CHAPTER:1 INTRODUCTION TO INSURANCE INDUSTRIES Insurance in its basic form is defined as A contract between two parties whereby one

e party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event." In simple terms it is a contract between the person who buys Insurance and an Insurance company who sold the Policy. By entering into contract of life Insurance company agrees to pay the Policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called Insurance Premiums. Insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. Thus, in life insurance by paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event. Life Insurance is desired to safeguard oneself and ones family against possible losses on account of risks and perils. By taking life insurance a person can have a peace of mind and need not worry about the financial consequences in case of any ultimately death.

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TYPES OF LIFE INSURANCE:

Life insurance may be divided into two basic classes temporary and permanent or following subclasses - term, universal, whole life and endowment life insurance. Temporary (term): Term assurance: provides for life insurance coverage for a specified term of years for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else.The three key factors to be considered in term insurance are: face amount (protection or death benefit), premium to be paid (cost to the insured), and length of coverage (term).Various insurance companies sell term insurance with many different combinations of these three parameters. The face amount can remain constant or decline. The term can be for one or more years. The premium can remain level or increase. A common type of term is called annual renewable term. It is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. Another common type of term insurance is mortgage insurance, which is usually a level premium, declining face value policy. The face amount is intended to equal the amount of the mortgage on the policy owners residence so the mortgage will be paid if the insured dies. A policy holder insures his life for a specified term. If he dies before that specified term is up, his estate or named beneficiary receives a payout. If he does not die before the term is up, he receives nothing. In the past these policies would almost always exclude suicide.

However, after a number of court judgments against the industry, payouts do occur on death by suicide (presumably except for in the unlikely case that it can be shown that the suicide was just to benefit from the policy). Generally, if an insured person commits suicide within the first two policy years, the insurer will return the premiums paid. However, a death benefit will usually be paid if the suicide occurs after the two year period. Permanent Life Insurance:Permanent life insurance is life insurance that remains in force (inline) until the policy matures (pays out), unless the owner fails to pay the premium when due (the policy expires OR policies lapse). The policy cannot be canceled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years).Permanent insurance builds a cash value that reduces the amount at risk to the insurance company and thus the insurance expense over time. This means that a policy with a million dollar face value can be relatively expensive to a 70 year old. The owner can access the money in the cash value by withdrawing money, borrowing the cash value, or surrendering the policy and receiving the surrender value. The four basic types of permanent insurance are whole life, universal life, limited pay and endowment. Whole Life Coverage: Whole life insurance provides for a level premium, and a cash value table included in the policy guaranteed by the company. The primary advantages of whole life are guaranteed death benefits; guaranteed cash values, fixed and known annual premiums, and mortality and expense charges will not reduce the cash value shown in the policy. The primary disadvantages of whole life are premium inflexibility, and the internal rate of return in the policy may not be competitive with other savings alternatives.
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Riders are available that can allow one to increase the death benefit by paying additional premium. The death benefit can also be increased through the use of policy dividends. Dividends cannot be guaranteed and may be higher or lower than historical rates over time. Premiums are much higher than term insurance in the short-term, but cumulative premiums are roughly equal if policies are kept in force until average life expectancy. Cash value can be accessed at any time through policy "loans". Since these loans decrease the death benefit if not paid back, payback is optional. Cash values are not paid to the beneficiary upon the death of the insured; the beneficiary receives the death benefit only. If the dividend option: Paid up additions is elected, dividend cash values will purchase additional death benefit which will increase the death benefit of the policy to the named beneficiary

Universal Life Coverage: Universal life insurance (UL) is a relatively new insurance product intended to provide permanent insurance coverage with greater flexibility in premium payment and the potential for a higher internal rate of return. There are several types of universal life insurance policies which include "interest sensitive" (also known as "traditional fixed universal life insurance"), variable universal life insurance, and equity indexed universal life insurance.A universal life insurance policy includes a cash account. Premiums increase the cash account. Interest is paid within the policy (credited) on the account at a rate specified by the company.

Mortality charges and administrative costs are then charged against (reduce) the cash account. The surrender value of the policy is the amount remaining in the cash account less applicable surrender charges, if any. With all life insurance, there are basically two functions that make it work. There's a mortality function and a cash function. The mortality function would be the classical notion of pooling risk where the premiums paid by everybody else would cover the death benefit for the one or two who will die for a given period of time. The cash function inherent in all life insurance says that if a person is to reach age 95 to 100 (the age varies depending on state and company), then the policy matures and endows the face value of the policy.Actuarially, it is reasoned that out of a group of 1000 people, if even 10 of them live to age 95, then the mortality function alone will not be able to cover the cash function. So in order to cover the cash function, a minimum rate of investment return on the premiums will be required in the event that a policy matures.Universal life insurance addresses the perceived disadvantages of whole life. Premiums are flexible. Depending on how interest is credited, the internal rate of return can be higher because it moves with prevailing interest rates (interestsensitive) or the financial markets (Equity Indexed Universal Life and Variable Universal Life). Mortality costs and administrative charges are known. And cash value may be considered more easily attainable because the owner can discontinue premiums if the cash value allows it. And universal life has a more flexible death benefit because the owner can select one of two death benefit options, Option A and Option B. Option A pays the face amount at death as it's designed to have the cash value equal the death benefit at maturity (usually at age 95 or 100). With each premium payment, the policy owner is reducing the cost of insurance until the cash value reaches the face amount upon maturity.
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Option B pays the face amount plus the cash value, as it's designed to increase the net death benefit as cash values accumulate. Option B offers the benefit of an increasing death benefit every year that the policy stays in force. The drawback to option B is that because the cash value is accumulated "on top of the death benefit, the cost of insurance never decreases as premium payments are made. Thus, as the insured gets older, the policy owner is faced with an ever increasing cost of insurance (it costs more money to provide the same initial face amount of insurance as the insured gets older).

LimitedPay: Another type of permanent insurance is Limited-pay life insurance, in which all the premiums are paid over a specified period after which no additional premiums are due to keep the policy in force. Common limited pay periods include 10-year, 20-year, and paid-up at age 65.

Endowments: Endowments are policies in which the cash value built up inside the policy, equals the death benefit (face amount) at a certain age. The age this commences is known as the endowment age. Endowments are considerably more expensive (in terms of annual premiums) than either whole life or universal life because the premium paying period is shortened and the endowment date is earlier.

Whole Life Coverage: Whole life insurance provides for a level premium, and a cash value table included in the policy guaranteed by the company. The primary advantages of whole life are guaranteed death benefits; guaranteed cash values, fixed and known annual premiums, and mortality and expense charges will not reduce the cash value shown in the

policy.The primary disadvantages of whole life are premium inflexibility, and the internal rate of return in the policy may not be competitive with other savings alternatives.Riders are available that can allow one to increase the death benefit by paying additional premium. The death benefit can also be increased through the use of policy dividends. Dividends cannot be guaranteed and may be higher or lower than historical rates over time. Premiums are much higher than term insurance in the short-term, but cumulative premiums are roughly equal if policies are kept in force until average life expectancy.Cash value can be accessed at any time through policy "loans". Since these loans decrease the death benefit if not paid back, payback is optional. Cash values are not paid to the beneficiary upon the death of the insured; the beneficiary receives the death benefit only. If the dividend option: Paid up additions is elected, dividend cash values will purchase additional death benefit which will increase the death benefit of the policy to the named beneficiary

WHO NEEDS LIFE INSURANCE:

Life insurance is designed to protect your family and other people who may depend on for financial support. If you dies and lose income, the people that are dependent on his/her financial support will lose that income, so life insurance can help cover some or all of that loss depending on the policy you choose. But there are instances where life insurance can be beneficial even if one has no dependents, such as desire to cover ones own funeral expenses. Here are some guidelines to help one decide if life insurance is the right choice for them: Children: Children do not need life insurance. Yes, there have been cases where life insurance for one's child has been a blessing, but in the majority of cases, children do not need life insurance since no one depends on income from them.

 Beginning Families: Life insurance should be purchased if one is considering starting a family. Ones rates will be cheaper now than when one gets older and future children will be depending on his/her income.

Established Families: If one has a family that depends on him/her, they need life insurance now! This does not include only the spouse or partner working outside the home. Life insurance also needs to be considered for the person working in the home. The costs of replacing someone to do domestic chores, home budgeting and childcare can cause significant financial problems for the surviving family.

Young Single Adults: The reason a single adult would typically need life insurance would be to pay for their own funeral costs or if they help support an elderly parent or other person they may care for financially. Otherwise, if one has other sources of money for a funeral and has no other persons that depend on their income then life insurance would not be a necessity.

Non-Child working couples: Both persons in this situation would need to decide if they would want life insurance. If both persons are bringing in an income that they feel is comfortable for living on alone if their partner should pass away, then life insurance would not be necessary except if they wanted to cover their funeral costs. But, maybe in some instances one working spouse contributes more to the income or would want to leave their significant other in a better financial position, then as long as purchasing a life
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insurance policy would not be a financial burden, it could be an option. For a low cost life insurance option look into Term Life Insurance.

Elderly: As long as one does not have people who are depending on their income for support, life insurance at this stage in life would not be necessary, unless again, one does not have any other means to pay his funeral expenses. But, be aware that purchasing a life insurance policy at this age can be very expensive. Before doing so, first talk to a financial advisor or accountant about looking into other saving options to pay for owns funeral costs before considering life insurance.

BENEFITS OF TAKING INSURANCE:

Under section 80c of Income Tax Act, a portion of premium paid for life insurance a policy is allowed as deduction from tax liability. Similarly, exemption is available for health insurance policy premiums.

An insurance scheme encourages thrift among individuals. It inculcates the habit of saving compulsorily, unlike other saving instruments, wherein the saved money can be easily withdrawn.

The beneficiaries to an insurance claim amount are protected from the claims amount are protected from the claims of creditors by affecting a valid assignment.

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For a policy taken under the MWP act 1874 (Married womens Property Act), a trust is carried for wife and children as beneficiaries.

Life policies are accepted as a security for a loan-they can also be surrendered for meeting unexpected emergencies.

Based on the concept of sharing of losses, the society will benefit as catastrophic losses are spread globally.

SOME OF THE IMPORTANT MILESTONES IN THE LIFE IN INDIA ARE:

INSURANCE BUSINESS

1818: Oriental Life Insurance Company, the first life insurance company on Indian soil started functioning. 1870: Bombay Mutual Life Assurance Society, the first Indian life insurance company started its business. 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

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1956: 245 Indian and foreign insurers and provident societies are taken over by the central government and nationalised. LIC formed by an Act of Parliament, i.e. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India.

ROLE OF LIFE INSURANCE IN ECONOMIC DEVELOPMENT:

For economic development, investments are necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people, particularly from the middle and lower income groups. These savings are channelled into investment for economic growth. The insurance Act has strict provisions to ensure that insurance funds are invested in safe avenues, like government bonds, companies with record of profits and so on.

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As on 31.3.2006, the total investments of the LIC exceeded Rs. 5, 20,000 crores, of which nearly Rs. 3, 00,000 crores were directly invested in government (birth state and centre) related securities, nearly Rs. 16,000 crores in the State Electricity Boards, nearly Rs. 22,000 crores in hosing loans, Rs. 19,000 crores in the power generation (private) sector and Rs.10,000 crores in water supply and sewerage systems. Other investments included road transport, setting up of industrial estates and directly financing industry. Investments in the corporate sector (shares, debentures and term loans) exceeded Rs. 30,000 crores. These directly affect the lives of the people and their economic well-being. The L.I.C is not an exception. All good life insurance companies have huge funds, accumulated through the payments of small amounts of premium of individuals.

These funds are invested in ways that contribute substantiality for the economic development of the countries in which they do. But even their investments in the various sectors and contributing directly and indirectly to the countrys economic development, would be of similar proportions. A Life insurance company funds are collected by way of premiums. Every premium represents a risk that is covered by that premium. The funds are collected and held in trust for the benefit of the policyholders. The management of life insurance companies are required o keep this aspect in mind and make all its decision in ways that benefit the community. This applies also its investment. That is why successful insurance companies would not be found investing in speculative ventures. Their investment, as in the case of the L.I.C, benefits the society at large.

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 Apart from investments, business and trade benefit through insurance without insurance, trade and commerce will find it difficult to face the impact of major perils like fire, earthquakes, and floods, etc. Financiers, like banks, would collapse if the factory, financed by it, is reduced to ashes by a terrible fire. Insurers cover also the loss to the financiers, if their debtors default.

INSURANCE ACT, 1938.

The insurance Act 1938, which came into effect from 1st July 1939, and was amended in 1950 and later in 1999, is the principal enactment relating to the business of insurance in India. The Act contains provisions regarding licensing of agents and their remuneration, prohibition of rebates, and protection of policys holder interests. It also has provisions placing limits on the expenses of the insurers, use of funds ad patterns of investments, maintaining solvency levels, and the constitutions of Insurance associations and Insurance councils and the Tariffs Advisory Committee for general use.
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Till the constitutions of the IRDA by the IRDA Act in 1999, the IRDA has replaced the controller of insurance.

THE INSURANCE ACT VESTS THE IRDA WITH THE POWERS TO:

Register insurance companies and also cancel their registration. Monitor and certify the soundness of the terms of life insurance business. Make regulations relating to the conduct of the business of insurance.Appoint additional directors.

Take over the management of an insurer and appoint administrators. Adjudicate on disputes between insurers and intermediaries or between intermediaries.

Decide on disputes relating to the settlements of claims of amounts not exceeding Rs.2000.By the end of December 2006, the IRDA had issued more than 25 regulations and also had issued several guidelines to the insurers on a variety of matters.

Insurance Business As A Career

Administrative Officer (AO) and Assistant Administrative Officer (AAO): These 1st class officer group in LIC and GIC begin their job with probation-cum-training period for
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6 months where the candidate is placed anywhere in the country. AAOs can choose any of the areas from Administration, Development and Accounts. Administration AAOs handle policy making, policy claims up to certain limit, checking clauses and details, filing official returns and statements to higher regional offices etc. The Development AAOs deal with marketing and procurement of business, meeting prospective clients, promoting the policies and getting contracts. The Accounts AAOs manage the funds including incomes and expenses of the corporation. AAO's can be promoted to AO's after 3 years of working experience. Development Officer: They are the II class officer group who are in charge of the development of the insurance policies. The work profile of the development officer includes recruitment of agents, training them for procurement of new business and servicing of the existing policies. Insurance / Composite Agents: Insurance agents help individuals, families and businesses select insurance policies that provide the best protection for their lives, health, and property. They are the people who have taken up an agency from the insurance company to sell their policy on a commission basis. They work with the development officer in the insurance Company and the credit for the policy of the insurance agents goes to the development officers within the organization. Insurance agents can also serve as financial consultants, who will offer a complete range of insurance solutions. Smart and efficient insurance agents working hard can become a development officer over a period of time. Insurance Surveyors: Surveyors are independent professionals who are hired by the insurance companies to work as consultants. Their main task is to assess the actual loss

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and avoid false claims filed by the insured. Their work involves a lot of fieldwork, communications, traveling, PR etc. A surveyor with a background in mechanical engineering assesses industrial accidents. Here the surveyor would investigate, evaluate, assess, adjust and determine the liability, negotiate and then finally submit a report to the insurance company.

Actuaries: This is the most important position in the insurance business which deals with a wide range of financial problems related with insurance investments, financial planning and management. They apply mathematical and statistical methods to evaluate the risk for their companies to be used for strategic management decisions and determine a premium rate, studies mortality trends, constructs mortality tables etc and areas related to benefits and investment. Insurance Underwriters: Underwriters assess the risk in the business and takes care of risk management. It is the underwriter who reviews the insurance applications and decides whether they should be accepted or rejected. They explain policies and quotes rates to medical personnel, other insurance companies or field representatives. Candidates with medical or life science background are preferred for this job. Investment Professionals: The funds collected from the investors have to be deployed in various investment options for maximizing the returns. For this investment professionals are required and this is a promising field for those with a degree in finance.

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LIFE ISURANCE AGENCY BUSINESS AS A PROFESSION.

The insurance agent is bound by the terms of appointment of the insurer and is expected to procure business for the insurer. It is not a job that he has to do at fixed hours, in prescribed ways and under close supervision. Once licensed and appointed, he is an independent professional. He is the master of his time. He is not prevented from perusing any other interest or vocation.

Many agents see the agency as a means to supplement their earnings. They may spend only part of the time on insurance, being busy on other work the rest of time. Some agents however, try to study and understand the business in great details and to improve their skills. They try to become the best in the profession. They would be recognized as experts in the fields. There are many agents, who started as part-time and then became whole-time agents, leaving their other secure jobs.

To most people, life insurance is just one of the many avenues for financial outlays. When an agent approaches a prospect with the proposal of life insurance, the chances are that the prospect will not know much about the benefits under various plans. He may be vaguely familiar with the alternatives available, but is unlikely to be sure of the details of all of them. He would need expert advice. If he sees the life insurance agent as one who is keen to divert his money to life insurance to the exclusion of other alternatives, then that agents intentions and expertise would be suspect. On the contrary, if he sees the agent as one who knows about the alternatives and who is

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willing to take note of the needs of the prospects, then that agent would have a better chance of persuading the prospect one way or the other. In other words, a little life, while dealing with the prospect, should be thinking of its interest and requirement and the best financial arrangement that would be appropriate in it situation.

To be able to advise the prospect on the best financial arrangements appropriate to his situation, the agent needs to be with familiar with the alternatives available in the market. He is also expected to know in full the benefits and limitations of the various plan being offered by the insurer.

A good agent is a good financier, taking into account not merely the plans offered by the insurers-his own as well as by the competition- but by the innumerable schemes on offer in the market from other financial institutions. The needs study on ones own. It also needs conviction that life insurance policies do not meet all the needs of all the people. Other instruments have their own advantages. The advantage may be in terms of tax benefits, ease of withdrawals, safety, appreciation, yield or return. No instruments will be better on all accounts. Therefore, making comparisons and saying one is better than the other, may often be inappropriate.

As an agent of the insurers, the life insurance agent is expected to obtain life insurance business and contribute to the revenues of the insurer. He is also depended upon to bring in business that would be profitable, to report attempts to commit any fraud, to report on relevant features that affect the risk of the subject of insurance. He is in with the person to

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be insured. Having met him at his place of work of residence and observed his life style and habits, he would be aware of the nature and characteristics of the risk, beyond what is contained in the proposal form. He is therefore, called the primary underwriter.

As an agent of the prospects, he is expected to look after the interests of the prospect. Even people, who are generally in financial matters like Chartered Accountants, may not be aware of the implications of the insurance, in relation to terms and conditions, warranties, exclusion, tax provisions, rights of the parties, etc. Agents also have the dual responsibility of being true to the interest of both the parties in the transaction. He is obliged to reveal to the prospect all the important terms and conditions of the policy, even if they are restrictive and unpleasant.

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SWOT analysis (alternately SWOT Matrix) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies. Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business, or project team that give it an advantage over others

Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others
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Opportunities: external chances to improve performance (e.g. make greater profits) in the environment

Threats: external elements in the environment that could cause trouble for the business or project

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, weaknesses, opportunities, and threats) in order to maximize the benefits of this evaluation and find their competitive advantage.

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CHAPTER 2 PROFILE OF THE COMPANY Max New York Life is a joint venture between Max India Ltd., one of Indias leading multi-business corporations and New York Life, a Fortune 100 company. Max New York Life Insurance, incorporated in 2000, is one of Indias leading private life insurance companies. The company offers both individual and group life insurance solutions. It has established a wide distribution network across India. Through its wide network of highly competent life insurance agent advisors and flexible product solutions, Max New York life Insurance is creating a partnership for life with its customers in India.

ABOUT MAX INDIA:

Max India is a multi-business corporate, driven by the spirit of Enterprise, focused on People and Service oriented businesses of Life Insurance (Max New York Life Insurance), Healthcare (Max Healthcare), and Clinical Research (Max Newman Medical International). Max Indias other businesses are Speciality packaging products (Max Speciality Products) and Healthcare Staffing
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(Max Health Staff). Max India Limited is listed on National Stock Exchange of India and the Bombay Stock Exchange.The companys vision is to be one of Indias most admired corporate for service excellence. Towards this end, it has established niche businesses that are today recognised as being at the fore front of service excellence, in each of the industry sectors where it operates. Keeping in mind the core interests in the Life Insurance and Healthcare space, and its business advantage due to significant presence in these areas, Max India is set to enter the Health Insurance business through Max Bupa Health Insurance Ltd, its new Joint Venture with Bupa Finance Plc UK, part of the Bupa Group, UK, a broad-based international health and care group. For the financial year 2007-08, the Max India Group reported revenues of Rs. 3,611 Crore (US$ 893 Mn), registering a growth of 81% over the previous year. The Group had a treasury corpus of Rs. 1,261 Crore (US$ 316 Million) with total investments of Rs. 4,840 Crore (US$ 1.2 Billion) as on March 31, 2008. About New York Life:

New York Life International, LLC, the international arm of New York Life Insurance Company, offers insurance products through its subsidiaries and affiliates in Hong Kong, China, Taiwan, South Korea, India, Argentina, Mexico, and Thailand.

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New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings from all four of the major credit rating agencies. Headquartered in New York City, New York Lifes family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investment Management LLC provides institutional asset management, retirement plan and trust services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual fund

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THE COMPANY OBJECTIVES:

The company believes in building relationships with the people they serve so that their customers enjoy the highest quality of service in life insurance. Towards this the company spells out its defining qualities as under:

1)

They are experts in life insurance: That's all they do.

2)

New York Life has over 156 years of experience in the life insurance business. It is a Fortune 100 company that has been trusted by millions worldwide, across generations.

3)

Their existence is rooted in their commitment to financial strength, integrity and responsibility. They have doubled their capitalization requirement to Rs. 200 crore from the initial Rs. 100 crore that has been stipulated by the Insurance Regulatory and Development Authority (IRDA). Their investments are confined only to debt instruments and they meet both Indian and US reporting norms. Max New York Life also deposits 1% of the premium income with the RBI, towards Contingency Funds.

4)

They like to believe they have the best Agent Advisors in the business. Backed by the best training and infrastructure, their Agent Advisors will spend time evaluating client needs
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rather than just selling. They are professionals who will thoroughly understand client needs before recommending the policy tailored to fit their unique needs.

5)

They endeavour to offer the best products with Flexibility as their cornerstone, so the customer can buy just what he needs. With their various Products and Riders & Options, the customer has more than 200 product combinations to choose from.

6)

They would like Transparency to be the bedrock of the way they do business. This is why they customize a Personal Insurance Plan, which gives the customer a broad overview of the details of his policy along with a year-on-year summary, even before he buys. And with the free look option the client even has the unconditional right to return the policy, if he so wishes, within 10 days of receiving it.

7)

They offer multiple bonus options, which includes options such as annual bonus, bonus accumulated and paid on maturity, bonus used to offset premiums, bonus utilized to buy Paid up additions and bonus used to buy one-year term insurance. So the customer can decide how he wants to use his bonus payments.

8)

They take their social responsibility seriously. Every policy sold by them benefits a needy child at SOS Children's Villages of India. They also provide life insurance to the rural and socially underprivileged.

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9)

They have a national presence with a network in the 9 cities of Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad, Pune and Chandigarh. VISION To become the most admired life insurance Company in India. MISSION

Become one of the top quartile life insurance companies in India Be a national player Be the brand of first choice Be the employer of choice Become principal of choice for agents

KNOWLEDGE Knowledge leads to expertise; and our expertise is in helping people protect them. Perfectly combining global expertise with local knowledge, we are India's life insurance specialists. Max New York Life believes that for knowledge to be of value it must be focused, current, tested and shared. CARING Max New York Life is redefining the life insurance paradigm by focusing on customers first. The service process is responsive, personalized, humane and empathetic. Every individual who represents the company is for us our brand champion.

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HONESTY Honesty is the heart of the life insurance business. It is all about trust. Transparency, integrity and dependability form the cornerstones of the Max New York Life experience. The company ensures that everyone who represents the brand carries a promise: we care in word as well as deed. EXCELLENCE Excellence at Max New York Life implies the ability to perform at a consistently high level. Focused on the value of continuous improvement in people, processes and the organization, the company strives for the highest standards of quality in every aspect of its business. ACHIEVEMENTS Max New York Life was among the top 25 companies to work with in India, according to 2003 Business World magazine, "Great Workplaces in India", Max New York Life was ranked at the 20th position. This survey is the local version of the "Great Places to Work" survey carried out every year in 22 countries. Max New York Life is the first life insurance company in India to be awarded the IS0 9001:2000 certifications. They were among top five most respected private life insurance companies in India according to a 2004 Business World survey. They have truly built an enviable sales force. With 201 agents becoming members of the MDRT in 2005, Max New York Life has moved up in the Top 50 MDRT global list.

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Growth of Max New York Life

Max New York Life (MNYL) is looking at maintaining a double digit growth rate both in terms of premium collection and number of policy holders this year, despite volatile market conditions with more tailor made products. Speaking at the launch of the product, Debashis Sarkar, senior director & chief marketing officer, Max New York Life said, We want to outperform the industry growth rate, maintain double digit growth rate both in terms of number of policy holders and premium collection and gain increased market share this year, despite the meltdown with increased focus on customer service and newer products. The company collected Rs 3,654 crores as total premium collection in January-December last year, almost a 60 per cent rise compared to the previous year. While insurance industry witnessed a negative eight per cent growth, MNYL achieved a 41 per cent growth in first year premium collection with a single premium adjusted at 10 per cent and in terms of number policy holders MNYL grew by 59 per cent, while the industry grew by only one per cent, informed Sarkar. Kolkata-based, The Peerless General Finance & Investment Company Limited will be the sole corporate agent and third party distributor of this product across India, for now. The company plans to rope in Yes Bank and other corporate agents later on. The product was specially designed for partnership distribution, and right now our first priority was to use the network of third party distribution channels, said Sarkar.

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CHAPTER 3 SWOT ANALYSIS OF MAX NEW YORK LIFE INSURANCE

STRENGTH Strong corporate governance model Quality product Adaptability to changes Strong brand name Large network Leading private corporation Diversification of funds Efficient management

WEAKNESS Low advertisement Focus only in urban market

OPPORTUNITY Fast growing economy Scope for opening new branches in any state in India Increase in population = Increase in polices Catering to the untapped rural & semi urban areas in India

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THREATS Cut throat competition New arrival of products every day Consumer do not invest easily Market uncertainty (recession , inflation , changes in government polices )

Today, agencies are working in an increasingly complex environment. But by capitalizing on their strengths, addressing their weaknesses, and seizing opportunities, agencies can secure a stronger, brighter future.

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CHAPTER 4 BALANCE SHEET OF MAX NEW YORK LIFE INSURANCE LIMITED AT 31ST MARCH 2008

(RS. LACS) Particulars AS AT 31ST MARCH 2008 SOURCES OF FUNDS SHAREHOLDERS FUNDS Share Capital Reserves and Surplus 4434.85 199943.43 204378.28 LOAN FUNDS Secured Loans Unsecured Loans Loans 85.98 17420.55 29640.46 61.82 17420.55 27566.60 12133.93 10084.23 3598.04 96727.02 100325.06 AS AT 31ST MARCH 2007

- Advance from others

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Deferred Tax Liability (Net) TOTAL APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation Net Block Capital Work in Progress

1200.14 235218.88

1104.89 128996.55

23754.60 6346.71 17407.89 521.54 17929.43

22017.07 5268.78 16748.29 391.71 17140.00

INVESTMENTS

206453.55

105827.80

CURRENT ASSETS, LOANS AND ADVANCES Inventories Sundry Debtors Cash and Bank Balances Other Current Assets 2760.86 6152.47 757.19 1333.61 2970.63 814.96

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Loans and Advances

5750.58 15421.10

4647.35 9766.55

Less: CURRENT LIABILITIES AND PROVISIONS Current liabilities Provisions 4855.89 NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) TOTAL 235218.88 128996.55 10565.21 270.69 4371.16 5395.39 633.36 3961.93 893.96 3740.36 630.80

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PROFIT & LOSS ACCOUNTOF MAX NEW YORK LIFE INSURANCE LIMITED FOR THE YEAR ENDED 31ST MARCH 2008 (RS IN LACS) Particulars For The Year Ended March 31, 2008 INCOME Sales Less: Sales Return Excise Duty 32299.22 (398.81) (3470.99) 28429.42 Income From Investment Activities Other Income 6917.96 2188.90 37536.28 INCREASE / (DECREASE) IN INVENTORY TOTAL INCOME EXPENDITURE Manufacturing and Other Expenses 28909.85 16552.78 503.49 38039.77 17661.12 (120.74) (1959.66) 15580.72 2787.46 1212.05 19580.23 82.84 19663.07 For The Year Ended March 31, 2007

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Financial Expenses Depreciation

1459.52 1138.92

491.77 576.08

TOTAL EXPENDITURE PROFIT BEFORE TAX Tax Expense PROFIT AFTER TAX

31508.29 6531.48 341.02 6190.46

17620.63 2042.44 620.43 1422.01

PROFIT BROUGHT FORWARD BALANCE CARRIED FORWARD TO THE BALANCE SHEET

60343.02

58921.01

66533.48

60343.02

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CHAPTER 5 FINDINGS&CONCLUSION

FINDINGS FROM THE STUDY IT is very clear that Agents are the life and blood of life insurance agency business. They play a very important role for getting business to the organization. Agents who are working in the cutthroat competition obviously expect some kind of security, recognization, and reward for working hard. They expect not only monetary rewards/incentives such as commission, bonus but also expect non-monetary rewards such as recognization which gives them sense of belonging and job satisfaction. It is the duty of these insurers (organization) to retain these assets in the organization by placing them in the position which best suits them. The organizations goals should be in line with the employees (agents) goal for both the organization and agents to prosper.

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CONCLUSION Life insurance industry in India has witnessed a sea change ever since it was opened up to private players in 1999. The liberalization transformed the industrys outlook towards the huge Indian market. For economic development, investments are very necessary. Investments are made out of savings. A life insurance company is a major instrument for the mobilization of savings of people. The savings are channeled into investments for the economic growth. Life insurance has contributed 520,000 crores as on 31.3.2008 out of which nearly 300,000 crores were directly invested in government related securities. Life insurance premiums form 1.8% of GDP. In India only 20% of the population is insured rest 80% is still left uninsured. So the insurance agents have to tap the untapped rural sector. Since agents are those people who get business to the organisation.

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BIBLIOGRAPHY/WIBLIOGRAPHY

www.webindia.com www.maxnewyorklife.com www.maxindia.com www.newyorklife.com www.insure2bsecure.com www.moneycontrolmaster.blogspot.com www.scribd.com www.irda.com

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