A PROJECT REPORT ON

―INDIAN INSURANCE INDUSTRY‖

SUBMITTED BY
BHAVSAR MANTHAN RAJENDRA
THIRD YEAR (BANKING AND INSURANCE (SEMESTER VI)
2011-2012

MODEL COLLEGE
DOMBIVLI

UNIVERSITY OF MUMBAI
APRIL 2012

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY

A PROJECT REPORT ON
―INDIAN INSURANCE INDUSTRY‖

SUBMITTED TO
THE UNIVERSITY OF MUMBAI
IN PARTIAL FULFILLMENT
FOR THE AWARD OF THE DEGREE OF
BACHELOR OF COMMERCE (BANKING AND INSURANCE)
(VI SEMESTER)

BY
BHAVSAR MANTHAN RAJENDRA
MODEL COLLEGE
DOMBIVLI
APRIL 2012

2

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY

TABLE OF CONTENTS

SR.NO.

DESCRIPTION

PAGE NO.

1.

DECLARATION

4

2.

ACKNOWLEDGEMENT

5

3.

CHAPTER 1: INTRODUCTION

6-12

4.

CHAPTER 2:THEORETICAL VIEW

13-33

5.

CHAPTER 3:COMPARATIVE STUDY

34-45

6.

CHAPTER 4: CONCLUSION

46-47

7.

BIBLOGRAPHY

48

8.

ANNEXURE

49-51

3

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY

DECLARATION

I, BHAVSAR MANTHAN RAJENDRA, STUDENT OF BANKING AND
INSURANCE VI SEMESTER OF MODEL COLLEGE DOMBIVLI (E),
HERE BY DECLARE THAT, I HAVE COMPLETED THIS PROJECT
ON ―Indian Insurance Industry‖ FOR THE ACADEMIC YEAR 20112012
THE INFORMATION SUMBITTED IS TRUE AND
ORIGINAL TO THE BEST OF MY KNOWLEDGE.

BHAVSAR MANTHAN RAJENDRA
THIRD YEAR (BANKING AND INSURANCE)

4

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY

ACKNOWLEDGEMENT

I WOULD LIKE TO EXTEND MY SINCERE GRATITUDE TO ALL
THOSE PEOPLE WHO HAVE HELPED ME IN THE SUCCESSFUL
COMPLETION OF MY PROJECT ENTITLED ―Indian insurance
industry‖
FIRST AND FOREMOST I WOULD LIKE TO THANK MY PROJECT
GUIDE MRS.GAURI PATHAK FOR BEING KIND ENOUGH IN
SPARING HER TIME AND ENERGY FROM HER BUSY SCHEDULE
AND HELPING ME IN COLLECTING THE NECESSARY DATES.
I WOULD ALSO LIKE TO EXPRESS MY SINCERE THANKS TO
OUR PRINCIPLE, DR. M.R.NAIR FOR HIS CONSTANT MORAL
SUPPORT AND VISION
THIS PROJECT COULD NOT HAVE BEEN POSSIBLE WITHOUT
HELP

OF

ENTIRE

LIBRARY

DEPARTMENT

OF

OUR

COLLEGE.THEY MAKE AS MUCH DATA, BOOKS, MAGAZINES,
ETC. AVAILABLE AS THEY CAN TO FACILITATE THE EASY
COLLECTION OF INFORMATION.

BHAVSAR MANTHAN RAJENDRA

5

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY CHAPTER 1 AN INTRODUCTION 6 .

it has the potential to become one of the biggest insurance markets in the region. Following the passage of the Insurance Regulatory and Development Authority Act in 1999. the number of insurers in India had been augmented by the entry of new private sector players to a total of 28. Although it accounts for only 2. rising household wealth and a further improvement in the regulatory framework. including sound economic fundamentals. while traditional agents were supplemented by other channels including the Internet and bank 7 . By mid-2004.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Introduction In 2003. the proliferation of innovative products and distribution channels. The inauguration of a new era of insurance development has seen the entry of international insurers. The insurance industry in India has come a long way since the time when businesses were tightly regulated and concentrated in the hands of a few public sector insurers. the Indian insurance market ranked 19th globally and was the fifth largest in Asia. India abandoned public sector exclusivity in the insurance industry in favor of market-driven competition. A combination of factors underpins further strong growth in the market.5% of premiums in Asia. This shift has brought about major changes to the industry. A range of new products had been launched to cater to different segments of the market. up from five before liberalization. and the raising of supervisory standards.

called premiums. wherein there is excessive coverage of high risk candidates in proportion to the coverage of low risk candidates.1% in non-life premiums between 1999 and 2003. there is huge untapped potential in various segments of the market. insurance to mitigate the negative financial consequences of these adverse events is underdeveloped. The underwriter is responsible for guarding against adverse selection. the decisions regarding necessary prices for such risks. Insurance or assurance. device for indemnifying or guaranteeing an individual against loss. does not fall heavily upon the actual loser.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY branches. The same is true for both pension and health insurance. These developments were instrumental in propelling business growth. While the nation is heavily exposed to natural catastrophes. in real terms. called a policy. Reimbursement is made from a fund to which many individuals exposed to the same risk have contributed certain specified amounts. where insurers can play a critical role in bridging demand and supply gaps. is mutuality. and rate making. the determination of which risks the insurer can take on. There are good reasons to expect that the growth momentum can be sustained. of 19% in life premiums and 11. The major operations of an insurance company are underwriting. 8 . Payment for an individual loss. In particular. The essence of the contract of insurance. Major changes in both national economic policies and insurance regulations will highlight the prospects of these segments going forward. divided among many.

―The collective bearing of risks is insurance. risks that attach to individuals. or a provision against inevitable contingencies or a co-operative device of spreading risks. psychological. insurance companies have become major suppliers of capital. and moral hazards in relation to applicants. the underwriter must consider physical.‖ 9 . Physical hazards include those dangers which surround the individual or property. ―Insurance is a plan by which large number of people associate themselves & transfer to the shoulder of all. GENERAL DEFINITION: The general definitions are given by the social scientists & they consider insurance as a device to protection against risks. jeopardizing the well-being of the insured. The amount of the premium is determined by the operation of the law of averages as calculated by actuaries.‖  In the words of Sir William.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY In preventing adverse selection. By investing premium payments in a wide range of revenue-producing projects. Some of such definitions are given below:  In the words of John Magee. and they rank among the nation's largest institutional investors.

―Insurance is a device for the transfer to an insurer of certain risks of economic loss that would otherwise come by the insured. ―Insurance is a co-operative form of distributing a certain risk over a group of persons who are exposed to it.‖  In the words of Thomas. which may or may not occur. ―Insurance is a substitution for a small known loss (the insurance premium) for a large unknown loss.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  In the words of Boone & Kurtz.‖  In the words of Allen Z.‖ 10 . which a prudent man makes against for the loss or inevitable contingencies. ―Insurance is a provision.‖  In the words of Ghosh & Agarwal. Mayer. loss or misfortune.

 It provides a view in Indian insurance market. SCOPE OF THE STUDY  It provides a complete knowledge of insurance sector in India.  To know what are the perception of the consumer about investments in insurance sector. 11 .A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY ABOUT THE REPORT TITLE OF THE STUDY The present study is titled as ―INDIAN INSURANCE INDUSTRY‖ OBJECTIVES OF THE STUDY  To Study the awareness of the insurance policies.  To know what are the priorities of people of city for making investment in Insurance.  To know the standing of the Indian insurance sector in global.

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY DATA AND METHODOLOGY:The data has been collected in two ways: PRIMARY DATA As far as primary data is concerned. primary data has been collected directly from the respondents through an questionnaire. SECONDARY DATA The secondary source of information has been collected from internet. CHAPTER 3 – Survey. for this study. CHAPTER 4 – Summarizes the results of the study. a detailed study is done and a survey has been taken up. 12 . books. the carefully analysis of the data is done to arrive at conclusion. Hence. CHAPTER LAYOUT CHAPTER 1 – Introduction of the title ―Indian insurance industry‖ CHAPTER 2 – Theoretical view of Indian insurance industry.

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY CHAPTER 2 THEORETICAL VIEW 13 .

England in particular. Yagnavalkya (Dharmasastra) and Kautilya (Arthasastra). This Company however failed in 1834. however. The writings talk in terms of pooling of resources that could be re-distributed in times of calamities such as fire. Oriental (1874) and Empire of India (1897) were started in the Bombay Residency. insurance has a deep-rooted history. the Madras Equitable had begun transacting life insurance business in the Madras Presidency. namely Albert Life Assurance. This era. 1870 saw the enactment of the British Insurance Act and in the last three decades of the nineteenth century. floods. This was probably a pre-cursor to modern day insurance. 1818 saw the advent of life insurance business in India with the establishment of the Oriental Life Insurance Company in Calcutta. Royal Insurance. was dominated by foreign insurance offices which did good business in India.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY HISTORY OF INSURANCE IN INDIA In India. Liverpool and London Globe Insurance and the Indian offices were up for hard competition from the foreign companies. 14 . Ancient Indian history has preserved the earliest traces of insurance in the form of marine trade loans and carriers’ contracts. Insurance in India has evolved over time heavily drawing from other countries. In 1829. the Bombay Mutual (1871). epidemics and famine. It finds mention in the writings of Manu (Manusmrithi).

1912 was the first statutory measure to regulate life business. 16 nonIndian insurers as also 75 provident societies—245 Indian and foreign insurers in all. However. the Government of India started publishing returns of Insurance Companies in India. The LIC absorbed 154 Indian. The Government of India. 1938 with comprehensive provisions for effective control over the activities of insurers. An Ordinance was issued on 19th January. 1956 nationalising the Life Insurance sector and Life Insurance Corporation came into existence in the same year.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY In 1914. 15 . with a view to protecting the interest of the Insurance public. the Indian Insurance Companies Act was enacted to enable the Government to collect statistical information about both life and nonlife business transacted in India by Indian and foreign insurers including provident insurance societies. decided to nationalize insurance business. In 1928. there were a large number of insurance companies and the level of competition was high. The Indian Life Assurance Companies Act. the earlier legislation was consolidated and amended by the Insurance Act. The Insurance Amendment Act of 1950 abolished Principal Agencies. The LIC had monopoly till the late 90s when the Insurance sector was reopened to the private sector. There were also allegations of unfair trade practices. In 1938. therefore.

the Oriental Insurance Company Ltd and the United India Insurance Company Ltd. This was the first company to transact all classes of general insurance business. In 1968.. a wing of the Insurance Association of India. the Indian Mercantile Insurance Ltd. It came to India as a legacy of British occupation. namely National Insurance Company Ltd. The General Insurance Council framed a code of conduct for ensuring fair conduct and sound business practices. was set up. 1973. the Insurance Act was amended to regulate investments and set minimum solvency margins. In 1972 with the passing of the General Insurance Business (Nationalization) Act. in the year 1850 in Calcutta by the British. 107 insurers were amalgamated and grouped into four companies. In 1907. 1957 saw the formation of the General Insurance Council. the New India Assurance Company Ltd.. The General Insurance Corporation of India was incorporated as a company in 1971 and it commence business on January 1sst 1973. 16 . The Tariff Advisory Committee was also set up then. General Insurance in India has its roots in the establishment of Triton Insurance Company Ltd.. general insurance business was nationalized with effect from 1st January.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY The history of general insurance dates back to the Industrial Revolution in the west and the consequent growth of sea-faring trade and commerce in the 17th century.

while ensuring the financial security of the insurance market. The IRDA was incorporated as a statutory body in April. former Governor of RBI. The process of re-opening of the sector had begun in the early 1990s and the last decade and more has seen it been opened up substantially. The Authority has the power to frame regulations under Section 114A of the Insurance Act.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY This millennium has seen insurance come a full circle in a journey extending to nearly 200 years. the Government set up a committee under the chairmanship of RN Malhotra. The objective was to complement the reforms initiated in the financial sector. Foreign companies were allowed ownership of up to 26%. In 1993. 1938 and has 17 . preferably a joint venture with Indian partners. 2000. the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry. The IRDA opened up the market in August 2000 with the invitation for application for registrations. The key objectives of the IRDA include promotion of competition so as to enhance customer satisfaction through increased consumer choice and lower premiums. The committee submitted its report in 1994 wherein. Following the recommendations of the Malhotra Committee report. to propose recommendations for reforms in the insurance sector. They stated that foreign companies are allowed to enter by floating Indian companies. in 1999. it recommended that the private sector be permitted to enter the insurance industry. among other things.

2002. 2000. The insurance sector is a colossal one and is growing at a speedy rate of 15-20%. Today there are 24 general insurance companies including the ECGC and Agriculture Insurance Corporation of India and 23 life insurance companies operating in the country. Together with banking services. Parliament passed a bill de-linking the four subsidiaries from GIC in July. insurance services add about 7% to the country’s GDP. A well-developed and evolved insurance sector is a boon for economic development as it provides long. In December. the subsidiaries of the General Insurance Corporation of India were restructured as independent companies and at the same time GIC was converted into a national re-insurer.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY from 2000 onwards framed various regulations ranging from registration of companies for carrying on insurance business to protection of policyholders’ interests.term funds for infrastructure development at the same time strengthening the risk taking ability of the country. 18 .

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Characteristics of Insurance:  Sharing of Risks Insurance is a co-operative device to share the burden of risk. A large number of persons share the losses arising from a particular risk.  Evaluation of Risk For the purpose of ascertaining the insurance premium. marine or accidental insurance. which forms the basis of insurance contract. the volume of risk is evaluated. or on happening of marine perils or loss of by fire. the insurer is not liable for payment of indemnity. it is not necessary. In such cases. such as the death of head of the family. 19 . Happening of the specified event is certain in life insurance. the insurance company is bound to make payment to the insured.  Payment of happening of specified event On happening of specified event.  Co-operative Device Insurance is a co-operative form of distributing a certain risk over a group of persons who are exposed to it (Ghosh & Agarwal). which may fall on happening of some unforeseen events. but in the case of fire.

 Insurance is not a gambling Insurance is not a gambling. subject to a maximum of the sum insured. Insurance is a valid contract to indemnity against losses. which gives gain to one party & loss to the other.  Insurance is not charity Charity pays without consideration but in the case of insurance. thus keeping the premium rate at the minimum.  Protection against risks Insurance provides protection against risks involved in life. It is a device to avoid or reduce risks. materials & property.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  Amount of payment The amount of payment in indemnity insurance depends on the nature of losses occurred. a fixed amount is paid on the happening of some uncertain event or on the maturity of the policy. however. Gambling is illegal. This will enable the insurer to spread the losses of risk among large number of persons. premium is paid by the insured to the insurer in consideration of future payment. 20 .  Large number of insured persons The success of insurance business depends on the large number of persons insured against similar risk. insurable interest is present in insurance contracts & it has the element of investment also. Moreover. In life insurance.

which is calculated on the basis of maximum risks. risks attached to individuals. John Magee writes. & the insured promises to pay a fixed rate of premium to the insurer. This may be the reason that Mayerson observes.  Ascertaining of losses By taking a life insurance policy. that insurance is a device to transfer some economic losses to the insurer.  A contract Insurance is a legal contract between the insurer & insured under which the insurer promises to compensate the insured financially within the scope of insurance policy. which spread the risks & losses of few people among a large number of people. one can ascertain his future losses in terms of money. This is done by the insurer to determining the rate of premium. and otherwise such losses would have been borne by the insured themselves. 21 .A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  Spreading of risk Insurance is a plan.‖  Transfer of risk Insurance is a plan in which the insured transfers his risk on the insurer. ―Insurance is a plan by which large number of people associates themselves & transfer to the shoulders of all.

To conclude. insurance is a device for the transfer of risks from the insured to the insurers. 22 .. both the parties are bound to disclose the important facts affecting to the contract before each other. It is a legal contract of a technical nature. subrogation. Utmost good faith is one of the important principles of insurance. insurable interest. who agree to it for a consideration (known as premium). etc. indemnity. which are the basis for successful operation of insurance plan. & promises that the specified extent of loss suffered by the insured shall be compensated. which includes utmost good faith. contribution.  Utmost Good Faith Insurance is a contract based on good faith between the parties. cause proximal.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  Based upon certain principle Insurance is a contract based upon certain fundamental principles of insurance. Therefore.

The reforms were aimed at creating a more efficient and competitive financial system suitable for the requirements of the economy keeping in mind the structural changes currently underway and recognizing that insurance is an important part of the overall financial system where it was necessary to address the need for similar reforms. In 1994. Only one State 23 . Malhotra Committee. ii) Competition Private Companies with a minimum paid up capital of Rs. Postal Life Insurance should be allowed to operate in the rural market.headed by former Finance Secretary and RBI Governor R. 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 submitted the report and some of the key recommendations included: i) Structure Government stake in the insurance Companies to be brought down to 50%. Malhotra.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Insurance Sector Reforms In 1993. Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations.N. All the insurance companies should be given greater freedom to operate.was formed to evaluate the Indian insurance industry and recommend its future direction.1bn should be allowed to enter the sector. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.

Hence. 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. it was decided to allow competition in a limited way by stipulating the minimum capital requirement of Rs. Controller of Insurancea part of the Finance Ministry. The committee emphasized that in order to improve the customer services and increase the coverage of insurance policies. An Insurance Regulatory body should be set up. Insurance companies must be encouraged to set up unit linked pension plans. Computerization of operations and updating of technology to be carried out in the insurance industry. The committee felt the need to provide greater autonomy to insurance companies in order to improve their performance and 24 . industry should be opened up to competition.100 crores. 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) v) Customer Service LIC should pay interest on delays in payments beyond 30 days. iii) Regulatory Body The Insurance Act should be changed.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Level Life Insurance Company should be allowed to operate in each state.should be made independent iv) Investments Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. But at the same time.

it had proposed setting up an independent regulatory body. For this purpose.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY enable them to act as independent companies with economic motives. The IRDA since its incorporation as a statutory body in April 2000 has fastidiously stuck to its schedule of framing regulations and registering the private sector insurance companies. The other decision taken simultaneously to provide the supporting systems to the insurance sector and in particular the life insurance companies was the launch of the IRDA online service for issue and renewal of licenses to agents. Since being set up as an independent statutory body the IRDA has put in a framework of globally compatible regulations. 25 . The approval of institutions for imparting training to agents has also ensured that the insurance companies would have a trained workforce of insurance agents in place to sell their products. Reforms in the Insurance sector were initiated with the passage of the IRDA Bill in Parliament in December 1999.The Insurance Regulatory and Development Authority.

• Government should take over the holdings of GIC and its subsidiaries so that these subsidiaries can act as independent corporations. 26 . the first step towards insurance sector reforms was initiated with the formation of Malhotra Committee. The committee was formed to evaluate the Indian insurance industry and recommend its future direction with the objective of complementing the reforms initiated in the financial sector.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY MALHOTRA COMMITTEE : In 1993. headed by former Finance Secretary and RBI Governor R. Key Recommendations of Malhotra Committee: Structure • Government stake in the insurance Companies to be brought down to 50%. • All the insurance companies should be given greater freedom to operate.N. Malhotra.

• Postal Life Insurance should be allowed to operate in the rural market. • Controller of Insurance should be made independent.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Competition • Private Companies with a minimum paid up capital of Rs. • No Company should deal in both Life and General Insurance through a single Entity. • An Insurance Regulatory body should be set up. 27 . • Only one State Level Life Insurance Company should be allowed to operate in each state. Regulatory Body • The Insurance Act should be changed. • Foreign companies may be allowed to enter the industry in collaboration with the domestic companies.1billion should be allowed to enter the industry.

28 . Malhotra Committee also proposed setting up an independent regulatory body .A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Investments • Mandatory Investments of LIC Life Fund in government securities to be reduced from 75% to 50%. Customer Service • LIC should pay interest on delays in payments beyond 30 days • Insurance companies must be encouraged to set up unit linked pension plans. • Computerisation of operations and updating of technology to be carried out in the insurance industry.The Insurance Regulatory and Development Authority (IRDA) to provide greater autonomy to insurance companies in order to improve their performance and enable them to act as independent companies with economic motives. • GIC and its subsidiaries are not to hold more than 5% in any company.

29 . of the management of life insurance pending nationalization of such business. For the purpose of servicing of policies issued before September 1. 1956 the President of the Indian Union issued an ordinance. the parliament passed a bill for nationalization of life insurance business in India and for setting up a corporation as the sole agency for carrying on this business in India. & the then Finance Minister explained the objectives of nationalization of life insurance business. in public interest. 1956.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Life Insurance Companies at a Glance: a) LIFE INSURANCE CORPORATION OF INDIA: On January 19. some integrated head offices & integrated branch office units were created. The corporation. In June 1956. Corporation also took over foreign life business of the Indian insurers. 1956. set up under this Act. These offices have nothing to do with the policies issued by the corporation. is known as ―Life Insurance Corporation of India‖. which started functioning on September 1. providing for the taking over.

Conduct business with utmost economy & with the full realization that the moneys belong to the policyholders.  To develop work satisfaction among agents & employees.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  Objectives of LIC:  Maximize mobilization of people’s savings by making insurance – linked savings adequately attractive.  To run the insurance business at minimum administrative costs.  To publicize & extent the insurance business specifically in rural & remote areas.  To make the investments more dynamic by popularizing the savings plans attached with insurance.  To function as trusts of the insured’s.  To invest the insurance fund keeping with maximum benefit & interest of insured’s. 30 .  To make the employees collectively responsible for providing efficient services to the insured’s.  To fulfill the needs of the society in a changing social and economic environment.  To provide suitable financial security at reasonable cost.

healthcare and information technology. Both the promoters are well known for their ethical dealings. India’s largest housing finance institution and Standard Life Assurance Company. HDFC manages Rs. their financial strength and their commitment to be a long-term player in the life insurance industry.450 Crores in assets and Standard Life manages over US $100 billion in assets. is a joint venture between HDFC. focused on the knowledge. 31 of life .000 Crores) in assets under management. 775. is one of the world’s experts in life insurance with over 156 years of experience in the business and over US$ 165 billion (Rs. Ltd. people. New York Life. Europe’s largest mutual life company. and Max India Limited. Max India Limited is a multi-business corporate. a Fortune 100 Company. 21. and service-oriented business insurance.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY b) HDFC STANDARD LIFE INSURANCE COMPANY: HDFC Standard Life Insurance Co. c) MAX NEW YORK LIFE INSURANCE COMPANY: Max New York Life Insurance Company is a joint venture between New York Life International Inc.

a company under Kotak Mahindra Group is a 74:26 life insu rance joint venture between Kotak Mahindra Finance Limited with Old Mutual.K. Old Mutual is today an International Financial Service Group based in London. which is why they believe that freedom to take life on "Jeene Ki Aazadi" The alliance of Om Kotak Mahindra with Old Mutual has given it unmatched expertise in life insurance a rea. life has its share of ifs. Their aim is to consistently offer a wide range of innovative life insurance products. Surely. It's often about things going right. U. The philosophy of Om Kotak Mahindra is helping their customers take financial decisions at every stage in life. we believe it has its 32 . At Birla Sun Life however. e) BIRLA SUN LIFE INSURANCE COMPANY: It is a joint venture of Aditya Birla Group and Sun Life Financial Services with the objective that Insurance is not about something going wrong. One of the wonders of human nature is that we never believe anything can actually go wrong.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY d) OM KOTAK MAHINDRA LIFE INSURANCE: Om Kotak Mahindra Life Insurance. to help their customers remain financially independent. With 156 years of experience in life insurance business.

4 billion.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY equally pleasant share of buts as well. with a presence in over 130 countries and jurisdictions throughout the world. f) TATA AIG LIFE INSURANCE COMPANY: Tata AIG is a joint venture that is backed by the Tata Group – India’s most respected industrial conglomerate. SBI is the largest bank in India and Cardiff is a leading insurance company in France operating in 29 countries. Be it living the same lifestyle in your post retirement days or providing a secure future for your loved ones. Cardiff is a wholly owned the largest subsidiary of European Bank. . and American International Group. (AIG) – the leading US-based international insurance and financial services organization. which make a life. g) SBI LIFE INSURANCE COMPANY: SBI Life Insurance Company Ltd. Tata AIG offers a gamut of innovative products in the Life Insurance sector. We at Birla Sun Life stand committed to helping you realize those happy moments. with revenues of more than US $8. in case something happens to you. Inc. 33 BNP Paribas. is a joint venture between State Bank of India and Cardiff of France.

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY CHAPTER 3 SURVEY. DATA ANALYSIS 34 .

Life 10 Kotak Mahindra 3 Post Office 15 HDFC 3 35 .1.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q. of Respondents LIC 50 Birla Sunlife 2 SBI 3 ICICI Pru.2. Of Respondents Yes 50 No 0 Q.Which Company’s Insurance Policies do you have? Company No.Do you have a Life Insurance Policy? Criteria No.

HDFC Co. 36 .A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY No. of Respondents No. Etc. allowed the Introduction of private player in Insurance in the year 2000. The reason behind this is that the LIC competitor since more than four decades and the Indian Govt.. of Respondents 60 50 40 30 20 10 0 LIC SBI Kotak HDFC As from the above chart it is very clear the all of the respondents have an insurance of the LIC while some of them have an insurance of the other companies like post Office. ICICI Prudential Life insurance Co.

000 to 20.000 6 30. of Respondents Below Rs.000 10 The analysis of the above available data is merely to find out the percentage of income that one is willing to invest in insurance. 10.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q.000 to 40.000 11 10. 37 .000 5 Above 40.000 to 30.000 18 20.3What is amount of insurance premium you pay annually? Criteria No.

is deductible up to certain limit from the income and also the maturity amount is also tax free. Their second priority is tax planning because the premium. while purchasing a policy? Criteria/Rank 1 2 3 4 5 Total Death Benefit 29 10 6 2 3 50 Children’s 7 13 21 3 0 44 5 5 6 20 7 43 Tax Planning 8 18 8 8 6 48 Financial 2 5 3 11 25 46 Future Retirement Planning Planning From the table and chart it can be say that most of the people rank death benefit first for the decision to make investment in Insurance. The third and fourth priorities are children’s future and retirement planning. 38 . which is paid by the people towards Insurance.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q.4What priorities would you consider most important.

5 Do you have any knowledge of the stock market? Criteria No. of Respondents Yes 25 No 7 The question number 5 and 6 are designed to know the awareness of people who have knowledge of share market or deals in shares also have the knowledge of the new modern insurance product i.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q.e.6If “Yes” do you have any knowledge about unit linked insurance plans? Criteria No. of Respondents Yes 32 No 18 Q. 39 . Unit Linked Insurance Plan. From the available data it can be say that those who deal in shares are also aware of the ULIP.

40 .7 If given a choice.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q. where would you like to invest your money? (Please Rank Your Choice) Choice/Rank 1 2 3 4 5 6 7 8 Total Mutual Fund 0 1 5 1 25 12 5 1 50 Insurance 4 12 14 4 8 3 0 0 45 Gold 4 8 1 2 2 5 13 13 48 Equities 17 3 0 5 2 6 1 0 34 Post Office 22 12 12 2 2 0 0 0 50 Debenture 0 2 4 10 1 14 2 0 33 Bank Deposit 0 6 12 19 1 0 3 1 42 Other 10 5 0 2 1 0 0 2 20 This question is mainly designed to know the investment priorities of the people of DOMBIVLI town.

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q.8 According to you what are the factors that would affect your decision while purchasing an insurance policy? Criteria/Rank 1 2 3 4 5 50 Premium 12 15 15 6 2 50 Return 21 17 8 2 2 50 Safety 20 14 15 1 0 50 Liquidity 1 1 9 18 21 50 Market 1 2 0 16 21 40 Condition The question No. 41 . As far as investment in insurance is concerned most of the people want that it should be safe and at the same time giving the compatible returns because insurance is not only for death benefit it is also a saving tool for future. 8 is designed to know which the factors are affecting the most to the prospect while making decision to invest in insurance. So the mix response of respondents is welcomed. Available data is such that there is a bit ambiguity.

9 Are you or any of your family members are planning to buy an insurance policy in near future? Criteria No. Q. of Respondents Yes 13 No 37 This question is taken to collect the information of those respondents who are going to plan to purchase insurance within near future that is used by the company for making personal contact for sale. of Respondents Yes 10 No 30 42 . 10 Are your needs satisfied with your current investment in insurance? Criteria No.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q.

So it will be useful for designing the promotional schemes of the company. that the company can focus on those areas where the competitors fail. There are many others reasons like more time taken by the company for claim settlement. So. etc. Because now a days the competition is very stiff in the insurance industry.10 and 11 are designed to know the percentage of people who are not satisfied with the current investment in insurance and also to know the reasons behind it. 11 If “No”. From the above table and chart it can be seen that the respondents who are dissatisfied give the main reason behind it are poor services. So the company can improve upon these and increase its market share by offering quality service to the customers. non-dispatchment of cheques and other important vouchers. All companies are trying to attract more customers by anyhow.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY Q. of Respondents High Premium 0 Low Return 1 Poor Services 7 Others 2 The question No. 43 . then give reasons? Criteria No.

Professional management 6. Low capital base 2. Yet to build strong distribution network 3.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY SWOT ANALYSIS  Strengths 1. Flexible Products 2. Cannot tap rural market 44 . Expertise in the field of insurance 5. Create a brand name  Weakness 1. Partners having experience in different markets of the world. 3. Synergy with existing operations 4.

Decades of experience and brand name of LIC 3. 45 . Banks ready to tie up for as a readymade distribution network for a small fee.  Threats 1.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  Opportunities 1. Large distribution network of LIC 2. 5% service tax on investments. Untapped market 2.

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY CHAPTER 4 CONCLUSION 46 .

which currently makes up 80% of premiums. Important steps have thus been already taken.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY India is among the most promising emerging insurance markets in the world. Furthermore. India needs to further liberalize investment regulations on insurers to strike a proper balance between insurance solvency and investment flexibility. a rising middle-income class. Obsolete regulations on insurance prices will have to be replaced by riskdifferentiated pricing structures. both the life and non-life insurance sectors would benefit from less invasive regulations. 13 private life Insurers and eight general insurers have joined the Indian market. Incumbent state-owned insurance companies have so far managed to hold their own and retain dominant market positions. an improving regulatory framework and rising risk awareness. price structures need to reflect product risk. The groundwork for realizing potential was arguably laid in 2000 when India undertook to open the domestic insurance market to private-sector and foreign companies. is widely tipped to lead the growth. Significantly. In addition. Yet. Since then. The major drivers include sound economic fundamentals. Its current premium volume of USD 18 billion has the potential to increase to USD 90 billion within the next decade. life insurance. To begin with. 47 . foreign players participated in most of these new companies – despite the restriction of 26% on foreign ownership. but there are still major hurdles to overcome if the market is to realize its full potential. their market share is likely to decline in the near to medium term. In particular.

gov.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY BIBLOGRAPHY WEBLIOGRAPHY http://www. JAWAHARLAL 48 .irda.edited by U.in/ADMINCMS/cms/NormalData_Layout.aspx?pa ge=PageNo4&mid=2 http://en.wikipedia.org/wiki/Insurance#History_of_insurance http://en.wikipedia.org/wiki/Insurance_in_India BOOKS Insurance Industry vol.3.

A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY ANNEXURE 49 .

while purchasing a policy? (Please Rank Your Choice)  Death Benefit   Children’s Education   Retirements Benefit   Tax Planning   Financial Planning   you have any knowledge of the stock market?  Yes  No   If “Yes” do you have any knowledge about unit linked insurance plans?  Yes  No  50        .A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  Do you have a Life Insurance Policy?  Yes  No   Which Company’s Insurance Policies do you have?  (Tick where applicable)  LIC  SBI Life Insurance  HFC Standard Life  New York MaxLife  Birla Sunlife  Alliance Bajaj  Cholamandalam  ICICI Pru. Life Insurance  TATA AIG Insurance MetLife Insurance  ING Vysya  OM Kotak Mahindra  AVIVA Life  AMP Sanmar  What is amount of insurance premium you pay annually?  What priorities would you consider most important.

then give reasons?  High Premium  Low Return   51 Poor Services  Other Reasons__________ .)   Equities  If other (specify)___________  According to you what are the factors that would affect you decision while purchasing an insurance policy?  (Please Rank Your Choice)  Premium   Return   Safety   Liquidity   Market Condition   Are you or any of your family members are planning to buy an insurance policy in near future?  Yes  No   Are your needs satisfied with your current investment in insurance?  Yes  No   If “No”.A PROJECT REPORT ON INDIAN INSURANCE INDUSTRY  If given a choice. where would you like to invest your money?  (Please Rank Your Choice)  Mutual Funds  Post Office Schemes   Insurance Policies  Debentures   Gold  Banks (FD’s etc.