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Projecta 101111005103 Phpapp01 PDF
Projecta 101111005103 Phpapp01 PDF
PROJECT REPORT ON
DECLARATION
I hereby declare that this project work entitled Comparative analysis of insurance
Product with different life insurance companies is my work, carried out under the
guidance of my faculty guides PROF. K.V. RAMNA and my company guide Mr.
VIKASH KUMAR. This report neither full nor in part has ever been submitted for
award of any other degree of either this management college or any other management
college.
ANUBHAV BHUSHAN
Regd. No- S0906
P.G.D.M.
C.S.R.E.M. , PARALAKHEMUNDI
ACKNOWLEDGEMENT
It gives me immense pleasure to express my deep sense of gratitude to DR. (PROF)
GURUCHARAN PATRA, Director, CSREM, Paralakhemundi, for his valuable
guidance and consistent supervision throughout the course.
I am also thankful to Mr. VIKASH KUMAR, my Company Guide of Reliance Life
Insurance company LTD, Ranchi, for his valuable guidance for preparing the Final
Report and also for providing the necessary facilities.
I am extremely thankful to PROF. K.V. RAMANA , Faculty Guide of CSREM,
Paralakhemundi for their timely guidance and support throughout the project work.
Finally I am indebted to our other faculty members, my friends and my parents who gave
their full-fledged co-operation for successful completion of my project.
It was an indeed learning experience for me.
ANUBHAV BHUSHAN
Regd. No. - S0906
Content
Page No.
CHAPTER No. 01
1.1. Abstract
.. 01
1.2. Introduction
...02
...02
..04
..04
..05
CHAPTER NO. 02
2. Review of Literature
06
06
07
07
08
10
CHAPTER NO. 03
3.1. Insurance Regulatory and Development Authority of India, Act10
Content
Page No.
CHAPTER NO. 04
4.1. Different Insurance Companies ..11
4.1.1. Top 10 Insurance Companies in India..13
4.2. Market share of Indian Insurance Companies ...17
4.3. Booming Insurance Market
..18
CHAPTER NO. 05
5.1. Advantage of Life Insurance
.19
CHAPTER NO. 06
6.1. Type of Insurance product
..22
..22
...22
. 22
...23
...23
...24
6.1.7. ULIP
.. 24
Content
Page No.
CHAPTER NO. 07
7. 1. Marketing mix in Insurance Industry
..25
7.1.1. Introduction
..25
..26
. 27
7.1.3.2. Price
.28
7.1.3.3. Place
.30
7.1.3.4. Promotion
..31
7.1.3.5. People
..32
7.1.3.6. Process
...32
35
CHAPTER NO. 09
9.1. Changing face of Indian Insurance industry
37
Content
Page No.
CHAPTER NO. 10
10.1. Valuing the invaluable
.42
.42
.42
CHAPTER NO. 11
11.1. Profile of the Company
.46
.49
.49
CHAPTER NO. 12
12.1. Other Player in Insurance Industry
12.1.1. Birla Sun Life
56
...56
59
Content
Page No.
60
13.1.1. Source
60
60
61
13.1.4. Methodology
61
.61
.62
.62
.62
..63
..63
13.1.8. Result
..73
..74
13.1.10. Conclusion
...75
13.1.11. Limitation
76
BIBLIOGRAPHY
.77
ANEXXURE
.78
Particulars
Page No.
Fig. No. 1
17
Table No. 1
17
Fig. No. 2
38
Table No. 2
54
Fig. No. 3
64
Table No.3
64
Fig. No. 4
65
Table No. 4
65
Fig. No. 5
66
Table No. 5
66
Fig. No. 6
67
Fig. No. 7
Types of Plan
68
Fig. No. 8
69
Fig. No. 9
70
Fig. No. 10
71
Chapter No. 01
1.1. Abstract
Today every sector is very competitive sector and I find that insurance sector has the
maximum growth and potential as compared to other sectors. Insurance has the maximum
growth rate of 75% while as other sector has maximum 12-15% of growth rate. This
growth potential attracts to enter in this sector and Reliance Life Insurance has given me
the opportunity to work and get experience in highly competitive and enhancing sector.
This project studies the existing management practices in the channel development
process and various benefits derived by them in Reliance Life Insurance .The project is
all about comparative analysis of different insurance products of different companies.
The objective of the project was to check the awareness level of Insurance and attitude of
the people towards insurance in the current market. Survey was also done regarding the
preference of insurance sector depending on the age group (whether they prefer
private players or public companies) . In the beginning, we gain an insight about the
company and its values and inherit them in our life, and then studied different types of
insurance plans like ULIPs, term plan, endowment plan, and various other plans. Now,
on to the statistical part, we designed a questionnaire that will provide a base for studying
the awareness level and perception of the life insurance. The project helped me in
developing my communication skill and interpersonal skills. During the tenure of my
internship I learned a lot from my seniors, colique etc but above all I learned a lot from
my own personal experience.
1.2. INTRODUCTION
1.2.1.
INSURANCE INDUSTRY
The history of life insurance in India dates back to 1818 when it was conceived as a
means to provide for English Widows. Interestingly in those days a higher premium was
charged for Indian lives than the non-Indian lives as Indian lives were considered more
risky for coverage. The Bombay Mutual Life Insurance Society started its business in
1870. It was the first company to charge same premium for both Indian and non-Indian
lives. The Oriental Assurance Company was established in 1880. The General insurance
business in India, on the other hand, can trace its roots to the Triton (Total) Insurance
Company Limited, the first general insurance company established in the year 1850 in
Calcutta by the British. Till the end of nineteenth century insurance business was almost
entirely in the hands of overseas companies .Insurance regulatation formally began in
India with the passing of the Life Insurance Companies Act of 1912 and the provident
fund Act of 1912. Several frauds during 20's and 30's sullied insurance business in India.
By 1938 there were 176 insurance companies. The first comprehensive legislation was
introduced with the Insurance Act of 1938 that provided strict State Control over
insurance business. The insurance business grew at a faster pace after independence.
Indian companies strengthened their hold on this business but despite the growth that was
witnessed, insurance remained an urban phenomenon.
The Government of India in 1956, brought together over 240 private life insurers and
provident societies under one nationalized monopoly corporation and Life Insurance
Corporation (LIC) was born. Nationalization was justified on the grounds that it would
create much needed funds for rapid industrialization. This was in conformity with the
Government's chosen path of Statelead planning and development. The (non-life)
insurance business continued to thrive with the private sector till 1972. Their operations
were restricted to organized trade and industry in large cities. The general insurance
industry was nationalized in 1972. With this, nearly 107 insurers were amalgamated and
grouped into four companies- National Insurance Company, New India Assurance
Company, Oriental Insurance Company and United India Insurance Company. These
were subsidiaries of the General Insurance Company (GIC).The general insurance
business was nationalized after the promulgation of General Insurance Business
(Nationalizations) Act, 1972.The post-nationalization general insurance business was
undertaken by the Genera
1.2.2.
The project deals with comparative analysis of different insurance products offered by
Insurance companies.
1.2.3.
determine
customer
preference
towards
private
insurance
The entry of foreign MNCs and the conductive business environment fostered by the
government, it is no wonder that the re-entry of private insurance has marked a second
coming for the sector. In just five years, the sector has undergone a makeover, offering
more choice, better services, quicker settlement, tighter regulation and greater
awareness s the environment become more and more competitive and services and
products become alike, creating a differentiation is becoming extremely tough. Thus, the
main objective of my project was to find out the preference of people regarding insurance
companies, which would help R.L.I. employees to market their product. The study then
goes on to evaluate and analyze the findings so as to present a clear picture of recent
trends in the Insurance sector.
Chapter No. 2
2. REVIEW OF LITERATURE
2.1. About Insurance Industry
"Insurance
is
contract
between
two
parties
whereby
one
party
called
insurer undertakes in exchange for a fixed sum called premiums, to pay the other party
called insured a fixed amount of money on the happening of a certain event."Insurance is
a protection against financial loss arising on the happening of an unexpected
event. Insurance companies collect premiums to provide for this protection. A loss is paid
out of the premiums collected from the insuring public and the Insurance Companies act
as trustees to the amount collected. For Example, in a Life Policy, by paying a premium
to the Insurer, the family of the insured person receives a fixed compensation on the
death of the insured. Similarly, in a car insurance, in the event of the car meeting with an
accident, the insured receives the compensation to the extent of damage. It is a system by
which the losses suffered by a few are spread over many, exposed to similar risks.
2.2. Logic of insurance
It is a system by which the losses suffered by a few are spread over many, exposed to
similar risks. Insurance is a protection against financial loss arising on the happening of
an unexpected event. Insurance companies collect premiums to provide for this
protection. A loss is paid out of the amount premiums collected from the insuring public
and the Insurance Companies act as trustees to the collected.
insurance sector is considered as a booming market with every other global insurance
company wanting to have a lion's share. Currently, the largest life insurance company in
India is still owned by the government.
started
by Europeans
in Kolkata to
cater to the
needs
of
European community. Pre-independent era in India saw discrimination among the life of
foreigners and Indians with higher premiums being charged for the latter. It was only in
the year 1870,
insurance
Bombay
Mutual
Life Assurance
Society,
the
first
Indian
company covered Indian lives at normal rates.At the dawn of the twentieth
century, insurance companies started mushrooming up. In the year 1912, the Life
Insurance Companies Act, and the Provident Fund Act were passed to regulate the
insurance business. The Life Insurance Companies Act, 1912 made it necessary that the
premium rate tables and periodical valuations of companies should be certified by an
actuary. However, the disparage still existed as discrimination between Indian and
foreign companies. The oldest existing insurance company in India is National Insurance
Company Ltd, which was founded in 1906 and is doing business even today. The
Insurance industry earlier consisted of only two state insurers: Life Insurers i.e. Life
Insurance Corporation of India (LIC) and General Insurers i.e. General Insurance
Corporation of India (GIC). GIC had four subsidiary companies.With effect from
December 2000, these subsidiaries have been de-linked from parent company
and
Assurance, Oriental Insurance, and United India Insurance which were headquartered in
each of the four metropolitan cities.
Chapter No. 3
3.1. Insurance Regulatory and Development Authority (IRDA) Act, 1999
Till 1999, there were not any private insurance companies in Indian insurance sector. The
Govt. of India then introduced the Insurance Regulatory and Development Authority Act
in 1999, thereby de-regulating the insurance sector and allowing private companies into
the insurance. Further, foreign investment was also allowed and capped at 26% holding
in the Indian insurance companies. In recent years many private players
entered
strength
population are covered under some insurance scheme. With more and more private
players in the sector this scenario may change at a rapid pace
Chapter No. 4
4.1. Different Insurance Companies
Insurance is an upcoming sector, in India the year 2000 was a landmark year for life
insurance industry, in this year the life insurance industry was liberalized after more than
fifty years. Insurance sector was once a monopoly, with LIC as the only company, a
public sector enterprise. But nowadays the market opened up and there are many private
players competing in the market. There are fifteen private life insurance
companies has entered the industry. After the entry of these private players, the market
share of LIC has been considerably reduced. In the last five years the private players is
able to expand the market (growing at 30% per annum) and also has improved their
market share to 18%.For the past five years private players have launched many
innovations
in
the
industry
in
terms
of
products,
market
channels
and
advertisement of products, agent training and customer services etc.The various life
insurers entered India:-
L.I.C.
ICICI Prudential
Bajaj Allianz
SBI Life
HDFC Standard
Birla sun life
Reliance life insurance
Max Newyork
Om kotak
AVIVA
TATA AIG
MetLife
Figure No. 1
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Company
L.I.C.
ICICI Prudential
Bajaj Allianz
SBI Life
HDFC Standard
Birla sun life
Reliance life insurance
Max Newyork
Om kotak
AVIVA
TATA AIG
MetLife
ING Vysya
Shriram Life
Table No. 1
Market share
48.10%
13.70%
10.30%
6.20%
4.10%
3.40%
3.40%
2.40%
1.90%
1.80%
1.50%
1.40%
1.20%
0.30%
India. Based on this analysis, the report gives a future forecast of the market that is
intended as a rough guide to the direction in which the market is likely to move. Total life
insurance premium in India is projected to grow Rs 1,230,000 Crore by 2010-11.
Total non-life insurance premium is expected to increase at a CAGR of 25% for the
period spanning from 2008-09 to 2010-11.
With the entry of several low-cost airlines, along with fleet expansion by existing ones
and increasing corporate aircraft ownership, the Indian aviation insurance market is all
set to boom in a big way in coming years.
Home insurance segment is set to achieve a 100% growth as financial institutions have
made home insurance obligatory for housing loan approvals
A booming life insurance market has propelled the Indian life insurance agents into
thetop 10 country list in terms of membership to the Million Dollar Round Table
(MDRT) an exclusive club for the highest performing life insurance agent.
Chapter No. 5
5.1 ADVANTAGES OF LIFE INSURANCE
5.1.1
the full sum assured is made available under a life assurance policy, whereas under
other savings schemes, the total accumulated savings alone will be available.
years from
Chapter No. 6
6.1 Types of insurance products
6.1.1. Term assurance planIn insurance language this is a pure risk cover and can be described as an insurance or risk
management product in its purest and simplest form. In case of your untimely death, your
dependents will receive the risk-cover amount or the sum assured. On the other hand, there
is no survival benefits if you survive the policy term, and you also do not get back the
premiums paid.
6.1.2. Endowment assurance plansIt is a traditional investment-cum-insurance plan. In other words, it provides both life
cover (in the event of death of life insured) or maturity benefits if he/she survives the
policy term. Endowment plans are typically front-loaded. Therefore it makes sense for you to
remain in the policy for at least 12-15 years.
6.1.3. Money-back policyIt is a variant of the endowment assurance policy-the difference is that you get the
survival benefits intermittently over the life of the policy. Thus taking care of his lump-sum
monetary requirements to enable him to meet his financial goals and major commitments.
The maturity benefit is the sum assured value less the survival benefits already paid under
the policy, plus bonuses accrued, if any. In case of untimely death the nominee will
receive
the
entire
sum
6.1.4. Whole life planThis policy provides the life assurance cover for almost the entire life. Most of the insurance
companies provide protection up to the age of 100 years. The sum assured is paid to you once
you reach this age, and the policy is terminated. In this payment of premium is for whole life,
and the sum assured is paid to your nominee in the event of your death. In other words, this is
equivalent to a term plan over your lifetime.
6.1.5. Pension planA pension plan can be looked as more of an investment product offered
cater
to
the
golden
retirement
years
of
an
by insurers to
retirement plans, these are designed to ensure that you are financially independent during
your retirement years. Most of the pension plans also provide an optional life assurance cover
in them.
6.1.6. Child planIt basically aims at ensuring the achievement of life goals of your child. The goal can be
higher education, financial help in establishing a business or profession, or even
marriage. In a child plan, the life assured can be the parent or the child. The beneficiary for
the policy, however, is the child. As a child is a minor, the life insurance contract is between
the parent and the insurance company. In case of early death of the parent, the premium
payment is waived off by the insurance company and the policy continues as originally
planned.
6.1.7. Unit Linked Insurance PlanULIPs have been the darling of insurance companies, intermediaries and the insured
population alike over the last five years. The main reason for this popularity is the twin
advantage of a pure life cover (insurance component) and a range of investment funds or
options (savings component) to match your risk profile. While the pure life cover provides
the much needed financial security to your dependents in the event of your untimely death,
the savings component allows you to participate in the capital markets and build wealth over
the long-term tenure of the policy.
Chapter No. 7
7.1. Marketing Mix in Insurance Industry (7 P's)
7.1.1. INTRODUCTION:
Wherever there is uncertainty there is risk. We do not have any control over uncertainties
which involves financial losses. The risks may be certain events like death, pension,
retirement or uncertain events like theft, fire, accident, etc. Insurance is a financial service for
collecting the savings of the public and providing them with risk coverage. The main
function of Insurance is to provide protection against the possible chances of generating
losses. It eliminates worries and miseries of losses by destruction of property and death.
It also provides capital to the society as the funds accumulated are invested in productive
heads. Insurance comes under the service sector and while marketing this service, due care is
to be taken in quality product and customer satisfaction. While marketing the services, it is
also pertinent that they think about the innovative promotional measures. It is not sufficient
that you perform well but it is also important that you let others know about the quality of
your positive contributions. The creativity in the promotional measures is the need of the
hour. The advertisement, public relations, word of mouth communication needs due care and
personal selling requires intensive care.
and the General Insurance Corporation (GIC) are the two leading companies offering
insurance services to the users. Apart from offering life insurance policies, they also offer
underwriting and consulting services. When a person or an organization buys an Insurance
policy from the insurance company, he not only buys a policy, but along with it the
assistance and advice of the agent, the prestige of the insurance company and the facilities of
claims and compensation. It is natural that the users expect a reasonable return for their
investment and the insurance companies want to maximize their profitability. Hence, while
deciding the product portfolio or the product-mix, the services or the schemes should be
motivational. The Group Insurance scheme is required to be promoted, the Crop Insurance is
required to be expanded and the new schemes and policies for the villagers or the rural
population are to be included. The Life Insurance Corporation has intensified efforts to
promote urban savings, but as far as rural savings are concerned, it is not that impressive. The
introduction of Rural Career Agents Scheme has been found instrumental in inducing the
rural prospects but the process is at infant stage requires more professional excellence. The
policy makers are required to activate the efforts. It would be prudent that the LIC is allowed
to pursue a policy of direct investment for rural development. Investment in Government
securities should be stopped and the investment should be channelized in private sector for
maximizing profits. In short, the formulation of product-mix should be in the face of
innovative product strategy.
.
7.1.3.2. PRICING:
In the insurance business the pricing decisions are concerned with:
i)
ii) Interest charged for defaulting the payment of premium and credit facility, and
iii) Commission charged for underwriting and consultancy activities.
With a view of influencing the target market or prospects the formulation of pricing strategy
becomes significant. In a developing country like India where the disposable income in the
hands of prospects is low, the pricing decision also governs the transformation of potential
policyholders into actual policyholders. The strategies may be high or low pricing keeping in
view the level or standard of customers or the policyholders. The pricing in insurance is in
the form of premium rates. The three main factors used for determining the premium rates
under a life insurance plan are mortality, expense and interest. The premium rates are revised
if there are any significant changes in any of these factors.
Mortality(deaths in a particular area):
When deciding upon the pricing strategy the average rate of mortality is one of the main
considerations. In a country like South Africa the threat to life is very important as it is
played by host of diseases.
Expenses:
The cost of processing, commission to agents, reinsurance companies as well as registration
are all incorporated into the cost of installments and premium sum and forms the integral part
of the pricing strategy.
Interest:
The rate of interest is one of the major factors which determines peoples willingness to
invest in insurance. People would not be willing to put their funds to invest in insurance
business if the interest rates provided by the banks or other financial instruments are much
greater than the perceived returns from the insurance premiums.
7.1.3.3. PLACE:
This component of the marketing mix is related to two important facets
i)
user in such a way that a gap between the services- promised and services offered is
bridged over. In a majority of the service generating organizations, such a gap is found
existent which has been instrumental in making worse the image problem. The
transformation of potential policyholders to the actual policyholders is a difficult task that
depends upon the professional excellence of the personnel. The agents and the rural career
agents acting as a link, lack professionalism. The front-line staff and the branch managers
also are found not assigning due weightage to the degeneration process. The insurance
personnel if not managed properly would make all efforts insensitive. Even if the policy
makers make provision for the quality upgradation, the promised services hardly reach to the
end users. It is also essential that they have rural orientation and are well aware of the
lifestyles of the prospects or users. They are required to be given adequate incentives to show
their excellence. While recruiting agents, the branch managers need to prefer local persons
and provide them training and conduct seminars. In addition to the agents, the front-line staff
also needs an intensive training programme to focus mainly on behavioral management.
Another important dimension to the Place Mix is related to the location of the insurance
branches. While locating branches, the branch manager needs to consider a number of
factors, such as smooth accessibility, availability of infrastructural facilities and the
management of branch offices and premises. In addition it is also significant to provide safety
measures and also factors like office furnishing, civic amenities and facilities, parking
facilities and interior office decoration should be given proper attention. Thus the place
management of insurance branch offices needs a new vision, distinct approach and an
innovative style. This is essential to make the work place conducive, attractive and proactive
for the generation of efficiency among employees. The branch managers need professional
excellence to make place decisions productive.
7.1.3.4. PROMOTION:
The insurance services depend on effective promotional measures. In a country like India, the
rate of illiteracy is very high and the rural economy has dominance in the national economy.
It is essential to have both personal and impersonal promotion strategies. In promoting
insurance business, the agents and the rural career agents play an important role. Due
attention should be given in selecting the promotional tools for agents and rural career agents
and even for the branch managers and front line staff. They also have to be given proper
training in order to create impulse buying. Advertising and Publicity, organisation of
conferences and seminars, incentive to policyholders are impersonal communication.
Arranging Kirtans, exhibitions, participation in fairs and festivals, rural wall paintings and
publicity drive through the mobile publicity van units would be effective in creating the
impulse buying and the rural prospects would be easily transformed into actual policyholders.
7.1.3.5. PEOPLE:
Understanding the customer better allows to design appropriate products. Being a service
industry which involves a high level of people interaction, it is very important to use this
resource efficiently in order to satisfy customers. Training, development and strong
relationships with intermediaries are the key areas to be kept under consideration. Training
the employees, use of IT for efficiency, both at the staff and agent level, is one of the
important areas to look into.
7.1.3.6. PROCESS:
The process should be customer friendly in insurance industry. The speed and accuracy of
payment is of great importance. The processing method should be easy and convenient to the
customers. Installment schemes should be streamlined to cater to the ever growing demands
of the customers. IT & Data Warehousing will smoothen the process flow. IT will help in
servicing large no. of customers efficiently and bring down overheads. Technology can either
complement or supplement the channels of distribution cost effectively. It can also help to
improve customer service levels. The use of data warehousing management and mining will
help to find out the profitability and potential of various customers product segments.
Chapter No. 8
8.1 Customer for Reliance Life Insurance
Life insurance is one of the best known insurance products today. People buy these products
as investment tools and also as protection for themselves and their families. All the insurance
companies the world over are looking at attracting the eye balls of customer and positioning
their solutions innovatively to cater to niche and specific markets. One of the most critical
aspects both from the view point of the customer and the insurer is getting important and
relevant leads that can be beneficial for both.
There is a big need for market intelligence, database of products and services and secondary
data that can be converted in to leads for the companies to tap. The customer also needs to
have relevant life insurance lead information on products that give him the best value for his
money. The Internet is the best repository for all relevant information both for the potential
customers as well as the insurance companies. The insurance companies can put up all kinds
of data and information on their websites that a potential customer can conveniently use to
arrive at a decision. On the other end of the spectrum, a customer can use relevant keywords
to search for information on the Internet to get hold of a good insurance product. So, the key
lies to getting Search Engine Optimization done by the insurance companies so that every
time an insurance specific keyword is used to search the Internet, their website is one of the
first to be displayed. This assures a large internet traffic that can help generate potential leads
from the information and digital footprints left by the visitors and can be later converted to
paying customers. Various B2B and B2C portals offer a host of innovative services that can
be used as leads by the insurance companies and also the potential customers who are
looking for a good deal in todays insurance jungle. Nowadays, banks have entered the
insurance domain and since they have a variety of customers already in their folds, they can
use their readily available database as leads to contact potential customers for their insurance
products. For consultants and insurance agents, it is imperative that they get associated for a
symbiotic relationship with retail shops and chains via the internet as well as otherwise to
gain maximum visibility and use tools such as advertisement, mailers, flyers and sales
incentives to gather life insurance leads and convert them to potential customers. The
customer gets the best of everything in the present scenario. All that a prospective client has
to do is log on to the internet, or call a toll free number or walk into an office to get the best
deal. However, it is always good to use all the resources, leads and information available to
ensure that he decides on the best product available. There are many ways in which both the
customer and the insurer can get access to all important life insurance lead. The trick lies in
using the leads well to get the most out of a particular situation. The endeavor of a company
is to position itself favorably so that the customer chooses him over other similar products
while the job of the client is to use the leads in such an effective way so that there is no
reason for him to repent later that he could have opted for a better deal.
Chapter No - 9
9.1 Changing face of Indian insurance industry
Indian life-insurance market is the target market of all the companies who either want to
extend or diversify their business. To tap the Indian market there has been tie-ups
between the major Indian companies with other International insurance companies to start
up their business. The government of India has set up rules that no foreign
insurance company can setup their business individually here and they have to tie up with an
Indian company and this foreign insurance company can have an investment of only 24% of
the total start-up investment. Indian insurance industry can be featured by:
Low market penetration
Ever growing middle class component in population.
Growth of customers interest with an increasing demand for better insurance
products.
Application of information technology for business.
Rebate from government in the form of tax incentives to be insured.
Today, the Indian life insurance industry has a dozen private players, each of which are
making strides in raising awareness levels, introducing innovative products and increasing
the penetration of life insurance in the vastly underinsured country. Several
of private insurers have introduced attractive products to meet the needs of their target
customers and in line with their business objectives
continuous effort to lure the customers with new product offerings. However, the market
share of private insurance companies remains very low -- in the 10-15% range. Even to this
day, Life Insurance Corporation (LIC) of India dominates Indian insurance sector. The heavy
hand of government still dominates the market, with price controls, limits on ownership, and
other restraints.
Emerging Areas
Healthcare Insurance & Pension Plans
Mutual fund linked insurance products
Multiple Distribution Networks .i.e. Bank assurance
The upward growth trend started from 2000 was mainly due to economic policies adopted by
the then Indian government. This year saw initiation of an era of economic liberalization and
globalization in the Indian economy followed by several reforms and long-term policies that
created a perfect roadmap for the success of Indian financial markets. On the basis of several
macroeconomic factors like increase in literacy rate & per capita income, decrease in death
rate and unemployment, better tax rebates, growing GDP etc., we estimate that the Indian
insurance sector will grow by $28.65 billion and reach $76.54 billion by 2011 with a CAGR
(compounded annual growth rate) of 12.44% and a growth of 59.82%.
Chapter No. 10
10.1. Valuing the invaluable
Both under insurance and over insurance can often be attributed to the lack of proper
understanding of the exact insurance needs for oneself and the family, and the failure to
spot and cover all liabilities properly and adequately, or being over-conservative in this
regard.
10.1.1.
Under Insurance
Under insurance, typically occurs when the existing financial liabilities and insurance
needs are fully taken care of. In the event of the untimely death of the only (or the main
earning) member of the family, his financial liabilities would obviously fall on his
dependents, leaving them in a state of financial distress that could threaten their need of
sustenance.
10.1.2.
Cover Insurance
Conversely, there are also instances where individuals indulge in life insurance covers that
far exceed in value than what is actually required. This is a classic case of over insurance,
which leads to an unnecessarily higher premium payment, leaving you much poorer. It results
in unnecessary expenditure that could otherwise be wisely invested Elsewhere. The need for
an adequate insurance cover is never static and keeps on varying with changes in the life
stages and important events of an individual. The table below provides an insight into the
various life stages and events when life insurance cover usually requires a revision.
sum, because her contribution to the family, in form of household services, has monetary
value.
3. I will get back all my premiums when I surrender my endowment policy
prematurely.
You couldnt be more wrong! You only get back the surrender value, which is based on
the paid-up value is a proportion of the original sum assured based on the number
of years for which premium was paid against the total premium-paying years. The
paid-up value of the policy is also calculated and available as per the policy conditions.
4. Insurance is primarily useful as a tax-saving instrument.
Again, this is a huge misconception! While you do get attractive tax
breaks, the primary objective of insurance is risk mitigations followed by wealth creation for
the long term. Many people end up taking this myth too seriously, particularly without
considering the costs and benefits involved.
5. After three years, I can walk away from any ULIP, along with the accrued
investment or the fund value.
Sure, you can do that! However, you need to remember that a ULIP, at least
initial
years,
is very different
from a
mutual
fund. While
in
the
charges o nominal fund management charge every year, a ULIP is front loaded. That means a
significant chunk of your premium is allocated across various charges in the initial years of
the policy and only the balance gets invested in a fund of your choice. As these charges taper
off and average over time, it makes sense to stay in a ULIP for at least 15 years. Therefore, if
your investment horizon is just 3-5 years, you better off in a mutual fund, and you can take
out a separate term assurance plan for the required risk cover.
Chapter No. 11
11.1.
PROFILE OF ORGANIGATION
Reliance a place on the global Fortune 500 list, the first ever Indian private company to
do so.
Dhirubhai is widely regarded as the father of Indias capital markets. In 1977, when
Reliance Textile Industries Limited first went public, the Indian stock market was a place
patronised by a small club of elite investors which dabbled in a handful of stocks.
Undaunted, Dhirubhai managed to convince a large number of first-time retail investors
to participate in the unfolding Reliance story and put their hard-earned money in the
Reliance Textile IPO, promising them, in exchange for their trust, substantial return on
their investments. It was to be the start of one of great stories of mutual respect and
reciprocal gain in the Indian markets.
Under Dhirubhais extraordinary vision and leadership, Reliance scripted one of the
greatest growth stories in corporate history anywhere in the world, and went on to
become Indias largest private sector enterprise.
Through out this amazing journey, Dhirubhai always kept the interests of the ordinary
shareholder uppermost in mind, in the process making millionaires out of many of the
initial investors in the Reliance stock, and creating one of the worlds largest shareholder
families.
11.1.1. ABOUT RELIANCE
R.L.I. Company Limited is a part of Reliance Capital Ltd. of the Reliance - Anil
Dhirubhai Ambani Group. Reliance Capital is one of Indias leading private sector
financial services companies, and ranks among the top 3 private sector financial services
and banking companies, in terms of net worth. Reliance Capital has interests in asset
management and mutual funds, stock broking, and general insurance, proprietary
investments,
private
equity
and
other
activities
in
financial
services.
Tax Benefits
It is one kind on benefit from life insurance policy . Maximum people buy insurance
because they want deduction in their income tax.
Premiums paid for Life insurance - Deduction under Section 80C
1. Category of assesses allowed deduction: Individual assessee and Hindu
Undivided Family assessee.
2. Eligible Savings: Premiums paid or deposited by assessee to effect or to keep in
force insurance on the life of following persons:
In case of individual assessee Himself/Herself, spouse, children of such
individual
In case of HUF assesses any member
3. 20% limit: If the amount of premium paid in a financial year for a policy is in
excess of 20% of the actual capital sum assured, then deduction will be allowed
only for premiums upto 20% of the sum assured.
4. Limit on amount of deduction: Deduction will be restricted to investments upto
Rs 100,000 in savings specified under Section 80C (including life insurance
premiums). The limit of deduction under Section 80C will be part of the overall
limit prescribed under Section 80CCE.
5. Disallowance: This benefit will be reversed if the policy is terminated/cease to be
inforce within 2 years after the date of commencement of policy.
Premiums paid for Pension plans - Section 80CCC
1. Permitted Deduction: Section 80CCC allows for deduction of premiums paid
under a pension scheme. As per this Section, the whole of amount paid or
deposited (excluding interest or bonus accrued or credited to the assessees
account, if any) as does not exceed the amount of Rs 100,000 is eligible for
deduction from the total income.
2. Receipt under Policy: Amounts received on surrender (whole/part) of annuity
plan, amounts received as Pension is taxed as income.
3. Limit: The limit of deduction under Section 80CCC will be part of the overall
limit prescribed under Section 80CCE.
3. Deduction and upper limit: The qualifying amounts under Section 80D for self,
spouse and dependent children is upto Rs. 15,000/- and additional deduction upto
Rs. 15,000/- for the parents. However, a higher amount of upto Rs 20,000/- is
permitted if the person, for whose health insurance the premium was paid, was
aged 65 years or more at any time during the financial year in which the premium
was paid. Such amounts of premium paid would be allowed as deduction from the
total income of the assessee.
Benefits under insurance policy - Section 10(10D)
As per Section 10(10D) of Income tax Act, 1961, any sum received under a life insurance
policy, including the sum allocated by way of bonus on such policy is exempt from tax.
However, this rule does not apply to following amounts:
any sum received other than as death benefit under an insurance policy which has
been issued on or after April 1 2003 and if the premium paid in any of the years
during the term of the policy is more than 20% of the sum assured.
citizen Rate
years)
(Above 65 years)
0 160,000
0 - 190000
0 240000
Nil
Rs. 160,001 to Rs. 500,000 Rs. 190,001 to Rs. Rs. 240,001 to Rs. 10%
500,000
500,000
500,001 to
800,000
800,000
Rs. 20%
30%
Table No. 1
Chapter No. 12
12.1 OTHERS PLAYERS
assets under management of over us$ 404.7 BILLION (as on 31 March, 2008). It is a
leading performer in the life insurance market in Canada.Birla
sun
life
insurance
(BSLI) has been operating for 7 years. It has contributed significantly to the
growth and development of the life insurance industry in India. It pioneered the launch of
unit linked life insurance plans amongst the private player in India. It pioneered the
launch of united linked life insurance plans amongst the private players in India. It
was the first player in industry to sell its policies through the Bancassurance
route and through the internet. It was the first private sector player to introduce a pure
term plan in the Indian market. BSLI has covered more than 2 million lives since it
commenced operations.
Mission
"Explore and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering
resources for economic development."
Vision
"A trans-nationally competitive financial conglomerate of significance to societies and
Pride of India Every day we wake up to the fact that more than 220 million lives are part
of our family called LIC.We are humbled by the magnitude of the responsibility we carry
and realize that the lives that are associated with us are very valuable indeed. Although
this journey started five decades ago, we are still conscious of the fact that, while
insurance may be a business for us, being part of millions of lives every day for the past
52 years has been a process called TRUST.
are
carried
out
from
second largest non life insurer in India having a large market presence in Northern and
Eastern India.
Chapter No. 13
13.1. RESEARCH METHODOLOGY
13.1 Sources
The success of any Insurance company depends on how well they are able to align
with the
objectives
and
needs
of
individual
customers,
and
is
able
to
provide proper solutions to them. To know how a company is performing and whether
they have any cutting edge advantage over competitors, an intensive study of the market
is absolutely necessary. In order to understand the performance of different companies in
the market, we did two types of surveys, primary survey and secondary survey.
13.1.2. Primary survey
Primary survey included: Visiting websites and fixing appointments with their agents.
Creation of database of prospective clients from different sources
calling them up to fix appointment and then visiting them.
Prepare a questionnaire for the market survey .
Meeting different people to know their views, perception and
preference of different insurance companies.
13.1.3
Secondary survey
Secondary survey included of consulting books, magazines, journals, internet and
also taking reference from:library.
Internet.
R.L.I. reports
13.1.4. Methodology
We would go in for a qualitative research as our objective is to judge the
perception and preference of different insurance products. The research would be
done from primary data.
potential customers of R.L.I. from different sectors as Reliance deals in many sectors of
business.
13.1.5.2.
Sampling Technique :
The sampling technique that is adopted is the simple random sampling wherein
every element in the target population has an equal chance or probability of getting
selected in the sample. That means every unit of the population who is more is in the
above mentioned age group, have an equal chance of getting selected
13.1.5.3
Sample Size:
Figure No. 1
No. of
respondent
Yes
No
85
15
Table No. 2
From the survey it was found out that 85% of the respondents had a life insurance
policy whereas 15% of the respondents didnt had a life insurance policy.
Insurance Company
38%
Private Company
62%
Public Company
Figure No.2
Company
Private
Company
Public Company
No. of
respondent
22
28
Table No. 3
Most of the people want to invest his money in public insurance company and in private
insurance company only 22 respondent want to invest their money. Most of the people
buy insurance from LIC and there are 24 private insurance company in India.
No. of Respondents
Figure
No.3
No. of
Respondents
LIC
ICICI Pru
Reliance Life Insurence
Bajaj life Insurance
Bharti AXA life
INSURANCE
19
12
9
6
4
Table No.4
The finding which came out from the survey was that 40% of the respondents who have a
life insurance cover bought life insurance from Life Insurance Corporation of India
(LIC). LIC is the most preferred brand in the insurance industry because it is the onl
only
government company which offers insurance. People prefer to buy insurance from LIC
because of the security being one of the prime factors. In the figure we can also see that
nowadays people mindset have changed towards insurance.
Figure No. 4
After the survey it was found that most of the respondents took policy or life insurance
cover from the suggestions of their friends or family.And only 23 respondents
took policy on the recommendation of the agents.
Type of plan
The respondents were asked which type of plan they go in for when they
take up insurance cover or policy.
Figure No. 5
After the survey it was found that term plan was the most preferred plan. Next on
the list was endowment plan. Pension plan and health plan are the
least preferred by customers .
Figure No.6
Most of the people want to invest his money in public insurance company and in private
insurance company only 7 to 8 respondent want to invest their money. Most of the people
buy insurance from LIC and there are 24 private insurance company in India.
Figure No. 7
If we see the younger who doing job or business or making planning for his future then
they are go with TATA AIG.
Pie Chart
Figure No. 8
Here we see that LIC have more number of market share. People believe more in LIC
because this is public sector insurance company.LIC have 60% market share in insurance
industry but other like private secter insurance companies have less number of market
share comparision than LIC.
Figure No. 9
People who buy policy from TATA AIG that people give highest rank to their insurance
company. Reliance have 10% share of their rank.
13.1.8. Results
After the survey it was found that still major portion of customers go for public insurance
companies, but with the entry of more and more private companies the scenario is
changing rapidly, people with a need of more and better returns are opting for private
companies, and this can be justified by the increasing market share of private companies
in the Indian insurance sector.
There are various ways in which private companies are found much more lucrative than
public companies and the facts which support this statement are as follows:1. Versatility of products.
2. Efficient fund managers.
3. Better customer services.
4. More returns.
5. Regular follow up.
6. Quicker settlement
13.1.10. Conclusion
Insurance is one sector that witnessed continuous growth owing to the
reforms in 2000. The insurance sector is likely to attain a size of Rs.
2,00,000 crore ($ 51.2 billion) in 2009-10. In life insurance, the business
grew by 23.3% to Rs. 93,000 crore in 2007-08 (Source:Assocham).
The
13.1.11. Limitations
BIBLIOGRAPHY
Marketing Management- Philip Kotlor, edition-twelth edition.April 2004,.
Publisher- Prentice Hall of India (p) Ltd, Analyzing Consumer Markets & Buyer
behavior & consumer behaviour.
WEBSITES
www.reliancelifeinsurence.com
www.irdaindia.org
wikipedia.org
www.selling-well.com
www.insureme.com
www.advisortoday.com
www.unlockthegame.com
www.lic.com
Annexure
QUESTIONNAIRES
CLIENT DETAIL
NAME:_____________________________SURNAME__________________________
_____
DATE OF BIRTH: ______________ (As On Document) Age
Proof:_______________________________________________
PRESENTADDRESS_____________________________________________________
________________________________________________________________________
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LANDMARK: ______________________PIN ___________
PHONE NO _____________ MOBILE________________
PERMANENT ADDRESS:
____________________________________________________________
________________________________________________________________________
_____EDUCATION: _____________
OCCUPATION: _______________________
DESIGNATION: ___________________________
GROSSINCOME:____________________________
NO. OF YEAR JOB / BUSINESS: _______________________
NAME OF
ORGANISATION:_______________________________________________
PREVIOUS POLICY DETAILS (IF ANY):
_______________________________________________________________
PRODUCT: ______________ _________PREMIUM __________________________
MODE : Yearly/Half-yearly/monthly
Payment Mode: CASH / DD / CHEQUE
Reference:
1. Mr./Mrs./Miss.____________________Address:_____________Mobile No:
2. Mr./Mrs./Miss.____________________Address:_____________Mobile No:
1. Yes
2. No
3. In which company
Very Good
Good
Fair
Bad
Family
Agent
Others..
Endowment Money
Children
Pension
Plan
Plan
Plan
Plan
back
Plan
ULIP
Health
Plan
Thank you !