Professional Documents
Culture Documents
Reliance Life Insurance Co. LTD
Reliance Life Insurance Co. LTD
SUBMMITED FOR
Partial fulfillment of the requirements of two
years full time
Master of Business Management (MBA)
SUBMITTED BY
Monika A Patel
Roll No: 37
(2005-2007)
SUBMITTED TO
R.K.COLLEGE OF BUSINESS MANAGEMENT
(RKCBM)
CONTENTS
Preface--------------------------------------------------- (3)
Certificate------------------------------------------------ (4)
Acknowledgement-------------------------------------- (5)
Executive Summary------------------------------------- (6)
Index----------------------------------------------------- (7)
PREFACE
The student of M.B.A. Sem-3 has to make a project report for the purpose of
our university examination. So, I have selected to make a report on the
Reliance Life Insurance Company Limited.
This has helped me to enrich their theoretical knowledge about the working
and functioning of all departments in the particular area of the management
and I have achieved this opportunity to do a project report.
In this report, I am very thankful to our Professor, Mr. Jay Badiany, who
gave me important guidance to fulfill the need of the report.
And, finally I am also very thankful to the Sales Manager Mrs.Priyanka
Srivastava, who has given me all the information, which is required in this
project report.
CERTIFICATE
This is to certify that Miss. Monika A Patel is the student of
Two-year fulltime Master of Business Administration
(MBA) at R. K. College of Business Management (RKCBM)
affiliated with Saurashtra University-MBA-Programme during
the academic year 2005-2007.
The report, titled as Summer Project Report has been
prepared by Miss. Monika A Patel during her summer training
at Reliance Life Insurance Company Limited. The
project prepared by Miss. Monika A Patel for the partial
fulfillment of the MBA Degree as per the prescribed
curriculum.
Prof.(Dr.)T.D.Tiwari
----------------Director
ACKNOWLEDGEMENT
EXECUTIVE SUMMARY
INDEX
CHAPTER
SUBJECT
NO.
1
INSURANCE INDUSTRY
1.1 Meaning of Insurance
1.2 Importance of Insurance
1.3 Difference between Insurance and Assurance
1.4 Principles of Insurance
1.5 History of Insurance
1.6 Time line in Insurance history
1.7 Meaning of Life Insurance
1.8 History of Life Insurance
1.9 Key features of Life Insurance
1.10 Benefits of Life Insurance
1.11 Role of Life Insurance in the growth of economy
2
INTRODUCTION TO THE COMPANY
2.1 About Reliance Life Insurance
2.2 History
2.3 Journey so far
2.4 Role of IT at Reliance Life Insurance
2.5 Mission
2.6 Core Values
2.7 Future Plans
2.8 Head Office
2.9 Branches
3
PRODUCT MIX
3.1 Traditional Plans
3.2 Unit linked Plans
4
HUMAN RESOURCE MANAGEMENT
4.1 Recruitment
4.2 Selection
4.3 Training and Development
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CHAPTER-1
INSURANCE INDUSTRY
10
11
Right now the insurance industry has great opportunities in a country like
India or China which huge population. Also the penetration of insurance in
India is very low in both life and non-life segment so there is lot potential to
be tapped.
Before starting the discussion on insurance industry and related issues, we
have to start with the basics of insurance. So first we understand what is
insurance? How the word insurance is different from the word
assurance? etc.
1.3 DIFFERENCE
BEETWEN
INSURANCE
AND
ASSURANCE
Assurance is older in history and it was used to describe all types of
insurances. From 1826, the term assurance came to be used only for the risks
covered by life insurance and the term insurance was exclusively used to
denote the risks covered by marine, fire, etc.
The word assurance indicated certainty. In life insurance, there is an
assurance from the insurance company to make payment under the policy
either on the maturity or at earlier death. On the other hand the word
insurance was used to denote indemnity type of insurances where the
insurance company was liable to pay only in case of the loss damage the
property.
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The insured event was bound to happen sooner or later under assurance but
the event insured against may or may not happen under insurance.
The principle of indemnity applies to insurance contracts(non-life) only.
The scope of the word, insurance is wider.
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The assured must have insurance interest in the life or property insured.
Insurable interest is that interest which considerably alters the position of
the assured in the event of loss taking place and if the event does not take
placed, he remains in the same old position.
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15
Life insurance in its modern form came to India from England in 1818. The
Oriental Life Insurance Company was the first insurance company to be set
up in India to help the widows of European community. The insurance
companies, which came into existence between 1818 and 1869, treated
Indian lives as subnormal and charged an extra premium of 15 to 20 per
cent. The first Indian insurance company, the Bombay Mutual Life
Assurance Society, came into existence in 1870 to cover Indian lives at
normal rates.
The Insurance Act, 1938, the first comprehensive legislation governing both
life and non-life branches of insurance were enacted to provide strict state
control over insurance business. This amended insurance Act looked into
investments, expenditure and management of these companies.
By the mid- 1950s there were 154 Indian insurers, 16 foreign insurers, and
75 provident societies carrying on life insurance business in India. Insurance
business flourished and so did scams, irregularities and dubious investment
practices by scores of companies. As a result the government decided to
nationalize the life assurance business in India. The Life Insurance
Corporation of India (LIC) was set up in 1956. The nationalization of life
insurance was followed by general insurance in 1972.
16
1818
in Calcutta.
1850 Non life insurance started with Triton Insurance
Company.
1870
1912
1938
1956
1972
1993
17
1994
1997
market in India.
2000
2001
2002
insurance policy.
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insured
are
often
the
same
person.
Life insurance may be divided into two basic classes term and permanent.
Whole life insurance provides for a level premium, and a cash value
table included in the policy guaranteed by the company. The primary
advantages of whole life are guaranteed death benefits, guaranteed
cash values, fixed and known annual premiums, and mortality and
expense charges will not reduce the cash value shown in the policy.
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buy
term
life
insurance
policy.
If you want to buy a whole life, universal life, or other cash value policy,
plan
to
hold
it
for
at
least
15
years.
Canceling these policies after only a few years can more than double your
life insurance costs. Check the National Association of Insurance
Commissioners website (www.naic.org/cis) or your local library for
information on the financial soundness of insurance companies.
20
21
Modern Insurance
Illegal almost everywhere else in Europe, life insurance in England was
vigorously promoted in the three decades following the Glorious Revolution
of 1688. The type of insurance we see today owes it's roots to 17th century
England. Lloyd's of London, or as they were known then, Lloyd's Coffee
House, was the location where merchants, ship owners and underwriters met
to discuss and transact business deals.
While serving as a means of risk-avoidance, life insurance also appealed
strongly to the gambling instincts of England's burgeoning middle class.
Gambling was so rampant, in fact, that when newspapers published names
of prominent people who were seriously ill, bets were placed at Lloyds on
their anticipated dates of death. Reacting against such practices, 79 merchant
underwriters broke away in 1769 and two years later formed a New Lloyds
Coffee House that became known as the real Lloyds. Making wagers on
people's deaths ceased in 1774 when parliament forbade the practice.
22
and their dependents. And the first life insurance policy for the general
public in the United States was issued, in Philadelphia, on May 22, 1761.
But it wasn't until 80 years later (after 1840), that life insurance really took
off in a big way. The key to its success was reducing the opposition from
religious groups.
In 1835, the infamous New York fire drew people's attention to the need to
provide for sudden and large losses. Two years later, Massachusetts became
the first state to require companies by law to maintain such reserves. The
great Chicago fire of 1871 further emphasized how fires can cause huge
losses in densely populated modern cities. The practice of reinsurance,
wherein the risks are spread among several companies, was devised
specifically for such situations.
With the creation of the automobile, public liability insurance, which first
made its appearance in the 1880s, gained importance and acceptance?
More advancement was made to insurance during the process of
industrialization. In 1897, the British government passed the Workmen's
Compensation Act, which made it mandatory for a company to insure its
employees against industrial accidents.
During the 19th century, many societies were founded to insure the life and
health of their members, while fraternal orders provided low-cost, membersonly insurance. Even today, such fraternal orders continue to provide
insurance coverage to members, as do most labor organizations. Many
employers sponsor group insurance policies for their employees, providing
not just life insurance, but sickness and accident benefits and old-age
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Some life insurance policies allow a policy owner to apply for a loan against
the value of their policy. Either a fixed or variable rate of interest is charged.
This feature allows the policy owner an easily accessible loan in times of
need or opportunity.
8) Conversion from Term to Permanent: When in need of temporary protection, individuals often purchase term life
insurance. If one owns a term policy, sometimes a provision is available that
will allow her to convert her policy to a permanent one without providing
additional proof of insurability.
9) Disability Waiver of Premium
Waiver of Premium is an option or benefit that can be attached to a life
insurance policy at an additional cost. It guarantees that coverage will stay in
force and continue to grow
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27
Similar to retirement planning the cash values that flow from ones life
insurance schemes can be utilized for educational needs of the insurer or his
children.
The Life Insurance Industry has an enviable track record among public
sector units. It has a Consistent profit and dividend paying record
accompanied by a steady growth in its financial resources. Through
investments in the Government sector and socially- oriented sectors the
Industry has contributed immensely to the nation's development. The
industry is recognized as one of the largest financial Institutions in the
country. The ventures initiated by the industry in the areas of Mutual Fund,
Housing Finance has done exceedingly well in recent years. To protect the
country's foreign exchange reserves, the reinsurance arrangement are so
organized that maximum retention is made possible within the country while
at the same time protecting interests of the policy holders.
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CHAPTER-2
INTRODUCTION TO THE COMPANY
29
30
2.2 HISTORY
Reliance Capital Limited announced the launch of its life insurance business
on February 1, 2006. This was after obtaining the required regulatory
approvals from the Registrar Of Companies and the Insurance Regulatory
and Development Authority.
It was in August 2005 that the ball was set rolling when Reliance Capital
Limited, the financial arm of Reliance Anil Dhirubhai Ambani Group
(ADAG) announced the requisition of 100% shareholding in AMP Sanmar
Life Insurance Company Limited; and the formal transfer of shares took
place in October 2005. The company will issue all policy contracts under the
Reliance Life Insurance Company limited name. All the existing policy
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contracts also stand transferred to the Reliance Life Insurance entity with all
the original contractual terms and commitments intact.
opportunities
through
Distribution
Matrix:
32
Institute. Amongst those who participate are the CEO, COO, Functional
Heads, Regional Managers and Regional Sales Managers.
February 26: A Puja held at the Churchgate office situated in Express
Building, 4th Floor, 14 E Road, Mumbai.
March 1: Churchgate office inaugurated by Mr. Amitabh Jhunjhunwala,
Mr. Amitabh Chaturvedi and Mr. Nandgopal.
March 6: Shifting to the new premises at Churchgate commences.
March 7:
1) World Class Data Centre: They plan to establish a Primary Data Centre at Navi Mumbai
(Dhirubhai Ambani Knowledge City) which will cater to their company
needs across India, with fail-over capability to their Chennai Data Centre
within the same business day in occurance if an incident or Disaster
happens.
33
2) Inter Office Connectivity: All their Branch / Area and Regional offices will be
interconnected to their Data Centre with a 24x7 access to Core
Applications like Lotus Mail, Life-Asia and Internet Applications. This
will enable their associates to work faster and better with high-speed
Internet connectivity and also ensure faster Turn Around Time for their
customers.
3) Customer Care Centre: They will host a centralized Customer Care Centre at
Dhirubhai Ambani Knowledge City at Navi Mumbai, which cater
services to internal and external queries and complications. A customer
Relationship Management Tool (CRM) and Lead Management System
(LMS) are in progress.
4) Web Portal: This portal will be an interface between both internal employees
and their external users. Some of the functions included in their portal are
Policy Tracking Systems, Corporate News, Quality Checking System,
Under Writing Medical System, and Agent Management System etc.
5) R World: -
34
35
9) Document Management System: DMS will enable both policy issuance and contract servicing
through an automated workflow, which yields a faster Turn around Time
to both internal and external users. This application will enable them to
have a paperless office and thus mitigate the risk of losing vital
records/papers.
10) Wireless Data Access: This will enable identified Top Sales Managers and Top Advisors
to access real time data for both LMS and CRM on the fly through Handheld
PDA device.
11) SAP ERP Modules: SAP (Finance and HR Modules), will automate the Expense,
Travel and Leave Management Systems.
2.5 MISSION
36
Reliance Life Insurance Company Limited has some core values which are
listed as follows:
1) Result Oriented
2) Performance Driven
3) Customer Focused
4) Learning and Development Oriented
5) Employee Centric
6) Informal and Fun
37
2.9 BRANCHES
They have so many branches and substations in the India. They have around
160 branches in the India. And they have planned to open more branches
across the country in the coming months.
38
CHAPTER
3
PRODUCT MIX
39
3.1 TRADITIONAL PLAN:Life insurance products are designed to suit the requirements
of customers. Fundamentally the product provide for:
Risk cover
Investment
Health cover
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2) Reliance Whole Life Plan: This insurance policy is designed for people who do not wish to avail of any
benefits themselves but wish to create an immediate estate to protect their
family by availing of insurance cover on their life at a very low cost.
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43
4) Reliance Endowment Plan: Reliance Life Insurances Reliance Endowment Plan is the key to all your
financial needs. It is an inexpensive and easy way to protect you, your
family or your business.
In a nutshell this plan will keep you financially prepared for all the special
occasions in your life - your daughters wedding, your childs university
education or even a new office for your business - by eliminating the burden
that a shortage of money creates.
In the event of your untimely death, Reliance Endowment Plan will also
assist your loved ones through this difficult time by the financial support that
it provides.
Reliance Endowment Plan also gives you the additional benefit of
participating in the companys profits, which you will receive at the end of
the policy period.
44
5) Reliance Special Endowment Plan: This insurance policy is designed for people who wish to combine savings
with extended security. The unique feature of this policy is that life
protection continues for five years after you have stopped the payment of
premium. Payment of sum assured at the end of premium paying term and
extension of life cover thereafter for the full sum assured for a period of 5
years, are characteristics of the policy.
This plan also participates in the profits.
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6) Reliance Cash Flow Plan: This insurance policy is designed for those who have a recurring need for
reinvestment in business or look for short-term investment channels. The
advantage of the policy is that they need not part with a sizable amount of
money at any one time, but create, through regular premium payments, a
periodic return of lump sums which become available for reinvestment at
higher returns, while providing simultaneously, substantial life cover.
Alternatively, it can be used to meet any immediate financial crisis in the
family like your son's college admission, your daughter's engagement, and
renovation of your home or perhaps, a holiday abroad.
46
The money is payable in installments. The first installment is paid at the end
of the 4th year and thereafter at the end of every 3rd year.
Features:a) Plan with profits
b) Minimum entry age is 15 year and maximum is 63 year
c) Maximum premium paying term is 34 year
d) Loan facility is not available
e) In case of death full sum assured + accrued bonuses up to
the date of death is payable immediately
f) In case of survival up to maturity date all premium paid
g) Rider accident death and critical illness
h) Mode of payment is available
7) Reliance Credit Guardian Plan: This insurance policy is designed for those who not only safeguards
individuals but also families and businesses from the financial hardship that
could arise from unfortunate and unexpected death.
Features: a) Loan protection against home, home improvement, two
wheelers and four wheelers
b) In case of death remaining loan amount paid immediately
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8) Reliance Special Credit Guardian Plan: This insurance policy is designed for those who not only safeguards
individuals but also families and businesses from the financial hardship that
could arise from unfortunate and unexpected death, disability or critical
illnesses.
Features: a) Loan protection against home, home improvement, two
wheelers and four wheelers
b) In case of death remaining loan amount paid immediately
c) In case of survival no benefit is available
d) Premium payment option for regular and single is available
e) Premium payment term is 2/3 of loan period and remaining
period paid by the company
f) Maturity amount = All the premium paid amount
g) Tax benefit is available
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Amongst the above plans the Reliance Market Return Plan is the
largest selling plan of the Reliance Life Insurance Company Limited. The
above two ULIP plans are discussed as follows:
1) Reliance Market Return Plan: Reliance Market Return Fund is the unit-linked product that helps you invest
in the financial markets in a combination of investment instruments of your
choice. You can enjoy the returns from the markets without the trouble of
monitoring and managing your own investment portfolio and keeping track
of the market movements. At the same time your investment premiums
provide you with insurance cover. Reliance Market Return Fund unit-linked
insurance plan provides you with a basket of fund options that balances your
return and risk exposure while providing life cover at the same time.
Features: a) Minimum entry age is 30 days and maximum entry age
is 65 year
b) Maximum policy term 40 year and minimum policy
term 5 year
c) Mode of premium as annual, quarterly, half yearly and
monthly Rs. 1000 (for salary deduction only) and Rs.
2500 (standing order/credit card)
d) Top up premium minimum Rs. 2500
e) Option of investment fund
i.
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ii.
iii.
iv.
2) Reliance Golden Years Plan: Reliance Golden Years Plan.. The Reliance Life Insurance no-worry stay
happyretirementplan. Reliance Golden Years Plan is a flexible package that
provides freedom of choice in choosing the type of investment, life cover,
vesting options such as commuting and annuity options. Contributions
provide Income tax savings as well.
Reliance Golden Years Plan, a flexible pension product is available for all
individuals who are between the ages of 18 and 65.
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ii.
ii.
iii.
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CHAPTER
53
4.1 RECRUITMENT
Recruitment is the process of finding and attracting capable applicants for
employment. The process begins when new recruits are sought and ends
when their applications are submitted. The result is a pool of applicants from
which new employees are selected.
In this company the Sales Manager, who recruits the advisors/agents for
selling the products of the company, does the recruitment. The advisors
should have at least passed the S.S.C. examination. They must pass the prerecruitment examination, which is conducted by the Insurance Institute of
India, Mumbai, or any other approved examination body. After clearing the
examination the code will be provided to them and the license will also be
given to them, the validity the license would be 3 years. After all these
requirements, the person will become an insurance advisor in the company.
4.2 SELECTION
Selection is the process of picking individuals (out of the pool of job
applications) with requisite qualifications and competence to fill job in the
organization. In simple words, it is the process of differentiating between
applicants in order to identify these with a greater likelihood of success in a
job.
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The Branch Manager, which includes-, will conduct the process of selection
of Sales Manager
1) Personal Interview: The first step of selection of Sales Manager in the
Reliance Life Insurance Company Limited is to conduct a personal interview
of an applicant by the Branch Manager.
2) Project 40 Interview: After clearing the personal interview, the project 40
interview will be taken by the Branch Manager. In this step, the applicant
should have to make a list of 40 and then start the business with them.
3) Interview with Regional Head: After clearing the project 40 interview, the applicant
should be interviewed by the Regional Head, who will check his/her
performance.
4) Negotiation: After clearing the interview with Regional Head, the
negotiation will be provided to the applicant.
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5) Medical Examination: After that, the medical check up should e made to the
applicant.
6) Selection: After clearing all the above steps the applicant should be
appointed/selected as a Sales Manager in the company.
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4.3 TRAINING AND DEVELOPMENT:Training and Development is any attempt to improve current or future
employee performance by increasing an employees ability to perform
through learning usually by changing the employees attitude or increasing
his/her skills and knowledge. The need for training and development is
determined by the employees performance deficiency, computed as follows:
Training & Development = Standard Performance Actual Performance
They are providing 100 hours training to their advisors, who
are newly recruited. They are also providing the product training to their
advisors and Sales Managers, who are newly recruited. The 100 hours
training is to be conducted at Net Bios Computer Academy whereas the
product training is to be conducted at NIS SPARTA. The NIS SPARTA
Institute has more than 150 batches and is trained over 3000 agents for most
of the private insurance companies. This institute is approved by IDRA to
train agents/advisors.
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4.5 COMMUNICATION
Communication is the process through which an individual can exchange
their beliefs, things, information, and experience to others. In simple words,
it is the process of exchanging the information from one person to another.
They are providing an open environment, which enabling free interaction
between all levels. The communication is provided in the following manner:
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BRANCH
BRANCH
BRANCH
REGIONA
L
REGIONA
L
REGIONA
L
CHANNEL
HEAD
CMO
CEO
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4.6 INCENTIVES
Incentives are monetary benefits paid to workmen in recognition of their
outstanding performance. They are providing an aggressive reward and
recognition plans, which are including sales incentives.
4.7 SERVICES
They are offering following certain services to their employees.
1) They are providing knowledge sharing and certification practices.
2) They are planned team building and fun events.
3) They are creating Reliance Life Insurance family, which includes
employees, associates and their families.
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4.10 DEPARTMENT
They are providing following areas or departments:
1) Retail Sales
2) Under Writing
3) Actuarial
4) Insurance Operations
5) Customer Service
6) Quality and Processes
7) Human Resources
8) Finance
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CHAPTER
MARKETING DEPARTMENT
63
Branch
Managers
Advisors
Customers
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enterprises. Through these small enterprises, the advisors will sell the
products/policy to customers of the small enterprises.
4) Rural Benefits:Brokerage firms have gained much of the institutional and
personal trust business lost by the banks. These firms have steadily
captured assets, primarily at the expense of the banks. The number of
non-bank trust companies has increased in recent years as independent
trust companies have emerged and more broker/dealers are integrated
services. Insurance companies view full-service brokers as a potentially
new distribution channel as well.
Another type of distribution channel is rural benefits. This
channel works as a dealership. In this channel, the dealers will sell the
policy to the target customers.
5) Web World:Direct sales of life insurance are growing rapidly, but many of
the traditional full-serve players seem to be letting it go. Across all
financial services, consumers are expressing a willingness to deal with a
variety of providers on the web. Web sites are starting to pop up offering
consumer insurance products especially designed for distribution over the
web.
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5.2 PROMOTIONAL
SEGMENT
PROGRAMMES
&
TARGET
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REWARD
ACHIEVERS
30,000
50,000
75,000
1,00,000
1,50,000
2,00,000
3,00,000
SUPER ACHIEVERS
5,00,000
7,50,000
10,00,000
15,00,000
20,00,000
LG Refrigerators GL-233
LG Air Conditioner 1T
Sony Digital Camcorder
Trip to Dubai 3D/4N
Hero Honda Splender
STAR ACHIEVERS
50,00,000
75,00,000
1,00,00,000
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I. Business (WRP)
II. Persistency
III. Product Mix
C. The qualification period is
I. Logins from 1st Apr 06 to 31st Mar 07
II. Issuances from 1st Apr 06 to 15th Apr 07
Qualification Criteria
Level
WRP (Rs)
Topaz
Pearl
Sapphire
Emerald
Ruby
Diamond
1,50,000
5,00,000
10,00,000
15,00,000
25,00,000
50,00,000
Traditional
Products
60%
60%
60%
50%
50%
50%
Persistency
80%
80%
80%
85%
85%
85%
3) Elite Club Scheme:In this scheme the advisor, who have login the regular
premium of Rs. 2, 00,000 will be eligible for the Elite Club
Membership.
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5.3COMPARATIVE STUDY
Presently there are 15 Life insurance companies in the country.
There is only one public sector company LIC and the rest 14 are private
sector. Although LIC has been dominating the Life Insurance business since
past few years the private players have now started to take the momentum.
Birla Sun Life Insurance Company: Birla Sun Life Insurance Company is a 74:26 joint venture
between Birla group and Sun Life Financial. It is a private sector company.
The company was registered on 31/1/2001. The market share for FY 200506 was 1.89%.
HDFC Standard: HDFC standard is a 74:26 joint venture between HDFC and
Standard Life. It is a private sector company. The company was registered
on 23/10/2000. The market share for FY 2005-06 was 2.87%.
ICICI Prudential Life Insurance: -
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ING Vysya Life insurance: ING Vysya Life Insurance is joint venture between Exide
(50%), Gujarat Cements (14.87%), Enam (9.13%) and ING (26 %). It is a
private sector company. The company was registered on 2/8/2001. The
market share for FY 2005-06 is 0.79%.
Met Life India: Met Life India is a 74:26 joint venture between 74:26 JV
between J & Bank, Pallonji & Co and MetLife. It is a private sector
company. The company was registered on 6/8/2001. The market share for
FY 2005-06 was 0.40%.
Bajaj Allianz Life Insurance Co.: Bajaj Allianz Life Insurance Company is a 74: 26 Joint
venture between Bajaj Auto limited and Allianz AIG. The company was
registered on 3/8/2001. The market share for FY 2005-06 was 7.56%.
SBI Life Insurance Company Ltd: SBI Life Insurance Company is a 74: 26 Joint venture between
SBI and Cardiff S.A. The company was registered on 31/3/2001.It is a
private sector company. The market share for FY 2005-06 was 2.31%.
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The TATA AIG Group: TATA AIG group is a 74:26 JV between Tata Group and AIG. It
belongs to the private sector. The company was registered on 12/2/2001. The
market share for FY 2005-06 was 1.29%.
Sahara India Life Insurance Company Ltd.: First Wholly Indian Owned Private Life Insurance Company.
The Company commenced operations from 30th October 2004. The market
share for FY 2005-06 was 0.06 %.
Shriram life insurance company Ltd: Shriram Life is a recent entrant into the life insurance sector
It is a 74:26 joint venture between the Shriram group through its Shriram
Financial Holdings and Sanlam Life Insurance Limited, South Africa. The
company expects to start operations soon.
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2) Market Share: -
Sr.
No
Insurer
LIC
71.44
Bajaj Allianz
7.56
ICICI Prudential
7.35
HDFC Standard
SBI Life
2.87
2.31
Birla SunLife
1.89
Tata AIG
1.29
1.23
Aviva
1.14
10
1.11
11
ING Vysya
0.79
12
Reliance Life
0.54
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13
MetLife
0.4
14
Sahara Life
0.06
15
Shriram Life
0.03
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Here we can see from the diagram that LIC is the market leader and it
commands the major part of the total life insurance market. Its market share
was approximately 98% before 2000 but after the entry of private players it
has significantly decreased.
Among private players Bajaj Allianz stands first. It has the market share of
approximately 7.56% in the total market and it constitutes 40% of the
market share among private players.
HDFC Standard comes third. SBI Life insurance Company Limited comes
fourth. ICICI Prudential is also one of the fastest growing life insurance
companies in India.
Rest of the players has market share below 2%.
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3) Capital Fund: -
CHAPTER
( Rs in Crore )
375
250
218
200
183
180
155
153
126
125
110
110
RESEARCH METHODOLOGY
R. K. College of Business Management
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6.1
OBJECTIVES OF STUDY
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6.2
QUESTIONNAIRE
It is most common instrument whether administered in person
81
6.3
82
83
6.4
LIMITATIONS
I am a human hang, so there is some limitation of the human
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6.5
ANALYSIS OF QUESTIONNAIRE
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MOTIVE
NO.
TAX
SAVING
RISK COVERAGE
RETURN/YIELD
TOTAL
20
5
23
2
50
86
Here we can see that majority of the people tend to invest in life insurance
for the risk coverage. The next preferred option is Tax Saving. We founded
from the discussion with public and some experts that those people with a
low income tend to invest in life insurance to gain tax benefit.
Saving motive constitutes very small part of the total sample. Return comes
last.
But this is the general conclusion of 50 people. If we take a larger sample,
we can get a different result.
As the private players have launched ULIPs, more and more people are
turning towards these products so the Investment motive has been gaining
command. Also the number of those people who wish to invest for return is
also increasing.
According to a life insurance expert (Vinod Thakkar ), life insurance is for
protection first then for Savings and Tax benefits all those things.
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21
19
8
2
3
11
25
11
24
16
7
3
TAX BENEFIT
SAVINGS
RISK COVER
RETURN/YIELD
Pr
ef
er
en
ce
40
35
30
25
20
15
10
5
0
1
4
10
35
We can see from the table and the graph that the number one motive of
people about investing in life insurance is risk coverage, which is the main
theme of life insurance followed by Tax benefit. The third position is of
saving and fourth is Return. This shows that still people consider other
financial tools more viable for return and life insurance is for Tax benefit
and risk cover.
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SOURCE
NO.
ON MY OWN
FAMILY DECISION
EMPLOYER DECIDES
AGENT GUIDANCE
TOTAL
29
7
0
14
50
89
Here we can see that majority people (58%) decides on their about investing
in life insurance. 28% persons decides as per the guidance of the agent.
There is no contribution of employers in the decision of ones investment in
life insurance. 14% people invest in life insurance as per the family decision.
90
N0.
Term Assurance
Whole Life
Endowment
Combined
ULIPs
TOTAL
9
9
7
19
6
50
As it is evident from the chart and the table 38% people prefer combination
of Whole Life and Endowment product. It gives people double advantage.
The person would get some amount at the end of the stipulated period; for
instance 20 years, and after that period the risk cover continues and the rest
of the amount would be paid when the person dies.
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Q.5 Would you prefer Reliance Life Insurance or LIC for buying the life
insurance policy?
(a) Reliance Life Insurance
(b) LIC
This is the most important question as it reflects the scope of the study. It is
the main theme of this questionnaire.
Prior to 2000 LIC was the only player in the life insurance market and it had
the total market. So people had to go to LIC for buying life insurance policy.
But after the entry of private players in 2000, some people have also turned
to private life insurers.
Reliance Life Insurance Company Limited is newly launched company. So it
has fewer customers as compared to LIC. But the ULIP plans are sold more
of Reliance life insurance as compared to LIC in todays environment.
Now lets see what people say:
Particulars
No.
15
35
50
As evident from the chart that 30% of people would prefer Reliance Life
Insurance while 70% would prefer LIC.
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Age
No.
18 to 30
31 to 50
51 to 65
TOTAL
5
30
15
50
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As evident from the chart that I have taken a sample of 50. Out of
which 10% people are aged between 18 to 30, 60% people are aged between
31 to 50, and remaining 30% people are aged between 51 to 65.
2) Occupation
(a) Service
(b) Business
(c) Profession
(d) Housewife
(e) Retired
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Occupation
No.
Service
Business
15
Profession
10
Housewife
Retired
15
TOTAL
50
As the evident from the chart that out of 50 respondents 10% are of service
men, 30% are of business men, 20% are of professions, 10% are of
housewives and remaining 30% are of retired.
3) Income
(a) 50,000 to 1,00,000
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No.
50,000 to 1,00,000
10
1,00,000 to 5,00,000
25
15
TOTAL
50
As the evident from the chart out of 50 respondents 20% are earning
annually between 50,000 to 1,00,000, 50% are earning between 1,00,000 to
5,00,000 and 30% are earning more than 5,00,000.
4) Family members
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(a) 2
(b) 3
(c) 4
(d) More than 4
Family Members
No.
15
20
More than 4
10
TOTAL
50
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As the evident from the chart out of 50 respondents 10% have 2 family
members, 30% have 3 family members, 40% have 4 family members and
remaining 20% have more than 4 family members.
6.6
SWOT ANALYSIS
SWOT analysis is the analysis of the internal and external factors, which
have impact on the survival of any organization. Now lets make SWOT
analysis for reliance Life Insurance Company Limited.
STRENGTHS:
1) Reliance Life Insurance Company Limited is the part of the
Reliance Capital.
2) The brand name is enough to sell the products easily.
3) Private placement of Rs. 10,000 crs worth of securities with RBI
by the government. Led to an improvement in market securities.
4) Strong liquidity from FII was the major reason for the up move.
5) Range of products
6) Reliance has a long and strong history of solvency, financial
stability.
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WEAKNESSES:
1) Newly established company, so people seems it risky.
2) Lack of staff.
3) Lack of advertisement, so most of the customers are not aware
of the Reliance Life Insurance.
OPPORTUNITY:
1) There is a vast untapped market in India. The life insurance
penetration in India is approximately 2.5%. So it has large
potential.
2) Intention of traditional products is to encourage long term,
regular and disciplined savings to systematically build up a
target fund.
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THREATS:
1) The main threat is from the other players who have grabbed
approximately 15% of the market share.
2) As the government has scrapped the rebate on the life insurance
premium, the people who used to invest in life insurance for the
sole motive of tax benefit may turn to other instruments.
CHAPTER
7
FINANCE DEPARTMENT
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FUND PERFORMANCE:-
1) Capital Secure Fund:This fund is for Reliance Golden Years Plan, and Reliance
Market Return Plan.
In line with the objective of protecting the capital against any erosion, 61.4%
of the funds were invested in short-term Government Securities (Gilts) and
to meet liquidity requirement higher about 40% of funds are kept in short
101
term bank deposits. The net return credited to policyholders and the asset
composition ratios are given in the boxes below.
0.36%
1.10%
4.09%
3.89%
% of total assets
38.60
Gilts
6.75% GOI 2006
6.75
13.69
40.96
Total Gilts
61.40
Total
100.00
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Asset Allocation:-
2) Balanced Fund:This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan.
To take advantage of the bullish trend in the equity market, the
equity holdings in the fund was maintained as close as possible to the
maximum of 20% allowed for the fund. Bank deposits were maintained only
for the purpose of liquidity management. To reflect their bearish view on the
debt market the duration of the fixed income portfolio was kept low. Within
the fixed income portfolio, allocation to Gilts was higher than corporate
bonds. All the bonds in the portfolio are top rated. The asset composition,
the details of the portfolio and the net returns are disclosed below.
2.47%
103
4.07%
13.83%
13.10%
Asset Name
% of Total Asset
Equity
20
22
Gilts
53
Bank Deposits
Total
100.00
104
3) Growth Fund:This fund is for Reliance Golden Years Plan, and Reliance Market
Return Plan.
To take advantage of the bullish trend in the equity market, the equity
holdings in the fund was maintained as close as possible to the maximum of
20% allowed for the fund. To reflect their bearish view on the debt market
the duration of the fixed income portfolio was kept low. All the bonds in the
portfolio are top rated. The asset composition, the details of the portfolio and
the net returns are disclosed below.
4.60%
7.99%
24.90%
21.04%
Asset Name
% of Total Asset
Equity
40
Gilts
45
Bank Deposits
105
Total
100.00
4) Equity Fund:This fund is for Reliance Market Return Plan. In line with the
stated asset allocation pattern and their view of the market, the entire corpus
of the fund was invested in equities. Net returns earned since inception and
the full portfolio are disclosed below.
11.18%
20.02%
64.46%
57.83%
106
Asset Name
% of Total Asset
Equity
98.93
1.07
Total
100.00
107
CHAPTER
8
CONCUSION
108
After the deep study of insurance sector of India, I can tell that this is
the sector, which has most business opportunities perhaps in India.
Insurance industry is one of the fastest sectors in India. Insurance
sector has been growing by 25% to 30% and it is expected to increase
by 50% in coming 5 years. After the opening up of the insurance
sector, it has become much competitive and insurance awareness
among people has increased.
As far as the comparison of Reliance Life Insurance and other players
is concerned, there are both positive as well as negative impacts on
both the sides.
For Reliance Life Insurance, the negative aspect is that its market
share is low.
For private players the negative aspect is that they have to fight with
the public sector giant which is established player with a high brand
value.
109
But the positive impact is that the life insurance awareness has
increased and the business of Reliance Life Insurance has increased.
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110
www.reliancelife.com
www.indiainfoline.com
www.bimaonline.com
www.google.com
Life Time Magazine of Reliance Life Insurance
Net Bios Computer Academys Life Insurance Book
111
CHAPTER
10
ANNEXURE
112
Questionnaire
NAME: ___________________________________________
113
114
Q.5 Would you prefer Reliance Life Insurance or LIC for buying the life
insurance policy?
(a) Reliance Life Insurance
(b) LIC
PERSONAL DETAILS
1) Age
(a) 18 to 30
(b) 31 to 50
(c) 51 to 65
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2) Occupation
(a) Service
(b) Business
(c) Profession
(d) Housewife
(e) Retired
3) Income
(a) 50,000 to 1,00,000
(b) 1,00,000 to 5,00,000
(c) More than 5,00,000
4) Family members
(a) 2
(b) 3
(c) 4
(d) More than 4
116