INTRODUCTION TO THE STUDY
Everyone is exposed to various risks. Future is very uncertain, but there is way to protect one’s family and make one’s children’s future safe. Life Insurance companies help us to ensure that our family’s future is not just secure but also prosperous. Life Insurance is particularly important if you are the sole breadwinner for your family. The loss of you and your income could devastate your family. Life insurance will ensure that if anything happens to you, your loved ones will be able to manage financially. This study titled “Study of Consumers Perception about Life Insurance Policies” enables the Life Insurance Companies to understand how consumer’s perception differs from person to person. How a consumer selects, organizes and interprets the service quality and the product quality of different Life Insurance Policies, offered by various Life Insurance Companies.
Insurance is a tool by which fatalities of a small number are compensated out of funds (premium payment) collected from plenteous. Insurance companies pay back for financial losses arising out of occurrence of insured events e.g. in personal accident policy death due to accident, in fire policy the insured events are fire and other allied perils like riot and strike, explosion etc. hence insurance safeguard against uncertainties. It provides financial recompense for losses suffered due to incident of unanticipated events, insured with in policy of insurance. Moreover, through a number of acts of parliament, specific types of insurance are legally enforced in our country e.g. third party insurance under motor vehicles Act, public liability insurance for handlers of hazardous substances under environment protection Act. Etc.
WHAT IS INSURANCE
It is a commonly acknowledged phenomenon that there are countless risks in every sphere of life .for property, there are fire risk; for shipment of goods. There are perils of sea; for human life there are risk of death or disability; and so on .the chances of occurrences of the events causing losses are quite uncertain because these may or may not take place. Therefore, with this view in mind, people facing common risks come together and make their small contribution to the common fund. While it may not be possible to tell in advance, which person will suffer the losses, it is possible to work out how many persons on an average out of the group, may suffer losses. When risk occurs, the loss is made good out of the common fund .in this way each and every one shares the risk .in fact they share the loss by payment of premium, which is calculated on the likelihood of loss .in olden time, the contribution make the above-stated notion of insurance DEFINITION OF INSURANCE Insurance has been defined to be that in, which a sum of money as a premium is paid by the insured in consideration of the insurer’s bearings the risk of paying a large sum upon a given contingency. The insurance thus is a contract whereby:
a. Certain sum, termed as premium, is charged in consideration, b. Against the said consideration, a large amount is guaranteed to be paid by the insurer who received the premium, c. The compensation will be made in certain definite sum, i.e., the loss or the policy amount which ever may be, and d. The payment is made only upon a contingency
More specifically, insurance may be defined as a contact between two parties, wherein one party (the insurer) agrees to pay to the other party (the insured) or the beneficiary, a certain sum upon a given contingency (the risk) against which insurance is required.
and by the influence of legislation controlling the transacting of insurance business. insurance may be classified into the following categories: 1. and Miscellaneous insurance
3. broadly. in number and extent owing to the growing complexity of present day economic system. Classification from business point of view a) Life insurance. and b) General insurance 2. Classification on the basis of nature of insurance a) b) c) d) e) Life insurance Fire insurance Marine insurance Social insurance. Classification from risk point of view a) b) c) d) Personal insurance Property insurance Liability insurance Fidelity general insurance
. which can be insured. The different type of insurance have come about by practice within insurance companies.TYPES OF INSURANCE Insurance occupies an important place in the modern world because of the risk.
THE IMPORTANCE OF INSURANCE Insurance benefits society by allowing individuals to share the risks faced by many people. But it also serves many other important economic and societal functions. Because insurance is available and affordable, banks can make loans with the assurance that the loan’s collateral (property that can be taken as payment if a loan goes unpaid) is covered against damage. This increased availability of credit helps people buy homes and cars. Insurance also provides the capital that communities need to quickly rebuild and recover economically from natural disasters, such as tornadoes or hurricanes. Insurance itself has become a significant economic force in most industrialized countries. Employers buy insurance to cover their employees against work-related injuries and health problems. Businesses also insure their property, including technology used in production, against damage and theft. Because it makes business operations safer, insurance encourages businesses to make economic transactions, which benefits the economies of countries. In addition, millions of people work for insurance companies and related businesses. In 1996 more than 2.4 million people worked in the insurance industry in the United States and Canada. Insurance as an investment that offers a lot more in terms of returns, risk cover & as also that tax concessions & added bonuses Not all effects of insurance are positive ones. The possibility of earning insurance payments motivates some people to attempt to cause damage or losses. Without the possibility of collecting insurance benefits, for instance, no one would think of arson, the willful destruction of property by fire, as a potential source of money.
THE INSURANCE INDUSTRY TODAY Since the 1970s, the insurance business has grown dramatically and undergone tremendous changes. As a result of the deregulation of financial services businesses— including insurance, banking, and securities trading—the roles, products, and services of these formerly distinct businesses have become blurred. For instance, citizens in the U.S. state of California voted in 1988 to allow banks to sell insurance in that state. In Canada, banks may also soon be allowed to sell insurance. Advances in communications technology have also allowed traditionally distinct financial businesses to keep instantaneous track of developments in other businesses and compete for some of the same customers. Some insurance companies now offer deposit accounts and mortgages. In the United States, life insurance companies now sell more pension plans and other asset management services than they do conventional life insurance. Developments in computer technology that have given insurance providers the ability to quickly access and process information have allowed them to custom-design policies to fit the needs of individual customers. But the increasing complexity of policies has also made some aspects of buying and selling insurance more difficult. In addition, improvements in geological and meteorological technology have the potential to change the way property insurers calculate risks of damage. For example, as scientists improve their abilities to predict severe weather patterns, such as hurricanes, and geological disturbances, such as earthquakes, insurers may change how they provide protection against losses from such events
EVOLUTION OF INSURANCE IN INDIA The marine insurance is the oldest form of insurance. If we trace Indian history there are evidence that marine insurance was practiced here about three thousand years ago. The code of Manu indicates that there was the practice of marine insurance carried out by the traders in India with those of Srilanka, Egypt and Greece .it is wonderful to see that Indians had even anticipated the doctrine of average and contribution. Fright was fixed according to season and was then very much at the mercy of the wind and other elements. Travelers by sea and land were very much exposed to the risk of losing their vessels and merchandise because of piracy on open seas and highway robbery of caravans was very common. The practice of insurance was very common during the rule of Akbar to Aurangzeb, but the nature and coverage of the insurance in this period is not well known. It was the British insurer who introduced general insurance in India in the modern form. The Britishers opened general insurance in India around the year 1700 .the first company known as the sun insurance office was set up in Calcutta in the year 1710. This was followed by several insurance companies like London assurance and royal exchange assurance (1720), Phoenix Assurance Company (1782). Etc. General insurance business in the country was nationalized with effect from 1st January 1973 by the General Insurance Business (Nationalization) Act, 1972. More than 100 non-life insurance companies including branches of foreign companies operating within the country were 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. with head offices at Calcutta, Bombay, New Delhi and Madras, respectively.
and in between them the period of world wide economic crises triggered by the Great depression. the Parliament of India passed the Life Insurance of India Act on 19th June 1956.
. Bombay mutual life assurance society. The Indian insurance company Act 1923 was enacted inter alia. the madras equitable life insurance society in 1829 and oriental life assurance company in 1874. and the Life Insurance Corporation of India was created on 1st September. to enable the government to collect statistical information about life and nonlife insurance business transacted in India by Indian and foreign insurer. an Indian insurer that came in to existence in 1871. This had adversely affected the faith of the general public in the utility of obtaining life cover In this background. The aggregate effect of these events led to a high rate of bankruptcies and liquidation of life insurance companies in India.prior to 1871. oriental life assurance company in 1818 followed by Bombay life assurance company in 1823. including the provident insurance societies. 1956.Life insurance in the current form came in India from united kingdom with the establishment of a British firm. by consolidating the life insurance business of 245 private life insurers and other entities offering life insurance services. was the first to cover Indian lives at normal rates. the adverse affects of the World War I and World War II on the economy of India. Indian lives were treated as sub standard and charged an extra premium of 15% to 20%. The first half of the 20th century was also marked by struggles for India’s independence. The first half of the 20th century marked by two world war.
As per the provisions of IRDA Act.similarly premium underwritten by GIC rose from 280 crores in 193 to 7647 crores in 1998 showing an annual growth rate of 25. 1999.the amount of savings pooled by LIC increased from Rs.53% . revenue of both of them increased in the last years . Apart from that a major policy shift by the Narasimha Rau government during 1990’s. 1999 (IRDA Act).N Malhothra .former governor reserve bank of India.57670 in 1994 with an annual growth rate of 16. Insurance sector has been opened up for competition from Indian private insurance companies with the enactment of Insurance Regulatory and Development Authority Act.Since 1972. promote and ensure orderly growth of the insurance industry. As a result.2704 crores in 1974 to Rs . the insurance sector has been totally under the control of government of India through LIC and GIC and its subsidiaries. Despite increase in premium collected by both LIC and GIC their were inefficiency and red tapeisum creeped in to the insurance sector.the Indian economy opened for foreign competition .18%. to examine the structure of Indian insurance sector and recommended changes to make it more efficient and competitive keeping in view structural changes in other part of the financial system of the country. Insurance Regulatory and Development Authority (IRDA) was established on 19th April 2000 to protect the interests of holder of insurance policy and to regulate. IRDA Act 1999 paved the way for the entry of private players into the insurance market. which was hitherto the exclusive privilege of public sector insurance companies/ corporations.
.In this background The government of India in 1993 had set-up a high powered committee by R.
no shifting. insurance at all because there is no hedge. The management of a company is entrusted to a board of directors who is elected by the shareholders from amongst themselves.
b) Partnership A partnership firm may also carry on the insurance business for the sake of profit.
. the personal liability of partners in respect to the partnership debts is unlimited. If some losses happened in the future the firm meets the loss out of the fund.
a) Self-insurance The arrangement in which an individual or concern sets up a private fund to meet the future risk. The company can operate insurance business and policyholders have nothing to do with the management of the concern. While it may be called ‘self insurance’ it is not a single matter of fact. In case of huge loss the partners may have to pay from their own personal funds and it will not be profitable to them to starts insurance business . some of these forms are outlined here.in the early period before the advent of joint stock companies many insurance undertakings were partnership firms or unincorporated companies
c) Joint stock companies The joint stock companies are those. Here the insured become the insurer for the particular risk. But in life insurance it is the practice to share certain portion of profit among the certain policyholders. These are formed for earning profits for the stockholders who are the real owners of the companies. the insurance organizations have been developed in different forms with innovation of insurance practice for social welfare and development. Since it is not an entity distinct from the persons comprising it. But it can be effectively worked only when there is wide distribution of risks subjected the same hazard. which are organized by the shareholders who subscribe the necessary capital to start the business. or distributing the burden of risk among larger Persons. It is merely a provision to meeting the unforeseen event.EVOLUTION OF INSURANCE ORGANIZATION With a view to serve the society.
the powers of Lloyds corporation were extended from the business of marine insurance to the other insurance and guarantee business. Since the insured are insurers also.Lloyds Act was passed incorporating the members of the association into a single corporate body with perpetual succession and a corporate seal . Taking its name from the coffee house Lloyd where underwriters assembled to transact business and pick-up news. which are incorporated and registered under Indian cooperative societies Act. In 1871. it is accumulated I the form of saving and is entitled in reducing the rate of premium. The concerns are also called ‘co operative insurance societies’ these societies like mutual fund companies are non profit organization . The organization traces its origins to the latter part of the seventeenth century .
f) Lloyd’s Association
Lloyd’s association is one of the greatest insurance institutions in the world.d) Mutual fund companies The mutual fund companies are co. they always try to reduce the management expenses and to keep the business at sound level.
e) Co-operative insurance organizations Cooperative insurance organizations are those concerns. has provided special
provisions for the co-operative insurance societies. They have power to participate in management and in the profit sharing to the full extent. 1938.the Indian insurance Act. The Lloyds Association also publishes.operative association formed for the purpose of effecting insurance on the property of its members. but after nationalization the societies have ceased to exist.so it is the oldest insurance organization in existing form in the world.the aim is to provide insurance protection to its members at the lowest reasonable net cost . The policyholders are themselves the shareholders of the companies each member is insured as well as insured. Whenever the income is more than the expenses and claims. Lloyds list and register of shipping for the information of insuring public and the insurers
the efforts made by the government to make the industry more dynamic and customer friendly. owns the insurance and runs the business for the benefit of the public. was formed to evaluate the Indian insurance industry and recommend its future direction. the state undertook only those insurances.g) State Insurance
The government of a nation. headed by former Finance Secretary and RBI Governor R. Japan and Mexico. The sate insurance is defined as that insurance which is under public sector. To begin with. N. some times. Malhotra. which were regarded as vital for the national interest. Malhotra Committee. In 1994. In Brazil. Previously. The Malhotra Committee Report In 1993.
INSURANCE SECTOR REFORMS
Having looked at the insurance sector. the Malhotra committee was set up with the objective of suggesting changes that would achieve the much required dynamism. the committee submitted the report and gave the following recommendations: Structure Government stake in the insurance Companies to be brought down to 50% Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations All the insurance companies should be given greater freedom to operate
. the insurance are largely nationalized.
But at the same time. Controller of Insurance (Currently a part from the Finance Ministry) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. Overall. GIC and its subsidiaries are not to hold more than 5% in any company (There current holdings to be brought down to this level over a period of time). Only one State Level Life Insurance Company should be allowed to operate in each stat Regulatory Body The Insurance Act should be changed.Competition Private Companies with a minimum paid up capital of Rs. Customer Service LIC should pay interest on delays in payments beyond 30 days. the committee felt the need to exercise caution as any failure on the part of new players could ruin the public confidence in the industry
.1bn should be allowed to enter the industry No Company should deal in both Life and General Insurance through a single entity Foreign companies may be allowed to enter the industry in collaboration with the domestic companies. the committee strongly felt that in order to improve the customer services and increase the coverage of the insurance industry should be opened up to competition. Insurance companies must be encouraged to set up unit linked pension plans. An Insurance Regulatory body should be set up. Postal Life Insurance should be allowed to operate in the rural market. Computerization of operations and updating of technology to be carried out in the insurance industry.
The nominee receives a guaranteed amount of money at a pre-determined time and not immediately on death of the insured. Pension schemes . Annuities / Children's policies . The insured does not receive money while he is alive.Cover the insured for a specific period.are policies that provide benefits to the insured only upon retirement. one should have a portfolio of policies covering all the needs
. These policies cost more than endowment with profit policies. These policies are best suited for planning children's future education and marriage costs. The insured receives money on survival of the term and is not covered thereafter.Few Life Insurance policies are:
Whole life policies . Endowment policies . his nominee would receive the benefits either as a lump sum or as a pension every month. the nominee receives the sum assured plus bonus upon death of the insured. On survival the insured receives money at the same pre-determined time.Cover the insured for life. Since a single policy cannot meet all the insurance objectives.The nominee receives money immediately on death of the insured. On survival the insured receives money at regular intervals during the term. If the insured dies during the term of the policy. Money back policies .
Whole life insurance provides a lifetime of protection as long as you pay the premiums to keep the policy active. it is the civilized world’s partial solution to the problems caused by death. In other words. Obviously. Term life insurance provides protection only during the term of the policy and the policies are usually renewable at the end of the term
. which leaves dependent families to fend for themselves and old age without visible means of support. Among other things the contracts also provides for the payment of premiums.1.2 BACKGROUND OF THE STUDY “Life Insurance is a contract for payment of a sum of money to the person assured on the happening of the event insured against”. They also accrue a cash value and thus offer a savings component. Life insurance helps in two ways dealing with premature death. substitute certainty for uncertainty and ensure timely aid for the family in the unfortunate event of the death of the breadwinner. there is a price to be paid for this benefit. by the assured. Life Insurance is universally acknowledged as a tool to eliminate risk. The most common types of life insurance are whole life insurance and term life insurance. Usually the insurance contract provides for the payment of an amount on the date of maturity or at specified dates at periodic intervals or at unfortunate death if it occurs earlier.
There are many Life Insurance Companies like LIFE INSURANCE CORPORATION OF INDIA BAJAJ ALLIANZ LIFE INSURANCE COMPANY ICICI PRUDENTIAL LIFE INSURANCE COMPANY HDFC STANDARD LIFE INSURANCE COMPANY BIRLA SUN-LIFE INSURANCE COMPANY ING VYSYA LIFE INSURANCE COMPANY METLIFE INSURANCE COMPANY TATA AIG LIFE INSURANCE COMPANY MAX NEW YORK LIFE INSURANCE COMPANY OM KOTAK MAHINDRA LIFE INSURANCE COMPANY
The study will be able to reveal the preferences.RESEARCH DESIGN
2. the earlier the product is introduced ahead of competitors. It also help the insurance companies to know whether the existing products are really satisfying the customers needs . an in depth study of the consumers.
2. 4) This study will also help the companies to understand the experience and expectations of the existing customers. according to the consumer’s need. 5) Apart from creating. their preferences and demand for their product is very necessary for setting up an efficient marketing network. needs. 2) Consumer markets and consumer buying behavior can be understood before sound product and marketing plans are developed 3) This study will help companies to customize the service and product.1 STATEMENT OF THE PROBLEM This Study will help us to understand the consumer’s perception about life insurance companies. organizes and interprets the Quality of service and product offered by life insurance companies. This study will help the companies to understand.2 SCOPE OF THE STUDY This study is limited to the consumers within the limit of Bangalore city.Hence the study is very important. perception of the customers regarding the life insurance products.
2. manufacturing and distribution capabilities for life insurance products. the expected contribution margin will be greater .3 NEED FOR THE STUDY 1) The deeper the understanding of consumer’s needs and perception. how a consumer selects.
o To produce an executive service report to upgrade service characteristics of life insurance companies. than the researcher proposes. The literature may also explain the needs for the proposed work to appraise the short comings and informational gaps in secondary data sources. origin and growth of the industry is also taken from some books.
o To access the degree of satisfaction of the consumers with their current brand of Insurance products. Information from various websites. To carry the research work the researcher has gone through a few reports. The sources of this information are as follows: Catalogues and Broachers from various life insurance companies. history.5. journals and websites. company data or industry reports that acts as a basis for proposed studies to begin with the research discussion of the related literature and relevant secondary data from a comprehensive prospective.
o To find out the differences among perceived service and expected service . that are associate with research problem. The details regarding Life Insurance Industry. books.4 OBJECTIVE OF THE STUDY o Ascertain the profile and characteristics of potential buyers. Basically the literature should be applied to the study. Articles from magazines and news paper. REVIEW OF LITERATURE: The literature review section critically examine the recent or historically significant studies. magazines etc.2. moving to more specific studies.
o To have an insight into the attitudes and behaviors of customers.
7 SAMPLE DESIGN: The process of drawing a sample from a large population is called sampling. Infect the research design is the conceptual structure where the research is conducted. from the various parts of the Bangalore city. Well-selected samples may reflect fairly and accurately the characteristics of the population. which guides the researcher in the collection and analysis of data required for practicing the research. The study is carried out to understand the Consumer Perception about life insurance companies in Bangalore city .2. It constitutes the ‘Blue Print’ for the collection.6 RESEARCH DESIGN: A research design is a basic plan. measurement and analysis of the data.
.8 SOURCES OF DATA: After identifying and defining the research problem and determining specific information required to solve the problem the researcher will look for the type and sources of data which may yield the desired results. there are two types of data. Sample Size: The sample size was 50 customers of different life insurance companies. while deciding about the method of data collection to be used for the study. belonging to various age groups.For this study the researcher used exploratory research design. This research covers 50 consumers in Bangalore city.
2. Sampling Technique Adopted: Convenient sampling
2. Population refers to the total of items about which information is defined. Sampling Unit: The sample unit of this survey was the customers having life insurance policies in Bangalore city.
Primary data is collected by framing questionnaires.The secondary data are collected from periodicals.
2. libraries etc.9 FIELD WORK: An interview-schedule and well-structured questionnaire is administered to the target respondents to collect primary data (Copy of questionnaire is attached in the appendix) Open and close-ended questions are used in the questionnaire. journals and Internet. whereas closed-Ended questions were relatively simple to tabulate and analyze. Closed-ended questions are those wherein the respondent has to merely check the appropriate answer from a list of options available. Open-ended questions are questions requiring answers in the
responder’s own words. magazines.Secondary Data: Secondary data means data that are already available i. they refer to the data which have been collected and analyzed by someone and can save both money and time of the researcher. which are collected for the first time. trade publications. The questionnaire contained questions. Openended questions yielded more insightful information. The orders of the questions are in such a manner that they begin with simple questions and lead on the questions that needed more involvement from respondents. Any doubts raised by the respondents were clarified to get the perfect answers from the distributors.
. which are both openended and closed-ended. Secondary data may be available in the form of company records. Secondary data sources are as follows: Company Reports Daily Newspaper Standard Textbook Various Websites
Primary Data: Primary data are those.e.
promotion and distribution of individual and organizational goals. pricing. money.
Consumer Research: Consumer research is the methodology used to study consumer behaviour. efforts] on consumption related items .OPERATIONAL DEFINITIONS OF THE STUDY Marketing: Marketing is a social and managerial process by which individuals and group obtain what they need and want through creating. Marketing Management: Marketing Management is the process of planning and executing the conception.
. Market Segmentation: Market segmentation is the process of dividing a market in the distinct subsets of consumer with common needs or characteristics and selecting one or more segments to target with distinct marketing mix.
Positioning: Positioning is the act of designing the company’s offering and image so that they occupy a meaningful and distinct competitive position in the target consumer’s mind.
Marketing Research: Marketing research is the systematic and objective search for. and analysis of information relevant to the identification and solution of any problems in the field of marketing. offering and exchanging products of value with others .
Consumer Behaviour: Consumer behaviour is the study of how individuals make decisions to spend their available resources [time.
This standard determines or guide an individual evaluation of the many objects encountered in everyday life. For a marketer to influence a motivated buyer to buy their products rather than competitors they must be careful to take the perception process into account while designing their marketing campaigns.
Attitude: An attitude is a person enduring favorable or unfavorable evaluation. and interprets information input to create a meaningful picture of the world. and action tendencies towards some object or idea.
. An internalized standard of evaluation a person possession. symbol. sign.Perception: Perception is the process by which an individual selects. Perception therefore influence what product consumer buys.
Brand: A brand is a name. emotional feeling. or design or a combination of them. term.
Attributes: Attributes are the strengths and weaknesses of a brand that create attitudes and are used by consumers to choose between brands that are relatively similar or functionally equivalent. used to identify the goods or services of one seller or group of seller and the differentiate them from those of competitors. organizes.
Values: A value is a concept of the desirable.
Accuracy: It is difficult to know if all the respondents gave accurate information.
.10 LIMITATIONS OF THE STUDY Although the study was carried out with extreme enthusiasm and careful planning there are several limitations.
Sample size: Due to time constraints the sample size was relatively small and would definitely have been more representative if I had collected information from more respondents . which handicapped the research viz.2. however due care is taken to include all the relevant information needed. some respondents tend to give misleading information.
Time Constraints: The time stipulated for the project to be completed is less and thus there are chances that some information might have been left out.
PROFILE OF THE INDUSTRY
brought into effect with the enactment of the Insurance Act. the Indian Insurance Companies Act was enacted. Bombay Mutual Life Assurance Society. the management of the entire life insurance business of 229 Indian insurers and provident insurance societies and the Indian life insurance business of 16 non-Indian Life insurance companies then operating in India. Indian Lives were treated as sub-standard and charged an extra premium of 15% to 20%. to enable the government to collect statistical information about both life and non-life insurance business transacted in India by Indian and foreign insurers. followed by Bombay Life Assurance Company in 1823. in its present form. 16 non-Indian insurers and 15 provident societies were carrying online insurance business in India. On 19th January 1956. 1912 was the first statutory measure to regulate life insurance business. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion.
By 1956. Oriental Life Insurance Company in Calcutta in 1818. a Indian insurer which came into existence in 1871 was the first to cover Indian lives at normal rates. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP. came to India from the United Kingdom with establishment of a British firm. Prior to 1871. in 1928. Together with banking services. Later. it adds about 7 per cent to the country’s GDP.
With largest number of life insurance policies in force in the world.
. including the provident insurance societies.
The Indian life Assurance Companies Act.3. 1938. however. was taken over by the central Government and then nationalized on 1st September 1956 when the Life Insurance Corporation came into existence.1 INDUSTRY PROFILE
History and Development of Life Insurance Life Insurance. Insurance happens to be a mega opportunity in India. the Madras Equitable Life Insurance society in 1829 and Oriental Government security Assurance Company in 1874. Comprehensive arrangements were. 154 Indian insurers.
A well-developed and evolved insurance sector is needed for economic development as it provides long-term funds for infrastructure development and at the same time strengthens the risk taking ability. There are two type of environment which affect the business one is environment which is internal to the organization (internal environment) and the other one which is external to the organization (external environment). and commercial. Here I would like to mention about Indian business environment and their impact on insurance sector. nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards.so the growth of insurance industry largely depends up on the environment in which they exists. employees. This industry provides long term funds which are essential for the growth and development of the nation . competitors. economic. The external environment of insurance business has been classified in four parts. Internal environment includes management. This itself is an indicator that growth potential for the insurance sector is immense. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. let us discus them in detail by taking one by one.Yet. financial. marketing intermediary etc.
INSURANCE AND BUSINESS ENVIRONMENT Insurance is considered as one of the important segment of the economy for its growth and development. technology. can enable investments in infrastructure development to sustain economic growth of the country. namely legal. shareholders. policyholders. to some extent.
. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. The Insurance sector.
which have tied up with International partners. Some of the Indian companies. it had proposed setting up an independent regulatory body. promote and ensure orderly growth of the insurance business and reinsurance business. Section 14 of the IRDA Act 1999. Based on the Malhotra committee report in April 2000 IRDA was incorporated. and to restrict international companies to a minority equity holding of 26 percent in any new company.THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY (IRDA) The Malhotra Committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. The Insurance Regulatory and Development Authority bill will clear the way for private entry into insurance. the bill requires direct insurers to have a minimum paid-up capital of Rest. to invest policyholder’s funds only in India. The sector is finally set to open up to private competition. 1 billion.
.The Insurance Regulatory and Development Authority.the authority shall have the duty to regulate. as the government is keen to invite private sector participation into insurance. A number of foreign Insurance Companies have set up representative offices in India and have also tied up with various asset management companies. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. power and functions of the authority . Over the past three year. Whether the insurer is old or new. are. lays the duties. private or public. Indian Promoters will also have to dilute their equity holding to 26 percent over a 10-year period.
Reforms and Implications
The liberalizations of the Indian insurance sector has been the subject of much heated debate for some years. To address those concerns. expanding the market will present challenges. around 30 companies have expressed interest in entering the sector and many foreign and Indian companies have arranged alliances. For this purpose.
US Liberty Mutual Fund. International insurers often derive a significant part of their business from multinational operations.Indian Partners Bombay Dyeing Tata Dabur Group ICICI Sundaram Finance Hindustan Times Ranbaxy HDFC CK Birla Group DCM Shriram Godrej M A Chidambaram Cholamandalam SK Modi Group 20th Century Finance Alpic Finance Vysya Bank Kotak Mahindra
International Partners General Accident. Switzerland Royal Sun Alliance. UK American Int. UK Met Life Guardian Royal Exchange. US Prudential. Multinational insurers are indeed keenly interested as. UK J Rothschild . Switzerland Commercial Union. UK Cigna. Australia Canada Life Allianz Holding. perhaps there home markets are saturated while emerging countries have low insurance penetration and high growth rates
. US Standard Life. UK Winterthur Insurance. UK Zurich Insurance. UK Legal and General. Germany ING Chubb. US
The likely impact of opening up of India’s insurance sector is that private players may swamp the market. Group.
Type of life insurance policies
Whole life insurance Whole life is a form of permanent insurance. but it does not make sense to make it your main policy. It's a little like putting your savings into the stock market. the amount of premiums and how often you pay the premiums.
Universal life insurance Universal life is similar to whole life. but it can also give you the best return for your money. For that reason. except that you can change the death benefit (the money paid to the beneficiary when the insured person dies). Essentially. the life insurance company will invest your insurance premiums for you.
Variable life insurance Variable life insurance is the riskiest form of permanent insurance. group insurance can be a good way to buy a little extra life insurance. It is the least flexible form of permanent insurance.
Group life insurance Many companies allow their employees to buy group life insurance through the company. they go down. If the investments do well. you can get very good rates for this insurance but you have to give the insurance up when you stop working there. with guaranteed rates and guaranteed cash values. Usually. If they do poorly. the death benefit and cash value of the policy go up.
they provide for a graded amount to be paid to the beneficiary. if the insured person dies during the term of coverage. wife and children. in each of the first three to five years after the insured dies. Such policies are not considered traditional life insurance because the child is not producing an income that needs to be protected.
2. the entire death benefit is paid to the beneficiary. Senior life insurance. After that period. This is a decreasing term policy that provides a stated income for a fixed period of time. This is life insurance on a child. with the primary wage-earner insured for the greatest amount. the parents are able to lock in an extremely low premium rate and allow many more years of tax-deferred cash value buildup . by buying the policy when the child is young.
3. but would be in a better position to handle it a few years later. Usually the coverage is sold in units per person. These payments continue until the end of a time period specified when the policy is purchased. This might be appropriate if the beneficiary is not able to handle a large amount of money soon after the death.There are a number of policies for specific insurance needs. Also known as graded death benefit plans. Juvenile insurance. Coverage is paid for by an adult. Family insurance. usually the parents or guardians.
. Family income life insurance.
4. the death benefit slowly increases. For example. However. A whole life policy that insures all the members of an immediate family -husband. Some of these include:
5. Usually it is sold by financial institutions making loans. the proceeds of the policy repay the loan directly to the lender or creditor. Credit life insurance is available for many kinds of loans including student loans. Credit life insurance can be purchased by an individual. Credit life insurance. Mortgage insurance
This decreasing term coverage is designed to pay off the unpaid balance of a mortgage if you die before the mortgage is paid off. . If a borrower dies. This insurance is designed to pay off the balance of a loan if you die before you have repaid it. meaning that the financial institution granting the mortgage is separate from the insurance company issuing the policy. The proceeds of the policy are paid to the beneficiaries of the policy. There are many different forms of annuities. you give the insurance company money for a certain period of time. The beneficiary is not required to use the proceeds to pay off the mortgage
7. Annuity An annuity is a form of insurance that enables you to save for your retirement. The policy is usually independent of the mortgage. farm equipment loans. auto loans. not the mortgage company. and then after you retire they will pay you a certain amount of money every year until you die.
6. to borrowers at the time they take out the loan. Premiums are generally level throughout the term of the policy. like banks. Most people who buy annuities are 55 or older
. furniture and other personal loans including credit cards. Basically.
The building blocks for all Life Insurance Corporation of India are (1) investment return. the premium rating of Oriental Government security life Assurance company were adopted by LIC with a reduction of 5% of the tabular premium or Re.3.
Life Insurance Corporation Of India .2 PROFILE OF THE ORGANISATIONS:
LIFE INSURANCE CORPORATION OF INDIA
Life Insurance Corporation of India was formed in September 1956 by passing LIC Act. for your Life Insurance Corporation Of India
. but underlying this complexity is a simple fact.there are many things to consider as Life Insurance Corporation of India offers various insurance products which are very complex. This reduction was made in anticipation of economies of scale that would emerge on the merger of different insurers in a single entity. 1956 in Indian parliament. and (3) expense management. whichever was less. (2) mortality experience. 1 per thousand sum assured. On the nationalization of the life insurance in 1956.
Promote amongst all agents and employees of the Corporation a sense of participation. without losing sight of the interest of the community as a whole.
Involve all people working in the Corporation to the best of their capability in furthering the interests of the insured public by providing efficient service with courtesy. in the investment of funds. Meet the various life insurance needs of the community that would arise in the changing social and economic environment.
Conduct business with utmost economy and with the full realization that the moneys belong to the policyholders.
Bear in mind.
Maximize mobilization of people's savings by making insurance-linked savings adequately attractive.
Act as trustees of the insured public in their individual and collective capacities. keeping in view national priorities and obligations of attractive return. pride and job satisfaction through discharge of their duties with dedication towards achievement of Corporate Objective
.Objectives of LIC
Spread Life Insurance much more widely and in particular to the rural areas and to the socially and economically backward classes with a view to reaching all insurable persons in the country and providing them adequate financial cover against death at a reasonable cost. whose money it holds in trust. the funds to be deployed to the best advantage of the investors as well as the community as a whole. the primary obligation to its policyholders.
VISION "A trans-nationally competitive financial conglomerate of significance to societies and Pride of India “
MISSION "Explore and enhance the quality of life of people through financial security by providing products and services of aspired attributes with competitive returns. and by rendering resources for economic development”
Various policies offered by life insurance corporation of India are 1) Whole Life Schemes • Whole life with profit • • • Limited payment whole life Single Premium whole life Convertible whole life plan
2) Endowment Schemes • • • • • • • Endowment plan with profit Limited payment Endowment Jeevan Mitra (Double Cover) Jeevan Mitra (Triple cover) Bhavishya Jeevan Jeevan Anand New Jana Raksha
3) Term Assurance Plan • • • • Anmol Jeevan 2 Year Term Assurance Covertible Term New Bima Kiran
Plan for needs of Children • • • • • • • Komal Jeevan Jeevan Sukanya Jeevan Kishore Jeevan Balya Jeevan Chaya Marriage/educational annuity Deffered Endowment
5) Periodic Money Back Plan • • • • • Jeevan Samridhi Jeevan Rekha Plan Money Back Plan Jeevan Surabhi Jeevan bharathi
6) Medical benefits linked insurance • • Asha Deep II Jeevan Asha II
7) For benefits to Handicapped • • Jeevan Aadhar Jeevan Vishwas
8) Plans to cover housing loans • Mortagage redemption
9) Joint life plan • Jeevan sathi
Thus an Endowment Assurance Policy provides for retirement and also serves as a means of family provisions.10) Investment plan • Bima Nivesh Triple cover
11) Capital market linked plan • Bima plus.
Endowment Assured Plan: Endowment plans are not covering the risk for whole life of the life assured. Endowment assurance plan are the most popular. tax liabilities if any and expenses connected with the last sickness and hospital charges etc. The term of risk cover under this plan is as per the need of life assured. religious rites and ceremonies to be performed.
Term Assurance Under the term assurance the risk cover is generally for specific short term. Such term assurance is maximum for 2 years. Under the whole life premium are payable throughout the life time of the life assured and this is the cheapest form of policy.
. Generally this type of assurance is useful for air traveling. This plan is ideally suited to person who wants maximum provision for his family at minimum cost.
Description of the LIC Policies Whole life plan: Whole life plan are those policies which life assured has to pay premiums till his death the sum assured will be paid to his dependent generally 70 years is assumed as a maximum age for payment of premium. The sum assured is payable on maturity or at death if earlier. It also meets the needs for funds required for funeral. They are eminently Suited to meet it one policy the twin demands of old age provision and risk cover for family.
Under these policies part of the sum assured is paid to the life assured in installments at selected intervals. Jeevan Mitra This plan provides additional insurance cover equal to the sum assured in the even of death during the term of policy so that the total insurance cover in the event of death is twice the basic sum assured. Say when the children are between 18 to 25 year of age. These needs arise at ages which can be approximately anticipated. This plan provides for a sum assured to keep aside to meet marriage educational expenses of children. leading to good jobs and happy marriage. Marriage Endowment/ educational annual plan Every father desires to see that his children are well settled in life through sound education. i. Under this plan the S A along with the vested bonus shall be payable at the end of the selected term either is lump sum or in ten half yearly installment.e. Children Plan Under the children plans the risk on the life of the children where covered generally this type of plans are helpful in education and marriage of the children. at the option of the life assured nominee beneficiary.Money Back Plans Under this plan specific percentage of sum assured will be backed to the life assured after specific period of time. The basic sum assured is doubled and the accrued bonus is also paid. This plan is of special interest to person who besides desiring to provide for their own old age and family feels the need for lump sum benefits at periodical intervals. the risk under which will commence from the vesting date.
. In addition. This policy shall be cancelled in case the life assured shall die before the deferred dates and in such an event provided the policy is then in full force in for a reduced cash option. Premium benefit and income benefit are included as additional benefit by payment of appropriate additional premium during the deferment period. Jeevan Balya: This plan is designed to enable a parent to provide for the child by payment of a very low premium an Endowment Assurance Policy.
ING VYSYA LIFE INSURANCE
ING Vysya Life Insurance Company Private Limited entered the private life insurance industry in India in September 2001, and in a short span of 18 months has established itself as a distinctive life insurance brand with an innovative, attractive and customer friendly product portfolio and a professional advisor force. It also distributes products in close cooperation with its sister company ING Vysya Bank through Bank assurance. Currently, it has over 3000 advisors working from 22 locations across the country and over 300 employees. ING Vysya Life Insurance Company is headquartered at Bangalore and has established a strong presence in the cities of Delhi, Mumbai, Kolkata, Hyderabad and Chennai. In addition ING Vysya Life operates in Vizag, Vijaywada, Mangalore, Mysore, Pune, Nagpur, Chandigarh, Ludhiana and Jaipur. ING Vysya Life has pioneered product innovations in the Indian life insurance market with customer-oriented cash bonus endowment and money back products. (Reassuring Life and Maximising Life), the first anticipated whole life product (Fulfilling Life) and the first Term/Critical Illness combination product (Conquering Life). Conquering Life is an innovative term and critical illness product that has been launched recently. Conquering Life provides affordable term cover and critical illness coverage for 10 critical illnesses of upto 50% of the Sum Assured. ING Vysya Life declared a bonus in September 2002 of 5% (cash bonus - payable immediately) and 4% (reversionary bonus payable at the end of the term).
The company has over 25,000 customers at the end of 2002 and has achieved a first premium income of Rs. 17 crores in 2002. ING Vysya Life Insurance is a joint venture between ING Insurance International BV a part of ING Group, the world's largest life insurance company (Fortune Global 500, 2002), ING Vysya Bank, with 1.5 million customers and over 400 outlets and GMR Technologies and Industries Limited, part of GMR Group also based in Bangalore and involved in the field of power generation, infrastructural development and several other businesses. ING Vysya Life has a paid up capital of Rs.140 crores and an authorised capital of Rs. 200 crores. Life insurance products offered by the company are: 1) Protection plan • • Critical illness plan Endowment plan
2) Savings plan • • • Endowment plan Child protection plan Money back plan
3) Investment Plan • Whole life plan • Limited payment endowment plan • Anticipated whole life plan
TATA-AIG Life Insurance Tata-AIG Life Insurance Company is a joint venture between the Tata Group and American International Group Inc (AIG), the leading US-based international insurance and financial services organization and the largest underwriter of commercial and industrial insurance in America. Its member companies write a wide range of commercial, personal and life insurance products through a variety of distribution channels in approximately 130 countries and jurisdictions throughout the world. AIG’s global businesses also include financial services and asset management, including aircraft leasing, financial products, trading and market making, consumer finance, institutional, retail and direct investment fund asset management, real estate investment management, and retirement savings products. TATA holds 76% shares and AIG holds 24% shares in the total share capital of TATA AIG. Tata AIG Life Insurance Company Ltd. "Tata AIG Life" offers a broad array of life insurance products to individuals, associations and businesses of all sizes, with a wide variety of additional coverage to ensure our customers can find an insurance product to meet their needs. Tata-AIG Life Insurance and Tata-AIG General Insurance, both joint ventures between the Tata Group and American International Group (AIG), provide life and general insurance policies and solutions to companies, institutions and organizations across India. It is licensed to operation on 12th February 2001. TATA-AIG life is spread over28 branch offices and 39 training offices across the country.
Tata-AIG Life offers a broad array of life insurance products and solutions to corporate and other organizations. These products and solutions have various valueadded benefits and options that deliver flexibility and choice to the company's clients. Tata AIG Life has completed its 4th year of operations and registered a Total Premium of Rs. 497 Crores for the period April 2004 - March 2005.
to service client groups in 19 Indian cities. 30 years – Security and Growth Assure Educate at 18. PRODUCTS The product range of TATA-AIG Life is wide-spread across different segments. Tata-AIG Life is the first private insurer in India to offer group retirement schemes. including endowment to term. Additionally.The company has some 20 life insurance products with over 250 product combinations. 20.
Maha life Invest Assure Health Protector Star Kid Shubh Life Nirvana Nirvana Plus Money Saver Plan Health First Assure Golden Life Assure 10. brokerage and banc assurance. etc. pension to group life and credit life. the company's group management division focuses on providing employee benefit solutions. 21 Assure Career Builder Plan at 27 Assure Golden Years Plan Assure 21 Money Saver Plan Assure 1/5/10/15/20/25 years/ to age lifelines TROP
. money back to whole life plans. including direct marketing. Some of the products are mentioned below. Tata-AIG Life uses different distribution channels.
the opening of the market looked very promising and both companies agreed the time was right to move the operation to the next level. In October 1998.HDFC STANDARD LIFE INSURANCE
The Partnership: HDFC and Standard Life first came together for a possible joint venture. In a further development Standard Life agreed to participate in the Asset Management Company promoted by HDFC to enter the mutual fund market. based in Mumbai. Around this time Standard Life purchased a further 5% stake in HDFC and a 5% stake in HDFC Bank. further strengthening the relationship. In October 1995 the companies signed a 3 year joint venture agreement. (IDFC). The next three years were filled with uncertainty. due to changes in government and ongoing delays in getting the IRDA (Insurance Regulatory and Development authority) Act passed in parliament. the joint venture agreement was renewed and additional resource made available. in January 2000 an expert team from the UK joined a hand picked team from HDFC to form the core project team. Around this time Standard Life purchased a 5% stake in HDFC. Around this time Standard Life purchased 2% of Infrastructure Development Finance Company Ltd. Despite this both companies remained firmly committed to the venture. to enter the Life Insurance market. Towards the end of 1999. Therefore. Standard Life also started to use the services of the HDFC Treasury department to advise them upon their investments in India. in January 1995. It was clear from the outset that both companies shared similar values and beliefs and a strong relationship quickly formed. The Mutual Fund was launched on 20th July 2000
The ambition of HDFC Standard Life is to mirror the success of the parent companies and be the yardstick by which all other insurance company's in India are measured. HDFC and Standard Life have a long and close relationship built upon shared values and trust. On the 23rd of October 2000. Companies ambition from as far back as October 1995. this is the maximum investment allowed under current regulations. Given Standard Life's existing investment in the HDFC Group. was to be the first private company to re-enter the life insurance market in India.4%. this ambition was realized when HDFC Standard Life was the only life company to be granted a certificate of registration. HDFC are the main shareholders in HDFC Standard Life. Products offered by the company are: INDIVIDUAL PLAN • • • • • • • With Profit Endowment Assurance With Profits Money Back Single Premium Whole of Life Term assurance Plan Loan Cover Term Assurance Personal Pension Plan Children’s Plan
GROUP PLANS • • Group Term Insurance Development Insurance Plan
.6%. with 81. while Standard Life owns 18.Incorporation of HDFC Standard Life Insurance Company Limited: The company was incorporated on 14th August 2000 under the name of HDFC Standard Life Insurance Company Limited.
ICICI PRUDENTIAL LIFE INSURANCE COMPANY
ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank.619 crore and wrote 111. 925 crore with ICICI Bank and Prudential plc holding 74% and 26% stake respectively. ICICI Prudential’s equity base stands at Rs.522 policies. with a wide range of flexible products that meet the needs of the Indian customer at every step in life. ICICI Prudential has retained its position as the No. •
Protection plan Life Guard 45
. and prudential plc. 1 private life insurer in the country. 1) 2) 3) 4)
Savings Plan Smart kid Life Time Save ‘n’ Protect Cash Bak
2. ICICI Prudential was amongst the first private sector insurance companies to begin operations in December 2000 after receiving approval from Insurance Regulatory Development Authority (IRDA). 2005 . For the past four years. a premier financial powerhouse. a leading international financial services group headquartered in the United Kingdom. Products offered by ICICI Prudential are
1. In the quarter ended June 30. the company garnered Rs 335 crore of new business premium for a total sum assured of Rs 2.
• • 5. • • • • 4.• • 3. • • •
Extra Protection Through Riders Retirement Plans Forever Life Life link pension Life time pension Reassure Investment Plans Assure Invest Life Link Group plans Group Superannuation Group Gratuity Group Term Assurance
auto finance. Old Mutual is listed on the London Stock Exchange (where it is included on the FTSE 100 Index) and also on the South African. It has 156 years of experience in the life insurance business.OM KOTAK MAHINDRA LIFE INSURANCE COMPANY
Established in 1985 as Kotak Capital Management Finance promoted by Uday Kotak the company has come a long way since its entry into corporate finance. Kotak Mahindra is today one of India's leading Financial Institutions Old Mutual plc is an international financial services group based in London with expanding operations in life assurance. investment banking. The Products offered by the Company are Individual Plan • • • • • • • • • Kotak Endowment Plan Kotak Term Plan Kotak Retirement Income Plan Kotak Child Advantage Plan Kotak Preferred Term Plan Kotak Capital Multiplier Plan Kotak Safe Investment Plan Riders Exclusions Under Riders
. The company got its name Kotak Mahindra as industrialists Harish Mahindra and Anand Mahindra picked a stake in the company. Namibian. consumer finance. Malawi and Zimbabwe stock exchanges. hire purchase. It has dabbled in leasing. asset management. broking etc. banking and general insurance.
Group Plan Kotak Term Group plan Kotak Gratuity Group plan Kotak Credit Term Group plan Riders Exclusions Under Riders
Rural Kotak Gramina Bima Yojana
MET LIFE INSURANCE COMPANY
For almost 137 years. Metropolitan Life Insurance Company has been insuring the lives of the people who depend on them. but as a social program" would be the future policy of the company Supporting Country and Community Over the years. sound investments.000 to found the National Union Life and Helping and Healing People In 1909. and innovative products and services. The company's social commitment and its commitment to the security of its policyholders have proven to be good business. strong leadership. not merely as a business proposition. MetLife Begins The origins of Metropolitan Life Insurance Company (MetLife) go back to 1863.
Products Offered by the company are 1) Whole Life • • • Met 100 Non par Met 100 Gold par Met 100 Platinum par
. MetLife Vice President Haley Fiske announced that "insurance. MetLife has made a difference by supporting urban renewal projects and community financing. Their success is based on their long history of social responsibility. MetLife Today In 2001 MetLife was the first insurance company to establish a financial holding company with a nationally chartered bank. when a group of New York City businessmen raised $100.
2) Endowment • • • • Met Gold par Met Platinum par Met Junior par Met junior Non par
3) Money Back • • Met Sukh Met Junior MB
4) Term • • • Met Mortagage Protector Met Riders Accidental death
BIRLA SUN LIFE INSURANCE COMANY LIMITED
Birla Sun Life Financial Services offers a range of financial services for resident Indians and Non Resident Indians. it is our aim to offer diverse and top quality financial services to customers. One of the wonders of human nature is that we never believe anything can actually go wrong. Brought together by two large. life has its share of ifs. debt securities. Birla Sun Life stand committed to help you realize those happy moments which make a life. At Birla Sun Life however. It's often about things going right. the Aditya Birla Group and Sun Life Financial . in case something happens to you. The life insurance products offered by the company are
Individual life • • • • • • Premium Back Term Plan Flexi Secure Life Retirement Plan Single Premium Bond Birla Sun Life Term Plan Flexi Life Line Whole Life Plan Flexi Cash Flow Money back Plan
Group Life • • • Pro Group Term Insurance Group Superannuation Plan Group Gratuity Plan 51
. powerful and reputed business houses.
Insurance is not about something going wrong. fixed deposits. etc. The Mutual Fund and Insurance companies provide wealth management and protection products to customers while the Distribution and Securities companies provide brokerage and trading services for investment in equities. they believe it has its equally pleasant share of buts as well. Surely. Be it living the same lifestyle in your post retirement days or providing a secure future for your loved ones.
This was the first full year of operations for Max New York Life.
The company has sold over 64. The total annualized first year premium for the financial year was over Rs 43 crore with the First Year Premium Income amounting to over Rs 38 crore.MAX NEW YORK LIFE INSURANCE COMPANY LTD. Max New York Life has clearly emerged as delivering top value across all these stakeholders
Max New York Life offers a suite of flexible products. over 1900 Agent Advisors and over 490 employees. 2002.
The company has 11 offices. the Company instituted satisfaction survey's conducted by independent agencies to measure the satisfaction levels of its customers.
Max New York Life today emerged as the country's leading private life insurance company having recorded a sum assured of over Rs 2100 crore for the year ending March 31. As part of the best practices adopted. Max New York Life believes in delivering top value to all its stakeholders. agents and employees.000 policies in the last financial year. which reinforces the company's focus on providing the true value of life insurance to the customer
Given the better-than-expected performance of the company. the shareholders have increased their investment in the company to Rs 250 crore with an authorized share capital to Rs 300 crore making Max New York Life Insurance Company among the highest capitalized life insurance companies in India Max New York Life also met its commitment for the rural and social sectors. This has exceeded the expectations of the company and the projections as submitted to IRDA. It has eight base products and nine options & riders that can be customized to over 250 combinations enabling customers to choose the policy that best fits their need
. Over 70 per cent of the premia income was from protection-oriented Whole Life Policies.
Children Endowment at age 24. Endowment to age 60. Five-year Term Renewable an. 20-year Endowment Participating Policy.The products are – Whole Life Participating d Convertible Whole Life-Non-Participating. Easy Term
. Children Endowment at age 18.
stability and strength. AG. Bajaj Allianz General Insurance received the Insurance Regulatory and Development Authority (IRDA) certificate of Registration (R3) on May 2nd. Bajaj Allianz General Insurance maintained its leadership position by garnering a premium income of Rs.6 Crores
.20 Crores over the last year for the same period. Bajaj Allianz made a profit after tax of Rs. 405 crores. Bajaj Auto holds 74% and Allianz. achieving a growth of 84% and registered a 52% growth in Net profits of Rs.9.480 Crores. The Company has an authorized and paid up capital of Rs 110 crores. which is a jump of 60% and the profit zoomed by 125% to Rs. all the offices are interconnected with the Head Office at Pune. 21. From Surat to Siliguri and Jammu to Thiruvananthapuram.BAJAJ ALLIANZ LIFE INSURANCE COMPANY LIMITED
Bajaj Allianz life Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Both enjoy a reputation of expertise. As on 31st March 2003.6 crores Bajaj Allianz today has a network of 42 offices spread across the length and breadth of the country. In the financial year 2003-04.300 Crores. In its first year of operations. Bajaj Allianz also became one of the few companies to make a profit in its first full year of operations. the company has acquired the No. 2001 to conduct General Insurance business (including Health Insurance business) in India. the premium earned was Rs. holds the remaining 26% Germany. Bajaj Allianz garnered a premium income of Rs. 2004-05. 1 status among the private non-life insurers. In the first half of the current financial year.
ANALYSIS AND INTERPRETATION
After looking at each attribute separately.4. Data analysis is the process of planning the data in an ordered form. In this research the researcher has analyzed the data using percentages and graphs. coded and tabulated for analyzing by using diagrams. combining them with the existing information and extracting from them. pictures etc. the data analysis is carried out. graphs. all the attributes were considered together to develop a map on the most preferred rank for all the attributes.1 INTRODUCTION TO ANALYSIS: In order to extract meaningful information from the data them. averages and measures of dispersion.
4. The analysis can be conducted by using simple statistical tools like percentages. Alternatively the collected data may be analyzed.
Interpretation is the process of drawing conclusions from the gathered data in the study. The various attributes were analyzed separately and the importance to each was calculated on the basis of the percentage. The rank having the maximum percentage was taken to be preferred importance to the particular attribute. The data are first edited. charts.2 DATA ANALYSIS TOOLS USED:
In this research the data analysis tools used are percentages and graphs.
39 – 48
29 – 38
3. The majority of the respondents belong to the age group 19 to 28 years with 48% and the second age group is 29 to 38 years with 26%.NO
AGE IN YEARS
NUMBER OF RESPONDENTS 24
PERCENTAGE OF RESPONDENTS 48 %
69 – 78
SOURCE :.SURVEY DATA
INFERENCE: The above table classified the respondents according to their age group. followed by 39 to 48 years and 49 to 58 years with 12% each.TABLE 1 AGE OF RESPONDENTS
49 – 58
19 – 28
59 – 68
GRAPH 1 AGE OF RESPONDENTS
20% 12% 10% 0% 0% 19 .28 YRS 29 .58 YRS 59 .68 YRS 69 .38 YRS 39 .78 YRS 2% 12%
.48 YRS 49 .
INFERENCE: This table helps us to understand that there are more number of male consumers with 68% market share than the female consumers with 32% Market share.TABLE 2
DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE
TYPES OF RESPONDENTS
NUMBER OF RESPONDENTS
PERCENTAGE OF RESPONDENTS
GRAPH 2 DIFFERENCIATION OF THE RESPONDENTS INTO MALE AND FEMALE
80% 70% 60% 50% 40% 32% 30% 20% 10% 0% 68%
R ES PO N
M A LE
FE M A LE
R ES PO
DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION
GOVERNMENT EMPLOYEES PRIVATE EMPLOYEES HOUSE WIVES
INFERENCE: It could be inferred that majority of consumers of life insurance policies are private employees with 48% and Government employees with 40%. house wives and retired persons with 4 % each. followed by students.NO
NUMBER OF RESPONDENTS
PERCENTAGE OF RESPONDENTS 4%
RETIRED PERSONS TOTAL
GRAPH 3 DIFFERENCIATION OF RESPONDENTS BASED ON THEIR OCCUPATION
50% 40% 40%
10% 4% 0%
ES YE ES EN TS ES W IV SO N ED PE R ET IR R YE S
EM PL O
000. Followed by the income group of 5.SURVEY DATA
INFERENCE: The majority of dominant income group having life insurance policies belong to the income group of 10.
20001 – 25000
10001 – 15000
GREATER THAN 30000 NIL
15001 – 20000
5. which is middle class group.001 to 15.NO
NUMBER OF RESPONDENTS
PERCENTAGE OF RESPONDENTS 10 %
TABLE SHOWING INCOME GROUP OF RESPONDENTS
SL.001 to 10.
LESS THAN 5000 5001 – 10.
15001 .20001 .>25000 15000 20000 25000 NIL
.GRAPH 4 GRAPH SHOWING INCOME GROUP OF RESPONDENTS
40% 35% 30% 25% 20% 15% 10% 5% 0% <5000 5001 1000 10001 .
SOURCE: . 38% of consumers own house and12% of the consumers own car.
NUMBER OF RESPONDENTS
PERCENTAGE OF RESPONDENTS
DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS OWNED
TWO WHEELER CAR
INFERENCE: This table helps us to know that most of consumers with life insurance policies own two wheelers with 50%.
GRAPH 5 DIFFERENCIATION OF RESPONDENTS ACCORDING TO THE ASSETS OWNED
60% 50% 50%
20% 12% 10%
0% HOUSE TWO WHEELER CAR
LIC has a major share of 78 %.
. followed by ICICI Prudential with 8% market share. followed by HDFC Standard Life with 6% market share.TABLE 6
MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
NUMBER OF RESPONDENTS 39
PERCENTAGE OF RESPONDENTS 78 %
SOURCE: .SURVEY DATA
INFERENCE: This table helps us to understand the market share of different life insurance companies.
GRAPH 6 MARKET SHARE OF DIFFERENT LIFE INSURANCE COMPANIES
90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2% 6% 8% 2% 2% 2% 78%
IC IC I
N EW YO
A H IN D
N C E
3. From this table we can infer that consumers give more importance for Return on investment.SURVEY DATA
INFERENCE: This table shows the strengths and weaknesses of the company.
TABLE SHOWING ATTRIBUTES FROM RESPONDENTS
1. and then premium outflow followed by service quality and product quality.
RETURN ON INVESTMENT COMPANY REPUTATION PREMIUM OUTFLOW SERVICE QUALITY PRODUCT QUALITY
2. and what are the important criteria or attributes on which decision making is done.
. secondly they prefer company reputation.
R ET U RN O N IN
10 12 14 16 18 0 2 4 6 8
C O M PA TM EN T
NY R EP U TA TI O
PR EM IU M N O U TF LO W SE R VI C E Q U AL I TY
GRAPH SHOWING ATTRIBUTES FROM RESPONDENTS
PR O DU CT Q U AL IT Y
3. It can be seen that personal factor influences a consumers to select a life insurance company.
INFERENCE: This table is helpful in knowing which media is best suitable for promoting a life insurance company.
5. followed by family.TABLE 8
FACTORS WHICH INFLUENCED TO SELECT LIFE INSURANCE COMPANY
SL. agents and advertisements. friends .
FACTORS WHICH INFLUENCED TO SELECT A LIFE INSURANCE COMPANY
15 11 10 6 5 5 2 1 0
IL Y EN TS ES T S T VE RT IS EM EN D M IE N ER O TH S
VALUE OF RESPONDENTS LIFE INSURANCE POLICY
NUMBER OF RESPONDENTS 0
PERCENTAGE OF RESPONDENTS 0%
INFERENCE: It can be inferred that majority of consumers buy the life insurance policy which costs more than Rs.
25000 – 50000
2.000 to Rs.000 to Rs.1.000 followed by Rs. 50.000.
10000 – 25000
3.000. 25. followed by Rs.
GRAPH 9 VALUE OF RESPONDENTS LIFE INSURANCE POLICY
50% 45% 40% 35% 30% 25% 20% 15% 10% 10% 5% 0% > 10000 10000 25000 25000 50000 50000 100000 > 100000 0% 16% 30% 44%
SURVEY DATA INFERENCE: From the table it is clear that majority of people (52%) prefer to invest in Bank and others (48%) prefer to invest in Insurance companies.TABLE 10
RESPONDENTS PREFERENCE TO INVEST THEIR MONEY
NUMBER OF RESPONDENTS INSURANCE COMPANY 24
PERCENTAGE OF RESPONDENTS 48 %
GRAPH 10 RESPONDENTS PREFERENCE TO INVEST THEIR MONEY
53% 52% 52% 51% 50% 49% 48% 48% 47% 46% INSURACE COMPANY BANK
INFERENCE: From this table it could be inferred that 94% of the consumers are satisfied with the service and quality of products of their life insurance companies.TABLE 11
SATISFACTION OF RESPONDENTS WITH CURRENT LIFE INSURANCE COMPANY
NUMBER OF RESPONDENTS 47
PERCENTAGE OF RESPONDENTS 94 %
SOURCE :. Only 6% of consumers are not satisfied.
SATISFACTION OF RESPONDENTS WITH CURRENT LIFE INSURANCE COMPANY
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
INFERENCE: From this table it could be inferred that 40% of the consumers have rated service offered as good. 24% of them have rated them as very good. 22% of them have rated as average and 14% of them have rated as excellent.TABLE 12
RATINGS OF THE SERVICES OFFERED BY THE RESPONDENT’S LIFE INSURANCE COMPANY
NUMBER OF RESPONDENTS 7
PERCENTAGE OF RESPONDENTS 14 %
RATINGS OF THE SERVICES OFFERED BY THE RESPONDENT’S LIFE INSURANCE COMPANY
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
O O D
E VE R A G PO O R O O D G
EX C EL LE N T
VE R Y
CONSUMERS WILLINGNESS TO COMMUNICATE THE SERVICE OFFERED BY THEIR LIFE INSURANCE COMPANY
NUMBER OF RESPONDENTS 39
PERCENTAGE OF RESPONDENTS 78 %
SOURCE :.SURVEY DATA
INFERENCE: From this table it can be noted that the majority of consumers (78%) would like to communicate to others about the service offered by life insurance companies and 22% of consumers would not like to communicate the service offered.
CONSUMERS WILLINGNESS TO COMMUNICATE THE SERVICE OFFERED BY THEIR LIFE INSURANCE COMPANY
90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
NUMBER OF LIFE INSURANCE COMPANY KNOWN BY RESPONDENTS
NUMBER OF LIFE INSURANCE COMPANY KNOWN
NUMBER OF RESPONDENTS
PERCENTAGE OF RESPONDENTS
8 – 10
SOURCE :. followed by 36% consumers who know less than 5 life insurance companies.SURVEY DATA
INFERENCE: This table helps us to know the consumer awareness about the life insurance companies.
. 58% of the consumers are aware about 5 to 7 life insurance companies.
NUMBER OF LIFE INSURANCE COMPANY KNOWN BY RESPONDENTS
70% 60% 50% 40% 30% 20% 10% 0% <5 5 TO 7 8 to 10 > 10 58%
INFERENCE: From the table we can rank the life insurance companies.
. LIC stands first. followed by ICICI Prudential followed by HDFC Standard life.TABLE 15
SCORES OF DIFFERENT LIFE INSURANCE COMPANIES
SOURCE:. followed by TATA AIG.
SCORES OF DIFFERENT LIFE INSURANCE COMPANIES
9 8 7 6 5 4 3 2 1 0
L VY SY A LA SU N LI FE M ET LI FE LI C FC IG TI A H D ER O TH A
8 7 6 5 4 3 2 1
CONCLUSION AND SUGGESTIONS
LIC has a major market share of 78%.001 to 10. agents and advertisements.
The majority of the consumers of life insurance companies are private employees with 48% and Government employees with 40%
The dominant income group having life insurance group belong to the group of 10001 to 15.5. friends. followed by family. followed by the female consumers with 32%.000.1
The majority of respondents belonged to the age group of 19 to 28 years which formed 48% followed by age group of 29 to 38 years which formed 26%.
The factors which influenced to select a life insurance company is the personal factor.
The male consumers capture the Market share with 68%.000 followed by 5.
The value of respondents life insurance policy costs more than 1.
Majority of the people (52%) prefer to invest in bank others (48%) prefer to invest in insurance company.000.
Majority of consumers are satisfied with the service and quality of products of their life insurance companies.
Majority of consumers (78%) would like to communicate the service offered by life insurance companies.
LIC stands first followed by ICICI prudential.000 followed by 50. 00.
.00. followed by HDFC Standard Life.000 to 1.
Majority of consumers (58%) are aware about 5 to 7 life insurance companies.
Hence it grows or erodes in line with the performance of that portfolio. So the companies are introducing new schemes. the investment portfolio of the Insurance Policy functions like a mutual fund and other investment. in conformity with the announced investment policy. People are aware of all the benefits and returns of insurance policies.
.2 CONCLUSION An Insurance policy is an investment oriented plan. They are interested to take high return policies in order to secure their lives. From this it is found that The LIC is the major market share holder in the insurance field. It is invested in a portfolio of debt and equity instruments. As compared to other investment plans. As a result of this new international and domestic companies are coming to the Indian Market. Even if there are many players in this field still it is an untapped market.
From this study it reveals that the consumer’s attitude towards Insurance Policy and Insurance Company changed a lot. Only a few portion of Indian population is insured. A 5 years before the consumers and the general public were not interested to take an Insurance Policy but now days there are many options and choices in front of the customers.5.
Since there are many players in the Indian Insurance Market the competition level is very high.
depending on the consumers characteristics.
d) Return on investment.
. Hence they should be regarded as maim targeted income groups.
c) Life insurance products are taken mainly by middle and higher income group. company reputation and premium outflow are most preferred attributes that are expected by the respondents. quality and return on investment in tact is necessary in order to tackle the competition. the life insurance companies have to adopt better strategies to attract more customers. Hence Insurance companies should try to bring their new product to the attention of potential early adopters. Hence greater focus should be given to these attributes.3 RECOMMENDATIONS AND SUGGESTIONS
With regard to insurance companies. consumers respond at different rates.
b) Keeping the cost. Life insurance products which are suitable for lower income group should also be released so that the market share increases.
a) Due to the intense competition in the life insurance market.5.
e) Private life insurance companies should adopt effective promotional strategies to increase the awareness level among the consumers. As there is intense competition in life insurance market. LIC should work hard to maintain its top position and offer better service and product. If they are dissatisfied .
f) Life insurance companies should ask for their consumer feedback to know whether the consumers are really satisfied or dissatisfied with the service and product of the companies. then the reasons for dissatisfaction should be found out and should be corrected in future.
g) The LIC brand name has earned a lot of goodwill and enjoys a high brand equity.
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1) 2) Dr. Pearson Education Inc. Fundamentals of Marketing.Consumer preference & buying perception of ready made silk garments. Prentice Hall. Prentice Hall. Delhi. Valarie Azithaml. Himalaya Publishers.International center for training & research in tropical sericulture. Walker Bruce J. Consumer Behaviour. Singh. Principles of Insurance Law. Schiffman. 2002
5) 6) 7) Ravi Shankar.2004
3) Kotler Philip.
wikipedia.irda.org www.lic.com www.com
.World Wide Web:
• • •
000 10. Do You Own House Two Wheeler Car
7.001-20000 Nil 5001-10. Do you have a Life Insurance Policy with any Life InsuranceCampany? Yes No
6.a) If yes.001-25. Occupation: 5.QUESTIONNAIRE
A STUDY CONDUCTED TO UNDERSTAND THE CONSUMER’S PERCEPTION ABOUT LIFE INSURANCE POLICIES
3.000-15.000 >25. name the Company___________________________________
b) Name the policy which you own_____________________________
3 a. Monthly income: <5000 15. Phone number: 4.000 20. Name : 2.
How do you rate the service offered by your Life Insurance Company? Excellent Average Very Good Poor Good
.000-50. What is the value of your life insurance? >10.000-25.000 10.000 >1. Are you satisfied with your current Life Insurance Company? Yes No
If Yes Why?___________________________________________ If No Why?___________________________________________
11.00.00. What factors do you consider while selecting a life insurance company? Premium Outflow Service Quality Return on Investment Company Reputation Product Quality
9. What factors influenced to select a Life Insurance company? Personal interest Agents Friends Advertisements Family others
10.000-1.000 25. Do you prefer to invest your money in a Insurance company or in a Bank? Insurance Company Bank
How many Life insurance Compannies do you know? <5 5-7 8-10 >10
16. Would You like to continue with the same Life Insurance Company? Yes No
18. Any suggestions for improving the service offered by life insurance companies
Thank You. Would you like to communicate the service offered by your Life Insurance Company to others? Yes No
.14. How do you rate the following Life Insurance Companies? LIC HDFC ING VYSYA MET LIFE INDIA INSURANCE BIRLA SUNLIFE ICICI Prudential TATA AIG Others