ON ³RECRIUTMENT AND SELECTION IN BHARTI INFRATEL´ Submitted for the partial fulfilment of the requirements For the award of degree

Degree Programmed of G.B. Technical University, NOIDA

Submitted by
AMIT KUMAR M.B.A. III Sem. Roll No. 0927170007

Submitted To

Bharat Institute of Technology
Partapur Byepass, Meerut (Affiliated to Uttar Pradesh Technical University, LUCKNOW)


I Rachna singh student of MBA III Semester from Bharat Institute of Technology. Here by declares that the project report titled ³RECRUITMENT AND SELECTION IN BHARATI INFRATEL´ is completed and submitted under the valuable guidance of Ms. Parul Agarwal Faculty of Management. The imperial finding in this report is based on the data collected by me. This project has not been submitted to U.P.T.U., Lucknow or any other university for the purpose of compliance of any requirement of any examination or degree.


AMIT KUMAR Roll No.0927170007 MBA (III) sem


µWhen a person is help, guide and co-operated his or her heart is bound to pay gratitude.¶ It is not a single man¶s effort which is sufficient for the accomplishment of a Research. Various factors, situations and persons integrate to provide the background for accomplishment of a task requires the effort of so many people and the work is no different. I acknowledge here the names of those people who have been instrumental in preparation of this Research. Firstly, I would like to thank my project guide Mr. Mukul Raghav, H.R. Manager, Bharti Infratel Centre, United World Cyber Work, Noida, who has been a constant source of inspiration for me during the completion of this project. He gave me invaluable inputs during our endeavor to complete this project. I am sincerely indebted to Mr. M.P. Sharma (Administrator) for his valuable suggestion and inspiration to undergo this study and his unstilted help which he gave for the completion of this Research. My grateful thanks are also due to various others technocrats, who inspire of there multifarious pre-occupation, were kind enough to spare time to grant me personal help and others cooperative activities. I would also like to thanks co-operation for providing the recruitment & selection and supplemental information used in this study.


The purpose of my research report was to learn the practical application of Recruitment and Selection Process and its importance in Bharti Infratel along with the HR policies of Bharti Infratel which prides itself to be the market leader. While carrying out the study I have gained a good amount of knowledge and insights of how HR department works but I have touched the tip of iceberg. There was more to learn but due to constraint of time it was not possible. The HRD manager has to work with the missionary spirit. Unlike many roles in an organization where tangible short- term benefits can be obtained, it is difficult for HRD functionary to demonstrate any tangible short- term accomplishment. Yet HRD managers are tempted to show to the top management, line manager and themselves that they are making things happen through training program, recruitment& selection. In Bharti Infratel a meticulously natural team stands at the very heart of the group. 4,000 Personnel evince perfect camaraderie. A steadfast dedication to qualify an attainment of maximum team potential is the touchstones of the company. The company is engaged in constant learning process through intensive selection and training program. Indeed, the aspiration is to shape a winning team of self motivated, empowered, professionals with knowledge and confidence to take independent decision. Bharti Infratel recognizes each employee¶s individuality, ability and efforts and also applauds for their contribution to the success of the group.



TABLE OF CONTENTS y y y y y Introduction Objective of Study Recruitment & selection process in Bharti Infratel Research methodology o Research design o Data collection 1 36 38 44 66 69 71 85 88 90 93 97 99 y y y y y y y y y y y y y y Data Analysis Findings Limitations Conclusion Recommendations Bibliography Questionnaire 5 .


Private insurance companies are essentially joint ventures with global insurance companies holding a maximum of 26 percent stake. Its ad spend more than doubled to Rs 81 crore in the fiscal 2003. While the private insurance companies have attained 13 to 14 percent share of the overall insurance market. This partly explains why the LIC increased its advertising spend multifold since the insurance sector was privatized. their share in key metros (Mumbai and Delhi) is as high as 30 to 40 percent. There is another dimension to the insurance numbers game. ICICI Prudential. driving sales. they have seized about 14 percent of the market. The competitors are basically the private insurance companies for example.CHAPTER 1: INTRODUCTION OF THE STUDY This study is based on a comparison between the Life Insurance Corporation of India with its competitors. prior to the insurance industry being privatized. mainly by creating alternative distribution channels while in contrast most of the LIC policies continue to be sold through its tied agency network. because they see India emerging as one of the biggest markets in the Asian region. 7 .Bharti AXA. Private players have certainly done their bit to increase the penetration levels of insurance. the private insurers sector also steadily increased their ad spend. Of course. Private Players in the life insurance business are growing at a scorching pace. Birla Sun Life etc. AEGON Religare. against Rs 37 crore in 1999-2000. Within three years of their inception. The multi-channel approach adopted by private insurance companies has proved to be a boon in terms of costing and their ability to capture business. thereby. The foreign partners are investing heavily in the Indian market and.

Life insurance industry recorded a premium income of Rs. As the private insurers have leaner organizational structure their average worked out to be 47. 201351. private insurers spent Rs 143 crore on advertising.85 crore in the previous financial year.08 percent.93 percent as against 48. to Rs 92 crore the following year.41 crore during 2008-09 as against Rs.17 per cent in single premium 8 . training expenses at 5. According to the annual report 2008-2009. the major expense of private insurers were employee expenses at 39. While the private players are targeting the upper middle class and high net worth individuals. LIC reported growth of 24. It is observed that LIC too has shifted its marketing strategy in favour of unit linked products since 2006-07 though LIC¶s performance has slowed down in 2007-08.32 crore). Employee remuneration and welfare benefits accounted for 60. The first year premium (comprising of single premium and regular premium) amounted to Rs.11 percent in 2007-2009. advertisement /publicity at 8. Advertisement and publicity expense of LIC accounted for 2.75 percent of the operating expense of LIC (8309.73 percent of the total operating expense. 93712.88 per cent as against a growth of 94.92 percent. The first year premium growth in 2007-08 over a higher growth in 2006-07 has been on account of continued popularity of unit linked products. In fiscal 2003. There is also a difference in the target client of the private and the LIC.52 in 2007-08 as against Rs.96 per cent in 2006-07. the LIC aims for the masses through its 2048 branches spread across semi rural and rural towns.from Rs 29 crore in fiscal 2001when the industry opened up. 75649.96 percent. 156075.21 crore in 2006-07 recording a growth of 23. training expense accounted for 1.44 percent of the total operating expense.

Private insurers have improved their market share from 18.61 per cent in 2007-08 in the total premium collected during the year.68 per cent of the gross premium underwritten (35.73 per cent in 2006-07). Among the private sector banks ICICI Prudential is the largest followed by Bajaj Allianz.48 per cent in non-single premium individual policies. This resulted in favourable growth in total premium for both LIC (17.11 per cent of the premium underwritten (8.19 per cent and private insurers (82. However a certain part of the market has been captured by the private players.10 per cent in 2006-07 to 25.28 per cent at Rs. 56567. because they were attracted by the µsecurity factor¶ attached with the state owned insurer. constituting 37.93 per cent in individual single and non-single policies respectively. 9 .78 crore in 2007-08. It was reported that the customers resorted to LIC after the awareness about insurance increased as a result of the marketing efforts of the new players. 61780.73 per cent in 2006-07). As against these. LIC paid benefits of Rs. LIC has not lost its position.41 crore in 2006-07) constituting 41.45 per cent and 69.70 per cent of the total premium underwritten.50 per cent) in 2007-08. The benefits paid by the private insurers showed an increase of 111.24 crore. The life industry paid gross benefits of Rs. 53298. 5212.individual policies and decline of 6. LIC remains by far the largest player in the market.02 crore in 2007-08 constituting 30. private insurance companies reported growth of 39. The size of life insurance market increased on the strength of growth in the economy and concomitant increase in per capita income. constituting 10.76 per cent of the premium underwritten (Rs.


for example. The existence of a large number of homogeneous exposure units allows insurers to benefit from the so-called ³law of large numbers´ which in effect states that as the number of exposure units increases. Lloyd¶s of London is famous for insuring the life or health of actors. Despite failing on this criterion. 11 . in law and economics.CHAPTER 2: INSURANCE Insurance. from one entity to another. Insurance is defined as the equitable transfer of the risk of a loss. and can be thought of as a guaranteed small loss to prevent a large. possibly devastating loss. Principles of insurance Commercially insurable risks typically share seven common characteristics: 1. The vast majority of insurance policies are provided for individual members of very large classes. is a form of risk management primarily used to hedge against the risk of a contingent loss. the actual results are increasingly likely to become close to expected results. Large commercial property policies may insure exceptional properties for which there are no µhomogeneous¶ exposure units. Satellite Launch insurance covers events that are infrequent. called the premium. An insurer is a company selling the insurance. Automobile insurance. in exchange for a premium. A large number of homogeneous exposure units. covered about 175 million automobiles in the United States in 2004. many exposures like these are generally considered to be insurable. There are exceptions to this criterion. actresses and sports figures. an insured is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage.

ACCIDENTAL LOSS. the time. at least in principle. with sufficient information. Events that contain speculative elements. place and cause of a loss should be clear enough that a reasonable person. The event that constitutes the trigger of a claim should be fortuitous. 3. 4. may involve prolonged exposure to injurious conditions where no specific time. take place at a known time. could objectively verify all three elements. The event that gives rise to the loss that is subject to the insured. The loss should be µpure. 12 . for instance. automobile accidents. place or cause is identifiable. and supplying the capital needed to reasonably assure that the insurer will be able to pay claims.¶ in the sense that it results from an event for which there is only the opportunity for cost. in a known place. For small losses these latter costs may be several times the size of the expected cost of losses. and from a known cause. or at least outside the control of the beneficiary of the insurance. Other types of losses may only be definite in theory. DEFINITE LOSS. There is little point in paying such costs unless the protection offered has real value to a buyer. are generally not considered insurable. plus the cost of issuing and administering the policy. Occupational disease. The size of the loss must be meaningful from the perspective of the insured. and worker injuries may all easily meet this criterion. Insurance premiums need to cover both the expected cost of losses. Ideally. The classic example is death of an insured person on a life insurance policy. Fire. adjusting losses. LARGE LOSS.2. such as ordinary business risks.

If there is no such chance of loss. Probability of loss is generally an empirical exercise. LIMITED RISK OF CATASTROPHICALLY LARGE LOSSES. There are two elements that must be at least estimable. it is not likely that anyone will buy insurance. Typically. The essential risk is often aggregation. insurers prefer to limit their exposure to a loss from a single event to some small portion of their capital base. Further. the transaction may have the form of insurance. on the order of 5 percent. 6. if not formally calculable: the probability of loss. AFFORDABLE PREMIUM. Where the loss can be 13 . If the likelihood of an insured event is so high. or the cost of the event so large. that the resulting premium is large relative to the amount of protection offered. and the attendant cost. but by the factors surrounding the sum of all policyholders so exposed. but not the substance.5. the ability of that insurer to issue policies becomes constrained. 7. CALCULABLE LOSS. while cost has more to do with the ability of a reasonable person in possession of a copy of the insurance policy and a proof of loss associated with a claim presented under that policy to make a reasonably definite and objective evaluation of the amount of the loss recoverable as a result of the claim. not by factors surrounding the individual characteristics of a given policyholder. even if on offer. If the same event can cause losses to numerous policyholders of the same insurer. the premium cannot be so large that there is not a reasonable chance of a significant loss to the insurer. as the accounting profession formally recognizes in financial accounting standards.

aggregated. the other neighbors must help? Otherwise. financial instruments and so on) and nonmoney or natural economies (without money. is another example of this phenomenon. We know of two types of economies in human societies: money economies (with markets. or are insured by a single insurer who syndicates the risk into the reinsurance market. or an individual policy could produce exceptionally large claims. money. The second type is a more ancient form than the first. markets. This type of insurance has survived to the present day in some countries where modern money economy with its financial 14 . particularly along coast lines. neighbors will not receive help in the future. Such properties are generally shared among several insurers. The classic example is earthquake insurance. the members of the community help build a new one. History of insurance In some sense we can say that insurance appears simultaneously with the appearance of human society. In such an economy and community. if a house burns down. where the ability of an underwriter to issue a new policy depends on the number and size of the policies that it has already underwritten. Wind insurance in hurricane zones. Should the same thing happen to one's neighbor. In commercial fire insurance it is possible to find single properties whose total exposed value is well in excess of any individual insurer¶s capital constraint. For example. financial instruments and so on). the capital constraint will restrict an insurer's appetite for additional policyholders. we can see insurance in the form of people helping each other. In extreme cases. the aggregation can affect the entire industry. since the combined capital of insurers and reinsurers can be small compared to the needs of potential policyholders in areas exposed to aggregation risk.

in which insurance is part of the financial sphere). 15 .000 Derrik (Achaemenian gold coin) the issue was registered in a special office. The Babylonians developed a system which was recorded in the famous Code of Hammurabi. the presents were fairly assessed by the confidants of the court. he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen. 1750 BC. When a gift was worth more than 10. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year). insurance in a modern money economy. Turning to insurance in the modern sense (i. respectively. and practiced by early Mediterranean sailing merchants.e.. Achaemenian monarchs of Iran were the first to insure their people and made it official by registering the insuring process in governmental notary offices. the monarch and the court would help him. the heads of different ethnic groups as well as others willing to take part. This was advantageous to those who presented such special gifts. If a merchant received a loan to fund his shipment. The most important gift was presented during a special ceremony. The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble. early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millenia BC. Chinese merchants travelling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing.instruments is not widespread (for example countries in the territory of the former Soviet Union). For others. c. presented gifts to the monarch. Then the assessment was registered in special offices.

in which people donated amounts of money to a general sum that could be used for emergencies. insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century. In the late 1680s. merchants. Toward the end of the seventeenth century. and ships¶ captains. and those willing to underwrite such ventures.. The Greeks and Romans introduced the origins of health and life insurance c. a separation of roles that first proved useful in marine insurance. Before insurance was established in the late 17th century. the inhabitants of Rhodes invented the concept of the µgeneral average'. Insurance became far more sophisticated in post Renaissance Europe. and specialized varieties developed. "friendly societies" existed in England.A thousand years later. Llyod¶s of London remains the leading market (note that it is not an 16 . London's growing importance as a centre for trade increased demand for marine insurance. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. as were insurance pools backed by pledges of landed estates.e. Today. These new insurance contracts allowed insurance to be separated from investment. It became the meeting place for parties wishing to insure cargoes and ships. Separate insurance contracts (i. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage. and thereby a reliable source of the latest shipping news. Edward Llyod opened a coffee house that became a popular haunt of ship owners. The Talmud deals with several aspects of insuring goods.

it refused to insure certain buildings where the risk of fire was too great. in 1732. though at times in concert through a national insurance commissioners¶ organization. In 1752." to insure brick and frame homes.200 houses. Insurance as we know it today can be traced to the Great fire of London. In the aftermath of this disaster. regulation of the insurance industry is highly Balkanized. but it works rather differently than the more familiar kinds of insurance. Below are (non17 .insurance company) for marine and other specialist types of insurance. state insurance commissioners operate individually. Nicholas Barbon opened an office to insure buildings. In the United States. with primary responsibility assumed by individual state insurance departments. The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston). particularly against fire in the form of perpetual insurance. which in 1666 devoured 13. he founded the Philadelphia Contribution for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. South Carolina. Whereas insurance markets have become centralized nationally and internationally. Specific kinds of risk that may give rise to claims are known as "perils". "The Fire Office. such as all wooden houses. In 1680. TYPES OF INSURANCE Any risk that can be quantified can potentially be insured. Benjamin Franklin helped to popularize and make standard the practice of insurance. he established England's first fire insurance company. Not only did his company warn against certain fire hazards. An insurance policy will set out in detail which perils are covered by the policy and which is not.

For example. and (b) the business owner's policy (BOP). 1. which bundles into one policy many of the kinds of coverage that a business owner needs. c. Most countries require you to buy some. BUSINESS INSURANCE It can be any kind of insurance that protects businesses against risks. but not all. It is a contract between you and the insurance company.exhaustive) lists of the many different types of insurance that exist. also called professional indemnity insurance. of these coverages. in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs. AUTO INSURANCE Auto insurance protects you against financial loss if you have an accident. 2. rehabilitation and sometimes lost wages and funeral expenses. A single policy may cover risks in one or more of the categories set out below. liability and medical coverage: a. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance. An auto insurance policy is comprised of six different kinds of coverage. Auto insurance provides property. b. Property coverage pays for damage to or theft of your car. auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Medical coverage pays for the cost of treating injuries. If you're financing a 18 . Liability coverage pays for your legal responsibility to others for bodily injury or property damage.

) or other publiclyfunded health programs will cover the cost of medical treatments. HOME INSURANCE It provides compensation for damage or destruction of a home from disasters. 5. y Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work.S. especially for people who rent housing. In some geographical areas. In the U. Dental insurance. including pets. the standard insurances exclude certain types of disasters. 3. is coverage for individuals to protect them against dental costs. It provides monthly support to help pay such obligations as mortgages and credit cards. insurers offer a package which may include liability and legal responsibility for injuries and property damage caused by members of the household.K. HEALTH INSURANCE Health insurance policies by the National Health Service (U. DISABILITY INSURANCE Disability Insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury.. like medical insurance. Most auto policies are for six months to a year. In some countries. your lender may also have requirements. 4.car. 19 . dental insurance is often part of an employer's benefits package. along with health insurance. such as flood and earthquakes that require additional coverage. The policy may include inventory. Maintenance-related problems are the homeowners' responsibility. or this can be bought as a separate policy.

CASUALTY INSURANCE Casualty insurance insures against accidents. 6. LIFE INSURANCE Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary. often taken as an adjunct to life insurance. and may specifically provide for income to an insured person's family. For example. 20 . Political risk insurance is a form of casualty insurance that can be taken out by businesses with operations in countries in which there is a risk that revolution or other political conditions will result in a loss.y Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession. y Workers¶ compensation insurance replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury. Annuities provide a stream of payments and are generally classified as insurance because they are issued by insurance companies and regulated as insurance and require the same kinds of actuarial and investment management expertise that life insurance requires. Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or an annuity. 7. not necessarily tied to any specific property. funeral and other final expenses. a company can obtain crime insurance to cover losses arising from theft or embezzlement. Crime insurance is a form of casualty insurance that covers the policyholder against losses arising from the criminal acts of third parties. burial.

Aviation insurance insures against hull. are the mirror image of life insurance. PROPERTY INSURANCE Property insurance provides protection against risks to property. from an underwriting perspective. In many countries. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. such as the U. cover also unlike other motor policies provides cover for instructor liability where both the pupil and driving instructor are equally liable in the event of a claim. inland marine insurance or boiler insurance. Certain life insurance contracts accumulate cash values. such as fire.S.Annuities and pensions that pay a benefit for life are sometimes regarded as insurance against the possibility that a retiree will outlive his or her financial resources. spares. This includes specialized forms of insurance such as fire insurance. deductibles. earthquake insurance. the tax law provides that the interest on this cash value is not taxable under certain circumstances. 21 . home insurance. such as annuities and endowment policies. Driving School Insurance provides cover for any authorized driver whilst undergoing tuition. hull wear and liability risks. and the UK. are financial instruments to accumulate or liquidate wealth when it is needed. they are the complement of life insurance and. Some policies. theft or weather damage. 8. flood insurance. In that sense. which may be taken by the insured if the policy is surrendered or which may be borrowed against.

insects. Many insurers in the U. the federal government created the National Flood Insurance Program which serves as the insurer of last resort. A fidelity bond is a form of casualty insurance that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. frost damage. for instance.Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery. hail. Builder¶s risk insurance insures against the risk of physical loss or damage to property during construction. Flood insurance protects against property loss due to flooding. as well as the construction of the home. do not provide flood insurance in some portions of the country. Rates depend on location and the probability of an earthquake.S. In response to this. It usually insures a business for losses caused by the dishonest acts of its employees. Crop insurance: "Farmers use crop insurance to reduce or manage various risks associated with growing crops. drought. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded. Most ordinary homeowners insurance policies do not cover earthquake damage. 22 . Such risks include crop loss or damage caused by weather." Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. or disease. Most earthquake insurance policies feature a high deductible.

. Most house insurance cover in the U. and of the cargo that may be on them. which extends the indemnity to cover loss of profit and other business expenses attributable to the delay caused by a covered loss.Landlord insurance is specifically designed for people who own properties which they rent out. etc. shipwreck. LIABILITY INSURANCE It is a very broad superset that covers legal claims against the insured.K will not be valid if the property is rented out therefore landlords must take out this specialist form of home insurance. automobile insurance also includes an aspect of liability insurance that indemnifies against the harm that a crashing car can cause to others' lives. Marine insurance and marine cargo insurance cover the loss or damage of ships at sea or on inland waterways. The protection offered by a liability insurance policy is twofold: a legal defense in the event of a lawsuit commenced against the policyholder and indemnification (payment on behalf of the insured) with respect to a settlement or court verdict. When the owner of the cargo and the carrier are separate corporations. or property. marine cargo insurance typically compensates the owner of cargo for losses sustained from fire. Many types of insurance include an aspect of liability coverage. 9. health. a homeowner's insurance policy will normally include liability coverage which protects the insured in the event of a claim brought by someone who slips and falls on the property. Surety bond insurance is a three party insurance guaranteeing the performance of the principal. For example. Liability policies typically cover 23 . Many marine insurance underwriters will include "time element" coverage in such policies. but excludes losses that can be recovered from the carrier or the carrier's insurance.

24 . Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes made by directors and officers for which they are liable. real estate brokers. and will not apply to results of wilful or intentional acts by the insured. property damage and cleanup costs as a result of the dispersal. Professional liability insurance. Professional liability insurance may take on different names depending on the profession. also called professional indemnity insurance. Prize indemnity insurance protects the insured from giving away a large prize at a specific event. In the industry.only the negligence of the insured. it is usually called "D&O" for short. Notaries public may take out errors and omissions insurance (E&O). For example. Environmental liability insurance protects the insured from bodily injury. Examples would include offering prizes to contestants who can make a half-court shot at a basketball game. disability. professional liability insurance in reference to the medical profession may be called malpractice insurance. Insurance agents. release or escape of pollutants. home inspectors. and website developers. protects insured professionals such as architectural corporation and medical practice against potential negligence claims made by their patients/clients. for example. Credit insurance: It repays some or all of a loan when certain things happen to the borrower such as unemployment. or death. or a hole-in-one at a golf tournament. Other potential E&O policyholders include. appraisers.

S.S. Insurance might also cover the failure of a creditor to pay money it owes to the insured.S. 10. property. liability and business pursuits. Mortgage insurance is a form of credit insurance. as well as disability and death benefits. Financial loss insurance protects individuals and companies against various financial risks. This type of insurance is frequently referred to as "business interruption insurance. This coverage typically includes expenses related to medical treatment and loss of wages. For example. citizens. Foreign Nationals must also be covered under DBA. although the name credit insurance more often is used to refer to policies that cover other kinds of debt. Depending on the country. U. DBA is required for all U. and Canada. health. and all employees or subcontractors hired on overseas government contracts. U.Mortgage insurance insures the lender against default by the borrower. residents. Green Card holders. Expatriate insurance provides individuals and organizations operating outside of their home country with protection for automobiles." Fidelity bonds and surety bonds are included in this category.S. Other Types Collateral protection insurance or CPI insures property (primarily vehicles) held as collateral for loans made by lending institutions. a business might purchase coverage to protect it from loss of sales if a fire in a factory prevented it from carrying out its business for a time. Defense Base Act Workers' compensation or DBA Insurance provides coverage for civilian workers hired by the government to perform contracts outside the U. although these products provide a benefit 25 .

Intentional acts are specifically excluded. In special cases. Nuclear incident insurance covers damages resulting from an incident involving radioactive materials and is generally arranged at the national level. Coverage for liability to third parties arising from contamination of air. Locked funds insurance is a little-known hybrid insurance policy jointly issued by governments and banks. or land due to the sudden and accidental release of hazardous materials from the insured site. Pet insurance insures pets against accidents and illnesses . care plans and even mobile phone insurance. 26 . Such insurance is normally very limited in the scope of problems that are covered by the policy. It is used to protect public funds from tamper by unauthorized parties. Therefore it is used only in extreme cases where maximum security of funds is required. water. warranties. a government may authorize its use in protecting semi-private funds which are liable to tamper. which consists of first-party coverage for contamination of insured property either by external or on-site sources. guarantees. It can cover individual purchase protection. as well.to a third party (the "obligee") in the event the insured party (usually referred to as the "obligor") fails to perform its obligations under a contract with the obligee.some companies cover routine/wellness care and burial. Pollution Insurance. The terms of this type of insurance are usually very strict. The policy usually covers the costs of cleanup and may include coverage for releases from underground storage tanks. Purchase insurance is aimed at providing protection on the products people purchase.

General. which sell other types of insurance. and pension business is very longterm in nature. The main reason for the distinction between the two types of company is that life. or Property/Casualty insurance companies. free and clear of liens or encumbrances. travel delay. non-life insurance cover usually covers a shorter period. By contrast. etc. It is usually issued in conjunction with a search of the public records performed at the time of a real estate transaction. annuity. 27 . life and non-life insurers are subject to different regulatory regimes and different tax and accounting rules. y y Standard Lines Excess Lines In most countries. such as one year. Travel insurance is an insurance cover taken by those who travel abroad. General insurance companies can be further divided into these sub categories. which covers certain losses such as medical expenses. INSURANCE COMPANIES Insurance companies may be classified into two groups: y Life insurance companies which sell life insurance.Title insurance provides a guarantee that title to real property is vested in the purchaser and/or mortgagee. personal liabilities. annuities and pensions products. y Non-life. loss of personal belongings.coverage for life assurance or a pension can cover risks over many decades.

They use pattern or "cookie-cutter" policies without variation from one person to the next. it is an in-house self-insurance vehicle. Excess line insurance companies typically insure risks not covered by the standard lines market.In the United States. In short. with huge reserves. These companies have more flexibility and can react faster than standard insurance companies because they are not required to file rates and forms as the "admitted" carriers do. homes or businesses. they still have substantial regulatory requirements placed upon them. They usually have lower premiums than excess lines and can sell directly to individuals. Captives may take the form of a "pure" entity (which is a 100% subsidiary of the self- 28 . This definition can sometimes be extended to include some of the risks of the parent company's customers. Reinsurance companies are insurance companies that sell policies to other insurance companies. These are the companies that typically insure autos. A reinsurer may also be a direct writer of insurance risks as well. However. They are regulated by state laws that can restrict the amount they can charge for insurance policies. allowing them to reduce their risks and protect themselves from very large losses. Non-admitted insurers are not licensed in the states where the risks are located. Captive insurance companies may be defined as limited-purpose insurance companies established with the specific objective of financing risks emanating from their parent group or groups. standard line insurance companies are "mainstream" insurers. They are broadly referred as being all insurance placed with nonadmitted insurers. State laws generally require insurance placed with surplus line agents and brokers not to be available through standard licensed insurers. The reinsurance market is dominated by a few very large companies.

Captives are becoming an increasingly important component of the risk management and risk financing strategy of their parent. employee benefits. The captive's exposure to such risks may be limited by the use of reinsurance. differential coverage standards in various parts of the world. public and product liability. they may provide coverage of risks which is neither available nor offered in the traditional insurance market at reasonable prices. y Insufficient credit for deductibles and/or loss control efforts. these companies are paid a fee by the customer to shop around for the best 29 . and of an "association" captive (which self-insures individual risks of the members of a professional. motor and medical aid expenses. This can be understood against the following background: y y y y heavy and increasing premium costs in almost every line of coverage. commercial or industrial association).insured parent company). economic and tax advantages to their sponsors because of the reductions in costs they help create and for the ease of insurance risk management and the flexibility for cash flows they generate. The types of risk that a captive can underwrite for their parents include property damage. of a "mutual" captive (which insures the collective risks of members of an industry). rating structures which reflect market trends rather than individual loss experience. There are also companies known as 'insurance consultants'. difficulties in insuring certain types of fortuitous risk. Additionally. employers' liability. Captives represent commercial. Like a mortgage broker. professional indemnity.

The financial stability and strength of an insurance company should be a major consideration when buying an insurance contract. provide information and rate the financial viability of insurance companies. a number of insurance companies have become insolvent. In recent years. 30 . A number of independent rating agencies. an 'insurance broker' also shops around for the best insurance policy amongst many companies. such as Best¶s. An insurance premium paid currently provides coverage for losses that might arise many years in the future. Neither insurance consultants nor insurance brokers are insurance companies and no risks are transferred to them in insurance transactions. with insurance brokers. For that reason. However. Third party administrators are companies that perform underwriting and sometimes claim handling services for insurance companies.insurance policy amongst many companies. These companies often have special expertise that the insurance companies do not have. Fitch. Standard & Poor¶s. Similar to an insurance consultant. leaving their policyholders with no coverage (or coverage only from a government-backed insurance pool or other arrangement with less attractive payouts for losses). the viability of the insurance carrier is very important. and Moody¶s Investors Service. the fee is usually paid in the form of commission from the insurer that is selected rather than directly from the client.


backed by the core values of diligence and transparency.Macquarie. REL also currently operates from 10 countries globally following its acquisition of London¶s oldest brokerage and investment firm. Harrison & Co. All employees of the group guided by an experienced and professional management team are committed to providing financial care. For its wealth management business. plc. Institutional and Wealth spectrums.CHAPTER 3: COMPANY¶S PROFILE ABOUT RELIGARE Religare Enterprises Limited (REL). Religare operates its Life Insurance business in partnership with the global major. With a view to expand. Religare has partnered with Australia based financial services major. Religare has also partnered with 32 . REL¶s businesses are broadly clubbed across three key verticals. catering to a diverse and wide base of clients. is one of the leading integrated financial services groups of India. diversify and introduce offerings benchmarked against global best practices. The vision is to build Religare as a globally trusted brand in the financial services domain and present it as the µInvestment Gateway of India¶.Aegon. the Retail. Hichens. REL offers a multitude of investment options and a diverse bouquet of financial services with its pan India reach in more than 1550 locations across more than 460 cities and towns.

Vistaar Entertainment to launch India¶s first SEBI approved Film Fund offering a unique alternative asset class of investments. VISION To build Religare as a globally trusted brand in the financial services domain and present it as the µInvestment Gateway of India'. MISSION Providing complete financial care driven by the core values of diligence and transparency. 33 . BRAND ESSENCE Core brand essence is Diligence and Religare is driven by ethical and dynamic processes for wealth creation.

established in 1996 was founded on the vision of creating an integrated healthcare delivery system. Australian Financial Services major as a partner) Vistaar Religare -The Film Fund India's first SEBI approved Film Fund (Vistaar as a partner) OTHER GROUP COMPANIES Fortis Healthcare Limited. including multi-specialty & super specialty centres. With 22 hospitals in India. the 34 .JOINT VENTURES AEGON Religare Life Insurance Company Life Insurance business (AEGON as a partner) Religare Macquarie Wealth Management Ltd. Private Wealth business (Macquarie.

management is aggressively working towards taking this number to a significant level in the next few years to provide quality healthcare facilities and services across the nation. Knowledge Management Solutions and software products and services. offering Enterprise IT Solutions. 35 . Religare Technova is poised to be a leader in the global IT space. Currently with over 1500 employees and presence in over 10 countries. Religare Technova Limited is the holding company for global IT business of the promoter group. Religare Wellness Limited (formerly Fortis Healthworld) is one of the leading players in the wellness retail space with a footprint of over 100 stores across India. The group envisages setting up a pan India world class retail network of wellness stores that would provide comprehensive solutions under one roof.

a robust IT infrastructure and strong risk analysis teams adept at identifying & analyzing your risks and providing you with tailor made solutions. Our strengths are a team of passionate professionals.) Religare Insurance Broking Limited (RIBL). General and Reinsurance domains. The company holds a composite broker's license operating in the Life. a Religare Enterprises Limited venture is one of India's leading insurance broking firms. 36 .About RIBL (Religare Insurance Broking Ltd. RIBL team across the country is driven by the core philosophy of creating and delivering value to its customers. RIBL not only provides customized solutions to individual clients but also to some of the leading corporate houses and institutions across the country. with one of the largest retail networks in the country.

CRM Best business practices and highest quality service Alliance with global and national players to get you the best deals Risk Pan India foot print Rich domain knowledge and Industry experts Portfolio Expertise to meet all your Insurance needs 37 . physical presence. proactive and customer centric Stability Part of a large diversified Indian trans-national group with presence in over 1550 locations across more than 460 cities & towns in India and globally across 10 countries. technical.Value Proposition Presence Strong Domain Expertise Comprehensive Management Flexibility Market understanding. Infrastructure Quality Strategic Partnerships Human.


Headquartered in Mumbai. formed in 1870. It is fully owned by the government of India. at least 2048 branches located in different cities and towns of India along with satellite Offices attached to about some 50 Branches.ABOUT LIC The Life Insurance Corporation of India (LIC) is the largest life insurance company in India and also the country's largest investor. Other insurance companies established in the preindependence era included y y Bharat Insurance Company (1896) United India (1906) 39 .6% of the Indian Government's expenses. and has a network of around one million and 200 thousand agents for soliciting life insurance business from the public History The Oriental Life Insurance Company. was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. the Life Insurance Corporation of India currently has 8 zonal Offices and 101 divisional offices located in different parts of India. which is considered the financial capital of India. the first corporate entity in India offering life insurance coverage. was the first native insurance provider. The Bombay Mutual Life Assurance Society. It was founded in 1956. It also funds close to 24. and it charged Indians heftier premiums. Europeans in India were its primary target market.

The Indian Insurance Companies Act of 1928 authorized the government to obtain statistical information from companies operating in both life and non-life insurance areas. was sent to prison for two years. The subsequent Insurance Act of 1938 brought stricter state control over an industry that had seen several financially unsound ventures fail. providing the first regulatory mechanisms in the Life Insurance industry. the Parliament of India passed the Life Insurance of India Act on 19/06/1956. In the ensuing investigations.y y y y y y y National Indian (1906) National Insurance (1906) Co-operative Assurance (1906) Hindustan Co-operatives (1907) Indian Mercantile General Assurance Swadeshi Life (later Bombay Life) The LIFE INSURANCE Act and the Provident Fund Act were passed in 1912. owner of the Times of India newspaper. by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. 40 . Eventually. and the Life Insurance Corporation of India was created on 01/09/1956. A bill was also introduced in the Legislative Assembly in 1944 to nationalize the insurance industry. Ram Kishan Dalmia. parliamentarian Feroze Gandhi raised the matter of insurance fraud by owners of private insurance companies. Nationalization In 1955. one of India's wealthiest businessmen. Nationalization of the life insurance business in India was a result of the Industrial Policy Resolution of 1956.

which commanded a monopoly of soliciting and selling life insurance in India. and employs over 1 million agents. The recent Economic Times Brand Equity Survey rated LIC as the No. 105divisional offices and 8 zonal offices. With the change in the India's economic philosophy from the early 1990s. The organization now comprises 2048 branches. and the subsequent relaxation of state control over several sectors of the economy. Indian as well as transnational Life Insurance brands. It also operates in 12 other countries. The Corporation. Current status Over its existence of around 50 years. created huge surpluses. has grown to 25000 servicing around 180 million policies and a corpus of over INR 3. However.which had created a policy framework for extending state control over at least seventeen sectors of the economy. 1 Service Brand of the Country. it still manages to be the largest player in the Indian market. Life Insurance Corporation of India. which started its business with around 300 offices. with the lion's share of 55%.4 trillion. 5. and contributed around 7 % of India's GDP in 2006.6 million policies and a corpus of INR 459 million. primarily to cater to the needs of Non Resident Indians. the monopolistic position of the Life Insurance Corporation of India was diluted. 41 . and it has had to compete with a number of other corporate entities. The company began operations with 5 zonal offices. 33 divisional offices and 212 branch offices. including the life insurance.

y LIC Housing Finance Incorporated in 19 June 1989. its main objective is to provide long term finance for construction or purchase of houses or apartments. 1989 with the objectives of offering US$ denomimated policies to cater to the insurance needs of NRI¶s and providing insurance services to holders of LIC policies currently residing in the Gulf. People 42 . y LIC Nepal A joint venture company formed in 2001 with the Vishal Group of Industries. y LIC Lanka A joint venture company formed in 2003 with the Bartleet Group of Companies. It has a Dubai office. LIC International operates in all GCC countries. it builds and operates "Assisted Community Living Centres" for senior citizens. Nepal. y LICHFL Care Homes A wholly owned subsidiary of LIC Housing Finance. Sri Lanka.In the financial year 2007-08 Life Insurance Corporation of India's number of policy holders are said to have crossed a whopping 200 million (fourth in terms of population of the countries of the world) Subsidiaries LIC owns the following subsidiaries: y Life Insurance Corporation of India International This is a joint venture offshore company promoted by LIC which commenced operations in July.

Mr. Vijayan. which is the largest investor in the country. many of which are very advanced in the Indian corporate scenario. The top brass is appointed by the Government of India after an intensive selection procedure. 43 . namely the Chairman and three Managing Directors. is particularly responsible for the major IT infrastructure turnaround that the organization has witnessed and for its advanced EDMS structure. The current Chairman.K. D. The Chairman assumes authority of the CEO and chairs the board while the Managing Directors are allotted the three main categories of the organization's functioning. T.LIC is one of the largest employers in India. which also happens to be one of the largest spenders on advertising in India. Mehrotra manages the Marketing Units of LIC. The organization is headed by 4 officers. Dasgupta manages the engineering and other functions.S. Though the company was accused to go by mere seniority in number of years for the selection of the senior management. Dasgupta (Managing Directors). Thomas Mathew manages the close to $187 billion investment portfolio of the company. this has changed as seen in the case of Thomas Mathew and A.

UK 2008-09 Company Ltd. USA 2000-01 Ltd. AVIVA Sahara Life Insurance Co. Ltd. Bharti AXA Life Insurance Co. ING Insurance International. Ltd. Ltd. Ltd. BNP Paribas Assurance SA. American International 2000-01 Assurance Co. SBI Life Insurance Co. Metlife International 2001-02 Holdings Ltd. New York Life. Ltd. Old Mutual. No. Sun Life.Ltd. Prudential of America 2008-09 Ltd. Italy IDBI Fortis Life Insurance Company Fortis. Netherlands Allianz Bajaj Life Insurance Co. Canada 2000-01 Tata-AIG Life Insurance Co. Standard Life Assurance. Netherlands 2007-08 Ltd. South Africa 2005-06 AXA Holdings. Reliance Life Insurance Co. 2001-02 B. 2000-01 Ltd. UK 2004-05 Foreign partners 17 18 19 20 Sanlam.V. Ltd. Shriram Life Insurance Co. Ltd. Future Generali India Life Insurance Company Ltd. Ltd. Netherlands 2008-09 Company Ltd. 2001-02 France ING Vysya Life Insurance Co. Sain 2007-08 Marketing Network Pvt. Generali. UK Max New York Life Insurance Co. Germany 2001-02 Metlife India Insurance Co. 44 .. France 2006-07 Pantaloon Retail Ltd. DLF Pramerica Life Insurance Co. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Insurers Year of Operation HDFC Standard Life Insurance Co.. UK 2000-01 Ltd. Aegon Religare Life Insurance Religare.. Canara HSBC OBC Life Insurance HSBC. Om Kotak Life Insurance Co.. USA 2001-02 AVIVA International 2002-03 Holdings Ltd. ICICI Prudential Life Insurance Co. South Africa 2001-02 Birla Sun Life Insurance Co. Ltd. Allianz.LIFE INSURANCE COMPANIES (PRIVATE) S. Prudential. Ltd. Ltd.


To understand customer perception regarding their preference towards LIC or private insurance companies. b. 46 . To study various insurance companies (their history. their advertising budgets etc.) c.CHAPTER 4: OBJECTIVES OF THE STUDY The study aims: a. To understand a closer perspective of insurance and its concepts.


directories.Chapter 5: RESEARCH METHODOLOGY The study would be carried out in two parts: a. penetration in the market etc. and is generally made available to other researchers free or at a concessional rate. The sample would consist of 75 individuals of Dehradun (simple random sample). The questionnaire includes open and closed ended questions. In this study it would include books. hard copy etc. internet. Primary data is collected directly from respondents using data collection methods. Before deciding on to collect the primary data there is a need to select a sample for conducting the study. Secondary data is the data that already exists which has been collected by some other person or organization for their use. b. Here in this study the data collection method which would be used is questionnaires. Primary data would be preferred to study the customer perception from which the conclusions would be drawn thereof. also likert attitude scale of measurement has been used to measure the customer preference. Secondary data would be preferred to study the companies for their advertising budgets. 48 . The customers are also being asked to rank some of the insurance companies. A questionnaire has been developed which would help to identify customer preference towards LIC or private insurers. government publications.


76 30 20 10 0 2007-08 2008-09 2009-10 46. unit linked insurance policies (ULIPs) have become increasingly popular. LIC Trends in insurance business After opening of the insurance sector.3 90.3 70 60 50 40 29.33 LIC Idustry 50 .31 41.31 82.75 90 80 70. Unit Linked Business (%) Private 100 88.91 62.CHAPTER6: FINDINGS AND ANALYSIS PRIVATE INSURERS VS. Below is the growth pattern of unit linked and non linked business.77 56.

25 9. While the private players have taken the lead in this segment.67 58.69 29.09 37. 51 .7 11.24 70 60 50 40 30 20 10 0 2007-08 2008-09 2009-10 17.Non Linked Business (%) Private 80 70. LIC has also made strong strides in the sale of ULIPs during the last three years.7 LIC Industry As reflected in the bar a diagram above it is the unit linked business which is driving the growth of premiums over the last 2-3 years.23 53.69 43.

Performance in the first quarter 2009-10
Life insurance: The life insurers underwrote a premium of Rs.14320.20 crore during the first quarter in the current financial year as against Rs. 12511.80 crore in the comparable period of last year recording a growth of14.45 per cent. Of the total premium underwritten, LIC accounted for Rs.7524.56 crore and the private insurers accounted for Rs. 6795.64 crore. The premium underwritten by LIC declined by 12.31 per cent while, that of private insurers increased by 72.88 per cent, over the corresponding period in the previous year. The number of policies written at the industry level declined by 7.78 per cent. While the number of policies written by LIC declined by 23.36 per cent, in the case of private insurers they grew by 44.00 per cent. Of the total premium underwritten, individual business accounted for Rs. 10995.90 crore and group business for Rs. 3324.30 crore. In respect of LIC, individual business was Rs. 5275.71 crore and group business was Rs. 2248.85 crore. In the case of private insurers, they were Rs. 5720.19 crore and Rs. 1075.45 crore respectively. The market share of LIC was 52.55 per cent in the total premium collection and 63.88 per cent in number of policies underwritten, lower than 68.58 per cent and 76.87 per cent respectively, reported in the previous year. Under the group scheme 56.13 lakh lives were covered recording a growth of 8.51 per cent over the previous period. Of the total lives covered under the group scheme, LIC accounted for 38.96 lakh and private insurers 12.77 lakh. The life insurers covered 12.50 lakh lives in the social sector with a premium of Rs17.10 crore and underwrote 13.53 lakh policies with a premium of Rs. 1275.78 crore in the rural sector. Non-Life Insurers: During the first quarter of the current financial year, the nonlife insurers underwrote a premium of Rs. 8778.18 crore recording a growth of 17.85 per


cent over Rs. 7448.74 crore underwritten in the same period of last year. The private nonlife insurers witnessed higher growth of 22.43 per cent by underwriting premium to the tune of Rs. 3541.78 crore as against Rs. 2892.89 crore underwritten in the same quarter of the last year. The public non-life insurers underwrote a premium of Rs. 5236.40 crore, higher by 14.94 per cent in the first quarter of 2007-08. The market shares of public and private insurer were 59.65 and 40.35 per cent respectively. ECGC underwrote credit insurance of Rs. 164.70 crore as against Rs. 88.09 crore in the previous year resulting in a significant growth of 86.98 per cent. Segment-wise, the premium underwritten in the Fire, Marine, Motor, Health and Miscellaneous segments by the non-life insurers were Rs. 1208.15 crore, Rs. 572.99 crore, Rs. 3624.23 crore, Rs. 1772.57 crore and Rs 1600.24 crore respectively. The Health segment recorded the highest growth (49.67 per cent) in the first quarter of the current financial year over the corresponding quarter of 2007-08. The Fire segment witnessed negative growth (-13.80 per cent) over in the same period. ln terms of number of policies, Fire and Marine, recorded negative growth rates (-5.14 per cent and -4.37 per cent respectively) over the one year period. In the Motor segment, the public insurers witnessed positive growth rate (23.09 per cent) in the premium underwritten despite issuing lesser number of policies. The premium underwritten in the Motor segment in the first quarter of the current financial year was Rs. 3624.23, constituting 41.29 per cent in the total premium underwritten. The contribution from the Public and Private life insurer in the Motor premium was Rs. 2151.19 crore (59.36 per cent) and Rs. 1473.04 crore (40.64 per cent) respectively.


The premium collection in the Health segment went up to Rs. 1772.57 in the first quarter of the current year, constituting for 20.19 per cent in the total premium. The number of policies, issued in this quarter, as a ratio of total number of policies worked out to 12.20 per cent. The shares of public and private non-life insurers in the Health segment remained similar to the Motor segment, which constituted 58.72 per cent (Public) and 41.28 per cent (Private) respectively in the first quarter of the current financial year. In terms of number of policies issued Health segment recorded a growth of 12.95 per cent. This growth was sharper in the public insurers with 20 per cent.

The total capital of the life insurers at end March 2008 stood at Rs. 12296.42 crore. The additional capital brought in by the existing private insurers during 2008-09 was Rs. 3787.01 crore and the two new entrants, brought in equity of Rs. 385 crore making the total additional capital brought in 2008-09 by the private insurers to Rs. 4172.01 crore. Of this, the domestic and the foreign joint venture partners added Rs. 3160.12 crore and Rs. 1011.88 crore respectively. PAID UP CAPITAL: LIFE INSURERS (Rs. Crore)


March 31, 2007

Additions 2008-09

during March 31, 2008

LIC Private Sector Total

5.00 8119.41 8124.41

0.00 4172.01 4172.01

5.00 12291.42 12296.42

There has been no infusion of capital in the case of LIC which stood at Rs.5 crore.


By the end of March 2008, there were eighteen life insurance companies operating in India. Subsequently, Aegon Religare Life Insurance Company Ltd., Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd., DLF Pramerica Life Insurance Company Ltd. was given Certificate of Registration by the Authority. With these two new companies the total number of life insurance companies operating in India rose to 21. The number of offices of the life insurers has increased dramatically in the year 2007-08 from 5373 at the beginning of the year to 8913 by the end of the year, showing a growth of over 65 per cent. A major portion of this expansion was in the private sector whose offices more than doubled from 3072 to 6391. LIC¶s offices increased at a more modest 10 per cent from 2301 offices to 2522. LIFE INSURANCE OFFICES (AS ON MARCH 31, 2009)

Insurer Private LIC Industry Total

2002 13 2186 2199

2003 116 2190 2306

2004 254 2191 2445

2005 416 2196 2612

2006 804 2197 3001

2007 1645 2220 3865

2008 3072 2301 5373

2009 6391 2522 8913

Note: Office as defined under Section 64 VC of the insurance Act, 1938

Significantly, the number of offices of private life insurers in semi-urban and smaller locations put together increased the highest, by over 140 per cent, from 1908 to 4592 in 2007-08.

2009 Insurer Private LIC Industry Total Note: Based on HRA classification of places done by Ministry of Finance.40) 50874157 Note: Figure in brackets indicate growth rate (in per cent) 56 . Mumbai. Chennai.61 per cent as against a growth of 21.01) 7922274 (104. Kolkata. B-1 and B-2 class cities of the HRA classification Semi-urban: C class cities of the HRA classification Others: Places not listed in the HRA classification Metro 628 311 939 Urban 1169 468 1637 Semi-urban 2692 848 3540 Others 1902 895 2797 Total 6391 2522 8913 New Policies New policies underwritten by the industry were 508. While the private insurers exhibited a growth of 67.52 lakh during 2006-07 showing an increase of 10.61) 13261558 (67.64) 46151566 2008-09 37612599 (-1.23 per cent.40 per cent.01 per cent in 2006-07. (previous year 104. NEW POLICIES ISSUED: LIFE INSURERS Insurer LIC Private Sector Total 2007-08 38229292 (21.DISTRIBUTION OF OFFICES OF LIFE INSURERS AS ON MARCH 31. Metro: Delhi. LIC showed a decline of 1.64 per cent). Hyderabad and Bangalore Urban: A.74 lakh in 2007-08 as against 461.

75649. The first year premium (comprising of single premium and regular premium) amounted to Rs. single premium. there has been a growth because of slow down in the premium underwritten by LIC the growth levels in 2008-09 were lower than 2007-08.36 crore (19. 54888. It is observed that LIC too has shifted its marketing strategy in favour of unit linked products since 2007-08 though LIC¶s performance has slowed down in 2008-09.93 per cent in individual single and non-single policies respectively.85 crore in the previous financial year. The growth in the number of policies underwritten in the Group Single and Non. LIC reported growth of 24.The market shares of private insurers and LIC. LIC reported a growth of 9.17 per cent and 82. 93712.single segments by the private insurers stood at 54 and 1 per cent respectively.46 per cent).41 crore during 2007-08 as against Rs.89 crore (153. Regular premium. A 57 . recording a growth of 29. 201351. respectively.01 per cent.83 per cent respectively in 2007-08. 156075. private insurance companies reported growth of 39. The first year premium growth in 2008-09 over a higher growth in 2007-08 has been on account of continued popularity of unit linked products.07 per cent and 73.26 per cent).11 per cent in Group Single Premium. While at the industry level. and Rs. PREMIUM Life insurance industry recorded a premium income of Rs.21 crore in 2007-08 recording a growth of 23.16 crore (27.45 per cent and 69. renewal premium in 200708 were Rs. Rs. 38824. in terms of number of policies underwritten. 107638.17 per cent in single premium individual policies and decline of 6.28 per cent).96 per cent in 2007-08. As against these.88 per cent as against a growth of 94.48 per cent in non-single premium individual policies.93 per cent as against 17.52 in 2007-08 as against Rs. were 26.

56 (97.28 (14.40) Single Premium 26222.56) 93712.65 (89.83 (105.08) 75649.36 (28.00) LIC Private Sector Total 26337.56 (28. PREMIUM UNDERWRITTEN BY LIFE INSURERS (Rs.38) 149789.35 (117.80 (27.52 (23.70) 15474.46 per cent of the total premium underwritten slightly higher than 51.88) LIC Private Sector Total 71599.01) Note: Figure in brackets indicate the growth (in per cent) 58 .86 (47.17) 19425.16 (21.59) 45361.01 (87.16) 107638.64 (19.97) 8827.37) 80426.84 (40.60) First Year Premium 33774.42 (25.82) 38824.24) 5049. In 2008-09 renewal premium accounted for 53.41) 17845.42 (82.41 (29.96) Renewal premium 59996.89 (33.87) Total Premium 89793.57 (6.04) 30288.53 per cent in 2007-08.10) 3950.95 (73.82 (44.84) 54888.99 (17.17 (113.15 (85.18) LIC Private Sector Total 56223.83) LIC Private Sector Total 127822.00 (-12.47 (102.22 (78.21 (94.04 (72. crore) Insurer 2007-08 Regular Premium 2008-09 LIC Private Sector Total 29886.19) 51561.71) 33715.31) 156075.26) 28666.36 (83.shift in the shares of first year premium and renewal premium to the total premium was observed in 2008-09.50) 201351.79) 28253.

10 per cent respectively in the previous year. This resulted in favourable growth in total premium for both LIC (17.83 per cent as against 19. It reflects increase in persistency ratio and enables insurers to bring down the overall cost of doing business.Increase in the renewal premium is a good measure of the quality of business underwritten by the insurers. 2.50 per cent) in 2008-09.10 per cent in 2006-07 to 25. Pension and Health contributed 59.61 and 0. 37.87 per cent in 2007-08.19 per cent) and private insurers (82. Annuity. The shift in favour of pension products is visible for the third consecutive year. MARKET SHARE The size of life insurance market increased on the strength of growth in the economy and concomitant increase in per capita income. Private insurers and LIC reported growth rates of 102.54. during 2008-09 grew by 33.61 per cent in 2007-08 in the total premium collected during the year. The renewal premium underwritten by the life insurance industry.41 per cent respectively during the year under review. Private insurers have improved their market share from 18.16 per cent and 25. Segregation of the first year premium underwritten during 2007-08 indicates that Life.75. 59 .

00 First Year Premium LIC Private Sector Total 74.90 18.11 100.00 Single Premium LIC Private Sector Total 86.MARKET SHARE OF LIFE INSURERS (Per cent) Insurer 2007-08 Regular Premium LIC Private Sector Total 65.23 100.68 100.00 74.98 100.32 25.61 100.39 25.77 52.00 Renewal Premium LIC Private Sector Total 89.01 100.99 13.00 47.58 100.89 34.96 13.00 64.98 100.00 Total Premium LIC Private Sector Total 81.00 83.00 86.02 10.10 100.04 100.02 35.42 16.00 2008-09 60 .

61 .

The corresponding ratio for private insurers averaged to 1 per cent. six companies namely Bharti AXA.03 per cent in 2007-08) towards commission on first year premium (excluding Single Premium).25 per cent (16. LIC incurred an expense ratio of 17.3 crore as against Rs. the excess was within the norms for the life insurance industry. Management expense of private insurers had stabilized in 2007-08.43 per cent. In the case of LIC. However. Bharti AXA which started business in 2007-08 exceeded the prescribed limits in the year 2008-09. 12 companies complied with the stipulations on expenses of management. ING Vysya. Out of 18 companies which underwrote business during 2008-09. 12258.49 per cent as against industry average of 1.56 per cent (17. the expenses of management continued to be within the allowable limits. 62 . For the private insurers this ratio worked out to be 15. IDBI Fortis and Bharti AXA. Aviva.01 per cent (16. Reliance and new entrantsFuture Generali and IDBI Fortis exceeded the prescribed limits. In the case of Future Generali.59 per cent in 2007-08). The total commission paid bythe life insurers in 2008-09 amounted to Rs.68 per cent in 2007-08). It was observed that commissions paid by the life insurance companies for procurement of new business has increased competition in the sector. 14704.EXPENSES As against the industry average of 16. The commissions paid by LIC towards the single premium was 1. In 2008-09.99 crore in 2007-08.

69 5089.05 42.33 50.19 4276.35 4963.3 4650.70 7525.21 7982.48 4460.79 2778.99 9614. crore) Insurer 2007-08 Regular LIC Private Sector Total 4789.46 5229.15 9474.95 504.51 456.97 2008-09 63 .65 554.40 12258.74 2735.58 3085.79 307.57 First Year LIC Private Sector Total 5203.98 4459.49 8919.81 4511.00 Renewal LIC Private Total 3969.89 578.61 14704.43 Single Premium LIC Private Sector Total 414.COMMISSION EXPENSES OF LIFE INSURERS (Rs.99 Total LIC Private Sector Total 9173.

crore) Insurer LIC Private Sector Total 2007-08 7085.85 2008-09 8309. Advertisement and publicity expenses of LIC accounted for 2. As the private insurers have leaner organizational structures compared to LIC their average worked out to be 47.84 6500. OPERATING EXPENSES OF LIFE INSURERS (Rs.78 Operating expenses as a per cent of gross premium underwritten for the private insurers worked out to 23.89 in 2006-07).11 per cent in 2006-07. Employee remuneration and welfare benefits accounted for 60.03 per cent in 2006-07). In the case of LIC. Training expenses in the case of LIC accounted for 1. advertisement and publicity at 8. 64 .93 per cent in 2006-07).93 per cent as against 48.92 per cent (8.75 per cent of the operating expenses of LIC in 2007-08 as against 57. training expenses (including agents training and seminars) at 5.73 per cent of the operating expenses (1.The major expense heads for the private insurers were employee expenses at 39.32 12032.49 per cent in the previous year.92 per cent in 2006-07).96 per cent (6.01 13585.46 20341.55 per cent of the gross premium underwritten in 2008-09 same as in 2007-08. operating expenses constituted 5.34 more or less at the same level as in 2007-08.93 per cent in 2006-07).44 per cent of the total operating expenses (3.08 per cent (37.

There has been a significant increase in the benefits paid on account of surrenders/withdrawals amounting to Rs. the investment income including capital gains was higher at Rs.28 per cent at Rs.24 crore (Rs. 2478.41 crore in 2006-07) constituting 41.73 per cent in 2006-07).06 crore in 2008-09 compared to Rs. 2466. The benefits paid by the private insurers showed an increase of 111.81 per cent in 2006-07). 5212.76 per cent of the premium underwritten (Rs. 55765.02 crore in 2007-08 (Rs. 56567. 6602. was Rs. 46784.BENEFITS PAID The life industry paid gross benefits of Rs. 17690. 21677.6 per cent in 2007-08.01 crore in 2006-07).37 per cent in 2007-08 (4. 61780.73 per cent in 2006-07).94 crore in 2006-07). INVESTMENT INCOME In the case of LIC.70 per cent of the total premium underwritten.48 crore in 2006-07. it increased to 37.25 crore as against Rs. inclusive of capital gains.78 per cent in2008-09 from a decline of 36. The investment income of the private insurers.77 crore (Rs. As a percentage of total income. LIC paid benefits of Rs. 65 . The share of investment income in the total income for the private life insurers increased to 23. The benefits paid by the life insurers net of re-insurance were Rs. constituting 37. 56595.32 crore in 2006-07.71 crore in 2007-08.62 crore in 2008-09 as against Rs. constituting 10.11 per cent of the premium underwritten (8. 55715. 61687.68 per cent of the gross premium underwritten (35.35 crore in 2006-07)constituting 30. 53298.78 crore in 2007-08.

With the total premium underwritten at Rs. the insurer still continues to report a deficit in the Revenue Account. 5. However. 2007. Metlife and Sahara life have reported net profits of Rs. Some of these companies reported surpluses in some segments of their business in 2007-08. In 2008-09. The company has reported profits by carrying deficit of Rs. 9. 34. As against net loss of Rs.02 crore in 2006-07.58 crore in 2008-09 as against Rs. 51. it reported a lower net profit of Rs.83 crore in 2007-08 and further increased its net profit level to Rs. the State Bank of India.16 crore. However. 66 . the company¶s operations have. 3. It reported higher net profit of Rs. however still to take off in a significant manner.25 crore and Rs. against net loss of Rs. which commenced operations in February. SBI Life insurance company was the first private company to report net profit of Rs. 2.34 crore. All the private insurance companies reported deficit in their respective Revenue Accounts in 2008-09. The deficits in Revenue account necessitated injection of further capital by the shareholders (except for Shriram Life). Shriram Life. 3. four of the private sector companies reported net profits.25 crore in 2008-09.5 crore in 2007-08.34 crore respectively. 488 crore in the revenue account. 11. 184.44 lakh in 2007-08.38 crore in 2007-08. Sahara Life has reported maiden net profits in 2008-09 at Rs. too reported net profit for the third successive year of operations. 21. Metlife reported net profit of 21. The company has succeeded in achieving an early break even on account of its lower cost of operations due to the large network of its Indian partner. 3.96 crore in 2007-08.PROFITS OF LIFE INSURERS In 2008-09.

Rs. with group business forming the major component of the re-insurance cessions.81 crore in 2007-08) complying with the provisions of Section 28 of the LIC Act.59 LIC continued to report surplus in the Policyholders¶ Account (Revenue Account in 2007-08).59 crore as against Rs. The continued financial support through equity injections reflected the promoters¶ commitment towards stabilizing the respective insurer¶s operations.4324. 786.81 757.81 2008-09 829. The private insurers together ceded Rs. 757. 67 . The net profits in the Profit & Loss account of the five insurers.95 crore in 2006-07). stood at Rs. 909.59 crore to the Government of India (Rs. 829. RETENTION RATIO LIC traditionally re-insures a small component of its business.52 crore (Rs. 757.19 crore (Rs.59 829. Similarly. DIVIDEND PAID: LIFE INSURERS (Rs.05 crore in 2007-08) as premium towards re-insurance.12 crore in 2007-08). 1956. 41. a small component of the business was reinsured. adjusted for interim bonus and allocation of bonus to policyholders was Rs. including LIC. crore) Insurer LIC Private Sector Total 2007-08 757. 1950. 87.RETURNS TO SHAREHOLDERS During 2008-09.81 crore in 2007-08.67 crore in 2006-07).23 crore (Rs. Surplus in the said account. 829. 160. During 2008-09. 231. the net losses reported by the private insurers stood at Rs. in the case of private insurers. LIC transferred Rs.95 crore was ceded as re-insurance premium (Rs.

Pushkar Lahiri Deepak Singh Negi Jasbeer Singh Tomar Rachiyata Raju Saini Siddharth Gupta Sandeep Singh Vikas Nanda 0% 50% 100% LIC MAX New York SBI Life Birla Sun Life TATA AIG ICICI Prudential Bharti AXA AEGON Religare Bajaj Allianz HDFC Standard Life Rajeev Jain LIC Amit Kumar Bhatt Manju Joshi Rahul Bajaj Amit Kumar Ankit Jain Pratap Singh Chauhan Virendra Singh Chauhan 0% 50% 100% MAX New York SBI Life Birla Sun Life TATA AIG ICICI Prudential Bharti AXA AEGON Religare Bajaj Allianz 68 . These respondents were given a questionnaire to be filled by them and on the basis of that questionnaire some findings were drawn out. Below is the percentage of likelihood for various companies based on the perception in the mind of customer. It included individuals of almost all age groups.A sample consisting of 75 respondents was taken randomly.

Sharma Naveen Singh 0% 50% 100% MAX New York SBI Life Birla Sun Life TATA AIG ICICI Prudential Bharti AXA AEGON Religare Bajaj Allianz HDFC Standard Life 69 .K.Sumit Jitendra Kumar Bansal Tauquir Ali Devendra Kumar Ajit Kumar LIC MAX New York SBI Life Birla Sun Life TATA AIG ICICI Prudential Aashish Srivastava Pradeep Kesarwani Satyapal Singh 0% 50% Bharti AXA AEGON Religare Bajaj Allianz 100% HDFC Standard Life Mandeep LIC Manmohan Singh Dinesh Katwal Ahuja Bhatt Ritesh Kumar Nand Kishore V.

67 9.46 AEGON Religare=3. based on the perception of the customer about various companies a pie chart can be drawn out which would show the likeliness/preference of the customer for a company while choosing his/her insurance policy.63% Bajaj Allianz=10.67% 3.63 7.27% HDFC Standard Life=8.27 TATA AIG=9.89% 70 . LIC=17.63 10.98% 17.95% SBI Life=11.95 ICICI Prudential=10.63% 10.98 9.23% MAX New York=10.Hari Singh LIC Ruchi Malhotra Devendra Singh Preeti Mittal Manav Verma Sandeep Sharma Ashish Mohan Kamal Prasad Sharma 0% 50% 100% MAX New York SBI Life Birla Sun Life TATA AIG ICICI Prudential Bharti AXA AEGON Religare Bajaj Allianz HDFC Standard Life Now.24% 10.24 Bharti AXA=7.23 Birla Sun Life=9.89 11.46% 8.

LIC is in the market since several years (1956) and has created a good position in the minds of the customers.08% 16. Services Provided.91% Goodwill=16.39 Risk cover=15. Rate of return=16.08 14. However. HDFC Standard Life.39% Services provided=16.41% Charges=10. Tax Benefit.41 16. There might be another reason to it that as Aegon Religare has just entered the insurance industry most of the customers are not aware of it. TATA AIG. Charges and Goodwill.The pie chart clearly indicates that the customers prefer LIC as their insurance provider followed by SBI Life. These factors were Rate of Return. These factors have been reflected in the pie chart below with their respective percentage based on the perception of the customer.9 10.28% 15.28 10. ICICI Prudential. Bajaj Allianz.01 Tax Benefit=14. Another dimension mentioned in the questionnaire were the factors that influence an individual while selecting an insurance policy. and AEGON Religare. MAX New York. The lowest preference is for Aegon Religare as most of the people do not know much about it.01% Flexibility=10.9% From the pie diagram it may be concluded that most of the people prefer LIC because of its goodwill (17%).91 16. Bharti AXA. Flexibility. as we know that the rate 71 . Risk cover. Birla Sun Life.

high flexibility. because of the advertisements. yet the customers go for LIC as they consider it to be more safe and has less risk. lower charges that the private insurers are able to snatch a certain portion of market of LIC. It is because of the rate of return. LIC continues to be a market leader and bears goodwill in the minds of the customers. The market share of LIC and Private insurers in 2007-08 was 81. 72 . however.39%. lower charges their market share in 2009-10 increased to 25. services provided. Despite the fact that some portion of the market has been overtaken by private insurers.61% whereas that of LIC lowered to 74.of return offered by LIC in its policies is much lower as compared to the private life insurers.10%. higher rate of return.9% and 18.


areas. 74 . Trading in online trading firm is as easy as it all delivered with internet and within a few minutes the customers can buy and sell a share which saves time as well as reduction of people work. LIC provides the facilities of relationship manager for encouragement and protects the interest of the investors. locality and occupation. From the above survey and observation it is found that most of the people who are trading in share market belongs to the employee group. As the share market value goes on increasing day by day the investor who wants to invest in shares also increased. Customers always want more services by paying less. It also provides the best satisfaction in their customers mind by the best trustable organization in the whole country and people are easily agreed to take the services provided by LIC. next comes the business men. Hence trading in share market is increasing day by day and investors are ready to invest their investment in share market only. Study also concludes that people are not much aware of commodity market and while it s going to be biggest market in India. The need of customers differs from person to person. I got the knowledge about the customer s needs and their references for having particular products. and other class of income people.CONCLUSION On the basis of the study it is found that LIC is better service provider than the other associations because of their timely research and personalized advice on what stocks to buy and sell.


Time constraints: The time required to conduct the research study is a constraint as we have also to sell insurance policies so conducting the research alone becomes somewhat hectic. No rural visits are scheduled for this study. 2. Some errors might also creep in during interpretation. Resources limited: As the study is conducted in individual groups and no additional help has been provided by the company in terms of financial support hence the best probable study is conducted in the given small resource pellets. Errors: There are always some chances of errors creeping in such as non response errors. 5. biased response errors etc. 76 . i. This study is totally about meeting people.e. Geographical: The study is relevant only under the geographical inbounds of Dehradun. which involves moving within the city. 4. 3. which certainly requires money. it does not lead to any motivation.CHAPTER 8: LIMITATIONS As fitting to every research As fitting to every research work here also there are certain limitations to the study which must be mentioned beforehand so that the reader might perceive it in those regards:1. the urban settlements. Monetary constraints: As there is no stipend which is provided by the company.


As we know that when a company is new in the market it should spend a considerable amount on advertisement to create awareness in the minds of customers. However. On the basis of that perspective Aegon Religare has 3.CHAPTER 9: RECOMMENDATIONS As we are undergoing training in Religare. sporting events etc.while the respondents were filling the questionnaire they were asked as to whether they knew about Aegon Religare and to my astonishment they responded ³WHICH COMPANY IS IT? / IS IT ALSO INSURANCE COMPANY?´ It was such a shame on my side that the company I was working with was never heard of. with Aegon as its partner it has failed to enhance its image in the eyes of the customer. The company¶s management hasn¶t made efforts to build the company¶s image.63% share in the minds of the customers. The people of Dehradun were astonished to hear that Aegon Religare is an insurance company. The results shown above prove this statement. One thing that I would like to clarify is that nowadays IPL is going on and to my surprise not a single ad of Aegon Religare was shown. Religare entered the insurance industry in 2008-09 with global major Aegon as its partner. As mentioned above. Most of the people still do not know about the company. Personal experience: . Not many people know that Irfan Khan is the brand ambassador of Aegon Religare. simple random sampling was done and 75 respondents perspective was collected. This clearly shows the management¶s leanness in projecting the company as another insurance company. it becomes important for us to recommend something good for the company itself. So it is strongly recommended on my part that the company should resort to advertising. launch exciting policies. 78 . organize trade fairs.


www.icallinsurance.com www. Ramakrishna Rau. Business India. Insurance Chronicle. Economic Times.org www. March 2009 Niraj Bajaj .org 80 .com www. IRDA Journal Life insurance and General Insurance from ICMR. µinsuring a bright future¶ .censusofindia.irdaindia. y y ICMR books on Financial Management and Business Research Methods. The Hindu.com www. M C Garg.licindia. April2008 Articles related to insurance from various news papers like The Times of India. Business Standard etc.com www. y Others y y y y T.bimaonline.business India.religareinsurance. K P Singh.wikipedia. Environment and Procedures by B S Bodla. January 2009 Endowment plans now.S.org http://www.REFERENCES Websites y y y y y y y Books y Insurance Fundamentals.

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