INSURANCE IN INDIA

Project submitted in partial fulfillment of the requirement for the degree of B.Com(Hons)
BY Name: NEHA KUMAR Roll NO: 462

COMMERCE DEPARTMENT INDRAPRASTHA COLLEGE

UNIVERSITY OF DELHI DELHI NOVEMBER, 2010

DECLARATION
This is to certify that the present project work is based on my understanding of the subject and has not been copied from some published source or website. My indebtedness to the other works on the subject has been acknowledged at relevant places.

This project work has not been submitted in part or full for any other degree or diploma of any university.

Name: Neha Kumar Roll No.:462

Dr. Vinita K. Dar Academic Mentor Commerce Department Indraprastha College Delhi University Delhi

Mrs. Renu Choudhry Teacher-in-charge Commerce Department Indraprastha College Delhi University Delhi

ACKNOWLEDGEMENT
In bringing out this study, I am extremely grateful to my mentor Dr. VINITA K. DAR of COMMERCE DEPARTMENT, INDRAPRASTHA COLLEGE who provided valuable comments and suggestions from time to time as to methodology, style and substance. Her valuable encouragement made it possible for me to complete the study in its present form.

Contents
Declaration Acknowledgement
Chapter 1 INTRODUCTION
Meaning of insurance Objective of the study Research methodology Limitations of the study Plan of the study

Chapter 2 Theoretical framework

Brief history of insurance Basic functions of insurance Major types of insurance Some players in this industry ULIP

Chapter 3 Players in Insurance Sector Chapter 4 Analysis & Interpretation

Comparative analysis of various players in the industry.

Chapter 5 Summary & Conclusions

Brief Summary
Conclusion

Scope for further research

Chapter 6 Appendices
Questionnaire

 Bibliography

CHAPTER 1 INTRODUCTION

Meaning of Insurance
Insurance is a contract between two parties whereby one party agrees to undertake the risk of another in exchange for consideration known as premium and promises to pay a fixed sum of money to the other party on happening of an uncertain event (death) or after the expiry of a certain period in case of life insurance or to indemnify the other party on happening of an uncertain event in case of general insurance. The party bearing the risk is known as the 'insurer' or 'assurer' and the party whose risk is covered is known as the 'insured' or 'assured'.

Objectives

To get information about features, customers look into before buying an insurance policy. To know the benefits required by the customers from the policy like tax benefits etc. To evaluate and study preference of consumers regarding various players in insurance sector To study about policies, products and services offered by different insurance companies which includes ICICI Prudential, Bajaj Allianz, LIC, SBI Life Insurance, TATA AIG Life Insurance and ING Life Insurance.

Research methodology
This Study is based on primary as well as secondary data. Data was collected from people of various age groups with varied incomes.50 customers were selected on random basis out of which 43 of them responded. Various other sources were used such as Company websites, newspapers and magazines. For the analysis of the data various statistical tools like percentages, pie charts and graphs have been used.

Limitations
There are various limitations as small samples have been taken and advance techniques have not been used and samples are also collected on random basis so it lacks accuracy.

Plan of the study

This study deals with 5 chapters .It starts with Introduction, secondly comes its Theoretical framework, thirdly case study of ICICI Prudential & Bajaj Allianz follows it , fourthly analysis and interpretation of the case study has been done and finally the study has been summarized and concluded.

CHAPTER 2 THEORETICAL FRAMEWORK

History of the Insurance Sector in India

Some of the important milestones in the life insurance business in India are: 1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business. 1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses. 1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalized. LIC formed by an Act of Parliament, viz. LIC Act, 1956, with a capital contribution of Rs. 5 crore from the Government of India. The General insurance business in India, on the other hand, can trace its roots to the Triton Insurance Company Ltd., the first general insurance company established in the year 1850 in Calcutta by the British. Some of the important milestones in the general insurance business in India are: 1907: The Indian Mercantile Insurance Ltd. set up, the first company to transact all classes of general insurance business. 1957: General Insurance Council, a wing of the Insurance Association of India, frames a code of conduct for ensuring fair conduct and sound business practices. 1968: The Insurance Act amended to regulate investments and set minimum solvency margins and the Tariff Advisory Committee set up. 1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India with effect from 1st January 1973. 107 insurers amalgamated and

grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC incorporated as a company. 1996: Setting up of (interim) Insurance Regulatory Authority(IRA). 1997: Govt. gives greater autonomy to LIC, GIC & its subsidiaries and flexibility in investment norms aimed at channeling funds to the infrastructure sector. 1998: Cabinet decides to allow 40% foreign equity in private insurance companies 26% to foreign companies and 14% to NRIs OCBs &FIIs. 1999: Standing Committee headed by Murli Deora decides that foreign equity in private insurance should be limited to 26%. The IRA bill is renamed the IRDA Bill. 1999: Cabinet clears IRDA Bills. 2000: President gives assent to IRDA Bill.

Basic Functions of the Insurance Industry

1. Risk Perception and Evaluation:

The fundamental function of an insurer is to provide a cover against the detriment caused to the insured due to the happening of certain specified and agreed events. Thus, prior to providing such umbrella through a product, the insurer has to assess the risk involved in the transaction. After the identification and categorization of the risks perceived, the probability of happening of the loss-causing events and the severity of the loss has to be assessed.

2. Designing the Insurance Product:

On the basis of the risks perceived, the insurer develops a product to cover the stipulated risks. While designing an insurance product, an insurer decides its cost to be charged from the insured in the form of premium, reduction thereof in certain cases like not lodging any claim during the previous covered period(s), suggesting the implementation of risk-mitigating measures, etc. The features of a product should be flexible enough to provide for the determination of premiums, rebates, additional premiums, etc. depending upon the risk benchmarks as determined.

3. Marketing of the Product:

The core function of the marketing force of an insurance company is to generate awareness about the insurance products among the target market. But in the Indian scenario, where the insurance penetration is too low as compared to the other nations, the marketing force needs to perform the pro-active role in

developing an insurance culture. It is through the efficiency of the sales force of an insurance company that the desirability and the success of a product are determined. In Indian insurance market, the function is, basically performed by the agents. The persons desiring to function as insurance agents have to obtain license to act as such from the IRDA or an officer authorized by the Authority in this behalf. The agents approach the prospective buyers and apprise them of the basic features of the products. In order to dispense with the functions, the agents need to possess adequate knowledge of the insurance industry, products and the modalities attached therewith.

4. Selling of the Products:

The term selling in the context of insurance industry connotes the issuance of policies to the applicant proposer. The non-life insurance policy basically embodies the covenant between the insurer and the insured wherein the former agrees to indemnify the latter for the loss caused to him on the happening of the certain agreed events up to a specified limit. In Indian industry, the function is, generally performed by the insurer. In addition, the insurance companies depute their Direct Selling Representatives to look after the function. They receive the proposal documents, vet them and issue policies to the proposers.

5. Management of Portfolio:
The insurer possesses huge amount of funds, which need proper management. The management of the portfolio of an insurance company requires the identification of investment avenues, evaluation thereof and the selection of the most appropriate mix of alternatives where the funds of the company can be invested. The selection requires the knowledge of finance related functions and techniques apart from the in-depth know of the patterns of requirement of funds in the company as well as in the industry as a whole.

Major Types of Insurance

Health Health insurance policies will often cover the cost of private medical treatments if the National Health Service in the United Kingdom (NHS) or other publicly-funded health programs does not pay for them. It will often result in quicker health care where better facilities are available. Dental insurance, like medical insurance, is coverage for individuals to protect them against dental costs. In the U.S., dental insurance is often part of an employer's benefits package, along with health insurance. Most countries rely on public funding to ensure that all citizens have universal access to health care.

Disability * Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards. * Total permanent disability insurance provides benefits when a person is permanently disabled and can no longer work in their profession, often taken as an adjunct to life insurance. * Disability overhead insurance allows business owners to cover the overhead expenses of their business while they are unable to work. * Workers' compensation insurance replaces all or part of a worker's wages lost and accompanying medical expense incurred because of a job-related injury.

Life Life insurance provides a monetary benefit to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. 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. 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. 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. In that sense, they are the complement of life insurance and, from an underwriting perspective, are the mirror image of life insurance. Certain life insurance contracts accumulate cash values, which may be taken by the insured if the policy is surrendered or which may be borrowed against. Some policies, such as annuities and endowment policies, are financial instruments to accumulate or liquidate wealth when it is needed.

Some Players in the Insurance Industry

Life Insurance & General Insurance 1. Oriental Insurance Company Ltd. 2. New India Assurance Company Ltd. 3. National Insurance Company Ltd. 4. United India Insurance Company Ltd. 5. Life Insurance Corporation of India 6. General Insurance Corporation of India New Entrants 1. ICICI Prudential Life Insurance Ltd. 2. Bajaj Allianz General Insurance Company Ltd. 3. Tata AIG Life Insurance Corporation Ltd. 4. Reliance General Insurance Company Ltd. 5. ING Vysya Life Insurance Corporation Ltd. 6. Tata AIG General Insurance Company Ltd. 7. Om Kotak Mahindra Life Insurance Corporation Ltd. 8. AVIVA Life Insurance, 9. Birla Sunlife Insurance, 10. HDFC Standard Life Insurance, 11. Max New York Life Insurance, 12. SBI life insurance

ULIP
In India, Unit Linked Insurance Policies (ULIPs) are insurance policies that combine risk coverage with investing in the stock/debt markets. In effect, they are designed to behave as normal insurance policies plus mutual funds. An investor's contribution to ULIPs gets invested in specific types of portfolios that he/she chooses. The policy typically pays back based on market returns on investments at the end of the insured period. Therefore, it forms an interesting savings instrument that can get good risk cover.

Features of ULIPs
1. Units allotted under ULIP schemes have Net Asset Values (NAV) declared regularly, like a mutual fund 2. Investors can invest across types of portfolios similar to mutual funds - growth equity, balanced, debt funds, etc. Investors can move across portfolios, typically at nominal costs 3. Investors can invest as a lump sum (single premium) or make premium payments on an annual, halfyearly, quarterly or monthly basis. Premium amounts can be changed over the course of ULIP's life 4. Investments qualify under Section 80C of the Income Tax Act. Maturity proceeds from ULIPs are tax free. There are no long term capital gains tax and 10% short term capital gains tax on equity portfolios within ULIP. For debt funds, long term capital gains tax is 10% while short term is at the investor's marginal tax rate. 5. However, charges charged by insurance companies can be quite confusing - therefore, investors should compare them with similar mutual funds to see if charges quoted are reasonable.

Despite their interesting structure and potential benefits, investors are better off clearly understanding portfolio types offered, performance of fund managers and expenses/fees before investing in ULIPs.

Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time.

ULIP provides multiple benefits to the consumer. The benefits include:

* Life protection * Investment and Savings * Flexibility * Adjustable Life Cover * Investment Options * Transparency * Options to take additional cover against * Death due to accident * Disability * Critical Illness * Surgeries * Liquidity * Tax planning

CHAPTER 3 PLAYERS IN THE INSURANCE SECTOR

ICICI PRUDENTIAL
About ICICI Prudential ICICI Prudential Life Insurance Company is a collaboration between ICICI Bank and Prudential plc. ICICI Prudential Life Insurance Company started operating in December 2000. Currently the company has 2000 branches all over India, has more than 274,500 advisors and has 20 bancassurance partners. The ICICI Prudential was the first of its kind to receive the AAA National Insurer Financial Strength rating from Fitch ratings. The Economic Times - AC Nielsen ORG Marg survey of 'Most Trusted Brands' voted ICICI Prudential as the Most Trusted Private Life Insurer of India, thrice consecutively. ICICI Prudential Insurance Plans ICICI Prudential offers a wide range of insurance plans to suit the various needs of individuals. The insurance plans by the company are enlisted: Life Insurance Plans: Education Insurance Plans Premium Guarantee plans Wealth Creation Plans Protection Plans Retirement Solutions: ForeverLife LifeLink Super Pension LifeTime Super Pension

Health Product Suite: Crisis Cover Cancer Care Plus Cancer Care Hospital Care Diabetes Care Plus Diabetes Care HealthAssure Plus Achievements of ICICI Prudential The ICICI Prudential has been honored with several awards. Some of them are mentioned below:
1. 2.

ICICI Prudential Life was awarded the ICICI Group Marketing Excellence Award 2008. For its excellence in Mass Communication, the company was awarded the INDY's Award in the Most Creative Advertisement-Television category.

3.

The Avaya Global Connect - Economic Times Customer Responsiveness Awards of 2007 awarded ICICI Prudential Life as the Most Customer Responsive Insurance Company.

4.

The company website - www.iciciprulife.com was given the award for being the best website by the Web 18 and Frost & Sullivan Genius of the Web Awards 2007 for commendable work in the online.

5.

The company is also the proud receiver of IMM Award for Excellence by the Institute of Marketing & Management.

ING LIFE INSURANCE

ING Vyasa is one of the largest insurance and financial services companies in the world. The Fortune 13 company, employs more than 1,00,000 people and has accumulated net profits to the tune of $9 billion. ING Life Insurance is known to offer several innovative and useful insurance products in India. It was in September, 2001 that ING Life Insurance started operations in India. Now, ING Life Insurance has more than 300 branches spread across 240 cities in the country. Important facts Some of the important facts related to ING Life Insurance in India have been listed below. ING Life Insurance services more than 5 lakh customers in India In the year 2007, ING Life Insurance earned over Rs. 1,000 crores in revenues. About 7,000 persons are employed with ING Life Insurance. The headquarters of the insurance firm is located in Bangalore. ING Life Insurance aims to cover the following important requirements of an Indian: Protection Savings Investment Retirement ING Group's operations in India

Apart from insurance, ING also carries out operations in important areas like banking and investment management. In fact, ING Vyasa Bank is one of the major private banks that serves Indian customers. ING Investment Management owns 2 subsidiary firms, ING Fund and Optimix. Popular ING Life Insurance Products Some of the major life insurance products offered by ING Life Insurance have been highlighted below. ING Term Life ING Term Life Plus Safal Jeevan ING LifePlus ING New Freedom Plan ING Golden Life

BAJAJ ALLIANZ
About Bajaj Allianz Bajaj Allianz General Insurance Company Limited is one of the private insurance companies in India. The Bajaj Allianz General Insurance Company Ltd is a Bajaj Finserv Limited and Allianz SE joint venture. Bajaj Finserv Limited is 74% shared holder in the company with the remaining 26% being held by Allianz SE. On 2nd May 2001, the Bajaj Allianz General Insurance was given the IRDA (Insurance Regulatory and Development Authority) certification of Registration for conducting the General Insurance business (which also included the Health Insurance business) in the country. Bajaj Allianz India is headquartered in Pune. The company has its offices in 200 towns all over India. Bajaj Allianz Services All sectors of General Insurance, Health Insurance and Risk Management enjoy the technical excellence provided by the Bajaj Allianz General Insurance Company. Bajaj Allianz is a registered Indian Insurance Company with Rs. 110 crores as its capital base. The company is certified to approve all types of general insurance inclusive of health insurance. The various insurance services offered by Bajaj Allianz are: Motor Insurance Asset Insurance

 Health Insurance Travel Insurance Corporate Insurance Achievements of Bajaj Allianz The ICRA Limited has given Bajaj Allianz the iAAA rating for its Claims Paying Ability. Bajaj Allianz made a Rs. 167 crore profit before taxes. After generating an amount of Rs. 105 crores, it became the first of its kind to cross the mark of Rs.100 crores in profit after tax. On 31st March 2008, Bajaj Allianz General Insurance collected a premium income worth Rs. 2578 crore. This marked a growth by 43 % for the company since the last year. In the first three months of 2008-09, Bajaj Allianz collected Rs.733.53 crores as gross premium against Rs.573.73 core last year recording a 28% growth.

LIFE INSURANCE CORPORATION (LIC)

LIC: An Overview LIC or Life Insurance Corporation is one among the largest insurers in India. Established in 1956, the Life Insurance Corporation of India is wholly administered by the Government of India. LIC's headquarters is in Mumbai. The 2048 branches of LIC are situated in different parts of the country. LIC (Life Insurance Corporation): History India went through tumultuous economic conditions during the British rule. The Battle of 1857, the 2 World Wars had an adverse impact on the nation's economy. The wars not only led to economic crisis but also contributed to liquidation of many Indian life insurance companies. As a result, the Indians lost faith in insurance. In 1912, the Life Insurance Companies Act, along with Provident Fund Act, was passed and the passing of this act was followed by the establishment of LIC in India. LIC (Life Insurance Corporation) started its journey with 33 divisional offices and 5 zonal offices. At that time, LIC had 212 branches all over India. Present condition of LIC LIC (Life Insurance Corporation) has bee ruling the Insurance sector of India for more than 50 years. At present, the organization has 2,048 offices and 180 million policies. More than 1 million agents are working in LIC. As per 2006 record, the company has contributed about 7 percent of the total Gross Domestic Product of India. Other than Insurance Plans, LIC (Life Insurance Corporation) operates the following plans: Unit Plans Pension Plans

Other than this, LIC also operates certain special plans and Group Schemes.

TATA AIG LIFE INSURANCE

About the Tata AIG Life Insurance Company Ltd.: Tata AIG Life Insurance Company Ltd. is one of the famous life insurance companies in India offering several interesting life insurance policies. Tata AIG Life Insurance Company Limited is often known as Tata AIG Life. Basically, it is a joint venture company and operated by the Tata Group. This famous life insurance company was formed by the American International Group, Inc. (AIG) and the Tata Group. Being one of the leading and oldest business groups in India, in 200708, Tata Group has earned $55 billion or Rs.221, 320 crore (excluding Corus financials). Who can avail life insurance policies from Tata AIG Life? Tata AIG Life Insurance Company Limited or Tata AIG Life brings to you a wide selection of life insurance policies for individuals, small business industries, large business industries and for associations. Apart from these, the company also provides additional life insurance coverage to assure the clients an insurance policy designed for them. Types of policies and services provided by Tata AIG Life Insurance Company Ltd.: The various life insurance policies and services offered by the Tata AIG Life include o o o

For individuals: Tata AIG Life Health First Tata AIG MahaLife Gold Tata AIG Life InvestAssure Plus

o o

Tata AIG Life InvestAssure II Tata AIG Life Health Protector - 5 Year Guaranteed Renewal Accident and Health

Plan
o o o o o o

Tata AIG Life InvestAssure Care Tata AIG Life InvestAssure Gold Tata AIG Life Health Investor Tata AIG Life InvestAssure Extra Tata AIG Life LifePlus Tata AIG Life Assure One year/ Five Years/10 Years/ 15 Years / 20 Years / 25

Years Lifeline Plans, and Term to age 60 known as Assure Lifeline to Age 60
o o o o o o

Tata AIG Life ShubhLife Tata AIG Life Easy Retire Tata AIG Life Assure 10 Years / 20 Years / 30 Years Security & Growth Plans Tata AIG Life Assure 21 years Money Saver Tata AIG Life Raksha 10 /15/ 20 /25 Tata AIG Life Assure Golden Years Plan For the Children:

o o o o o

Tata AIG Life Assure 21 years Money Saver Tata AIG Life Assure Career Builder Tata AIG Life Starkid Tata AIG Life InvestAssure II Tata AIG Life MahaLife Gold

o o

Tata AIG Life InvestAssure Plus Tata AIG Life Assure Educare at 18 & Assure Educare at 21 Retirement Plans:

o o o o o o o o

Tata AIG Life Nirvana Tata AIG Life Easy Retire Tata AIG Life InvestAssure Gold Tata AIG Life Assure Golden Years Plan Tata AIG Life MahaLife Gold Tata AIG Life InvestAssure Future Tata AIG Life InvestAssure II Tata AIG Life Nirvana Plus

Corporate life insurance products offered by Tata AIG Life Insurance Company Ltd.: The Tata AIG Life Insurance Company Limited also offers various corporate life insurance products that include Group Pensions Employee Benefits Workplace Solutions Credit Life

SBI LIFE INSURANCE

State Bank of India (SBI) Life Insurance is a joint venture between the State Bank of India and BNP Paribas Assurance. SBI is the largest banking firm in India and 7 associate banks come under the fold of the SBI Group. SBI Life Insurance offers products to individuals, groups and corporates in India. Important facts More than 40,000 insurance advisors work with SBI Life Insurance in India. SBI Life Insurance is known for qualities like trustworthiness, ambition, innovation, dynamism and excellence in its area of specialization. The SBI Group owns more than 14,500 branches located across the country of India. The corporate headquarters of SBI is located in Mumbai

Types of Insurance Products The different types of insurance products offered by the State Bank of India have been highlighted below. Group products Retirement solutions Group protection schemes

Individual products Unit Linked Plans Pension Plans Money Back Schemes Savings Plan

Popular SBI Life Insurance Products SBI Life Insurance offers different individual and group products to customers in India. Some of the popular insurance products and schemes offered by SBI Life Insurance have been listed below. SBI Life- Horizon II SBI Life- Unit Plus II SBI Life- Unit Plus Child Plan SBI Life Swadhan SBI Life- Sudarshan

CHAPTER 4 ANALYSIS AND INTERPRETATION

EVALUATION OF PREFERENCES OF CUSTOMERS

Preference company
Preferences of respondents about which company to go for vary from Person to person .Respondents were asked various questions related to their preferences about Insurance Companies. This is shown in Table 1 & Fig. 1.

of

respondents

of

insurance

Table 1 Preference of respondents

Company Name L.I.C ICICI Prudential SBI Life Insurance BAJAJ ALLIANZ TATA AIG Total No of Respondents 20 9 7 3 4 43 (%) 46.51 20.93 16.27 6.97 9.30 100

Fig. 1. Preference of respondents

3 7

4 20

LIC ICICI SBI

BAJAJ ALLIANZ TATA AIG

Interpretation - As shown in the above Table and Fig. among the private players ICICI takes
the lead with respect to Bajaj Allianz and Major share among the preference of customers is taken by LIC i.e. 20 customers out of 43 prefer LIC for their insurance cover.

Benefits of insurance cover

Insurance is mainly an instrument used by consumers for hedging the future contingent risk related with life, health and non-life general issues. Respondents were asked various questions related to their Views about benefits of Insurance Cover. This is given in Table 2 & Fig. 2.

Table 2 Benefits of insurance cover

Benefits It Safeguards Future Tax Deductions Return on investment Total No Of Respondents 20 10 13 43 (%) 46 23 31 100

Fig. 2. Benefits of insurance cover

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Safegaurds Future Tax Deductions Future Investm ent %share of Respondents

Interpretation - Above Table and Fig reveals that 46% of the respondents believe that
safeguarding future uncertainty is the biggest benefit of the insurance policy and 23% & 31 % of them believe that other benefits are tax deductions and future investment

Features of the Insurance Policy

Respondents were asked various questions related to their Views about features of Insurance policy they would look for while buying it. This is depicted in Table 3 & Fig. 3.

Table 3 Features of the Insurance Policy

Feature Low Premium Larger risk Coverage Money Back Guarantee Reputation of company Easy access to agents Total No of respondents 12 16 7 4 4 43 (%) 27.90 37.20 16.30 9.30 9.30 100

Fig. 3 Features of the Insurance Policy

low Prem ium Larger Risk coverage Money back gaurantee Reputation of company Easy AccessTo Agents

Interpretation - Above Table and Fig reveals that Majority of the respondents found larger risk
coverage as the most attractive feature of their policy and the next best feature according to the respondents is low premium.

Type of Insurance Policy

Insurance policy is offered by company in form of life insurance as well as non-life. Respondents were asked about the type Insurance Policy they already have. This is depicted in Table 4 & Fig. 4.

Table 4 Type of Insurance Policy

Policy Type Life Non life Both No of Respondents 27 16 10 (%) 63% 37% 23%

Fig. 4 Type of Insurance Policy

70% 60% 50% 40% 30% 20% 10% 0% Life Non Life Both

Interpretation
Above Table and Fig reveals that 63% of the respondents have life insurance cover while 23% have both the type of insurance policies.

Sector preferred while taking Insurance Policy

Insurance policies are being offered by public as well as private companies. Respondents were asked that while taking Insurance Policy they would go for public or private sector. This is depicted in Table 5 & Fig. 5.

Table 5 Sectors preferred

Sector Public Private Total No of Respondents 27 16 43 (%) 63% 37% 100

Fig. 5 Sectors preferred

Private Sector

Public Sector

0%

10%

20%

30%

40%

50%

60%

70%

Interpretation
As shown in above Table & Fig Majority of the customers prefer public sector for their insurance policy.

CHAPTER 5 SUMMARY AND CONCLUSION

SUMMARY
Insurance is also now being regarded as a versatile financial planning tool. Research indicates that Indians have four basic financial needs during their life asset accumulation (such as buying a house or car), protecting their family, securing their childrens education, and provision for their retirement. So, while there are three basic types of insurance, these have been structured with

increased flexibility to meet focused requirements. Furthermore, these can be enhanced with riders to protect one against disability and provide monetary compensation at times of critical illnesses or surgeries. India being a country having a huge population of around one billion people with only 22% of the insurable population in India possessing insurance the country has a vast potential which has been left untapped till now. The competition in the insurance sector is becoming so intense that it has become difficult to identify the crucial success factors though the distribution strength will always be the key to success. Another area of vast improvement is in service attitude and delivery. Undoubtedly, the biggest beneficiary of the competition amongst life insurers has been the consumer. A wide range of products, customer focused service and professional advice has become the mainstay of the industry, and the Indian consumer has become the focus of each of the companys strategies. Consumers today also seek products that offering flexible options, preferring products with benefits unbundled and customizable to suit their diverse needs. This all adds up to major change in demand for insurance products. Firms will need to constantly innovate in terms of product development to meet ever-changing consumer needs. Competition will result in the market to grow beyond current rates and offer additional consumer choice through the introduction of new products, services and price options. With the heightened awareness and consumer education comes a willingness to view life insurance as an integral part of the financial portfolio. No longer is life insurance a poorly understood product that is posed onto people. Nor is it a product that is only to be brought hurriedly at the time of filling taxes. Its now catching on as an important element that is purchased to fulfill specific rational and emotional

needs and has clear benefits and advisors are being trained to sell insurance as a solution to meet these needs. To conclude with we would just like to say that the Indian insurance market is quite a big one and more importantly a huge part of it has been left untapped till now, therefore there is enough room for all the private players to establish themselves provided they give the Indian consumer the best value for their money in the long run because it will take time for the people to get out of the nutshell of being getting insured only with LIC as till few years ago it used to have an absolute monopoly in this market.

CONCLUSION
Majority of the population (46.51%), when they think of insurance it means LIC and

followed by ICICI Prudential (20.93%) and BAJAJ ALLIANZ(6.97%). Majority of the population believes that insurance is superior to other form of savings. It provides tax benefits which is not provided in other forms of savings and to the more it provides security for the future and returns on their investments.

 When people opt for an insurance company, most of them look for larger risk coverage,

Low Premium and Money Back Guarantee. Not many of them look for additional benefits. According to the study 63% go for Life Insurance and rest of the 37% opt for non-life and there are some who will go for both. Majority of the public prefer Public Sector instead of Private Sector due to security of investment.

SCOPE FOR FURTHER RESEARCH

Advanced techniques would have been used. Samples should be collected on universal basis instead of random basis so as to attain accuracy in results.

CHAPTER 6 APPENDICES

Questionnaire for Customers

1. Are you employed Yes No

2. Your monthly income? <10k 10k 20k 20k 30k 30k 40k >40k ____ ____ ____ ____ ____

3. Do you have any insurance policy Yes No

4. Which insurance policy do you have Life Non-life Both

5. Which Sector would you prefer for taking insurance policy? Public Sector Private Sector ____ ____

6. Rank your preference for the following insurance companies LIC ICICI Prudential SBI Life Insurance OM Kotak Mahindra TATA AIG Life Any Other ( Please Specify ) ____________ ____________ ____________ ____________ ____________ ____________

7. For how many years do you have any insurance policy? (Tick One) <5 Yrs 5 10 Yrs 10 -15 Yrs Other ( Please Specify ) ______ ______ ______ ______

8. What do you think are the benefits of the insurance cover? It Safeguards from future uncertainty Tax Deductions Return on investment Any Other Benefit _____ _____ _____ _____

9. Rank the following features of a insurance policy according to your preference Low Premium Larger risk coverage Money back guarantee Reputation of company Easy access to agents Any other ( Please specify ) _____ _____ _____ _____ _____ _____

Thank You Name: ____________________________ Address: ___________________________ _________________________ _________________________ Occupation: _________________________

Bibliography
Websites

www.google.com www.wikipedia.com
www.iciciprulife.com www.bajajallianz.com www.insurance.headlinesindia.com

Books
Chavas Jean Paul

Risk Analysis in Theory and Practice Academic P (Publisher)

Blanchard Ralph H

Introduction to Risk and Insurance

Beard Book (Publisher)

Magazines and Newspaper

Business Today Business 24x7

 Economic Times