A PROJECT REPORT ON EMERGENCE OF MAX NEW YORK LIFE ONE OF THE BIGGEST PRIVATE LIFE INSURANCE PLAYER A COMPARATIVE

E ANALYSIS WITH OTHER MAJOR INSURANCE PLAYERS

Submitted as a part o !urri!u"um i# Masters o $usi#ess Admi#istratio# pro%ramme b& INSTITUTE O' MANA(EMENT SCIENCES UNIVERSITY O' LUC)NOW

A!ademi! Year *++,-*++.

AMAR )UMAR (UPTA M$A /RETAIL MANA(EMENT0

/INSTITUTE O' MANA(EMENT SCIENCES UNIVERSITY O' LUC)NOW1LUC)NOW0

CONTENTS Chapter ! EXECUTIVE SUMMARY " Chapter #! INSURANCE $ AN INTRO%UCTION & Chapter '! IN%USTRY PROFILE ( 342 ORI(IN O' INSURANCE 34* ORI(IN O' LI'E ASSURANCE IN IN5IA 343 INSURANCE SECTOR RE'ORMS 346 POTENTIALITY O' INSURANCE IN IN5IAN MAR)ET Chapter )! LIFE INSURANCE PRO%UCTS #* 6427 WHOLE LI'E POLICY 64*7 EN5OWMENT POLICY 6437 MONEY $AC) POLICY 6467 TERM POLICY 6487 ANNUITY 6497 JOINT LI'E POLICY 64:7 (ROUP INSURANCE Chapter +! IR%A ACT *** '" 8427 5UTIES1 POWERS1 'UNCTIONS Chapter "! PLAYERS IN IN%IAN INSURANCE IN%USTRY '* 9427 LI'E INSURERS 94*7 (ENERAL INSURERS 9437 INSURANEC $USINESS Chapter &! COMPANY PROFILE )' :427 A$OUT ICICI PRU5ENTIAL :4*7 PRO5UCTS :437 A$OUR THE PARTNERS :467 INSURANCE PLANS

Chapter (! MARKETING RESERCH Chapter *! CONCLUSION Chapter ,! RECOMMEN%ATION Chapter ! BIBLIOGRAPHY Chapter #! ANNEXURE -UESTIONNAIRE

+( (( *, *# *'

ACKNOWLEDGEMENT There is always a sense of gratitude which one express to other for the helpful so needy services they render during all phases of life. I would like to express my gratitude towards all those who have been helpful to me in getting this mighty task of training to a successful end. First of all, I consider it a pleasant duty to express my heart felt appreciation , gratitude and indebtedness to Mr. Abhishek Gupta (Mana er! A en"# Re"ruit$ent% & Mr.Su$it Naran (Sa'es Mana er% for his keen interest, invaluable pain taking & excellent guidance, patience, endurance, encouragement & thoughtful advice throughout the project work duration. I would also like to be thankful to Mr. Ka'han Kau' ((ran"h Mana er) MA* NEW YORK L+,E +NSURANCE) S-A-.A-AN/UR%) who has given me the right way to prepare my project report. I am also thankful to all my friends who gave me constant & continuous inspiration to complete this project. (AMAR KUMAR GU/TA%

/RE,ACE Insurance market is growing very fast. The opportunity is also high in this sector as only ! of Indian market is covered by this sector and the players are trying to extend in to the rest untapped " !. Though #I$ in India is the market leader, relatively younger private organi%ation are also doing well in this sector. This is the pick time for all the players to capitali%e this growth and increase their market share through good distribution channel network. &'( )*+ ,-./ is one of the major #ife insurance player. who is emerging a market leader among private insurance group. The success story of good market share of different organi%ation depends on the distribution channel network of the organi%ation. The distribution channel network is the interface between the producer or service provider and user. 0ence it should be highly effective to create a good brand perception on its user.

Chapter ! 0 E*ECUT+1E SUMMARY The Indian Insurance Industry is broadly segmented into public and private insurance companies. 1efore year 2333, only public sector insurance companies were allowed to do business in India. 1ut after year 2333, insurance sector was thrown open for private insurance companies as well. 1ut as of now there now around 4" private life insurance companies and around " private non5life insurance companies doing business in India. This report is prepared with an aim to provide an overview of present Indian Insurance Industry. 'lso with #I$, heading the public life insurance companies and &'( )*+ ,-./ #IF* heading the private life insurance players, this report also provides a comparative analysis of #ife policies. 1ased on this report , the prospecting insurance customers would get help in choosing the right insurance products for themselves.

Chapter ! 2 +NSURANCE 3 AN +NTRODUCT+ON Insurance may be described as a social device to ensure protection of economic value of life and other assets. 6nder the plan of insurance, a large number of people associate themselves by sharing risks attached to individuals. The risks, which can be insured against, include fire, the perils of sea, death and accidents and burglary. 'ny risk contingent upon these, may be insured against at a premium commensurate with the risk involved. Thus collective bearing of risk is insurance. Insurance is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurrence of unforeseen events. The term 7risk7 is used to describe the possibility of adverse results flowing from any occurrence or the accidental happenings, which produce a monetary loss. Insurance is a pool in which a large number of people exposed to a similar risk make contributions to a common fund out of which the losses suffered by the unfortunate few, due to accidental events, are made good. The sharing of risk among large groups of people is the basis of insurance. The losses of an individual are distributed over a group of individuals. De4initi5ns8 Genera' 6e4initi5n7 I# t;e <ords o Jo;# Ma%ee1 =I#sura#!e is a p"a# b& t;emse">es <;i!; "ar%e #umber o peop"e asso!iate a#d tra#s er to t;e s;ou"ders o a""1 ris?s t;at atta!; to i#di>idua"s4@

,un6a$enta' 6e4initi5n7 In the words of 9.:. 0ansell, ;Insurance accumulated contributions of all parties participating in the scheme.< C5ntra"tua' 6e4initi5n7 In the words of justice Tindall, ; Insurance is a contract in which a sum of money is paid to the assured as consideration of insurer=s incurring the risk of paying a large sum upon a given contingency.< Chara"teristi"s 54 insuran"e :haring of risks $ooperative device *valuation of risk >ayment on happening of a special event The amount of payment depends on the nature of losses incurred. The success of insurance business depends on the large number of people insured against similar risk. Insurance is a plan, which spreads the risk and losses of few people among a large number of people. The insurance is a plan in which the insured transfers his risk on the insurer. Insurance is a legal contract which is based upon certain principles of insurance which includes, utmost good faith, insurable interest, contribution, indemnity, causas proxima, subrogation, etc. The scope of insurance is much wider and extensive.

,un"ti5ns 54 insuran"e7 /ri$ar# 4un"ti5ns7 4. >rovide protection85 Insurance cannot check the happening of the risk, but can provide for the losses of risk. 2. $ollective bearing of risk8 5 Insurance is a device to share the financial losses of few among many others. ?. 'ssessment of risk8 5 Insurance determines the probable volume of risk by evaluating various factors that give rise to risk. @. >rovide certainty8 5 Insurance is a device, which helps to change from uncertainty to certainty. Se"5n6ar# 4un"ti5ns7 4. >revention of losses8 5 Insurance cautions businessman and individuals to adopt suitable device to prevent unfortunate conseAuences of risk by observing safety instructions. 2. :mall capital to cover large risks8 5 Insurance relives the businessman from security investment, by paying small amount of insurance against larger risks and uncertainty. ?. $ontributes towards development of larger industries. Other ,un"ti5n7 &eans of savings and investment7 Insurance companies are business houses. The product they sell is financial protection. To succeed and survive, they must cover their !osts1 <;i!;

include payments to cover the losses of policyholders, as well as sales and administrative expenses, taxes and dividends. +nsuran"e "5$panies ha8e t95 s5ur"es 54 in"5$e for covering these costs8 pre$iu$s and in8est$ent in"5$e. The premiums are collected on a regular basis and invested in Bovernment 1onds, Bilt, stocks, mutual funds, real estates and other conservative avenues. 0owever, investment income depends on market conditions, interest rates, economy etc. and varies from year to year. 1ecause of the uncertainty associated with the investment income, insurance companies must generate enough income from premiums to cover the bulk of their expenses. The risk be"5$es insurab'e i4 the 45''59in 9ith8 The insured must suffer financial loss if the risk operates. The loss must be measurable in money, The object of the insurance contract must be legal. The insurer should have sufficient knowledge about the risks he accepts. re:uire$ents are "5$p'ie6

,un6a$enta's 54 +nsuran"e The fundamental >rinciples of the Insurance are as follows8 +nsurab'e +nterest8 Insurable interest means the legal right to insure. Insurable Interest is a must and only then the insurance contract is enforceable at law. This principle differentiates a $ontract of insurance from wager. #ack of insurable interest renders the contract null and void. For Insurable Interest to exist there must be >roperty, .ights, I#terest1 Li e or

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#iabilityC this must be insured and the Insured should have a legally recogni%able relationship thereto. The Insured should be benefited by the safety of the property or is prejudiced by its loss. Insurable Interest may arise in the following manner8 4. O9nership8 'bsolute ownership entitles the owner to insure the property. This is the commonest method whereby Insurable Interest arises. 2. /artia' +nterest is also insurable e.g. a mortgagee. ' creditor can also insure the life of his debtor but only to the extent of his loan. ?. A6$inistrat5rs an6 e;e"ut5rs i.e. officials appointed by a court of law to take care of a property may also insure the property. @. Re'ati5nship does not automatically constitute insurable interest. The only relationship recogni%ed by law for this purpose is the one between a husband and wife. . An e$p'5#er can insure his employee under a >ersonal 'ccident >olicy as he has insurable interest in them.

/r5;i$ate "ause8 Benerally, the claims are payable under insurance policies if they arise out of events which are proximately caused by the insured perils. In other words, the proximate cause of the event has to be peril covered by the policy, so as to constitute a valid claim.

C5ntributi5n8 'n insured may have several insurance on the same subject matter. If he recovers his loss under all these insurance, he will obviously make a profit out of loss. This will be an infringement of the principle of indemnity. $ommon #aw has, therefore, evolved the doctrine of contribution whereby the insured is prevented from recovering more than his loss, despite his having several insurance on the subject matter.

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Subr5 ati5n7 The principle of indemnity seeks to prevent the insured from making profit out of loss. 0owever, it may so happen that that the insured may recover his loss under his policy and he may also have rights against third parties. If, after the insurance claim is settled, the insured is allowed to enforce his rights against third parties and to retain whatever damages he receives from them, he will certainly make a profit and the principle of indemnity will be infringed. $ommon #aw has therefore, evolved the doctrine of subrogation as corollary to the principle of indemnity. :ubrogation may be defined as the transfer of rights and remedies of the insured to the insurers who have indemnified the insured in respect of the loss. The $ommon #aw right of subrogation is implied an all contracts on indemnity, as it arises only after payment of loss.

Ut$5st G556 ,aith7 In all Beneral Insurance contracts we know that a property or interest or liability or life is offered for insurance and the insured has to take decisions on the acceptance of the proposal. If he decides to accept the proposal a premium commensurate with the risk has to be charged. To enable him to take necessary decision in this regard, the insurer must have certain facts about the risk offered. These facts influence the judgment of the insurer in deciding about the acceptance or otherwise of the risk and the rate of premium to be charged, if accepted. :uch facts are known as material facts.

Nature 54 +nsuran"e C5ntra"ts +hen the insured pays the premium and the insurers accept the risks, the contract of insurance is concluded. The policy issued by the insurers is the evidence of the contract. The contract of insurance, like any other contract, for

2*

example a contract for the sale of goods, is subject to the general law of contract as embodied in the Indian $ontract 'ct,4DE2. 'ccording to this 'ct, a contract must have certain essential features in order to make it legally valid and enforceable. The following are the essential elements8 aF -ffer and acceptance8 6sually, the offer is made by the proposer, and acceptance made by the insurer. bF $onsideration8 This means that the contract must involve some mutual benefit to the parties. The premium is the consideration from the insured and the promise to indemnity is the consideration from the insurers. cF 'greement between the parties8 1oth the parties should agree to the same thing in the same sense. dF $apacity of the parties8 1oth the parties to the contract must legally competent to enter into the contract. For example, minors cannot enter into insurance contracts. eF #egality8 The object of the contract must be legal and the contract should not violate any legal reAuirements. *.g. no insurance can be had for smuggled goods. .isk .easonable or not, risks are inescapable in business. *very business venture is something of a gamble, because the possibility of loss is as real as the prospects for profits. 'nd even though managers do everything possible to ensure that their business succeeds, they cannot guard against every conceivable form of risk.

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>ure .isk versus :peculative .isk >ure .isk8 *vents representing the kind of risk that no business can predict or escape, known as >ure .isk, it is the threat of a loss without the possibility of gain. In other words, a disaster such as avalanche or fire is costly for the business it strikes, but the fact that no disaster occurs contributes nothing to a firmGs profit. :peculative .isk8 It is the type of risk that offers the prospect of making profit 5 and prompts people to go into business in the first place. *very business accepts the possibility of losing money in order to make money. 'pproaches to .isk &anagement .isk &anagement is the process of reducing the threat of loss due to uncontrollable events. :teps in selecting a risk management approach8 To identify all the things those can possibly go wrong. H To consider the probability that an event will occur.

TechniAues of .isk &anagement are8 4. 'voiding the .isk8 +hen a company avoids risk, it eliminates the possibility that a particular event will occur. To avoid the possibility of a suit, for example, not to produce any products 5which would, of course, eliminate both the threats of a lawsuit and the opportunity to profit. +ith rare exceptions, avoiding risk entirely is extremely difficult. 2. .educing .isk8 ' more practical approach is to reduce the risk by taking precautions. .isk reduction is an important element in most companiesG approach to risk management. Typical precautions include putting safety locks

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on doors to prevent robberies, installing overhead sprinklers to minimi%e fire damage, and periodic checking motor vehicles to prevent accidents. ?. 'ssuming risk8 &any companies draw on current revenues or set aside a 7$ontingency Fund7 to cover unexpected losses. :etting aside money on regular basis could be cheaper than purchasing insurance. &oreover, the company can earn interest on the reserved cash. :uch assumption of risk is also called self5insurance or risk retention. @. Transferring the risk8 &ost companies still rely on outside insurance firms for financial protection against catastrophic losses. In buying insurance, companies transfer the risk of loss to an insurance firm, which agrees to pay for certain types of losses. In exchange, the insurance firm collects a fee known as a premium. Insurable and 6ninsurable .isks8 Insurable risks8 'n insurable risk 5 one that an insurable company will cover 5 Benerally meets the following reAuirements. The peril insured against must not be under the control of the Insured. This means, of course that insurer do not pay for losses that are intentionally caused by an insured, caused at the InsuredGs direction, or caused with the insuredGs collusion. For example, a fire insurance policy excludes loss caused by the Insured=s own arson. It does, however, include loss caused by an employeeGs arson. #osses must be calculable, and the cost of insuring must be economically feasible. To operate profitably, insurance companies must have data on the freAuency of losses caused by a given peril. If this information covers a long period of time and is based on a large number of cases, Insurance companies can usually predict Auite accurately how many losses will occur in the future. For example, the insurance companies to fix up the rate of premium of >ersonal 'ccident

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Insurance may use the information of the number of people who will die each year in India in accidents. The peril must be unlikely to affect all insured simultaneously. 6nless an insurance company spreads its coverage over large geographic areas or a broad population base or different classes of Insurance, a single disaster might force it to pay out all its policies at once. The possible loss must be financially serious to the Insured. 'n Insurance company could not afford the paperwork involved in handling numerous small claims of a few .upees each. 's a result, many policies have a clause specifying that the insurance company will pay only that part of a loss greater than an amount 5 the deductible or excess 5 stated in the policy. The excess represents small losses that the Insured has to absorb.

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$hapter I ? I)96:T., >.-FI#* ?.4 -rigin of #ife Insurance #ife 'ssurance was born in *ngland when the first policy providing temporary cover for a period of 42 months was issued as easy as 4 D? '.9. The 'micable :ociety started granting fluctuating sum on death since 4E3 and a fix sum since 4E E, +ith the development of mortality tables, the life 'ssurance acAuired a scientific character. The *Auitable :ociety founded in 4EJ2 was the first :ociety established on scientific basis. ?.2 -.IBI) -F #IF* '::6.')$* I) I)9I' In India, after failure of two 1ritish companies, the *uropean and the 'lbert in 4DE3, which attempted writing business on Indian lives, first Indian #ife 'ssurance :ociety was formed in the same year called 1ombay &utual 'ssurance :ociety #td. It was followed by the -riental #ife 'ssurance $ompany #imited in 4DE@, 1harat in 4D"J and *mpire of India in 4D"E. The Idea of insurance was born out of a desire of the people to share loss of an individual by many. -riginally it restricted to forms other than life assurance. It started with &arine Insurance, where the losses on account of perils of sea were shared by all who were engaged in trade. .eference to some forms of insurance, is found in the codes of 0ammurabi, &anu K&anav 9harma :hastraF. The word L,ogakshema= is used in the .ig Meda suggesting that some form of community insurance was practiced by the 'ryans in India over ?333 years ago. In India during 1uddhist period burial societies existed which were mutual in their character and used to help a family by building a house, protecting the widow, marrying the girls.

2:

The :wadeshi &ovement of 4"3 provided impetus to the formation of several companies such as the L0industan $ooperative=, the L6nited India=, the L1ombay #ife=, the L)ational=. Further in the wake of freedom movement number of companies such as the L)ew India=, the LNupiter= the L#akshmi= emerged. The Bovernment began to exercise a certain measure of control on Insurance business by passing the LInsurance 'ct= in 4"42. For controlling investment of funds, expenditure and management, a comprehensive 'ct was passed known as LThe Insurance 'ct 4"?D=. For controlling the affairs, the office of $ontroller of Insurance was established. The act was extensively amended in 4" 3. In the year 4" , approximately 4E3 Insurance -ffices and D3 >rovident Fund

:ocieties had been registered for transacting #ife 'ssurance business in India. There were, however, no full guarantees to the policyholders. The concept of trusteeship was lacking. &any insurance companies went into liAuidation. There were malpractices in insurance business. For achieving the following purposes it was felt necessary to nationali%e the insurance business in India. To provide security to the policyholders KiF To utili%e the funds for nation5building activities. KiiFTo avoid cut throat competition KiiiF KivF To abolish mal5practices To spread the insurance message to the rural areas.

The first step in this direction was taken by the Bovernment of India by issuing the #ife Insurance Kthe *mergency provisionsF -rdinance, 4" J on 4" th Nanuary, 4" J. The then Finance &inister, :hri $. 9. 9eshmukh mentioned the purpose

2,

of nationalisation as reaching the goal of socialistic pattern of society, rendering genuine service to the people in the rural area. The #ife Insurance

$orporation 'ct K'ct (((I of 4" JF was passed by the >arliament in Nune 4" J which came in force on 4st Nuly 4" J. The #ife Insurance $orporation of India came into existence on 4st :eptember 4" J. ?.? I):6.')$* :*$T-. .*F-.&: 0aving looked at the insurance sector, let us look at the efforts made by the government to make the industry more dynamic and customer friendly. To begin with, the &alhotra committee was set up with the objective of suggesting changes that would achieve the much reAuired dynamism. The &alhotra $ommittee .eport In 4""?, &alhotra $ommittee, headed by former Finance :ecretary and .1I Bovernor .. ). &alhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. In 4""@, the committee submitted the report and gave the following recommendations8 :tructure Bovernment stake in the insurance $ompanies to be brought down to 3! Bovernment should take over the holdings of BI$ and its subsidiaries so that these subsidiaries can act as independent5corporations 'll the insurance companies should be given greater freedom to operate

&arket .egulations8

2.

>rivate $ompanies with a minimum paid up capital of .s.4bn should be allowed to enter the industry

)o $ompany should deal in both #ife and Beneral Insurance through a single entity

Foreign companies may be allowed to enter the industry in collaboration with the domestic companies

>ostal #ife Insurance should be allowed to operate in the rural market -nly one :tate #evel #ife Insurance $ompany should be allowed to operate in each state

.egulatory 1ody The Insurance 'ct should be changed 'n Insurance .egulatory body should be set up $ontroller of Insurance K$urrently a part from the Finance &inistryF should be made independent Investments &andatory Investments of #I$ #ife Fund in government securities to be reduced from E ! to 3! BI$ and its subsidiaries are not to hold more than timeF ! in any company

KThere current holdings to be brought down to this level over a period of

$ustomer :ervice

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#I$ should pay interest on delays in payments beyond ?3 days

Insurance companies must be encouraged to set up unit linked pension plans

$omputeri%ation of operations and updating of technology to be carried out in the insurance industry

-verall, the committee strongly felt that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. 1ut at the same time, the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry. 0ence, it was decided to allow competition in a limited way by stipulating the minimum capital reAuirement of .s.4 bn. This amount is not very high for foreign firms, as it translates to only about 6:O2 million. Further, to date it is unclear whether eAuity should be payable in one go or should be brought in as installments. 'lso, the foreign eAuity participation was to be restricted to only @3!. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. For this purpose, it had proposed setting up an independent regulatory body. The industry and analysts find that there is lack of clarity in the following areas85

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Though coverage of rural areas was to be made compulsory, it raises the Auestion as to who would subsidies the rural policies as they would be difficult to service and hence costs will go up.

There is some confusion with respect to investments. +here should the funds be investedP $urrently E3! of the funds with #I$ & BI$ are invested in Bovernment securities. +ould new entrants be allowed to invest in B-I securitiesP

The report also does not enumerate exit options available to the new entrants. In the event of failure, there should be an arrangement made whereby the other $ompanies pool in to bail the customers, who in all probability would be middle class individuals.

?.@ >-T*)TI'#IT, -F I):6.')$* I) I)9I') &'./*T &arketing inefficiency of general insurers has kept society in dark even when so many personal as well as commercial lines of insurance covers are available for them. Insurers have failed to identify the need of the individual risk factors and thereafter selecting proper market segments and developing demand of these needs by adopting proper marketing mix. There is great scope of commercial line of insurance as we are developing at a very fast rate but the potentiality and scope of personal lines of insurance is vast as this areas is still under5tapped. >roduct designing and pricing is also simple and growth of this portfolio is guaranteed in this country which has a base of over 433 crore population, where there are about 2 crore dwellings, 23 crore schools, colleges and crore small and big shops. 1ut despite this educational institutions and about

the Indian insurers share in personal line of business is very low or negligible. There are enormous growth opportunities to Indian as well as foreign insurers because of such a huge base of population there is ample scope to introduce **

the new line of covers as per the changing needs and to increase the per capita share of the insurance by encouraging risk transfer by investing small portion of the savings of the individuals. 1y opening up the sector far more opportunities has came up in insurance and reinsurance market. 'fter privati%ation of this sector presence of the foreign players has also increased. Therefore the insurers, in time to come, will have to change their attitude from selling of the product to marketing of the protection needs of the insured and for this what is reAuired is8 *ffective product planning :uitable pricing *fficient promotion and physical distribution. >roper physical evidence. Bood and well trained sales force.

,our >lans, ,our 9reams & Their Future8 The *ssence of #ife Insurance ,our family counts on you every day for financial support8 food, shelter, transportation, education, and much more. ,ou and your spouse have plans for your future and dreams for your family8 another child, a bigger home, a new business, college education, travel, retirementQ #ife insurance is all about making sure your family has adeAuate financial resources to make those plans and dreams come true, if you were to die prematurely. 'nd just as your spouse and children Kas beneficiariesF count on you, you count on your spouse. ThatGs why coverage for your spouse is also important. If he or she were to die

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unexpectedly, you would feel similar financial strains. This is especially true today, with so many 7double income7 families.

+hen :hould :omeone InvestP The answer, of course, is right nowR :ince no one can tell when the best time to invest is, it is whenever you have the moneyR -ne should first invest in any plans for which tax5deductible contributions can be made because these types of savings reduce current taxes. Then, any more surplus funds should be invested in a variable annuity, especially in eAuities so as to get the maximum growth of the capital. Insurance as a :afety )et The function of insurance is to protect you against losses you canGt afford. This is done by transferring the risks of a person, business, or organi%ation 55 the 7insured7 55 to an insurance company, or 7insurer.7 The insurer then reimburses the insured for 7covered7 losses 55 i.e., those losses it pays for under the policyGs terms. 's the insurance consumer, you pay an amount of money, called a premium, to the insurer to transfer the risk. The insurer pools all its premiums into a large fund, and when a policyholder has a loss, the insurer draws funds from the pool to pay for the loss. #ife is full of unexpected events that can create large financial losses. For example, whenever you drive, it is possible that you may have a costly accident. .isks affect you by causing worry about potential loss and how to deal with the conseAuences. Insurance reduces anxiety over a possible loss and absorbs the financial brunt of its conseAuences. 0owever, while insurance coverage is essential, how much and what type of insurance people need differ with each individual. ,ou must decide how much risk youGre

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willing to tolerate without insurance. For example, benefits for disability policies typically begin after a waiting period of one to six months. Therefore, you should ensure that you have some form of coverage or financial resources before the policy period begin.

+here $an I Bet InsuranceP :ince insurance can be expensive, it makes sense to get more than one price Auote for coverage. 't one time, we in India had no option but the nationali%ed insurance companies like #I$, BI$, etc. )ow several private players, often with foreign tie5ups, are entering the fray. There are now several companies selling any one type of insurance, each with its own price structures, coverage, and policy exclusions. To help consumers choose among the various types of coverage=s, companies train sales representatives in the technical points of their insurance products. &any representatives work for just one insurance company. There are also brokers and independent agents 55 self5employed business people who sell insurance on commission for several insurers 55 who claim they can comparison shop to get the best coverage=s for consumers. $ertain banks also sell insurance. +hat Type of Insurance 'gent :hould I TrustP +ith multiple players in the life insurance field now, a choice should be first made regarding the insurance company before choosing an agent. To determine a companyGs willingness to pay claims, ask a policyholder who has filed several claims. -bviously, the more claims an insurer has handled with no complaints, the more likely that the company will provide you with good service. 1arring #I$, the remaining players in life insurance are still new in the field, so this kind of information will not be available for another few years at the least. It

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remains to be seen how the newer players will perform on the claims front, but given the regulatory framework and their strong parentage, their performance should be comparable, if not better than #I$. It is Auite imperative that your insurance agent be competent and professional enough to clearly understand your insurance reAuirements and suggest a suitable scheme. 'lso, with insurance companies offering varying rate of commissions on different schemes, there is a likelihood that a Gnot5so5 professionalG agent may be tempted to recommend a scheme which pays him a higher commission, though it may not be very suitable for your needs. This is especially so in the case of #I$, sole provider of life insurance in our country till recently, where the eligibility criteria are not very rigorous and very often the level of knowledge and competence of the agents leaves a lot to be desired. The new players seem to be much more stringent in appointing agents and more committed in providing training to them. In todayGs context, especially in case of #I$, it may be advisable to go in for an agent who comes recommended from one of your friends, relatives or associates. Further, the agent should be able to provide you with a comparison of multiple schemes and also explain them in simple terms, so that you are are able to make an informed decision. In case an agent is not inclined to spend the time and resources to provide you with relevant information and solve your Aueries, it may be better to give a go5by to such a person and start looking for a new agent. The market is becoming increasingly competitive and it should not be a difficult task to find a good agent. #ife Insurance >layers8

1ajaj 'llian% Beneral Insurance8 1ajaj 'llian% Beneral Insurance $ompany #imited is a joint venture between 1ajaj 'uto #imited and 'llian% 'B of Bermany. 1oth enjoy a reputation of expertise, stability and strength.

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1irla :un #ife Insurance8 The 'ditya 1irla Broup contributes its knowledge of the Indian market while :un #ife Financial contributes global expertise in the areas of protection and wealth management.

09F$ :tandard #ife Insurance8 09F$ and :tandard #ife have a long and close relationship built upon shared values and trust. >roviding long term financial security to policy holders will be the constant endeavor.

I$I$I >rudential #ife Insurance8 The $ompany was granted $ertificate of .egistration for carrying out #ife Insurance business, by the Insurance .egulatory and 9evelopment 'uthority.

I)B Mysya #ife Insurance8 I)B, the world=s second largest life insurance company together with Mysya 1ank, one of India=s leading private sector banks, forms I)B Mysya #ife Insurance.

#ife Insurance $orporation K#I$F8 #ife Insurance $orporation K#I$F has been one of the pioneering organi%ations in India who introduced use of Information Technology in their business.

&et#ife India8 The &etropolitan #ife Insurance $ompany is the number one insurer in the 6.:. It is helping build financial independence for its customers.

-riental Insurance8 The -riental Insurance $ompany #td. K-I$#F is one of the leading Beneral Insurance companies in India and is a subsidiary of the Beneral Insurance $orporation KBI$F of India.

.oyal :undaram 'lliance Insurance8 .oyal :undaram marks the coming together of :undaram Finance, one of India=s most respected and trusted finance companies, and .oyal and :un 'lliance, one of the largest insurance groups in the world.

*:

Tata 'IB Insurance8 #ife insurance & general insurance for individuals & corporates by Tata 'IB. This site will guide you on how to capitali%e on opportunities and protect against uncertainties.

*,

$hapter I @ #IF* I):6.')$* >.-96$T: @.4 +0-#* #IF* >-#I$, These are low5cost insurance plans where the sum assured is payable on the death of the insured ' typical whole life policy runs as long as the policyholder is alive. In other words, the risk is covered for the entire life of the policyholder, which is why it is known as whole life policies. The policy money and the bonus are payable only to the nominee of the beneficiary upon the death of the policyholder. The policyholder is not entitled to any money during his or her own lifetime, i.e. there is no survival benefit. +hole life policies are fairly rigid and inflexible and are suitable only in a few, very specific cases. +hole #ife >olicy can be a good initial policy to buy since its cost is very low. That is an important consideration when one is just starting a career. @.2 *)9-+&*)T >-#I$, 6nder these plans, the sum assured is pay5able on the maturity of the policy or in case of death of the insured individual before maturity of the policy. *ndowment policies cover the risk for a specified period at the end of which the sum assured is paid back to the policyholder along with the entire bonus accumulated during the term of the policy. It is this feature 5 the payment of the endowment to the policyholder upon the completion of the policy=s term 5, which rightly accounts for the popularity of endowment policies. The original sum assured and the accumulated bonus 5 received back comes handy from the endowment can either be used for buying an annuity policy to generate a *.

monthly pension for the whole life, or put it in any other suitable investment of his choice. 's compared to whole life policies, the premium rates for endowment policies are higher and the bonus rates are lower. -n the plus side, these polices offer an endowment 5 representing a return on his premium payments payable to him in his own lifetime when the policy comes to an end. @.? &-)*, 1'$/ >-#I$, 6nlike ordinary endowment insurance plans where the survival benefits are payable only at the end of the endowment period, money back policies provide for periodic payments of partial survival benefits during the term of the policy, of course so long as the policy holder is alive. 'n important feature of this type of policies is that in the event of death at any time within the policy term, the death claim comprises full sum assured without deducting any of the survival benefit amounts, which may have already been paid as money5back components. :imilarly, the bonus is also calculated on the full sum assured 6nder money back policies premiums can be paid as per the insurance company=s policy. These could be Auarterly, half yearly or annually. The premiums for these policies are payable for the selected term of years, or till death if it occurs earlier. 1y buying such policies one can receive income at regular intervals other than the risk cover it provides. 'lso a good amount of bonus on the full sum assured is Auite a good bargain Individual before expiry of the policy

3+

@.@ T*.& >-#I$,8 Term policiesC cover only the risk during the selected term period. If the policyholder survives the term, the risk cover comes to an end. ' Term plan is designed to meet the needs of people who are initially unable to pay the larger premium reAuired for a whole life or an endowment assurance policy, but they hope to be able to pay for such a policy in the near future. )o surrender, loan or paid5up values are granted under these policies because reserves are not accumulated. If the premium is not paid with the days of grace, the policy will lapse without acAuiring a paid5up value. 0owever, a lapsed policy may be revived during the lifetime of the life assured but before the expiry of the period of two years from the due date of the first unpaid premium on the usual terms. 'ccident and S or 9isability benefits are not granted on policies under the Term plan. @. '))6IT, K>*):I-) >#')F These plans provide for either immediate or deferred pension for life. The pension payments are made till the death of the annuitant Kper5son who has a pension planF unless the policy has provision of guaranteed period. 'n annuity is an investment that one make, either in a single lump sum or through installments paid over a certain number of years, in return for which one receive back a specific sum every year, every half5year or every month, either for life or for a fixed number of years. 'fter the death of the annuitant or after the fixed annuity period expires for annuity payments, the invested annuity fund is refunded, perhaps along with a small addition, calculated at that time.

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'nnuities differ from all the other forms of life insurance discussed so far in one fundamental way 5 an annuity does not provide any life insurance cover but, instead, offers a guaranteed income either for life or a certain period. Typically annuities are bought to generate income during one=s retired life, which is why they are also called pension plans. 'nnuity premiums and payments are fixed with reference to the duration of human life. @.J N-I)T #IF* >-#I$, Noint life policies are similar to endowment policies in as much as these policies also offer maturity benefits to the policyholders, apart form covering the risks as all life insurance policies. 1ut these are categori%ed separately as these cover two lives together thus offering a uniAue advantage in some casesC notable, for a married couple or for partners in a business firm. 6nder a joint life policy the sum assured is payable on the first death and again on the death of the survivor during the term of the policy. Mested bonuses would also be paid besides the sum assured after the death of the survivor. If one or both the lives survive to the maturity date, the sum assured as well as the vested bonuses are payable on the maturity date. The premiums payable cease on the first death or on the expiry of the selected term, whichever is earlier. 'ccident benefits eAuivalent to the sum assured are available under this plan on the first death. 0owever, if both lives are covered under 9ouble 'ccident 1enefit K9'1F, the surviving life is covered under 9'1 until the end of the policy year, in which the first life dies under the cover of the policy.

3*

These benefits are available with respect to both lives if 1oth lives perish simultaneously owing to an accident. To avoid such an eventuality, nomination is allowed under the policy -. 1oth die within the specified period as a result of the same accident -.

The second life also dies in the same policy year as result of another accident. To avoid such an eventuality, nomination is allowed under the policy. >articularly for couples 5 Noint life policies provide dual5purpose income and risk protection for both belonging to every income group and class of society. 6nder a joint life plan though the premium payment stops after the first lifeGs death, bonuses continue to accrue on the basic :um 'ssured till &aturity 9ate or till the death of the second life, if earlier. @.E B.-6> I):6.')$* Broup Insurance offers life insurance protection under group policies to various groups such as employer5employee, professionals, co5operatives, weaker sections of society etc. It also provides insurance coverage to people under certain approved occupations at the lowest possible premium cost. 1esides providing insurance coverage, it also offers group schemes to employers, which provide funding of gratuity and pension liabilities of the employer=s Broup insurance plans have low premiums. :uch plans are particularly beneficial to those for whom other regular policies are a costlier proposition. Broup insurance plans extend cover to large segments of the population including those who cannot afford individual insurance. 's such the premia one need to pay is comparatively lower and at the same time one benefits. can avail of insurance

33

The main features of the schemes are low premium and simple insurability conditions. >remiums are based upon age combination of members, occupation and working conditions of the group. ' number of group insurance schemes have been designed for various groups. These include employer5employee groups, associations of professionals Ksuch as doctors, lawyers, chartered accountants etc.F, and members of cooperative banks, welfare funds, credit societies and weaker sections of society. $reditor5 9ebtor groups are also offered group insurance schemes. Broup insurance schemes providing uniform cover can be granted to outstanding loans. These groups are &embers of primary housing societies where housing loans are granted by :tate 'pex housing societies, borrowers granted loans by Institutional agencies in >ublicSNoint :ectors for housing purposes and borrower members of cooperative societiesSbanks formed by employees of the same employers @.D :>*$I'# >#') :pecial plans are insurance policy plans available from the national insurance providers to serve the needs of citi%ens that cannot be commonly classified or segregated. These special plans are designed to satisfy needs ranging from debt5clearance in event of the death of the insured to financial aid in the event of a medical mishap. :pecial plans also provide financial assistance for handicapped dependants as well as emergency surgery reAuired if and when a medical condition arises. :ince special plans are designed for people with diverse and specific needs, the average citi%en may not necessarily need or use them. ,et, in the normal

36

course of life, situations may arise when one may need to provide for unplanned or unexpected contingencies and mishaps.

38

$hapter I I.9' '$T 4""" 's per the section @ of I.9' 'ctG 4""", Insurance .egulatory and 9evelopment 'uthority KI.9', which was constituted by an act of parliamentF specify the composition of 'uthority. The 'uthority is a ten member team consisting of 8 KaF KbF a $hairmanC five whole5time membersC

KcFfour part5time members, Kall appointed by the Bovernment of IndiaF .4 96TI*:, >-+*.: ')9 F6)$TI-): -F I.9' :ection 4@ of I.9' 'ct, 4""" lays down the duties, powers and functions of I.9'.. K4F :ubject to the provisions of this 'ct and any other law for the time being in force, the 'uthority shall have the duty to regulate, promote and ensure orderly growth of the insurance business and re5insurance business. K2F +ithout prejudice to the generality of the provisions contained in sub5section K4F, the powers and functions of the 'uthority shall include I KaF issue to the applicant a certificate of registration, renew, modify, withdraw, suspend or cancel such registrationC KbF protection of the interests of the policy holders in matters concerning assigning of policy, nomination by policy holders, insurable interest, settlement of insurance claim, surrender

39

value of policy and other terms and conditions of contracts of insuranceC KcF :pecifying reAuisite Aualifications, code of conduct and practical training for intermediary or insurance intermediaries and agentsC KdF :pecifying the code of conduct for surveyors and loss assessorsC KeF KfF >romoting efficiency in the conduct of insurance businessC >romoting and regulating professional organi%ations

connected with the insurance and re5insurance businessC KgF #evying fees and other charges for carrying out the purposes of this 'ctC KhF calling for information from, undertaking inspection of, conducting enAuiries and investigations including audit of the insurers, intermediaries, insurance intermediaries and other organi%ations connected with the insurance businessC KiF control and regulation of the rates, advantages, terms and conditions that may be offered by insurers in respect of general insurance business not so controlled and regulated by the Tariff 'dvisory $ommittee under section J@6 of the Insurance 'ct, 4"?D K@ of 4"?DFC KjF :pecifying the form and manner in which books of account shall be maintained and statement of accounts shall be rendered by insurers and other insurance intermediariesC KkF .egulating investment of funds by insurance companiesC

3:

KlF KmF

.egulating maintenance of margin of solvencyC 'djudication of disputes between insurers and intermediaries or insurance intermediariesC

KnF KoF

:upervising the functioning of the Tariff 'dvisory $ommitteeC specifying the percentage of premium income of the insurer to finance schemes for promoting and regulating professional organi%ations referred to in clause KfFC

KpF

:pecifying the percentage of life insurance business and general insurance business to be undertaken by the insurer in the rural or social sectorC and

KAF

*xercising such other powers as may be prescribed.

3,

Chapter 3 < /LAYERS +N +ND+AN +NSURANCE +NDUSTRY <.0 L+,E +NSURERS Insurance industry, as on 4.@.2333, comprised mainly two players8 the state insurers8

#ife Insurance $orporation of India K#I$F

<.2 GENERAL +NSURERS7

Beneral Insurance $orporation of India KBI$F Kwith effect from 9ecG2333, a )ational .einsureF

BI$ had four subsidiary companies, namely K with effect from 9ecG2333, these subsidaries have been de5linked from the parent company and made as independent insurance companies. 4. The -riental Insurance $ompany #imited 2. The )ew India 'ssurance $ompany #imited, ?. )ational Insurance $ompany #imited @. 6nited India Insurance $ompany #imited.

3.

Yr7 2===!2==>8 Insurance Industry in the year 233352334 had 4 new entrants, namely8 Li4e +nsurers7 S.N5. 4 2 ? @ Na$e 54 the C5$pan# &ax )ew ,ork #ife Insurance $o. #td. 09F$ :tandard #ife Insurance $ompany #td. I$I$I >rudential #ife Insurance $ompany #td. -m /otak &ahindra #ife Insurance $o. #td. 1irla :un #ife Insurance $ompany #td. J E D " 43 44 42 4? 4@ 4 Tata 'IB #ife Insurance $ompany #td. :1I #ife Insurance $ompany #imited I)B Mysya #ife Insurance $ompany >rivate #imited 'llian% 1ajaj #ife Insurance $ompany #td. &etlife India Insurance $ompany >vt. #td. .eliance #ife Insurance $ompany #td. :hriram #ife Insurance $ompany #td. :ahara India #ife Insurance $ompany #td. 1harti '(' #ife Insurance $ompany #td. 'viva #ife Insurance $ompany #td.

6+

Genera' +nsurers8 S.N5. 4 2 ? @ Na$e 54 the C5$pan# .oyal :undaram 'lliance Insurance $ompany #imited .eliance Beneral Insurance $ompany #imited. IFF$- Tokio Beneral Insurance $o. #td T'T' 'IB Beneral Insurance $ompany #td. 1ajaj 'llian% Beneral Insurance $ompany #imited J I$I$I #ombard Beneral Insurance $ompany #imited.

<.? +NSURANCE (US+NESS8 Insurance business is divided into four classes 8 4F #ife Insurance 2F Fire Insurance ?F &arine Insurance and @F &iscellaneous Insurance. #ife Insurers transact life insurance businessC Beneral Insurers transact the rest. )o composites are permitted as per law Le is'ati5n Kas on 4.@.2333F8

Insurance is a federal subject in India. The primary legislation that deals with insurance business in India is8

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Insurance 'ct, 4"?D, and Insurance .egulatory & 9evelopment 'uthority 'ct, 4""". +nsuran"e /r56u"ts Kas on 4.@.2333F Kfor latest information get in touch with the current insurers I website information of insurers is provided at the web page for insurersF8 Li4e +nsuran"e7 >opular >roducts8 *ndowment 'ssurance K>articipatingF and &oney 1ack K>articipatingF. &ore than D3! of the life insurance business is from these products. Genera' +nsuran"e7 Fire and &iscellaneous insurance businesses are predominant. &otor Mehicle insurance is compulsory. Tariff 'dvisory $ommittee KT'$F lays down tariff rates for some of the general insurance products. )ew products have been launched by life insurers. These include linked5 products. For details, please visit the websites of life insurers.

6*

Chapter $ &

COMPANY PROFILE
&. ABOUT MAX NEW YORK Ma; Ne9 Y5rk Li4e +nsuran"e C5$pan# Lt6 . is a joint venture between )ew ,ork #ifeC a Fortune 433 company and &ax India #imitedC one of IndiaGs leading multi5 business corporations. The company has positioned Itself on the Auality platform. In line with its 8isi5n t5 be the M5st A6$ire6 Li4e +nsuran"e C5$pan# in +n6ia , it has developed a strong corporate governance model based on the core values of excellence, honesty, knowledge, caring, integrity and teamwork. The strate # is t5 estab'ish itse'4 as a Truste6 Li4e +nsuran"e Spe"ia'ist through a Auality approach to business. Incorporated in 2333, &ax )ew ,ork #ife started commercial operation in 2334. In line with its values of financial responsibility, &ax )ew ,ork #ife has adopted prudent financial practices to ensure safety of policyholderGs funds. The $ompanyGs paid up is .s. 4,2?2 crore. 0aving set a (est in C'ass A en"# Distributi5n M56e' in place, the company is spearheading a major thrust into additional distribution channels to further grow its business. The company has multi5channel distribution that includes the agency distribution, partnership distribution, bancassurance, distribution focused on emerging markets and alliance marketing through employed sales force. The company currently has?? ban"assuran"e re'ati5nships) 0@ "5rp5rate a en"# tie!ups an6 6ire"t sa'es 45r"e at 0@ '5"ati5ns. &ax )ew ,ork #ife has put in place a uniAue hub and spoke model of distribution to deepen rural penetration. The company has ?" K" hub office ?3 spoke officesF offices dedicated to emerging markets in >unjab and 0aryana. &ax )ew ,ork #ife offers a suite of flexible products. It now has ?A pr56u"ts covering both life and health insurance and D riders that can be customi%ed to over D33 combinations enabling customers to choose the policy that best fits their need. 1esides this, the company offers J products and @ riders in group insurance business. The company currently has more than 43,@2@ employees. /r5$5ters7 &ax )ew ,ork #ife is a joint venture between &ax India #td., one of India=s leading multi5business corporate and )ew ,ork life, a Fortune 433 company. 63

&ax )ew ,ork #ife Insurance, incorporated in 2333, is one of India=s 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, &ax )ew ,ork life Insurance is creating a partnership for life with its customers in India. Ma; +n6ia Lt6.

Founded in 4"D , &ax India #imited is a >ublic #imited company listed on the ):* and 1:* of India with over 2J,333 shareholders. Today, &ax India #imited is a multi5business corporate, driven by the spirit of *nterprise, focused on /nowledge, >eople and :ervice oriented businesses of8

0ealthcare K&ax 0ealthcareF #ife Insurance K&ax )ew ,ork #ife InsuranceF $linical .esearch K)eeman &edical InternationalF

Ma; a's5 Maintains +nterests in7

:pecialty >lastic >roducts for the packaging industry K&ax :peciality >roductsF

0ealthcare :taffing K&ax 0ealth :taffF

>rominent shareholders are &r 'naljit :ingh and a leading private eAuity firm, +arburg >incus which accounts for 2D.E! of the total shareholding. The balance shareholding is held by the public and Institutional Investors. Ti'' 0BBB) The C5$pan#Cs Main +nterests an6 /artnerships 9ere the 45''59in 7 (usiness

1ulk 'ctive >harmaceuticals *lectronic $omponent 9istribution &obile Telephony

66

M5:'T $ommunications >lating $hemicals Information Technology

/artners

9:& Bist 1rocades &otorola, 6:' 'vnet Inc., 6:' 0utchison Telecom #td. 0ong /ong $omsat Investment Inc., 6:' & #ockheed &artin, 6:' 'totech, Bermany &ind $rossing, 6:'

In 2333, the $ompany reinvented and restructured itself to focus on the businesses of T#ife= under the them, #ifeQ-ur Focus. &ax )ew ,ork #ife Insurance, founded as a Noint Menture between &ax India #imited and )ew ,ork #ife, a Fortune 433 company, is one of the leading private life insurers in India. &ax 0ealthcare, a subsidiary of &ax India #imited is India=s first provider of comprehensive, standardi%ed, seamless, and integrated world5class healthcare services. )eeman &edical International K)&IF is an International $linical .esearch provider operating across three locations spanning )orth 'merica, 'sia and #atin 'merica. *ach location is backed by comprehensive infrastructure and highly skilled and experienced personnel.

68

Ne9 Y5rk Li4e LLC

)ew ,ork #ife Insurance $ompany,Kwww.newyorklife.comF a Fortune 433 company founded in 4D@ , is the largest mutual life insurance company in the 6nited :tates and one of the largest life insurers in the world. 0eadAuartered in )ew ,ork $ity, )ew ,ork #ife=s family of companies offer life insurance, annuities and long5term care insurance. )ew ,ork #ife Investment &anagement ##$ provides institutional asset management and retirement plan services. -ther )ew ,ork #ife affiliates provide an array of securities products and services, as well as institutional and retail mutual funds. The mission of )ew ,ork #ife is to maintain its superior Gfinancial strengthG, adhere to the highest standards of GintegrityG and demonstrate GhumanityG by treating its customers, agents and employees with compassion, consideration and respect. )ew ,ork #ife is one of the largest and strongest life insurance companies in the world with more than 6:9O24 billion assets under management and has received among the highest ratings for financial strength from the life insurance industryGs principal rating agencies8 '.&. 1est K''UF, :tandard & >oorGs K''UF, &oodyGs K'a4F, Fitch K'''F. 'ccording to &oodyGs, 7)ew ,ork #ifeGs rating reflects the companyGs good Auality investment portfolio, ample liAuidity, and sound capitali%ation, as well as the good growth potential of its international business.< 's a leader in the insurance industry, )ew ,ork #ife continues to bring to its operations new management concepts, advanced technologies, new distribution and training systems and innovative insurance products.

69

Chi'6ren /'ans
>arenting is all about creating the right environment for your children to grow in. The care & love that you shower on them must also be accompanied with the proper planning for their future. 0elping your child 7win the battle of life7 is the best gift that a >arent can give to his child. &ax )ew ,ork #ife with their children plans makes it possible for you to achieve this dream of giving your child a happy and financially secured future. Following are the products, which will provide financial support to your children, while pursuing their dream careers, getting married, buying a home etc8

Chi'6renDs En659$ent t5 0A (/ar% Chi'6renDs En659$ent t5 2@ (/ar% SMART StepsE SMART StepsE /'us SMART StepsE Sin 'e /re$iu$

6:

Retire$ent /'ans
>eople retire but needs donGt. &ax )ew ,ork #ife with their retirement plans comes forward to support you in your old age and makes the unfulfilled dreams of your life come true. .etirement is like a second life, where you can fulfill all your dreams, which you have been pushing aside in your past because of lack of time. -ur retirement plans make sure that you maintain your comfortable lifestyle and donGt compromise with your wishes because of lack of financial resources in your old age. Eas# Li4eE Retire$ent (/ar% SMART +n8estE /ensi5n

6,

-ea'th /'ans
' very common saying 5 70eath is +ealth7, may have become old but itGs true. 9iseases can grab anyone at anytime. :o, you have to pre5plan in such a way that you donGt have any financial constraint at the time, when your loved ones are in severe pain. *verybody believes that 7prevention is better than cure7 and adapt strict diet plans, exercise daily for it as well but no matter how well you take care of your self, diseases can grab you anytime. :o, &ax )ew ,ork #ifeGs 0ealth >lans have been designed to take into account the diverse set of needs at times of an individualGs ill health. These health plans provide you financial security at the time of health treatments reAuired. Li4eLine Me6iCashE Li4eLine We''nessE /'us Li4eLine Me6iCashE /'us Li4eLine Sa4et# NetE Li4eLine We''nessE

6.

Sa8in s /'ans
It must be admitted that a certain degree of instability lies in every individualGs life. Foreseen and unforeseen needs can arrive at any point of time. &ax )ew ,ork #ifeGs savings plans will help you. -ur dual benefits saving plans recogni%es your need for a complete all round financial protection and therefore provides you life cover and helps in the growth of your money. &oney will fly soon, if not taken care of. Therefore, we offer you diverse savings plans, which would undoubtedly suit your needs and your budget. Wh5'e Li4e /arti"ipatin Li4e GainE /'us 2F (/ar% 2= #ear En659$ent (/ar% Li4e /a#E M5ne# (a"k En659$ent t5 A e <= (/ar% Li4e GainE En659$ent Li4e GainE /'us 2= (/ar% Li4e /artnerE

8+

Rura' /'ans
Can an#b56# re$e$ber 9hen the ti$es 9ere n5t har6 an6 $5ne# n5t s"ar"eG &ax )ew ,ork #ifeGs .ural >lans have been tailored especially to meet all kinds of reAuirements of rural customers or investors. The 0assle free procedures and #ow & affordable premiums, being the key features of rural plans, proves &ax )ew ,ork #ife exceptional in offering their incredible services to all the classes of our society. The following .ural plans have been designed keeping in mind the rural investors. :o that they donGt have to worry about the high premium rates and complex application forms. Eas# Ter$ /5'i"#

82

What is Ma; 1iHa#

The (a"k r5un6 's human beings we all have dreams and aspirations, a desire to achieve and go beyond. Bo beyond the present, changing our lives and for some, changing the lives of others too for the better. +e are all firm believers in the Thand of destiny=, however that doesn=t deter us from trying, thankfully. ,et there are those, who through the drudgeries and miseries of their everyday life, sometimes feel trapped refusing to seek and explore an otherwise unexplored path. The 1isi5n $reated with the vision to empower every Indian to secure his dreams, &ax Mijay is an honest endeavor to provide financial security to the under5served masses by creating a life insurance product rooted in a deep understanding of their financial needs. S5 9hat is Ma; 1iHa#) a sa'utati5n) a 8i"t5r# path 5r an insuran"e p5'i"#G &ax Mijay is not just another life insurance policy of &),#C &ax Mijay is the symbol of victory of the common man, a beacon for a better tomorrow. +e believe that true win for India lies in encouraging people to save their hard earned money, a small contribution that would go on to change their future. +hile the underlying reality remains that ;&oneyQIt just slips through< &ax Mijay initiative will empower people, provide hope and will offer insurance cum saving solutions to the under5served packed in the form of an Insurance :avings 1ox K1eema BullakF Ma; Ne9 Y5rk Li4e +nsuran"e C5$pan# Li$ite6 pr5u6'# presents a uni:ue Li4e +nsuran"e p5'i"# IMa; 1iHa#J which isI

'bout making better tomorrow possible ' $lear sight of goal 5 Fulfillment of dream ' belief in the path to achieve the goal, and ;Mijay< is the Triumph of human life

8*

Chapter! A MARKET RESEARCWhat is Market Resear"hG &arket research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. &arket research firms fall in to the three categories8 4F :yndicated5service research firms5These firms gather consumer and trade information, which they sell for a fee. 2F $ustoms market research firms5These firms are hired to carry out specific projects. They design the study and report the findings. ?F :pecialty5line market research firms5These firms provide speciali%ed research services to other firms. (ene4its 54 Market Resear"h Information gained through marketing research isnGt just 7nice to know.7 ItGs solid information that can guide your most important strategic business decision. &arket research is effective when the findings or conclusions you reach have a value that exceeds the cost of the research itself. Market resear"h Cust5$ers -nce you have good research, you should be able to formulate more effective and targeted marketing campaigns that speak directly to the people youGre trying to reach in a way that interests them. For example, some retail stores ask customers for their %ip codes at the point of purchase. This information, which ui6es #5ur "5$$uni"ati5n 9ith "urrent an6 p5tentia'

83

pinpoints where their customers live, will help the storeGs managers plan suitable direct mail campaigns. Market resear"h he'ps #5u i6enti4# 5pp5rtunities in the $arketp'a"e. For example, if you are planning to open a retail outlet in a particular geographic location and have discovered that no such retail outlet currently exists, you have identified an opportunity. The opportunity for success increases if the location is in a highly populated area with residents who match your target market characteristics. The same might be true of a service you plan to offer in a specific geographic area or even globally, via the Internet. Market resear"h $ini$iKes the risk 54 65in business. Instead of identifying opportunities, the results of some market research may indicate that you should not pursue a planned course of action. For example, marketing information may indicate that a marketplace is saturated with the type of service you plan to offer. This may cause you to alter your product offering or choose another location. Market research helps you evaluate your success. Information gathered through market research helps you to determine if youGre reaching your goals. In the above example, if your productGs target market is women between the ages of ? and 3, then youGre making progress toward your goal. KIf not, this information can indicate a needed change in marketing strategyRF L Marketplace competition is in45r$ati5n ab5ut the 5ther "5$panies +ithin your area of business. .esearch answers these Auestions8 +ho my primary competitors in the marketP 0ow do they compete with what ways do they not compete with meP +hat are their are meP In

strengths and

86

weaknessesP 're there profitable opportunities based weaknessesP +hat is their market nicheP +hat makes my from the othersP 0ow do my competitors position communicate their services to the marketP they perceived by the marketP sales volumeP L Environmental factors in45r$ati5n un"58ers e"5n5$i"a' an6 $ircumstances that can influence your productivity and operations. to be answered include8 +hat are the current and future +hat are the current and future socio5economic economic and political policies have on the industryP +hat are the growth

upon their business uniAue

themselvesP 0ow do they

+ho are their customersP 0ow are

+ho are the industry leadersP +hat is their

p5'iti"a' Vuestions

population trendsP

trendsP +hat effects do your target market or my

expectations for my marketP +hat outside

factors influence the industryGs performanceP +hat are the trends for this market and for the economyP Is the industry growing, at a plateau, or decliningP Target market. +hat is the best target market for the products or services being offered by the organi%ationP 0ow large is the target market and how can it be describedP +hat are the attitudes, opinions, preferences, lifestyles ) and so on of its membersG /r56u"tsMser8i"es. .egarding particular, products and services, how satisfied or dissatisfied is the target. market with what is currently availableP +hat product features and benefits do those consumers desireP 0ow do they compare the organi%ation=s product with those offered by competitorsP Price. 0ow much value does the target market place on the product in AuestionP +hat products are they willing to substitute for the product in AuestionP +hat prices are charged for those substitutesP +hat advantagesW in

88

features or benefits or appealsWdoes the organi%ation=s product have that might allow it to charge a higher priceP Distribution. +hat distribution channel is the target market most likely to use when purchasing the product in AuestionP Is the organi%ation=s pricing in line with what the target market expects to pay for the product when purchased through that channelP 9oes the pricing include the si%e of margin the channel traditionally expects to receiveP +ill the channel be able to provide the service or support needed for the productP /r5$5ti5n. +hat can the organi%ation say in its advertisements about its product that will appeal to the target market and lead them to consider the organi%ation=s product more attractive, than those offered by competitorsP Through what mediumKsF Ktelevision, newspaper, billboards, etc.F should the organi%ation advertiseP +hat specific vehicles Ki.e., what specific television programs or newspapersF should the organi%ation use to carry the advertisementsP 0ow often should the advertisements appear, and how much money should the organi%ation spend on advertisingP :hould personal selling be used and, if so, howP +hat kinds of promotions would have a favorable effect on the target marketP Market Resear"h The /r5"ess

&arket research, like other components of marketing such as advertising, can be Auite simple or very complex. ,ou might conduct simple market research such as including a Auestionnaire in your customer bills to gather demographic information about your customers. -n the more complex side, you might

89

engage a professional market research firm to conduct primary research to aid you in developing a marketing strategy to launch a new product. .egardless of the simplicity or complexity of your marketing research project, youGll benefit by reviewing the following seven steps in the market research process. Step One7 De4ine the /r5b'e$s) the 6e"isi5n a'ternati8es) an6 the resear"h 5bHe"ti8es7 The market research process begins with identifying and defining the problems and opportunities that exist for your business, such as8 4 #aunching a new product or service. 2 #ow awareness of your company and its products or services. ? #ow utili%ation of your companyGs products or services. KThe market is familiar with your company, but still is not doing business with you.F @ ' poor company image and reputation. >roblems with distribution, your goods and services are not reaching buying public in a timely manner. the

Step T957 Set ObHe"ti8es) (u6 et an6 Ti$etab'es Objective: +ith a marketing problem or opportunity defined, the next step is to set objectives for your market research operations. ,our objective might be to explore the nature of a problem so you may further define it. -r perhaps it is to determine how many people will buy your product packaged in a certain way and offered at a certain price. ,our objective might even be to test possible

8:

cause and effect relationships. For example, if you lower your price by 43 percent, what increased sales volume should you expectP +hat impact will this strategy have on your profitP Bu get: 0ow much money are you willing to invest in your market researchP 0ow much can you affordP ,our market research budget is a portion of your overall marketing budget. ' method popular with small business owners to establish a marketing budget is to allocate a small percentage of gross sales for the most recent year. This usually amounts to about two percent for an existing business. 0owever, if you are planning on launching a new product or business, you may want to increase your budget figure, to as much as 43 percent of your expected gross sales. -ther methods used by small businesses include analy%ing and estimating the competitionGs budget, and calculating your cost of marketing per sale. Timetables: >repare a detailed, realistic time frame to complete all steps of the market research process. If your business operates in cycles, establish target dates that will allow the best accessibility to your market. For example, a holiday greeting card business may want to conduct research before or around the holiday season buying period, when their customers are most likely to be thinking about their purchases. Step Three7 Se'e"t Resear"h T#pes) Meth56s an6 Te"hni:ues There are two types of research7 primary research or original information gathered for a specific purpose and secon ary research or information that already exists somewhere. 1oth types of research have a number of activities and methods of conducting associated with them.

8,

:econdary research is usually faster and less expensive to obtain that primary research. Bathering secondary research may be as simple as making a trip to your local library or business information center or browsing the Internet. :ee &arket .esearch Types, &ethods and TechniAues for more details about the activities and methods for primary and secondary research. Step ,5ur7 Desi n Resear"h +nstru$ents The most common research instrument is the Auestionnaire. /eep these tips in mind when designing your market research Auestionnaire. 4 /eep it simple. 2 Include instructions for answering all Auestions included on the survey. ? 1egin the survey with general Auestions and move towards more specific Auestions. @ /eep each Auestion brief. If the Auestionnaire is completed by the respondent and not by an interviewer or survey staff member, remember to design a Auestionnaire that is graphically pleasing and easy to read. J .emember to pre5test the Auestionnaire. 1efore taking the survey to printer, ask a few people5such as regular customers, colleagues, or employees5to complete the survey. 'sk them for feedback surveyGs style, simplicity and their perception of its purpose. E &ix the form of the Auestions. 6se scales, rankings, open5ended Auestions and closed5ended Auestions for different sections of the Auestionnaire. The 7form7 or way a Auestion is asked may influence "uestions and open!en "uestions. 8. the answer given. 1asically, there are two Auestion forms 7 close !en the

friends on the

Step ,i8e7 C5''e"t Data To help you obtain clear, unbiased and reliable results, collect the data under the direction of experienced researchers. 1efore beginning the collection of data, it is important to train, educate and supervise your research staff. 'n untrained staff person conducting primary research will lead to interviewer bias. :tick to the objectives and rules associated with the methods and techniAues you have set in :tep Two and :tep Three. Try to be as scientific as possible in gathering your information. Step Si;7 Or aniKe an6 Ana'#Ke Data -nce your data has been collected, it needs to be 7cleaned.7 $leaning research data involves editing, coding and the tabulating results. To make this step easier, start with a simply designed research instrument or Auestionnaire. :ome helpful tips for organi%ing and analy%ing your data are listed below. 4 #ook for relevant data that focuses on your immediate market needs. 2 .ely on subjective information only as support for more general objective research. ? 'naly%e for consistencyC compare the results of different methods of data collection. For example, are the market demographics you from the local media outlet consistent with your survey results G your findings of

provided to

@ Vuantify your resultsC look for common opinions that may be counted together.

Step Se8en7 /resent an6 Use Marketin Resear"h ,in6in s

9+

-nce marketing information about your target market, competition and environment is collected and analy%ed, present it in an organi%ed manner to the decision makers of the business. For example, you may want to report your findings in the market analysis section of your business plan. 'lso, you may want to familiari%e your sales and marketing departments with the data or conduct a company5wide informational training seminar using the information. In summary, the resulting data was created to help guide your business decisions, so it needs to be readily accessible to the decision makers. RESEARC- STUDY A.0. RESEARC- O(.ECT+1ES The objective of the project is to find out the consumer :atisfaction or >reference and behavior of customer towards ;Insurance :ector especially towards &'( )*+ ,-./. +hat all are the stimuli effecting there choices before selecting a Insurance company. Is it the credibility, good return or celebrity endorser. It also helps in letting the above Insurance know its basic position in relation to its competitors in the market & how better can it help re5design its product in achieving higher sales growth. The study of this research also analyses the findings and provide MA* NEW YORK with the effective recommendations or suggestions. RESEARC- MET-ODOLOGY Resear"h Desi n ' research design is a type of blue print prepared depending on various types of blueprints available for the collection, measurement and analysis of data. ' research design calls for developing the most efficient plan of gathering the 92

needed information. The design of research study is based on the purpose of the study. ' research design is the specification of methods and procedures for acAuiring the information needed. It is overall operational pattern or framework of the project that stipulates what information is to be collected from which source by what procedures. T#pes) Meth56s an6 Te"hni:ues Se"5n6ar# Resear"h 6sually the easiest and least expensive, secondary research is information that already exists somewhere. It may be a study, a group of articles on a topic, or demographic or statistical data gathered by someone else. For example, the demographic data about car owners in your county available from your $hamber of $ommerce may be just the information you need5and itGs already gatheredR Se"5n6ar# Resear"h A"ti8ities 4 .eview and analy%e the existing data on your target markets available from maga%ines, books, published research studies, government publications, etc. 2 *valuate the competition. ? 'ssess environmental factors such as social, economic, political, etc. Se"5n6ar# Resear"h Meth56s 1ecause secondary research already exists, no specific scientific method or techniAue is needed to collect information. Instead, your efforts are spent locating and gathering market information from reliable sources. 9onGt forget the

9*

Internet. &any of the resources listed below, such as maga%ines, trade associations and government resources now have materials available online. :ome resources for gathering secondary research information include8 4 Libraries an6 5ther pub'i" in45r$ati5n "enters 5 #ook in reference centers for resource materials and other existing data on your market. 2 (55ks an6 business pub'i"ati5ns 5 &any books have been written on specific industries and markets. #ook for helpful existing data and environmental factors. ? Ma aKines an6 ne9spapers 5 *ach and every day, studies and other survey results are released as news events. 'lso, look into news about environmental factors such as the leading economic indicators or the upcoming local political elections. @ Tra6e ass5"iati5ns 5 &ost associations have reports on the industries they serve, the standards they operate under and leaders in the field. &any even conduct educational seminars on trends and other issues. 'ssociations are also helpful in researching the competition. $hambers of $ommerce 5 The local $hamber is a terrific resource for information on the community you hope to serve, other local businesses and maps of the area. -ne can also learn from other members at $hamber networking events. 4 1anks, real estate and insurance companies may keep information and statistics on the communities they serve. 2 Wh5'esa'ers an6 $anu4a"turers 5 $ontact these enterprises for

information on the industry standards, customers, costs, distribution, potential problems

93

? Indian government resources can provide extensive demographic data on population, markets and the economy like $ensus 1ureau of India . @ Me6ia representati8es 5 'dvertising salespeople at TM, radio, and print media outlets keep information on the markets their viewers, listeners, and readers to help influence potential advertisers. C5$petiti5n 5 'sk directly for company brochures, menu of products services, prices, annual reports, etc. -ne may have to disguise self as a potential customerR /ri$ar# Resear"h :ometimes, the information you need doesnGt exist5anywhereR ,ouGve searched the Internet, you scoured the library, journals and databases all to no avail. ThatGs when you may need to conduct primary research, or research conducted for a specific purpose. F,I, the secondary research you may have used was probably someoneGs primary data once. /ri$ar# Resear"h A"ti8ities 4 $onducting surveys to create market data or using other research Instruments such as Auestionnaires, focus groups, interviews, etc. 2 )oting first5hand observations ? $onducting experiments /ri$ar# Resear"h Meth56s *ach methodology uses 7sampling7 which allows the researcher to reach conclusions about a population within a certain degree of accuracy without having to survey everyone. It is not necessary to have a large sample si%e. and

himSher

96

:amples as few as one percent of a target market can often provide reliable results, under the direction of experienced researchers. >rimary research can be either :ua'itati8e 5r :uantitati8e . Vualitative research provides definitive market information regarding the opinions and behaviors of the subjects in the market research study. Vualitative research is used to achieve a variety of objectives. 4 -btain helpful background information on a market segment 2 *xplore concepts and positioning of a business or product ? Identify attitudes, opinions and behavior shared by a target market @ >rioriti%e variables for further study Fully define problems J >rovide direction for the development of Auestionnaires Sa$p'in Sa$p'e ' sample is the set of observations obtained from experimental unit that were selected from a larger group Kthe populationF. 1y studying the sample it is hoped to draw valid conclusions about the larger group. If the conclusions drawn from a sample are to be meaningful the sample must be obtained in a random fashion. This means that each member of the population has an eAual chance of being included in the sample. This ensures that the sample is unbiased. 6nfortunately, it is not always easy to obtain a truly random sample from sampling units that are widely dispersed.

98

' representative sample is only possible if, before collecting the sample, the researcher has carefully and completely defined the population, including a description of the members to be included. #hy $ample% :ampling is done in a wide variety of research settings. #isted below are a few of the benefits of sampling8 4. Re6u"e6 "5st8 It is obviously less costly to obtain data for a selected subset of a population, rather than the entire population. Furthermore, data collected through a carefully selected sample are highly accurate measures of the larger population. >ublic opinion researchers can usually draw accurate inferences for the entire population of the 6nited :tates from interviews of only 4,333 people. 2. Spee68 -bservations are easier to collect and summari%e with a sample than with a complete count. This consideration may be vital if the speed of the analysis is important, such as through exit polls in elections. ?. Greater s"5pe8 :ometimes highly trained personnel or speciali%ed eAuipment limited in availability must be used to obtain the data. ' complete census KenumerationF is not practical or possible. Thus, surveys that rely on sampling have greater flexibility regarding the type of information that can be obtained. It is important to keep in mind that the primary point of sampling is to create a small group from a population that is as similar to the larger population as possible. In essence, we want to have a little group that is like the big group. +ith that in mind, one of the features we look for in a sample is the degree of representative ness 5 how well does the sample represent the larger population

99

from which it was drawnP 0ow closely do the features of the sample resemble those of the larger populationP Types of $amples 'lthough there are a number of different methods that might be used to create a sample, they generally can be grouped into one of two categories8 0 Probability samples 5r 2 &on!probability sa$p'es. /r5babi'it# Sa$p'es The idea behind this type is random selection. &ore specifically, each sample from the population of interest has a known probability of selection under a given sampling scheme. There are four categories of probability samples described below. Si$p'e Ran65$ Sa$p'in The most widely known type of a random sample is the simple random sample K:.:F. This is characteri%ed by the fact that the probability of selection is the same for every case in the population. :imple random sampling is a method of selecting n units from a population of si%e ) such that every possible sample of si%e n has eAual chance of being drawn. 'n example may make this easier to understand. Imagine you want to carry out a survey of 433 voters in a small town with a population of 4,333 eligible voters. +ith a town this si%e, there are 7old5fashioned7 ways to draw a sample. For example, we could write the names of all voters on a piece of paper, put all pieces of paper into a box and draw 433 tickets at random. ,ou shake the box, draw a piece of paper and set it aside, shake again, draw another, set it aside, etc. until we had 433 slips of paper. These 433 form our sample. 'nd this

9:

sample would be drawn through a simple random sampling procedure 5 at each draw, every name in the box had the same probability of being chosen. Strati4ie6 Ran65$ Sa$p'in In this form of sampling, the population is first divided into two or more mutually exclusive segments based on some categories of variables of interest in the research. It is designed to organi%e the population into homogenous subsets before sampling, then drawing a random sample within each subset. S#ste$ati" Sa$p'in This method of sampling is at first glance very different from :.:. In practice, it is a variant of simple random sampling that involves some listing of elements 5 every nth element of list is then drawn for inclusion in the sample. :ay you have a list of 43,333 people and you want a sample of 4,333. $reating such a sample includes three steps8 4. 9ivide number of cases in the population by the desired sample si%e. In this example, dividing 43,333 by 4,333 gives a value of 43. 2. :elect a random number between one and the value attained in :tep. In this example, we choose a number between 4 and 43 5 say we pick E. ?. :tarting with case number chosen in :tep 2, take every tenth record KE, 4E, 2E, etc.F. C'uster Sa$p'in In some instances the sampling unit consists of a group or cluster of smaller units that we call elements or subunits Kthese are the units of analysis for your studyF. There are two main reasons for the widespread application of cluster sampling. 'lthough the first intention may be to use the elements as sampling units, it is found in many surveys that no reliable list of elements in the 9,

population is available and that it would be prohibitively expensive to construct such a list. In many countries there are no complete and updated lists of the people, the houses or the farms in any large geographical region. +$p5rtant thin s ab5ut "'uster sa$p'in 8 4. &ost large5scale surveys are done using cluster samplingC 2. $lustering may be combined with stratification, typically by clustering within strataC ?. In general, for a given sample si%e n cluster samples are less accurate than the other types of sampling in the sense that the parameters you estimate will have greater variability than an :.:, stratified random or systematic sample. N5n pr5babi'it# Sa$p'in :ocial research is often conducted in situations where a researcher cannot select the kinds of probability samples used in large5scale social surveys. The primary difference between probability methods of sampling and non probability methods is that in the latter you do not know the likelihood that any element of a population will be selected for study. There are four primary types of non5probability sampling methods8 A8ai'abi'it# Sa$p'in 'vailability sampling is a method of choosing subjects who are available or easy to find. This method is also sometimes referred to as hapha%ard, accidental, or convenience sampling. The primary advantage of the method is that it is very easy to carry out, relative to other methods. ' researcher can merely stand out on hisSher favorite street corner or in hisSher favorite tavern and hand out surveys. -ne place this used to show up often is in university courses. ,ears ago, researchers often would conduct surveys of Vuota :ampling.

9.

Vuota sampling is designed to overcome the most obvious flaw of availability sampling. .ather than taking just anyone, you set Auotas to ensure that the sample you get represents certain characteristics in proportion to their prevalence in the population. )ote that for this method, you have to know something about the characteristics of the population ahead of time. :ay you want to make sure you have a sample proportional to the population in terms of gender 5 you have to know what percentage of the population is male and /urp5si8e Sa$p'in . >urposive sampling is a sampling method in which elements are chosen based on purpose of the study. >urposive sampling may involve studying the entire population of some limited group Ksociology faculty at $olumbiaF or a subset of a population K$olumbia faculty who have won )obel >ri%esF. 's with other non5 probability sampling methods, purposive sampling does not produce a sample that is representative of a larger population, but it can be exactly what is needed in some cases 5 study of organi%ation, community, or some other clearly defined and relatively limited group. A.?. RESEARC- MET-ODOLOGY ADO/TED L T#pe 54 resear"h 7! Vualitative research !E'e$ent! $onsumers !Sa$p'in unit! *ach element acts as an independent unit. L Sa$p'in T#pe85 'rea sampling. 's research was limited on the basis of geographical location i.e. S-A-.A-AN/UR L Sa$p'e SiKe7 ! 0<= $ustomers

:+

L Data S5ur"e7 ! >rimary 9ata collected by conducting face to face interviews. L Resear"h instru$ents7 !

personal

Vuestionnaire was used to extract the information from the respondents . Nuesti5ns 9ere 5 $lose ended 5 &ultiple choices L Meth56 54 Sa$p'in 7 ! .andom A.@. CONSTRUCT+ON O, NUEST+ONNA+RE +ords are often used in different ways by different people. ,our goal is to write Auestions that each person will interpret in the same way. ' good Auestion should be short and straightforward. ' Auestionnaire should not be too long, use plain *nglish and the Auestion shouldnGt be difficult to answer. -nly through careful writing, editing, review, and rewriting can you make a good Auestionnaire. $onsider the following guidelines for conducting your surveys8 6se $losed5ended Auestions as well as open5ended ones /ut #5ur :uesti5ns in a '5 i" 5r6er The issues raised in one Auestion can influence how people think about subseAuent Auestions. It is good to ask a general Auestion and then ask more specific Auestions. For example, you should avoid asking a series of Auestions about a Insurance sector and then Auestion about the most important factors in selecting a Insurance company 4 The purpose of the survey

:2

2 +hy it is important to hear from the correspondent ? +hat may be done with the results and what possible impacts may occur with the results. @ 'ddress identification >erson to contact for Auestions about the survey. J 9ue date for response

:*

Li$itati5ns
4 The research covers only west 9elhi, so the survey results are restricted to a particular area. 2 1iased answers can sometimes be received in Auestionnaire because customers some times tend to hide their salary, price as the factor for buying the product etc. ? :urvey is done under limited time constraint so the completeness of the product may not be sure. @ 1ehavior of the customer keeps on changing as they are continuously in linked with the external environmental happening. &arket is more heterogeneous so the survey is not too flexible. J $onsumer taste and preferences are hard to judge so it can change freAuently. E >eople were hard pressed with time so most of them were reluctant to answer.

:3

Ana'#sis & Data +nterpretati5n

Tab'e!0 TA(LE +S S-OW+NG T-E SE* RAT+O O, T-E RES/ONDENTS W-+LE TAK+NG T-E SAM/L+NG +N DEL-+ REG+ON SE* ONO.O, RES/ONDENTS MALE 02F ,EMALE ?F

O N5. 54 Resp5n6ents

22!

&'#* F*&'#*

ED!

Ana'#sis7! ,r5$ ab58e tab'e 9e "an see that >AO pe5p'e are $a'e resp5n6ent an6 22O are 4e$a'e 9hi'e takin the sa$p'e 5ut 54 0<= pe5p'e.

:6

Tab'e!2 TA(LE +S S-OW+NG T-E AGE GROU/ O, T-E RES/ONDENTS AGE 0A!2F 2<!?F ?<!@F A(O1E @F

NO.O, RES/ONDENTS

@=

<=

?A

22

Ana'#sis7! ,r5$ ab58e tab'e 9e "an 4in6 that the 2FO resp5n6ents are 54 a e r5up bet9een 0A!2F an6 ?>.FO pe5p'e are 54 2<!?F. Rests are 54 2?.>O bet9een?<!@F an6 ab58e @F are 0?.>FO. +n4eren"e7! ,r5$ ab58e tab'e an6 ana'#sis 9e "an see the $a;i$u$ n5. 54 resp5n6ents are 54 a e bet9een 2<t5?F.

:8

Tab'e!? TA(LE +S S-OW+NG T-E OCCU/AT+ON O, T-E RES/ONDENTS OCCU/AT+ON (US+NESS SER!1+CE /RO,ES! S+ONAL ONO.O, RES/ONDENTS @? A2 2F ANY OT-ERS 0=

Ana'#sis7! ,r5$ ab58e tab'e 9e "an et that 2<.A>O resp5n6ents are 4r5$ business "'ass. F0.2FO be'5n s t5 ser8i"e "'ass an6 0F.<2Oare pr54essi5na's an6 rest <.2FO be'5n s t5 5ther "'ass. +n4eren"e7! ,r5$ ab58e tab'e 9e "an in4er that $aH5rit# 54 resp5n6ents be'5n s t5 ser8i"e "'ass.
!)-.-F .*:>-)9*)T:

16:I)*:: :*.5MI$* >.-F*:5:I-)'# '), -T0*.:

:9

Tab'e!@ TA(LE +S S-OW+NG T-E +NCOME LE1EL O, T-E RES/ONDENTS +NCOME (ELOW 2F==== O NO. O, RES/ONDETS 02? 2F==== !!@===== 22 @===== !!<===== 0? A(O1E <===== 2

Ana'#sis7! ,r5$ ab58e tab'e 9e "an 4in6 that ><.A>O resp5n6ents be'5n s t5 in"5$e r5up 54 be'59 2F====. 0?.>FO be'5n s t5 in"5$e r5up 54 2F====!@==)===) A.02O 54 @==)=== t5 <==)===) an6 0.2FO 54 ab58e <==)===. +n4eren"e7! ,r5$ ab58e tab'e an6 ana'#sis 9e "an in4er that $a;i$u$ n5. 54 resp5n6ents are be'5n s t5 in"5$e r5up be'59 2F====.
! )-. -F

1*#-+ 2 3333 2 3333 @33333 @33333 J33333 '1-M* J33333

::

Tab'e!F TA(LE +S S-OW+NG W-Y /EO/LE (UY +NSURANCE /OL+CY SA,ETY O, L+,E ?= +N1ESTMENT FF TA* SA1+NG >F OT-ERS =

Ana'#sis7! ,r5$ ab58e tab'e 9e "an see that the 0A.>FO resp5n6ents bu# the insuran"e p5'i"# 45r sa4et# purp5se)?@.?>O pe5p'e take it as a in8est$ent an6 @<.A>O bu# it 45r ta; sa8in . +n4eren"e7! ,r5$ ab58e tab'e an6 ana'#sis 9e "an in4er that the $a;i$u$ resp5n6ents 9ant the ta; sa8in 9hi'e bu#in a insuran"e p'an.
D3 E3 J3 3 @3 ?3 23 43 3 :'F*T, -F #IF* I)M*:T&*)T T'( :'MI)B -T0*.: :eries4

:,

Ta/0e1" TABLE IS SHOWING THAT PEOPLE ARE ASSOCIATE% WITH WHICH INSURANCE COMPANY ICICI PRU%ENTIAL ', *" LIC BIRLA SUN LIFE ) MAX NEW YORK ( OTHERS

433 "3 D3 E3 J3 3 @3 ?3 23 43 3

"J

?3 @ I$I$I #I$ 1I.#'

4D

42

&'( )*+ -T0*.: ,-./

A2a03454!1 Fr67 a/68e ta/0e 9e :a2 4ee that ",; re4p62<e2t4 are a446:5ate< 95th LIC= (.&+; 95th ICICI PRU= .#+; 95th MAX NEW YORK=#.+; 95th BIRLA SUN LIFE AN% &.+; 95th 6ther4. I2>ere2:e!1 Fr67 a/68e ta/0e a2< a2a03454 9e :a2 52>er that 7a?6r5t3 6> pe6p0e are a446:5ate< 95th LIC /@t ICICI 54 the /5AAe4t pr58ate 05>e 524@ra2:e pr685<er

:.

Tab'e!> TA(LE +S S-OW+NG -OW /EO/LE COME TO KNOW A(OUT NEW /OL+C+ES AGENTP AD1+S+ORS 02= NEWS/A/ERP MAGAQ+NE 2< A < +NTERNET OT-ERS

02= 0== A= <= @= 2= = AGENTP AD1+S+ORS +NTERNET

Ana'#sis7! ,r5$ ab58e tab'e 9e "an see that >FO resp5n6ents Ne9spaperPMa aKine) FO thr5u h +nternet) ?.>FO thr5u h 5ther 9a#s.

et

in45r$ati5n ab5ut ne9 p5'i"ies thr5u h A entPA68is5rs. 0<.2FO thr5u h

,+

+n4eren"e7!,r5$ ab58e tab'e an6 4in6in s 9e "an in4er that A entPA68is5rs are the $ain $e6iu$ 54 in45r$ati5n ab5ut insuran"e p'an. Tab'e!A TA(LE +S S-OW+NG W-AT +N,LUENCES /EO/LE TO (UY A /OL+CY AND W-AT +S T-E REASON O, T-E+R ASSOC+AT+ON W+T- T-+S COM/ANY RETURN 00< SER1+CE ?@ AD1ERT+SENENT 2 CELE(R+TY ENDORSER 2 OT-ERS <

423 433 D3 J3 @3 23 3 ?@ 2 .*T6.) 2 $*#*1.IT, *)9-.:*. J 44J

Ana'#sis7! ,r5$ ab58e tab'e 9e "an see that 20.2FO pe5p'e 5 45r ser8i"e 54 the "5$pan# >2.FO 9ant hi h return 2.FO ass5"iate6 9ith 5ther 4a"t5r. the "5$pan# 6ue t5 a68ertise$ent an6 "e'ebrit# en65rser an6 ?.>FO 9ith

,2

+n4eren"e7! ,r5$ ab58e tab'e an6 ana'#sis 9e "an in4er that $aH5rit# 54 pe5p'e in4'uen"e6 b# the return 54 the "5$pan#.

,*

Tab'e!B TA(LE +S S-OW+NG -OW /R+1ATE L+,E +NSURANCE COM/AN+ES ARE /ER,ORM+NG GOOD 00? ,A+R ?F /OOR F CANCT SAY >

423 433 D3 J3 @3 23 3 ? E B--9 F'I. >--. $')=T :', 44?

Ana'#sis7! ,r5$ ab58e tab'e 9e "an think their "5$pan# is per45r$in

et that $aH5rit# 54 pe5p'e >=.<2O

556 an6 20.AO) think 4air 9here ?.02O

think their "5$pan# per45r$in p55r an6 @.?>O i8e n5 resp5nse. +n4eren"e7! ,r5$ ab58e tab'e an6 ana'#sis 9e "an in4er that $a;i$u$ n5. 54 pe5p'e sa# their "5$pan# are per45r$in 556.

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Chapter 3 B

C5n"'usi5ns
4 The age group between 2J5? is more conscious about the insurance and they avail the policies. 2 >eople get insured for safety purpose but some people have different thoughts like investment or tax saving. ? >rofessionals are the highly insured group and following are service class as well as businessmen. @ *conomic condition of a person influenced for getting insurance policies. I$I$I ;>rudential< is the biggest private life insurance company according to finding of research. 'fter #I$ it has the most number of customers. J 'gent or 'dvisors are the big sources of information about a new plan of insurance company. E 9ue to credibility of that company people buy a insurance plan. D >eople are now thinking the private insurance companies are doing a good job and it is easily accessible. " 6#I> is the popular plan among the insure because it has a higher return 43 $hange is very important and one who goes with the changing environment always succeed, that is what I have learned from the study. The competition has grown too much in the insurance sector with the opening of the sector. This is for the #I$ to change their strategy on the basis of the competition. -n the basis of the project I can conclude that the insurance sector is one of the oldest industry of India. It was under private control earlier but

,6

" nationali%ed after independence. For many years it was only #I$ for life and BI$ for general insurance companies available. In 4""4 when the liberali%ation started, foreign investors become attracted towards the country. In 4""? government appointed &r. ..). &alhotra committee to suggest reforms measures. In 4""D the )ew I.9' 1ill was passed and became a law, which paved the way for foreign insurance companies. &ultinational insurance companies aligned with the Indian companies to step into this sector. #I$ has the largest network of operation with 24@D offices, 42@,333 employee and E 3333 agents. I$I$I >rudential is the largest private player in the insurance industry in India. It has sold over one5lakh fifty thousand policies till date. 1esides #I$, I$I$I >rudential is facing stiff competition from other private insurance players. -ut of total population of 4 billion of country, only 22! have insurance cover. :o we can say that there is still large potential for both the public and private companies. >rivate companies have to give varied customi%ed product to compete with the #I$, which is holding about "E! of the total market.

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Chapter 3 0=

RECOMMENDAT+ONS
4 >eople have less knowledge about current Insurance plan, so company should advertise it more through Television, .adio and )ewspaper because these mediums are easily accessible to them. 2 The return in insurance plan should be hiked because people are ready to take risks. ? Insurance companies has some plan about poor people but it is not implemented properly they are remain untouched. @ Bovernment should allow hiking the stake of foreign collaborator because it makes more competitive market of insurance. Bovernment should withdraw its umbrella from #I$, it make healthier competition among insurance companies. J Insurance companies should come up with new policies that can cover the entire family in one policy. E Insurance companies should extend its cover to poor people, because it is known fact that merely 22! people are insured out of 433! D Insurance companies should venture their policies in remote areas of our country. The insurance companies should now try to identify the gap between current level of customer service and customer expectations. :ome of the strategies being recommended are as follows8

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4 /r56u"t Di44erentiati5n8 -ffering a product that is distinctly different from other products available in the market. 2 +nn58ati8eness8 Identifying means of a delightful customer experience. ? Ri6ers8 These are additional offerings along with the main product. @ ,'e;ibi'it#7 The companies should make their products flexible for the convenience of their customer. -ass'e ,ree Ser8i"e7 'll bureaucracy in customer interactions should be eliminated. J /r5per /5'i"# D5"u$entati5n7 +rong interpretationsS non5awareness of policy document by the customer may have serious implications in the long term and the possibility of the same should be alleviated by the insurance companies.

,:

Chapter 3 00

(+(L+OGRA/-Y
4 Insurance 'dvisor=s &anuals and :tudy &aterial of &'( )*+ ,-./. 2 Insurance +atch and other &aga%ines. ? *conomic Times @ www.google.com www.licindia.com J www.maxnewyorklife.com E www.irda.gov.in

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ANNE*URE
Nuesti5nnaire 45r Stu6# 54 +nsuran"e /re4eren"es 9ear :irS&adam, I am a student of ;RRRRRRRRRRRRRRRRRRRRRR< as a part of my curriculumC I am doing a brief survey to find out more about consumer preference regarding Insurance. I would be grateful if you could spare a few minutes to participate in it. /indly mark where reAuired. 4. Na$e7 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!(Opti5na'% 2. C5nta"t N57 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!(Opti5na'% ?. L5"ati5n7 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! @. Se;7 F. O""upati5n7 <. A e 8 >. Annua' +n"5$e &ale 1usiness >rofessionals 4D52 yrs ?J5@ yrs X 2, 3,333 @33,3335J,33,333 A. D5 #5u p5ssess a 'i4e insuran"e p5'i"#G ,es B. Wh# 65 #5u bu# insuran"e p5'i"#G :afety for life Tax saving Investment purpose -thers )o Female :ervice -thers 2J5? yrs @ & above 2, 3,3335@,33,333 J, 33,333 & above

,.

0=. Whi"h insuran"e "5$pan#) #5u are ass5"iate6 9ithG I$I$I Tpru= &'( )*+ ,-./ #IF* -thers 00. Wh# #5u are ass5"iate6 9ith this "5$pan#) 9hat in4'uen"es #5u t5 bu# a p5'i"#G Bood return 'dvertisement -thers 02. -59 65 #5u "5$e t5 kn59 ab5ut ne9 p5'i"ies 54 #5ur insuran"e C5$pan#G 'gentY'dvisors Internet Bood >oor $an=t say )ewspaperY&aga%ine -thers Fair :ervice $elebrity endorser #I$ 1irla :un life

0?. -59 65 #5u think the pri8ate insuran"e "5$panies are per45r$in G

0@. Sh5u'6 the stake 54 45rei n "5''ab5rat5r be hike6) +4 Yes 9h#G !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 0F. What 5ther ser8i"es 95u'6 #5u 9ant 4r5$ #5ur insuran"e "5$pan#G !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! T-ANK+NG YOU

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