MBA Program

Shivaji University, Kolhapur

Introduction:-

Life Insurance in its modern form came to India from England in the year 1818. Life
insurance is different from other insurance business in the sense that here object matter of
insurance is life being the insurance at the time of death or at the expiry of certain period.
Life insurance business is the business of effective contracts the payment of money is
assured on death or the happening of any contingency dependent on human life and any
contract. This is subject to the payment for a term dependent on human life. Life
insurance is a contract between the policy owner and the insurer, where the insurer agrees
to pay a sum of money upon the occurrence of the insured individual's or individuals'
death or other event, such as terminal illness or critical illness. In return, the policy owner
agrees to pay a stipulated amount called a premium at regular intervals or in lump sums.
There may be designs in some countries where bills and death expenses plus catering for
after funeral expenses should be included in Policy Premium. In the United States, the
predominant form simply specifies a lump sum to be paid on the insured's demise. Life
policies are legal contracts and the terms of the contract describe the limitations of the
insured events. Specific exclusions are often written into the contract to limit the liability
of the insurer; for example claims relating to suicide, fraud, war, riot and civil
commotion. In some sense we can say that insurance appears simultaneously with the
appearance of human society. We know of two types of economies in human societies:
money economies and non-money or natural economies. The second type is a more
ancient form than the first. In such an economy and community, we can see insurance in
the form of people helping each other. For example, if a house burns down, the members
of the community help build a new one. Should the same thing happen to one's neighbor,
the other neighbors must help. Otherwise, neighbors will not receive help in the future.
This type of insurance has survived to the present day in some countries where modern
money economy with its financial instruments is not widespread. Insurance is system by
which the losses suffered by a few are spread over many, exposed to similar risks.
Insurance is a protection against financial loss arising on the happening of an unexpected
event. Insurance policy helps in not only mitigating risks but also provides a financial
cushion against adverse financial burdens suffered. ULIP came into play in the 1960s and

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is popular in many countries in the world. The reason that is attributed to the wide spread
popularity of ULIP is because of the transparency and the flexibility which it offers. Unit
Linked Insurance Plan (ULIP) provides for life insurance where the policy value at any
time varies according to the value of the underlying assets at the time. ULIP is life
insurance solution that provides for the benefits of protection and flexibility in
investment. The investment is denoted as units and is represented by the value that it has
attained called as Net Asset Value (NAV).As times progressed the plans were also
successfully mapped along with life insurance need to retirement planning. In today's
times, ULIP provides solutions for insurance planning, financial needs, financial planning
for children’s marriage planning also can be done with this.

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Objectives of The Study :-

a. To study the concept unit linked plans.

b. To compare the various plans (Growth fund) on the basis of their net asset values.

c. To derive conclusions by comparing their stability with Index.

d. To derive easy way to compare plans for investment to common people.

Research Methodology:-

The data which is required for the study is collected from the following
source.

• Primary Data :-

In this particular project the primary data is collected by consulting

with sales development manager.

• Secondary Data :-

Secondary information is the second hand information collected by

else before which can be used in the research study.

 Office documents & report of the company.

 Internet.

The data so collected is subjected to various techniques to arrive

at meaningful findings & suggestions.

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Limitations of The Study:-

1. The study is based on historical data.

2. The net asset value of every unit changes every day to making a correct
present assessment for the future is very difficult.

3. Problem in understanding the concept of unit linked plan and net asset value is
very difficult.

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ORGANISATIONAL PROFILE

HDFC Standard Life Insurance Company Ltd. is one of India's leading

private insurance companies, which offers a range of individual and group insurance
solutions. It is a joint venture between Housing Development Finance Corporation
Limited (HDFC Ltd.), India's leading housing finance institution and a Group Company
of the Standard Life, UK. HDFC as on December 31, 2007 holds 72.38 per cent of equity
in the joint venture.

History

The Standard Life Assurance Company ("Standard Life") was

established in 1825 and the first Standard Life Assurance Company Act was passed by
Parliament in 1832. Standard Life was reincorporated as a mutual assurance company in
1925.

The Standard Life originally operated only through branches or agencies of the mutual
company in the United Kingdom and certain other countries.

Its Canadian branch was founded in 1833 and its Irish operations in 1838. This largely
remained the structure of the group until 1996, when it opened a branch in Frankfurt,
Germany with the aim of exporting its UK life assurance and pensions operating model to
capitalize on the opportunities presented by EC Directive 92/96/EEC (the 'Third Life
Directive') and offer a product range in that market with features which local providers
were unable to offer.
In the 1990s, the group also sought to diversify its operations into areas which
complemented its core life assurance and pensions business, with the intention of
positioning itself as a broad range financial services provider.

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Banking, Healthcare and Investments -

The group set up Standard Life Bank, its UK mortgage and retail savings banking
subsidiary, in 1998 and Standard Life Investments, which had previously been the in-
house investment management unit of the group’s life assurance and pensions business,
was separated into a distinct legal entity in the same year, with the aim of establishing it
as an independent investment management business providing services to both the group
and third party retail and institutional clients. The group acquired Prime Health Limited
(subsequently renamed Standard Life Healthcare) in the United Kingdom in 2000.
Standard Life Healthcare expanded in March 2006 with the acquisition of the PMI
business of First Assist.

Standard Life Asia Limited/Joint ventures –

The group’s Hong Kong subsidiary, Standard Life Asia Limited ('SL Asia'), was
incorporated in 1999 as a joint venture and became a wholly-owned subsidiary of
Standard Life in 2002. The group’s operations in Hong Kong were established to give the
group a presence in the Far East from which it could expand into China. The group’s
joint ventures in India with Housing Development Finance Corporation Limited ('HDFC')
were incorporated in 2000 (in relation to the life assurance and pensions joint venture)
and 2003 (in relation to the investment management joint venture). The group’s joint
venture in China with Tianjin Economic Development Area General Company ('TEDA')
became operational in 2003.

Standard Life International Limited –

The group also incorporated Standard Life International Limited ('SLIL') in 2005
for the purposes of providing the group with an offshore vehicle, based in Ireland,
through which it could sell tax-efficient investment products into the United Kingdom.
Sales of these products commenced in 2006.

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Service company –

Following the group’s strategic review in 2004, the group established a service company
structure for the provision of central corporate services to the group’s business units.
Standard Life Employee Services Limited ('SLESL') supplies a wide range of central
services to the rest of the group, including IT, facilities, legal and human resources
services, and employs staff working in the group’s UK and Irish operations (other than
SLI, SLB and SLH, which employ their staff directly). This service company structure
was created to enable Standard Life to comply with regulatory restrictions on the
provision of non-insurance services and to exploit group-wide synergies.

Our key strengths

Financial Expertise

As a joint venture of leading financial services groups, HDFC Standard Life has the
financial expertise required to manage your long-term investments safely and efficiently.

Range of Solutions
We have a range of individual and group solutions, which can be easily customized to
specific needs. Our group solutions have been designed to offer you complete flexibility
combined with a low charging structure.

Track Record so far Our gross premium income, for the year ending March 31, 2008
stood at Rs.4,859 crores and new business premium income stood at Rs.2,685 crores. The
company has covered over 9,59,000 lives year ending March 31, 2008.

Our Vision

'The most successful and admired life insurance company, which means that we are the
most trusted company, the easiest to deal with, offer the best value for money, and set the
standards in the industry'.
'The most obvious choice for all'.

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Our Values

Values that we observe while we work:

Integrity
Innovation
Customer centric
People Care “One for all and all for one”
Team work
Joy and Simplicity

Mission and vision

Mission

What we do;

Our mission is to build valuable customer relationships by helping customers grow and
protect their assets.

Vision

What we aspire to achieve;

Our vision is to help our customers around the world feel confident about their future
wealth and wellbeing.

Strategy

How we will deliver our mission and vision;

Our strategy is to build valuable customer relationships with leading service and
compelling propositions through:

• creating capital efficient, innovative products

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• opening new routes to markets

• leveraging investment management expertise and performance

• driving for operational excellence

Values

What we believe in; Thinking holistically: taking a whole view of the person, their needs
and how these can be met Being flexible: developing innovative products, services and
solutions that allow for change and evolve with peoples’ needs Delivering performance:
being a better place to grow and protect assets Acting with integrity: ensuring each and
every one of us does the right thing .

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Shivaji University, Kolhapur

Stockholding Pattern

HDFC Standard Life

81.40% 18.60%

Some of the competitors of HDFC are,

LIC
ICICI Prudential
Bajaj Allianz
Max New York Life Insurance
Birla Sun Life Insurance
Aviva Life Insurance India
ING Vysya Life Insurance
Kotak Mahindra Old Mutual
MetLife India Insurance
Reliance Life Insurance
SBI Life Insurance
Shriram Life Insurance
Tata AIG Life Insurance

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HDFC Group Companies:-

HDFC ERGO General Insurance

HDFC Securities

HDFC Banks HDFC

Mutual Fund

HDFC realty.com

HDFC

Some of our valued bank assurance partners:-

HDFC
HDFC Bank
Union Bank Of India
Indian Bank
Saraswat Bank
Bank of Baroda

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HDFC STANDARD LIFE INSURANCE PLANS

1. Individual Plans

Protection Plans
You can protect your family against the loss of your income or the burden of
a loan in the event of your unfortunate demise, disability or sickness.
These plans offer valuable peace of mind at a small price.

Our Protection range includes

Term Assurance Plan
Loan Cover Term Assurance Plan
Home Loan Protection Plan

Investment Plans

Our investment products are well suited to meet your long-term needs.

Single Premium Whole Of Life plan

Unit Linked Wealth Maximiser Plus

Pension Plans
Our Pension Plans help you secure your financial independence even after retirement.

Our Pension range includes

Personal Pension Plan
Unit Linked Pension
Unit Linked Pension Plus
Unit Linked Pension II
Unit Linked Pension Maximiser II
Savings Plans

Our Savings Plans offer you flexible options to build savings for your
future needs such as buying a dream home or fulfilling your children’s

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Immediate and future needs.

Our Savings range includes

Endowment Assurance Plan

Assurance Plan
Savings Assurance Plan
Children’s Plan
Money Back
Unit Linked Endowment
Unit Linked Endowment Plus
Unit Linked Endowment Suvidha
Unit Linked Endowment Suvidha Plus
Unit Linked Endowment II
Unit Linked Endowment Plus II
Unit Linked Young Star
Unit Linked Young Star Plus
Unit Linked Young Star Suvidha
Unit Linked Young Star Suvidha Plus

Unit Linked Young Star Plus II

Unit Linked Enhanced Life Protection II
SimpliLife

Health Plans

Critical Care Plan

Organization Structure:-

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Theoretical Background

Insurance Regulatory & Development Authority

Insurance Regulatory and Development Authority (IRDA) was constituted
in 1999 by an Act of Parliament to protect the interests of the policyholders and to
regulate, promote and ensure orderly growth of the insurance industry. IRDA consists of
a ten member team that comprises a Chairman, five whole-time members and four part-
time members. IRDA allows registration of new players in the insurance field. It also has
the authority to renew, modify, withdraw, suspend or cancel such registration. IRDA
ensures protection of the interests of the policy holders in matters concerning assigning of
policy, nomination by policy holders, insurable interest, settlement of insurance claim,
surrender value of policy and other terms and conditions of contracts of insurance. It
specifies requisite qualifications, code of conduct and practical training for intermediary
or insurance intermediaries and agents.
After creation of IRDA, insurance sector has seen tremendous growth. Before
IRDA came into force there were only players in the insurance field, namely, Life
Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).
Since then 23 new players have entered in the insurance sector.

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Unit Linked Insurance Plans (ULIP)

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

ULIP came into play in the 1960s and is popular in many countries in the world. The
reason that is attributed to the wide spread popularity of ULIP is because of the
transparency and the flexibility which it offers.

As times progressed the plans were also successfully mapped along with life insurance
need to retirement planning. In today's times, ULIP provides solutions for insurance
planning, financial needs, financial planning for children’s marriage planning also can be
done with this.

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

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

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Unit-linked insurance plans, ULIPs, are distinct from the more familiar ‘with profits’
policies sold for decades by the Life Insurance Corporation. ‘With profits’ policies are
called so because investment gains (profits) are distributed to policyholders in the form of
a bonus announced every year. ULIPs also serve the same function of providing
insurance protection against death and provision of long-term savings, but they are
structured differently.
In ‘with profits’ policies, the insurance company credits the premium to a common pool
called the ‘life fund,’ after setting aside funds for the risk premium on life insurance and
management expenses.

Every year, the insurer calculates how much has to be paid to settle death and maturity
claims. The surplus in the life fund left after meeting these liabilities is credited to
policyholders’ accounts in the form of a bonus. In a ULIP too, the insurer deducts
charges towards life insurance (mortality charges), administration charges and fund
management charges. The rest of the premium is used to invest in a fund that invests
money in stocks or bonds. The policyholder’s share in the fund is represented by the
number of units.

The value of the unit is determined by the total value of all the investments made by the
fund divided by the number of units. If the insurance company offers a range of funds,
the insured can direct the company to invest in the fund of his choice. Insurers usually
offer three choices — an equity (growth) fund, balanced fund and a fund which invests in
bonds. In both ‘with profits’ policies as well as unit-linked policies, a large part of the
first year premium goes towards paying the agents’ commissions.

Features of ULIPs include:

1. Units allotted under ULIP schemes have Net Asset Values (NAV)
declared regularly, like a mutual fund
2. Investors can invest across types of portfolios similar to mutual funds -
growth equity, balanced, debt funds, etc. Investors can move across portfolios, typically
at nominal costs

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3. Investors can invest as a lump sum (single premium) or make premium

payments on an annual, half-yearly, quarterly or monthly basis. Premium amounts can be
changed over the course of ULIP’s life
4. Investments qualify under Section 80C of the Income Tax Act. Maturity
proceeds from ULIPs are tax free. There are no long term capital gains tax and 10% short
term capital gains tax on equity portfolios within ULIP. For debt funds, long term capital
gains tax is 10% while short term is at the investor’s marginal tax rate.
5. However, charges charged by insurance companies can be quite confusing
- therefore, investors should compare them with similar mutual funds to see if charges
quoted are reasonable.
Despite their interesting structure and potential benefits, investors are better off
clearly understanding portfolio types offered, performance of fund managers and
expenses/fees before investing in ULIPs.

SUM ASSURED:

The term ‘Sum Assured’ is normally used in conventional life insurance plan to
indicate guaranteed death and / or maturity benefit payable. In a unit linked plan the sum
assured can be expressed in two ways:
As an integrated benefit
When the sum assured is expressed as an integrated benefit, on the happening of the
specified event the higher of the sum assured or the value of the units in the fund is
payable. This means that as the value of the fund increases the risk cover diminishes. The
integrated benefit in an unit linked policy makes sense as the risk premium charge
depends on the age of the life assured and does not remain constant during the term of a
unit linked policy. Thus as the age increases the risk cover diminishes and the premium
under the policy goes towards investment. In case the life assured is interested in a life
cover the alternate way of providing the same is by taking a Term Assurance plan in
addition to the unit linked plan.

As an additional benefit

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When the sum assured is expressed as an additional benefit, on the happening of the
specified event in addition to the value of the units in the fund the sum assured is also
payable. Since the risk cover under the policy does not diminish during the term of the
policy the policyholder has to pay the charge towards the risk cover. In a unit linked plan
the risk charges increase as the age of the life assured increases.
Maturity Benefit will depend upon the number of units standing to the credit of the
insured and the NAV on the date of maturity. A life insurance company can structure any
risk benefit under the unit-linked policy. For example the death benefit, accident benefit
and critical illness benefits can be offered under the unit-linked plan as an integrated
benefit or as an additional benefit or a combination of both.
PREMIUM:

A unit-linked policy can be structured with flexibility in the premium. The following
flexibility can be offered under a unit-linked plan.

Choice of the premium amount

In a unit linked plan the policyholder can choose the amount of premium he desires to
pay under the contract.
The premium paid is used to buy units of the fund chosen. Some charges are deducted by
canceling the units in the policyholders account. In case the policyholder does not pay
any future premiums the charges are still deducted by canceling the units from his
account.
Some of the unit-linked policies have the condition for a regular payment of a contracted
premium during the term of the policy. The advantage of this is that the investment is
done on a regular basis and the policyholder can get the benefit of what is called the
rupee cost averaging.

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Net Asset Value-

The Net Asset Value - NAV mainly determines the value of each holdings of the mutual
fund. It is expressed as per-share amount. In a majority of the mutual fund holdings, the
Net Asset Value is calculated on a daily basis after the trading closes in some specified
financial exchange. However in some of the mutual funds, the net asset value is
calculated many times in a day during the trading period.

The open-end schemes in mutual funds sell as well as exchange their shares at the net
asset value. The closed-end schemes in mutual funds are allowed to sell their shares at
either higher or lower price range than their actual net asset value. This system is known
as the premium or discount in mutual fund industry. In the mutual fund industry, when a
fund is divided in varied groups of shares, each group has its own NAV which clearly
determines the difference in fees and expenses payable by various groups.

What It Is:
Most commonly used in reference to mutual or closed-end funds, net asset value (NAV)
measures the value of a fund's assets, minus its liabilities. NAV is typically calculated on
a per-share basis.

How It Works/Example:
A fund's NAV fluctuates along with the value of its underlying investments. The formula
for NAV is:

NAV = (Market Value of All Securities Held by Fund + Cash and Equivalent Holdings -
Fund Liabilities) / Total Fund Shares Outstanding

Investors are the owners of the mutual fund. Funds collected under a particular scheme
are invested in different securities. So the ownership interest of the unit holders is
represented by these securities.

The units of an open-ended mutual fund scheme are sold and purchased by the
mutual fund at a price based on NAV. The NAV of a mutual fund is calculated by

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dividing the net asset of the scheme by the no of outstanding units under that scheme on
that date of valuation.

NAV = Value of securities – Liabilities

No. of units outstanding

An investment company calculates the NAV of a single share (or the "per share NAV")
by dividing its NAV by the number of shares that are outstanding. For example, if a
mutual fund has an NAV of $100 million, and investors own 10,000,000 of the fund’s
shares, the fund’s per share NAV will be $10. Because per share NAV is based on NAV,
which changes daily, and on the number of shares held by investors, which also changes
daily, per share NAV also will change daily. Most mutual funds publish their per share
NAVs in the daily newspapers.

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Formula for calculation of percentage change =

Closing –Opening ×100

Opening

Index values:-

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Date Open %Change Average

02/04/2008 16,023.3
0
07/04/2008 15,390.1 -3.95
5
11/04/2008 15,840.5 2.93 1.28
6
16/04/2008 16,288.7 2.83
6
21/04/2008 16,611.4 1.98
1
25/04/2008 16,781.9 1.03
7
30/04/2008 17,479.0 4.15
1

02/05/2008 17,560.1 0.46

5
07/05/2008 17,404.1 -0.89
5
12/05/2008 16,641.4 -4.38
5
16/05/2008 17,476.4 5.02
1
21/05/2008 17,065.6 -2.35 -0.82
1
26/05/2008 16,468.3 -3.50
2
30/05/2008 16,454.0 -0.09
3 HDFC
Standard Life
04//06/2008 15,992.9 -2.80
0 April
09/06/2008 15,115.9 -5.48
Date 7 NAV % Change
02 Apr 2008
13/06/2008 15,327.1 1.40 07.74
07 Apr 20080 07.59 -1.94
11 Apr 2008
18/06/2008 15,744.2 2.72 07.79 -2.43 2.64
16 Apr 20081 07.86 0.90
21 Apr 2008
23/06/2008 14,423.0 -8.39 07.99 1.65
5
27/06/2008 14,127.7 -2.05
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30/06/2008 13,791.0 -2.38
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25 Apr 2008 08.14 1.88

30 Apr 2008 08.18 0.49

Average - 0.80

May

Date NAV % Change

02 May 2008 08.27 1.10
07 May 2008 08.19 -0.97
12 May 2008 07.97 -2.69
16 May 2008 08.19 2.76
21 May 2008 08.17 -0.24
26 May 2008 07.81 -4.41
30 May 2008 07.83 0.26

Average - -0.60

June

Date NAV % Change

04 Jun 2008 07.50 -4.21
09 Jun 2008 07.35 -2.00
13 Jun 2008 07.45 1.36
18 Jun 2008 07.48 0.40
23 Jun 2008 06.94 -7.22
27 Jun 2008 06.69 -3.60
30 Jun 2008 06.59 -1.49

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Average - -2.40

HDFC & Sensex:-

As shown in the diagram the changes in the index and NAV are not much but the
direction between the month April and in May and June is in the opposite way
as in the April and May. The change is also not much.

BIRLA SUNLIFE:-
April

Date NAV % Change

02 Apr 2008 16.06
07 Apr 2008 16.02 -0.25
11 Apr 2008 16.06 0.25
16 Apr 2008 16.14 0.50
21 Apr 2008 16.22 0.50
25 Apr 2008 16.29 0.43
30 Apr 2008 16.41 0.74

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Average - 0.31

May
Date NAV % Change
02 May 2008 16.49 0.49
07 May 2008 16.48 -0.06
12 May 2008 16.35 -0.79
16 May 2008 16.44 0.55
21 May 2008 16.45 0.06
26 May 2008 16.27 -1.09
30 May 2008 16.30 0.18

Average- -0.09

June
Date NAV % Change
04 Jun 2008 16.09 -1.29
09 Jun 2008 16.08 -0.06
13 Jun 2008 16.13 0.31
18 Jun 2008 16.18 0.31
23 Jun 2008 15.84 -2.10
27 Jun 2008 15.76 -0.51
30 Jun 2008 15.59 -1.08

Average - -0.63

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Birla Sun life & Index:-

As shown in the above diagram comparison between the index and the NAV is shown. In
the month of April and in May percentage change in the index and the NAV is more.
However, in case of May and June the change is in the opposite side as compare to April.

Reliance

April

Date NAV % Change

02 Apr 2008 12.62
07 Apr 2008 12.60 -0.16
11 Apr 2008 12.67 0.56
16 Apr 2008 12.77 0.79
21 Apr 2008 12.92 1.17
25 Apr 2008 12.99 0.54
30 Apr 2008 13.06 0.54

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Average - 0.49

May
Date NAV % Change
02 May 2008 13.14 13.14
07 May 2008 13.08 13.08
12 May 2008 12.94 12.94
16 May 2008 13.09 13.09
21 May 2008 13.06 13.06
26 May 2008 12.81 12.81
30 May 2008 12.81 12.81

Average - -0.27

June

Date NAV % Change

04 Jun 2008 12.52 -2.26
09 Jun 2008 12.42 -0.80
13 Jun 2008 12.42 0.00
18 Jun 2008 12.50 0.64
23 Jun 2008 12.10 -3.20
27 Jun 2008 11.89 -1.74
30 Jun 2008 11.80 -0.76

Average - -1.16

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Reliance & Sensex:-

As shown in the above diagram the change in the index and NAV is more in the month of
And in June, that much means the change in the index is more than the change in the
NAV.

TATA AIG
April
Date NAV % Change
02 Apr 2008 22.83
07 Apr 2008 22.46 -1.62
11 Apr 2008 22.98 2.32
16 Apr 2008 23.23 1.09
21 Apr 2008 23.75 2.24
25 Apr 2008 24.01 1.09
30 Apr 2008 24.22 0.87

Average - 0.86

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May
Date NAV % Change
02 May 2008 24.43 0.87
07 May 2008 24.09 -1.39
12 May 2008 23.40 -2.86
16 May 2008 23.90 2.14
21 May 2008 23.81 -0.38
26 May 2008 22.83 -4.12
30 May 2008 22.91 0.35

Average - -0.77

June

Date NAV % Change

04 Jun 2008 21.87 -4.54
09 Jun 2008 21.30 -2.61
13 Jun 2008 21.62 1.50
18 Jun 2008 21.74 0.56
23 Jun 2008 20.41 -6.12
27 Jun 2008 20.01 -1.96
30 Jun 2008 19.65 -1.80
Average - -2.14

Tata & Sensex:-

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Shivaji University, Kolhapur

As shown in the above diagram in April the change between index and NAV is in the
same direction. But in the month of May and June the change in the index and in the
NAV is in the opposite with respect to April. In the month of May and June the
difference in change is also very less.

LIC
April

Date NAV % Change

02 Apr 2008 9.34
07 Apr 2008 9.34 0.00
11 Apr 2008 9.37 0.37
16 Apr 2008 9.44 0.73
21 Apr 2008 9.61 1.82
25 Apr 2008 9.70 0.85
30 Apr 2008 9.73 0.39

Average - 0.60

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May

Date NAV % Change

02 May 2008 9.80 0.69
07 May 2008 9.77 -0.26
12 May 2008 9.71 -0.62
16 May 2008 9.58 -1.39
21 May 2008 9.74 1.72
26 May 2008 9.68 -0.64
30 May 2008 9.37 -3.24

Average - -0.53

June

Date NAV % Change

04 Jun 2008 9.06 -3.30
09 Jun 2008 8.94 -1.28
13 Jun 2008 8.96 0.18
18 Jun 2008 9.06 1.12
23 Jun 2008 8.66 -4.42
27 Jun 2008 8.46 -2.30
30 Jun 2008 8.33 -1.51

Average - -1.64

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LIC & Sensex:-

As shown in the diagram in all the three months the percentage change in the NAV and in
the index both moves in the same direction but percentage change is less in NAV than the
change in the index except in the month of June the change is with the index.

ICICI Prudential:-

April

Date NAV % Change

02 Apr 2008 11.45
07 Apr 2008 11.30 -1.31
11 Apr 2008 11.35 0.44
16 Apr 2008 11.51 1.41
21 Apr 2008 11.69 1.56
25 Apr 2008 11.18 -4.36
30 Apr 2008 11.88 6.26

Average - 0.57

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May

Date NAV % Change

02 May 2008 11.91 0.25
07 May 2008 11.81 -0.84
12 May 2008 11.65 -1.35
16 May 2008 11.82 1.46
21 May 2008 11.80 -0.17
26 May 2008 11.51 -2.46
30 May 2008 11.65 1.22

Average - -0.27

June

Date NAV % Change

04 Jun 2008 11.29 -3.09
09 Jun 2008 11.19 -0.89
13 Jun 2008 11.14 -0.45
18 Jun 2008 11.24 0.90
23 Jun 2008 10.83 -3.65
27 Jun 2008 10.65 -1.66
30 Jun 2008 10.52 -1.22

Average - -1.44

ICICI Prudential and Index

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As shown in the above diagram the change in the value of NAV and the index is more in
all the months. When change is positive in the month April both have positive and in
May and June negative change in both NAV and I Index.

Findings and Observations :-

Comparison Chart:-

Company

Rank 1 2 3 4 5 6

Month Birla Reliance ICICI LIC HDFC Tata Index

April 0.31 0.49 0.57 0.60 0.80 0.86 1.28

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May -0.09 -0.27 -0.27 -0.53 -0.60 -0.77 -0.82

June -0.63 -1.16 -1.44 -1.64 -2.40 -2.14 -2.43

ULIP Growth Fund

Reliance life insurance

Asset allocation % of Fund
Debt.: 60%
Equity: 40%

Bank deposits /mutual funds 18.35%

Gilts 13.27%
Equity 39.44%
Corporate bonds 28.94%
100.00%

TATA AIG
Asset allocation % of Fund
Equity 30.97%

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Corporate Bonds 48.18%

CD/CPs 8.33%
Cash, Bank & Others 12.52%
100.00%

Birla Sunlife
Asset allocation % of Fund
GOVERNMENT SECURITIES 14.67%
CORPORATE DEBT 61.91%
EQUITY 18.11%
MMI 5.32%
100.00%

HDFC Standard Life % of Fund

Asset Allocation
Equity 94.32%
Debt 2.89%
Non-Government Securities 2.79%
100.00%

ICICI PRUDENTIAL % of Fund

Asset Allocation
Equity 85.96%
Debt 3.23%
Non-Government Securities 10.81%
100.00%

LIC % of Fund
Asset Allocation

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Equity Shares 87.33%

Debt 9.89%
Non-Government Securities 2.78%
100.00%

1. As shown in the above chart there are basically three months and their Averages
are calculated.
2. There are 5companies are taken for the comparison.
3. All the percentage changes of each company for each month are compared with
the percentage change in Sensex of that particular month.
4. On the basis of these comparisons it is observed that as there is some change in
the Sensex takes place it also affects on the percentage change in the averages
of the various companies. The most important reason for that is the Investment
portfolio maintained by that particular company for the investing the customers
money.

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5. So as shown in the above chart there are various types of fund compositions of
various companies. Because of the varied proportion of the investment in
different sectors the risk in the investment increases or decreases.
6. In the above chart the companies who have invested in the government bonds or
securities are most stable unit prices, but in case of the companies who have
invested in the equity or in debt they are most risky investments but also has
greater amount of return.
7. It is also clear from the above study that where the equity exposure is less the
volatility is less and where the equity exposure is more the return and risk also
more.
8. On the basis of this –
High risk-High return products- HDFC Standard life, TATA AIG, ICICI
Prudential

Average risk-Steady return products - Birla Sunlife, LIC, Reliance.

9. From the comparison chart it is also clear that the top three companies are

1. Birla Sunlife

2. Reliance

3. ICICI Prudential

Suggestions:-

For Customers:-
1. In the 21st century the people became very busy in their work and because of
that they just rely on their insurance agent, but there is need to see some major
aspect before taking the policy of a particular company.

2. When anyone want to take any Unit Linked insurance policy there is need to
take a look at the position of the NAV of that particular policy.

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3. As in the case of the unit linked policy the major aspect of the policy is the
money of this policy is invested in the stock market and because of that there
is need to take in to account the position of index and the NAV of that policy.

4. There is also another fact that, No matter in which company you are investing
but the important aspect is portfolio of your investment. Means in simple
words the equity and debt composition.

5. By taking in to account the market trend you can decide the portfolio. Means
that if the market is showing upward trend then invest more in equity for
more return and when market shown down turn invest more in debt for steady
return with no risk.

For Company:-

1. Make aware the financial consultants about the concept Net Asset Value.

2. For using the switching options there is need to take in to account the
various factors and the one of the important factor is the market trend and
the position of that particular fund NAV.

3. And another fact that if company becomes successful in making aware

about this concept to people then there is definitely one useful factor for
selling the insurance.

Conclusion:-

Generally people don’t take in to account the important aspects while taking an
insurance policy so, It is clear from the study that there is also need to take in to
consideration the Net Asset value of that particular product on that particular date and
also on historical dates. Which gives the complete idea about the trend of that company
which is with the index or completely different. It helps to give the idea about the amount
of risk and return involved.

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Bibliography:-

1. HDFC Standard life handbook.

2. Investment and Portfolio Management 4th Edition (Prasanna

Chandra.)

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3. www.wikipedia.com

4. www.licofindia.com

5. www.hdfcstandardlife.com

6. www.birlasunlife.com

7. www.tataaig.com

8. www.icicipru.com

9. www.relianceinsurance.com

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