around the world. This also applies to the regulatory environment as regulators share their expertise across borders, creating a more uniform regulatory environment that ultimately benefits both consumers and the industry as a whole. Another area in which globalization has helped the life insurance industry is by allowing the freer flow of managerial talent across borders. Companies like New York Life are moving smart managers from one market to another, wherever their talents may be needed in the organization. This helps broaden the horizons not only of each company but also of the entire industry itself. What effect does globalization have on local-national insurers in emerging markets? Some people believe its positive: "When foreign insurers like New York Life enter a market that had formerly been closed, they bring with them world7

class product development and marketing standards that significantly raise the awareness of consumers. This heightened awareness helps educate consumers to the benefits of life insurance, increasing demand throughout the market, benefiting foreign and domestic insurers alike. Effects of Liberalization and Deregulation on Efficiency This shows the effects of liberalization and deregulation on the efficiency of life insurers in selected Asian life insurance markets. As used in this study, liberalization denotes a reduction of barriers to market access, and deregulation denotes a lessening of national regulation. Indian deregulation followed liberalization by a discernable period (four years) whereas Philippine deregulation occurred concurrently with liberalization. In neither instance could these deregulation efforts be characterized as substantial. Nonetheless, these two markets can be contrasted with those of Taiwan and Thailand which undertook virtually no deregulation during the study period. Liberalization and deregulation of the Indian life insurance markets were associated with increases and improvements in total efficiency. The evidence suggests that liberalization and deregulation of the Philippine life insurance market were effective in accelerating a shift of the production frontier and in narrowing the gap between the costs of the average firm and those of the best -practice life insurers. This finding implies that a small group of best-practice firms was gaining efficiency and that the average firm responded to a more competitive market by emphasizing cost saving. In addition, liberalization/deregulation seems to have stimulated scale economies. The positive consequences of these government changes are associated with a convergence of Philippine life insurers operation toward the long-run optimal scale. The evidence also suggests that liberalization/deregulation generated impressive productivity growth for Philippine life insurers.

Effect of Privatization
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In fact, it's in recognition of the huge potential of the market and the need to make insurance, particularly life insurance, available on a wider scale, that the government opened the industry to private players. Today, the Indian life insurance industry has a dozen private players, each of which are making strides in raising awareness levels, introducing innovative products and increasing the penetration of life insurance in the vastly underinsured country. Each of the private insurers bas introduced revamped products to meet the needs of their target customers and in line with their business objectives. Some insurers are pursuing a mission to be a scale player in the mass market by introducing a wide range of products to meet the need of each customer. Others have taken a more focused approach, introducing select products that hold potential and fill market gaps. Whatever the case may be, each life insurer has approached the category with a fresh perspective. So, how successful have these efforts been? The results are noteworthy. The number of new policies issued has gone from a little less than 1.7 crore in 1999-2000 to over 2.3 crore in the last year. More heartening is that premiums from new business written by life insurers have nearly quadrupled, from pre- privatization days of about Rs 4,000 crore in 1999-00 to over Rs 15,000 crore in 2001-02. These numbers clearly indicate that not only is life insurance growing rapidly, but that the new customers are insuring themselves for greater amount, possibly closer to what their actual insurance and protection needs are. A large part of the success of the new entrants ran be attributed to the government appointed Insurance Regulatory and Development Agency (IRDA), which developed the regulatory framework. The regulations governing the life and non-life insurers are pragmatic and forward -looking, ensuring the customer is protected and creating an environment for thriving private sector participation and a level playing field. Undoubtedly, the largest beneficiaries of privatization have been the customers, who now have an array of policies to choose from, a number of channels to approach insurers through, levels of customer service so far unseen in this industry, and more information about their investments than ever before. Encouraging as these trends may seem, they are just the tip of the iceberg. Consumer awareness, though increasing, is still low and the different types of policies available and the specific benefits of each often confuse them. And it's the job of insurance companies to educate them about these.
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But heightened awareness and consumer education goes far beyond positive results. With them comes a willingness to view life insurance as an integral part of the financial portfolio, marking a significant change from the earlier attitude, where insurance was purchased as a tax saving tool. The benefits of the increased awareness are evident - penetration of the life insurance is begirning to cut across socio-economic classes and attract people who have never purchased insurance before.

Traditionally, tied agents were the single channel through which insurance policies were sold. Insurance agents would sell policies to their family, friends, and would then direct their efforts towards people outside this circle. Today tied agents still contribute the maximum business, but the manner in which they approach customers has changed significantly. They are more professional and are able to guide customers much better about the product that would best meet their needs. While this addresses the issue of trust, there is still a need for a broad based approach. There's also been a huge improvement in service attitude and delivery. Technology has come to our aid, giving us a platform, the reach and the ability to service each customer seamlessly. Multiple touch points have emerged -contact centers, email, facsimile, websites - which enable the customer to get in touch with insurance companies quickly, easily and directly.

As with privatization in any industry, the benefits aren't restricted to the customer alone, but extend to society at large, by generating employment opportunities for thousands. Over the past 2 years, insurance companies both life and non-life - are estimated to have collectively hired at least 6,000 employees to staff their operations across the country. Another 90,000-odd have been appointed as life insurance advisors who counsel and recommend products to insurance buyers. And because of the specialized nature of several functions in the insurance industry, we see completely new skill sets being created; skill sets that are lasting, unique and raise the bar within the industry.

With the transformation in the industry comes a huge opportunity to tap largely ignored segments. One of the most promising areas for life insurers is retirement solutions. Consider this: Only 89% of the working population in our country has a form of social security for old age. People in the unorganized sector, self employed persons and those engaged in agriculture, have no form
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of guaranteed post-retirement income. Add to this the fact that life expectancy is expected to rise from 77 years to 85 years in the next decade. And those persons aged 60 and above are expected to form 8.6% of the total population by the year 2016. It becomes obvious that the task of retirement planning and pensions is immense and require a comprehensive, long ranging regulations.

Current Trend & Market Scenario

In a tough battle to expand market shares the private sector life insurance industry consisting 14 life insurance companies at 26% have lost 3% of market share to the state owned Life Insurance Corporation (LIC) in the domestic life insurance industry in 2006-07. According to the figures released by Insurance Regulatory & Development Authority the total premium these 14 companies have shot up by 90% to Rs 19,471.83 crore in 2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilization of Rs 55,934 crore has been able retain a market share of 74.26 % during the reporting period. In total the life insurance industry in first year premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07 performance has thrown a few surprises in the ranking among the private sector life insurance companies. New entrants like Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively during the year. Reliance Life which has become one of the top five companies ended the year with a premium of Rs 930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance Company during the year Bajaj Allianz overtook ICICI Prudential in terms of monthly market share in March, for the first time ever. Bajajs market share among private players in non-single premium for March stood at 29.1% vs. ICICI Prudentials 23.8%. Bajaj gained 4.6 percentage point market share among private sector players for FY07.

Among other private players, SBI Life and Reliance Life continued to do well, each gaining 4% market share in FY07. SBI Lifes growth was driven by increasing contribution from ULIP premiums. Another notable development of the 2006-07 performance has been the expansion of retail markets by the life insurance companies. Bajaj Alliannz Life insurance has added 20 lakh
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policies while ICICI Prudential has expanded over 19 lakh policies during the year.

Company Analysis
(Reliance life Insurance)
Background Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net
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worth. Reliance Capital has interests in asset management and mutual funds, stock broking, life and general insurance, proprietary investments, private equity and other activities in financial services. Reliance Capital Limited (RCL) is a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India under section 45-IA of the Reserve Bank of India Act, 1934. Reliance Capital sees immense potential in the rapidly growing financial services sector in India and aims to become a dominant player in this industry and offer fully integrated financial services. Reliance Life Insurance is another step forward for Reliance Capital Limited to offer need based Life Insurance solutions to individuals and Corporate.

Promoters & Management

Reliance Life Insurance Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil Dhirubhai Ambani Group. The company acquired 100 per cent shareholding in AMP Sanmar Life Insurance Company in August 2005. Taking over AMP Sanmar Life provided Reliance Life Insurance a readymade infrastructure and a portfolio. AMP Sanmar Life Insurance was a joint venture between AMP, Australia and the Sanmar Group. Headquartered in Chennai, AMP Sanmar had over 90 offices across the country, 9,000 agents, and more than 900 employees.

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Range of Products
Reliance Secure Child Plan Reliance Automatic Investment Plan Reliance Money Guarantee Plan Reliance Endowment Plan Reliance Special Endowment Plan Reliance Group Term Assurance Policy Reliance EDLI Scheme Reliance Group Gratuity Policy Reliance Group Superannuation Policy

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Reliance Cash Flow Plan Reliance Child Plan Reliance Whole Life Plan Reliance Golden Years Plan Reliance Golden Years Plan Value Reliance Golden Years Plan Plus Reliance Market Return Plan Reliance Term Plan Reliance Simple Term Plan Reliance Special Term Plan Reliance Credit Guardian Plan Reliance Special Credit Guardian Plan Reliance Connect 2 Life Plan

Different policy which is offered by the organization

A well-qualified insurance policy would work with a person to prepare his plan. A policy is finance savvy and combines the objectivity and trust, developed through years of experience and expertise in planning ones personal finance. The kinds of services which offer by company can vary widely. Some policy assess every aspect of ones financial life, including saving, investments, insurance, taxes, retirement, and estate planning and help one develop a detailed strategy or plan for meeting all financial goals. The major policy in the market by the company is as follows

1) Reliance Whole Life Plan

Youve always loved your family. As a loving person you want to be rest assured that they will be happy, even if something were to happen to you. With Reliance Whole Life Plan you can be sure that your family will receive
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that timely financial Support they need. Go ahead, live your today to the fullest, without a worry about tomorrow.
Key Features

Insurance protection till age 85 Choice of extending your insurance coverage till age 99 Convenient Premium Payment Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Get Sum Assured plus Bonuses in case of your unfortunate death Option to add two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Policy Loan available after three full years premium payment

How does this Plan work?

You pay premium every year for the desired Premium Paying Term. You get Sum Assured plus bonuses on reaching age 85. You choose to continue with the insurance cover till the age of 99 and the Policy will continue to participate in profits till then. On death, your Beneficiary will get the Sum Assured plus accumulated bonuses.

Sample Premiums

The tables below illustrate the indicative premiums for an individual Life Assured across different Sum Assured for a Premium Paying Term of 20, 30 and 40 years.
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2) Reliance Special Endowment Plan

Reliance Special Endowment Plan is the key to all your financial needs. You get a desired lump sum after a specified period. However, your life insurance protection continues for an extended period. If anything were to happen to you, your Beneficiary will get another Sum Assured along with the bonuses. The Policy comes with an added feature of a limited Premium Term, which is always five years less than the Policy Term.

Key Features

Twin Benefit of protection and savings Sum Assured is paid on survival, at the end of the Premium Paying Term Life Cover for full Sum Assured continues beyond Premium Paying Term

Extended Life Cover for five years after Premium Paying Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Choose to add the Benefit of two Riders Critical Illness And Accidental Death Benefit and Total and Permanent Disablement Rider Choose to avail of a Policy Loan available after three full years of Premium payment Policy participates in profits even after Premium Paying Term

How does this Plan work?

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You pay premium every year. The Premium Paying Term is always five years less than the Policy Term. On survival to the end of the premium paying term you get the Sum Assured. On survival to maturity (i.e. at the end of the Policy Term) accumulated compounded bonuses are paid.

Sample Premium

The tables below illustrate the indicative premiums for a Life Assured across different Sum Assured and ages for a Policy Term of 20, 25 and 30 years.

3) RELIANCE MONEY GURANTEE PLAN

UNDER THIS PLAN THE INVESTMENT RISK IN THE INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER. Yes, it's a trio the pace setter plan, which promises Life Protection, an opportunity to gain control over your investments along with protection of downside risk! For the select few like you, the Reliance Money Guarantee Plan is a Unit Linked product addressing comprehensive need to strike that perfect balance of Protection and Savings that you deserve as you grow successfully. The Reliance Money Guarantee Plan is a Regular Premium Unit Linked Policy which guarantees the entire premium (including premiums for top- ups) paid by you. This is a plan which helps you reap all the benefits of a rising market simultaneously protecting you from the downside risk of the market. Key Features
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Capital Guarantee The sum of all premiums paid is guaranteed on maturity or on death before the maturity. Capital Guarantee is available on both the basic premiums as well as on top-up premiums Unique Return Shield feature to protect your returns Choice to invest from 3 pre-packaged investment fund options Unmatched flexibility through our Exchange Option to move between the Reliance Money Guarantee suite of products offered, as you grow up the ladder Liquidity in the form of partial withdrawals from top-up fund Option to package with Accidental Death & Disability and Term Insurance riders

How does this plan works? The premium contributed by you net of Premium Allocation Charges and Miscellaneous Charge is invested in fund option of your choice for a specified period of time as selected by you and units are allocated depending on the price of units for the fund/funds. The Fund Value is the total value of units that you hold in the fund. The Policy has a minimum Guaranteed Fund Value which is equal to total of all premiums paid (excluding any additional and extra premiums if any), to be payable on survival to maturity or earlier death. The amount of top-up premiums paid is also guaranteed on death provided there is no partial withdrawal. The amount of top-ups premium is guaranteed on maturity provided the top-ups premium was paid at least 10 years before the date of maturity and there is no partial withdrawal. The Sum Assured under the Policy is fixed on the basis of the selected annual premium and Policy Term. The Mortality Charges and Policy Administration Charges are deducted through cancellation of units whereas the Fund Management Charge is priced in the Unit Value. The premiums for riders, if selected, are payable over and above the premium for the basic Policy.

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4) RELIANCE MARKET RETURNS PLAN

You have always aspired for the best in life. And we help you achieve just that. With Reliance Market Return Plan you can have the twin advantage of insurance protection as well as reaping benefits of investment growth. It is a flexible plan, which works all through your life and meets changing requirements like additional protection, liquidity through cash, option to invest in different asset class, steady golden years and many more. Key Features Twin benefit of market linked return and insurance protection A Unit Linked Plan, different from traditional Life Insurance Products with maximum maturity age of 80 years Option to create your own portfolio depending on your Risk appetite Choose from four different investment funds Flexibility to switch between funds Option to pay regular as well as single premium & top-ups Option to package your Policy with Accidental rider Flexibility to increase the Sum Assured Liquidity through partial withdrawals

How does this Plan work? The premium paid by you, net of Premium Allocation Charges is invested in fund/funds of your choice and units are allocated depending on the price of units for the fund/funds. The Fund Value is the total value of units that you hold in the fund/funds. The Mortality Charges and Policy Administration Charges are deducted through cancellation of units whereas the Fund Management Charge is priced in the Unit Value.

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5) Reliance Cash Flow Plan

While most insurance plans block your money for a certain period of time, Reliance Cash Flow Plan gives you the double Benefit of life insurance along with easy liquidity through lump sum cash. It provides money periodically when you need it. It lets you live life to the fullest today and at the same time, helps you stay protected for tomorrow by giving you the flexibility of receiving a specified percentage of the Sum Assured at specified intervals.

Key Features Easy Liquidity - Get periodic cash flows at the end of the fourth year and thereafter at the end of every three years Wealth creation through bonus additions On maturity, receive accumulated bonuses along with final lump sum payout More value for your money by way of High Sum Assured Rebate Full Sum Assured plus bonuses in case of your unfortunate death. This is over and above the Survival Benefits already paid Option to add two Riders Critical Illness Rider & Accidental Death Benefit and Total and Permanent Disablement Rider

How does this Plan work?

You pay premium every year for the entire term and get Survival Benefits at periodical intervals as mentioned below. On death, your Beneficiary will get the full Sum Assured, plus accumulated bonuses, over and above the Survival Benefits already paid to you.

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Sample Premiums

The tables below illustrate the indicative premiums for an individual Life Assured across different Sum Assured for a Policy Term of 16, 25 and 31 years.

6) Reliance Child Plan

As a parent, it is only natural to dream of a smooth and blissful life for your child. This is exactly why you need to secure your childs tomorrow, today. Reliance Child Plan helps you save systematically so that you can give your child the much-needed financial security in the future. Simply put, Reliance Child Plan gives you the freedom to enjoy every moment with your child today, without worrying about his/her tomorrow.

Key Features

Risk protection for you during the term of the Policy Accumulated bonus at the end of the Policy Term 25% of Sum Assured payable every year as lump sum Benefit during the last four Policy Anniversaries All future premiums are waived in the event of unfortunate loss of life Guaranteed Fixed Benefits continue even after loss of life of the Policyholder
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More value for your money by way of High Sum Assured Rebate Choose to add the Benefit of two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Policy participates in profit even after the loss of life of the Life Assured

How does this Plan work?

You pay premium every year for the entire term and get guaranteed Fixed Benefits every year during the last four years of the Policy Term. On death, your Beneficiary will get the Sum Assured, guaranteed Fixed Benefits on specified dates and all future premiums will be waived. All attached bonuses are payable at the end of the Policy Term and will remain attached to your Policy even after payment of Life Cover Benefit.

Sample Premiums

The tables below illustrate the indicative premiums for an individual Life Assured across different Sum Assured for a Policy Term of 15, 18 and 20 years.

7) Reliance Special Credit Guardian Plan

In todays world of easily available loans, we often tend to neglect the implications of non-payment in case of our untimely demise. Reliance Special Credit Guardian Plan helps you and your family avoids such situations by securing your housing loans, personal loans and even credit card payments. What makes the Plan special is the fact that on survival at maturity, all premiums paid for your basic Policy will be returned to you.

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Key Features

Different types of loans are covered under this plan - Housing Loan, Personal Loan, outstanding on credit cards etc. Limited premium paying term Single and Regular Premium payment options Discount on premium rates for women Decreasing Term Insurance Option to add two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider

How does this Plan work?

You pay premium every year for the entire term. The Sum Assured decreases as per the Policy Schedule in line with the outstanding Loan Schedule. On death, your Nominee will get the Sum Assured. On survival on maturity, you will receive all basic premiums paid.

Sample Premiums

The tables below illustrate the indicative premiums for a male Life Assured across different Sum Assured and ages for a Policy Term of 10, 20 and 30 years.

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Future plans and Projects

Less than 25% of total population covered under life insurance.

Life insurance premium as part of GDP accounts for 2.5% as compared to 12.5% in USA.(India-27th in world).

Fifth biggest country in terms of GDP in PPP terms. Insurance market growth of 47.3% for the year 200506 and 34.7% for the year 2004-05. Saturating American and European market pushing global companies to markets like India and China in Search of new markets.

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Why Life Insurance:

1 What do you think of Life Insurance primarily?
Considering the Indian general mass about what they think about insurance policy, majority of the people bought insurance as a security against death which depicts people have ensured that their dependents dont suffer incase of any uncertainty as life insurance indemnifies the nominees in case of an eventuality to the insured. By having insurance policy, the financial future of the nominees is secured in the absence of the person insured. It means they use life insurance to cover the risk of there life. Over 8% of the people purchase insurance as a word-of-mouth due to high demand of the product and as a tax saving and many other reason. It was also observed that around 28% of the people bought insurance as a mixture of both risk cover & and as an investment product. The analysis of respondents is shown below in figure.

2 What are the important features of an insurance investment for you?

Investing is a conscious decision to set money aside for a long enough periods in an avenue that suits your risk profile. The objective behind investments, majority of the respondents disclosed growth of capital as their prime objective while safety of capital stands secondary. This reflects the investor willingness to take calculated risks for growth of their capital. It highlights that growth of capital is the most important factor which they consider wile investing. However, it can also be seen that of the investors prefer safety of their capital as their secondary objective which depicts that investors give greater emphasis to the returns and willing to adjust with safety of capital. Liquidity is the least important factor as less no. of the respondents voted for it which signifies that the financial planner should designed the portfolio giving more importance to growth and safety of capital as per individual financial goals while liquidity should have the minimum focus. The
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important features as per the respondent are growth, safety, security& risk covers are important.

3 Whom do you rely on before buying an insurance policy?

An individuals decision has a vital role to play in achieving investment objectives and thereby making investments in a systematic manner. Decisions can make or break investment avenues as wrong decisions would merely lead to wrong investments result. There are majority of people who feel that they can handle their portfolio on their own and hence make their own decisions regarding investments. But in questionnaire the respondents are asked to rank the person whom they rely before buying an insurance policy. Which show that self (through comparison of various companies) holds 40% and other get low than that in which others & company advertisement not gets a single percentage?

4 What are the important attributes you look for in him/ her in an insurance agent if u relies on him?
The average score of importance derived by taking an average of the scores given by the respondents on the respective parameter. These averages were then converted to percentage form and then subsequently ranks were allotted. The first rank signified most important parameter or factor which the investor consider that she / he rely on insurance agent, while in subsequent ranks the level of importance reduce accordingly. Transparency holds the highest rank in the responses which primarily highlights absolute importance for unbiased and impartial services in the minds of the investors. Secondly, Investors while deciding, look into the banquet of services being offered by the advisors in relation.

5 Do you think you will like to buy an insurance policy scrutinizing features online?
The knowledge about insurance policy, majority of the people answer that they dont know more about policy they just believe & get advice from a financial advisor. There are a number of financial advisors offering a diverse portfolio of services to suit different financial requirements of the individuals. In order to accomplish the task, these companies provide the assistance of professional financial advisors. The advisors educate individuals on the merits of a long-term approach and regular investing and help to rebalance their portfolio. This type of response is avail from the investor as they are busy in there work more.

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6 How do you think you will like to pay premiums?

These averages were then converted to percentage form and then subsequently ranks were allotted. The first rank signified most important parameter or factor which the investor consider while deciding to make payment, while in subsequent ranks the level of importance reduce accordingly. Transparency holds the highest rank in the responses which primarily highlights absolute importance for unbiased and impartial services in the minds of the investors. Secondly, Investors while deciding, look into the banquet of services being offered by the advisors in relation. Investors are not much bothered to go in office & make payment of policy.

7 What is frequency?

your

preferred

premium

payment

Investing is a conscious decision to set money aside for a long enough periods in an avenue that suits your risk profile. The people who have there own business they mainly believe in making payment in yearly or a half yearly mode. As per there view they need cash frequently in there business so they withdraw cash on certain point for there investment.

8 What is your preferred time period of insurance?

On enquiring from the respondent about there preferred time period for a insurance policy, 40% of the respondents feel that investing in insurance is the safest form of investment so they want to invest for a long time of 10 to 15 year The least time which is liked by the respondent is the time period of 1year not a single respondent choose the time period for a year. It can be seen from the response that people are more willing to put their money for a long period then a short period. About 30% of the respondents feel that insurance for more than 15 year is also the safe form of investments as it gives assured returns on the sum invested. Some of the respondent are also short term investor in the insurance as they invest to get a return in a short time they generally invest in the ulip, cash flow plan so they get there return in a short period of time.

Product Analysis
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Reliance Whole Life Plan

Youve always loved your family. As a loving person you want to be rest assured that they will be happy, even if something were to happen to you. With Reliance Whole Life Plan you can be sure that your family will receive that timely financial Support they need. Go ahead, live your today to the fullest, without a worry about tomorrow.

USP of Product
Insurance protection till age 85 Choice of extending your insurance coverage till age 99 Convenient Premium Payment Term Wealth creation through bonus additions More value for your money by way of High Sum Assured Rebate Get Sum Assured plus Bonuses in case of your unfortunate death Option to add two Riders Critical Illness and Accidental Death Benefit and Total and Permanent Disablement Rider Policy Loan available after three full years premium payment

Competition
ICICI prudential life time super HDFC Single premium Whole of Life Insurance Bajaj Allianz Life Time Care Birla Sun Life Term Plan SBI Life Insurance Sukhjeevan (Single Premium Product)

Marketing & Strategies

Having set a best in class agency distribution model in place, the company is spearheading a major thrust into additional distribution channels to further grow its business. The company is using a five-pronged strategy to pursue alternative channels of distribution. These include the franchisee model, rural
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business, direct sales force involving group insurance and telemarketing opportunities, banc assurance and corporate alliances.

1) Building a Franchisee model 2) Rural business 3) Direct sales force involving group insurance. 4) Bank assurance 5) Corporate alliances 6) Advertising 7) Sales promotion 8) Cross selling

SWOT Analysis

Strength Brand name Minimum allocation Charges Self fund house Wide distribution network Nationwide presence Highest sum assured

Weakness Promotional displays not provided to the customer. Lack of trust on private ltd. Company Limited products compared to LIC

Opportunity

Threat Competitor also innovating same type

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Untapped market. Liberalization sector coming in

of product.

insurance More number of competitors coming in market which will hamper profitability by providing more People going for brand product. services. Literacy rate increasing. Increased awareness investment tools of other

Pricing Strategies

Penetration pricing
As Reliance life insurance is new to the market they are trying to penetrate and survive by keeping low prices and lucrative offers. For this they are focusing mainly on the maximum market share and maximizing the reach to the people, keeping the cost lowest and the services the best

Suggestions & Conclusion

Selling of Financial Products is a never ending project, as it is about establishing a company in the market. The whole project gave a good learning about the Insurance Industry (includes every insurance company) and about Reliance life insurance. This year Life Insurance Industry has grown by 62%, which means people starts adopting insurance with different perspective, which is a green signal for any insurance company. This year ULIP (unit linked insured plan) have done a good business, means people have seen insurance as an investment option.

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Seeing the latest trend of the market, it is obvious that insurance industry will grow at large and in future there will not be any house which doesnt have any insurance policy.

1 Low Saving Potential

The advisor should promote regular savings among the investors so as to open various investment channels for them to fetch good returns.

2 Growth of Capital is the Major Objective behind Investments

It was observed that do investments for achieving growth of capital i.e. revenue maximization. Safety of capital was considered secondary objective behind investments assured returns which reflect that investors are more concerned for growth rather than safety irrespective of their financial goals in life. A advisor can take care of all the financial goals in keeping thee goals in mind, he can recommend certain investment options ranging from mutual funds, insurance, IPO, post office schemes, secondary markets, etc.

3 High Awareness of Financial Advisors in the Indian Market

Majority of the investors are aware about the concept of financial advisors but among them, very few investors have actually gone for availing these services which shows lack of trust and confidence in the services provided by the financial advisors in the eyes of general public. The financial advisors should find out the deficiencies and flaws in the current services being provided to the investors and attempt at Suggesting ways and means to remedy the same.

4 Investors taking Financial Decisions Independently

Investors are taking their financial decisions independently without doing any financial planning. This reflects the need for proper advisors who will take note of and 32

record all the financial goals and will simultaneously work out the money value for each of the goals.

Recommendations
On studying the peculiarities of the wealth management industry and analyzing the responses of the investors on their perception and expectation from a financial advisor, the following points are recommended which a general financial advisor should consider while approaching the people. India is seeing a maturing financial environment. Interest rates have fallen and unlike in the past, options to attract savings exist through a spate of financial products and services that have differing risk/growth and asset accretion propositions. It is becoming increasingly obvious to people that their money, in real terms, would fall in value if they were to keep their money in the bank. And hence the keenness to find out the right avenue that would help grows their savings or assets.

1 Awareness of the Benefits of Planning Early for Retirement Anyone who will retire needs to plan for it. There is more than one reason to save for retirement. The all-important reason is the rising cost of living. Its called inflation. If you start planning for retirement early on, you can bridge the gap between what you have in your hand today and what you would like to
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have when you retire. If you begin saving for retirement early on in your life, you can set aside smaller amounts.

2 Financial Planning Should Be Encouraged Financial planning is the process of charting out the money course of your life. Its like having a financial roadmap that guides your every step till you pass on the baton to the next generation. In other words, it is a process in which an individual sets long-term financial goals through investments, tax planning, asset allocation, risk management, retirement planning and estate planning.

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3 Certified Financial Planners Financial planning is a new animal in the Indian market, but this beast is already attracting a lot of attention. The big thing to happen is the coming to India of the Certified Financial Planner (CFP) mark, owned by the Board of Standards in the US and licensed out to non-profit associations in 18 countries, including the US, Canada, Australia and the UK. Leading financial players asset management companies, banks, mutual funds and insurance companies, forms these associations. 4 Unbiased Advisory Investment Advisory Services are in this business of managing the assets of individuals and corporations. However, the distinct model of services should enables the advisors to offer unbiased advise on the entire spectrum of personal finance, keeping the clients interest foremost while doing so. The investment strategies developed across perpetuity should outline a detailed financial plan with frequent reviews of investment decisions made to ensure that portfolios are in line with what was planned. Id like to add here that the financial advisory should not only be unbiased with respect to an asset class but it should also be independent of biases across manufacturers within an asset class.

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Bibliography

IRDA Website Reliance Insurance Website

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