A PROJECT REPORT ON

COMPARATIVE ANALYSIS OF

INSURANCE PRODUCTS

A PROJECT SUBMITTED TO

UNIVERSITY OF MUMBAI for partial completion of the degree of

Bachelor of Management Studies
Under the faculty of Commerce

By
MR. AMAAN DODHIA

Under the Guidance of

Prof. SURAJ

ROLL NO. 8613

DIV - D

THAKUR COLLEGE OF SCIENCE & COMMERCE

KANDIVALI (E), MUMBAI-400101

(2018-19)
 DECLARATION

I, the undersigned MR. AMAAN DODHIA hereby, declare that the work
embodied in this project work titled “COMPARATIVE ANALYSIS OF
INSURANCE PRODUCTS ” forms my own contribution to the research work
carried out under the guidance of Prof. SURAJ is a result of my own research
work and has not been previously submitted to any other University for any
other Degree/ Diploma to this or any other University.

Wherever reference has been made to previous works of others, it has been
clearly indicated as such and included in the bibliography.

I, hereby further declare that all information of this document has been obtained
and presented in accordance with academic rules and ethical conduct.

MR. AMAAN DODHIA

Certified by

Prof. SURAJ
Date: 21th FEB, 2019

CERTIFICATE

This is to certify that Mr. AMAAN DODHIA has worked and duly completed
his project work for the Degree of Bachelor of Accounting & Finance under the
faculty of Commerce in the subject of RESEARCH and his project is entitled
“ COMPARATIVE ANALYSIS OF INSURANCE PRODUCTS” under my
supervision.

I further certify that my entire work has been done by the learner under my
guidance and that no part of it has been submitted previously for any degree or
diploma of any University.

It is his own work and facts reported by his personal findings and
investigations.

Signature of the Project Internal Guide

(Prof. SURAJ)

Date of Submission :
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they are so numerous and
depth is so enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank the University of Mumbai for giving me

chance to do this project.

I take this opportunity to thank our Coordinator Prof. Nishant Jha , for her
moral support and guidance.

I would also like to express my sincere gratitude towards my project guide Prof.
SURAJ whose guidance and care made the project successful.

I would like to thank my college library, for having provided reference books
and magazines related to my project.

Lastly, I would like to thank each and every person who directly and indirectly
helped me in the completion of the project especially my parents and peers
who supported me throughout my project.
 INDEX

CHAPTER TITLE PAGE NO.

1 INTRODUCTION 6

2 RESEARCH METHODOLOGY 25

LITERATURE REVIEW
3 38
DATA ANALYSIS,
INTERPRETATION &
4 86
PRESENTATION

CONCLUSION & SUGGESTION

5 93

BIBLOGRAPHY &
6 97
ANNEXURE
 CHAPTER NO. 1 : INTRODUCTION

! About the project

The project deals with comparative analysis of different insurance products
offered by insurance companies.

! Purpose of the project

The main purpose of the project is to do comparative analysis of different
insurance products, check the awareness level and perception of insurance
by the individuals. The project would also help in understanding
preference of people regarding private and public insurance companies.
The main objective of the research is

o Making comparative analysis between:-

i) Birla sun life insurance with life insurance Corporation of India.

ii) Birla sun life insurance with Tata AIG life insurance.

iii) National Health Plan with Reliance Health Wise Policy.

o Finding out the features and benefits of these plans

o To find out the awareness level of insurance in Kolkata

o To determine customer preference towards private insurance

companies and public insurance companies.

o Marketing of different insurance products.

 ! Scope of the project

The entry of foreign MNC’s and the conductive business environment

fostered by the government, it is no wonder that the re-entry of private
insurance has marked a second coming for the sector. In just five years, the
sector has undergone a makeover, offering more choice, better services,
quicker settlement, tighter regulation and greater awareness ‘s the
environment become more and more competitive and services and
products become alike, creating a differentiation is becoming extremely
tough. Thus, the main objective of my project was to find out the
preference of people regarding insurance companies, which would help
karvy employees to market their product. The study then goes on to
evaluate and analyze the findings so as to present a clear picture of recent
trends in the Insurance sector.

Insurance is a means of protection from financial loss. It is a form of risk

management, primarily used to hedge against the risk of a contingent or
uncertain loss.
An entity which provides insurance is known as an insurer, insurance
company, insurance carrier or underwriter. A person or entity who buys
insurance is known as an insured or as a policyholder. The insurance
transaction involves the insured assuming a guaranteed and known
relatively small loss in the form of payment to the insurer in exchange for
the insurer's promise to compensate the insured in the event of a covered
loss. The loss may or may not be financial, but it must be reducible to
financial terms, and usually involves something in which the insured has
an insurable interest established by ownership, possession, or pre-existing
relationship.
The insured receives a contract, called the insurance policy, which details
the conditions and circumstances under which the insurer will compensate
 the insured. The amount of money charged by the insurer to the insured for
the coverage set forth in the insurance policy is called the premium. If the
insured experiences a loss which is potentially covered by the insurance
policy, the insured submits a claim to the insurer for processing by a claims
adjuster. The insurer may hedge its own risk by taking out reinsurance,
whereby another insurance company agrees to carry some of the risk,
especially if the primary insurer deems the risk too large for it to carry.

Risk which can be insured by private companies typically shares seven

common characteristics:

1. Large number of similar exposure units: Since insurance operates

through pooling resources, the majority of insurance policies are provided
for individual members of large classes, allowing insurers to benefit from
the law of large numbers in which predicted losses are similar to the actual
losses. Exceptions include Lloyd's of London, which is famous for
insuring the life or health of actors, sports figures, and other famous
individuals. However, all exposures will have particular differences, which
may lead to different premium rates.
2. Definite loss: The loss takes place at a known time, in a known place, and
from a known cause. The classic example is death of an insured person on
a life insurance policy. Fire, automobile accidents, and worker injuries
may all easily meet this criterion. Other types of losses may only be
definite in theory. Occupational disease, for instance, may involve
prolonged exposure to injurious conditions where no specific time, place,
or cause is identifiable. Ideally, the time, place, and cause of a loss should
be clear enough that a reasonable person, with sufficient information,
could objectively verify all three elements.
3. Accidental loss: The event that constitutes the trigger of a claim should be
fortuitous, or at least outside the control of the beneficiary of the
insurance. The loss should be pure, in the sense that it results from an
event for which there is only the opportunity for cost. Events that contain
speculative elements such as ordinary business risks or even purchasing a
lottery ticket are generally not considered insurable.
4. Large loss: The size of the loss must be meaningful from the perspective
of the insured. Insurance premiums need to cover both the expected cost of
losses, plus the cost of issuing and administering the policy, adjusting
losses, and supplying the capital needed to reasonably assure that the
insurer will be able to pay claims. For small losses, these latter costs may
be several times the size of the expected cost of losses. There is hardly any
 point in paying such costs unless the protection offered has real value to a
buyer.
5. Affordable premium: If the likelihood of an insured event is so high, or
the cost of the event so large, that the resulting premium is large relative to
the amount of protection offered, then it is not likely that the insurance
will be purchased, even if on offer. Furthermore, as the accounting
profession formally recognizes in financial accounting standards, the
premium cannot be so large that there is not a reasonable chance of a
significant loss to the insurer. If there is no such chance of loss, then the
transaction may have the form of insurance, but not the substance (see the
U.S. Financial Accounting Standards Board pronouncement number 113:
"Accounting and Reporting for Reinsurance of Short-Duration and Long-
Duration Contracts").
6. Calculable loss: There are two elements that must be at least estimable, if
not formally calculable: the probability of loss, and the attendant cost.
Probability of loss is generally an empirical exercise, while cost has more
to do with the ability of a reasonable person in possession of a copy of the
insurance policy and a proof of loss associated with a claim presented
under that policy to make a reasonably definite and objective evaluation of
the amount of the loss recoverable as a result of the claim.
7. Limited risk of catastrophically large losses: Insurable losses are ideally
independent and non-catastrophic, meaning that the losses do not happen
all at once and individual losses are not severe enough to bankrupt the
insurer; insurers may prefer to limit their exposure to a loss from a single
event to some small portion of their capital base. Capital constrains
insurers' ability to sell earthquake insurance as well as wind insurance in
hurricane zones. In the United States, flood risk is insured by the federal
government. In commercial fire insurance, it is possible to find single
properties whose total exposed value is well in excess of any individual
insurer's capital constraint. Such properties are generally shared among
several insurers, or are insured by a single insurer who syndicates the risk
into the reinsurance market.

Legal

When a company insures an individual entity, there are basic legal

requirements and regulations. Several commonly cited legal principles of
insurance include:[17]
1. Indemnity – the insurance company indemnifies, or compensates, the
insured in the case of certain losses only up to the insured's interest.
2. Benefit insurance – as it is stated in the study books of The Chartered
Insurance Institute, the insurance company does not have the right of
recovery from the party who caused the injury and is to compensate the
Insured regardless of the fact that Insured had already sued the negligent
party for the damages (for example, personal accident insurance)
3. Insurable interest – the insured typically must directly suffer from the loss.
Insurable interest must exist whether property insurance or insurance on a
person is involved. The concept requires that the insured have a "stake" in
the loss or damage to the life or property insured. What that "stake" is will
be determined by the kind of insurance involved and the nature of the
property ownership or relationship between the persons. The requirement
of an insurable interest is what distinguishes insurance from gambling.
4. Utmost good faith – (Uberrima fides) the insured and the insurer are bound
by a good faith bond of honesty and fairness. Material facts must be
disclosed.
5. Contribution – insurers which have similar obligations to the insured
contribute in the indemnification, according to some method.
6. Subrogation – the insurance company acquires legal rights to pursue
recoveries on behalf of the insured; for example, the insurer may sue those
liable for the insured's loss. The Insurers can waive their subrogation rights
by using the special clauses.
7. Causa proxima, or proximate cause – the cause of loss (the peril) must be
covered under the insuring agreement of the policy, and the dominant
cause must not be excluded
8. Mitigation – In case of any loss or casualty, the asset owner must attempt
to keep loss to a minimum, as if the asset was not insured.

Indemnification
To "indemnify" means to make whole again, or to be reinstated to the
position that one was in, to the extent possible, prior to the happening of a
specified event or peril. Accordingly, life insurance is generally not
considered to be indemnity insurance, but rather "contingent" insurance
(i.e., a claim arises on the occurrence of a specified event). There are
generally three types of insurance contracts that seek to indemnify an
insured:
1. A "reimbursement" policy
2. A "pay on behalf" or "on behalf of policy"
3. An "indemnification" policy
From an insured's standpoint, the result is usually the same: the insurer
pays the loss and claims expenses.
If the Insured has a "reimbursement" policy, the insured can be required to
pay for a loss and then be "reimbursed" by the insurance carrier for the loss
and out of pocket costs including, with the permission of the insurer, claim
expenses.
Under a "pay on behalf" policy, the insurance carrier would defend and
pay a claim on behalf of the insured who would not be out of pocket for
anything. Most modern liability insurance is written on the basis of "pay
on behalf" language which enables the insurance carrier to manage and
control the claim.
Under an "indemnification" policy, the insurance carrier can generally
either "reimburse" or "pay on behalf of", whichever is more beneficial to it
and the insured in the claim handling process.
An entity seeking to transfer risk (an individual, corporation, or association
of any type, etc.) becomes the 'insured' party once risk is assumed by an
'insurer', the insuring party, by means of a contract, called an insurance
policy. Generally, an insurance contract includes, at a minimum, the
following elements: identification of participating parties (the insurer, the
insured, the beneficiaries), the premium, the period of coverage, the
particular loss event covered, the amount of coverage (i.e., the amount to
be paid to the insured or beneficiary in the event of a loss), and exclusions
(events not covered). An insured is thus said to be "indemnified" against
the loss covered in the policy.
When insured parties experience a loss for a specified peril, the coverage
entitles the policyholder to make a claim against the insurer for the covered
amount of loss as specified by the policy. The fee paid by the insured to the
insurer for assuming the risk is called the premium. Insurance premiums
from many insureds are used to fund accounts reserved for later payment
of claims – in theory for a relatively few claimants – and for overhead
costs. So long as an insurer maintains adequate funds set aside for
anticipated losses (called reserves), the remaining margin is an insurer's
profit.

Social effects

Insurance can have various effects on society through the way that it
changes who bears the cost of losses and damage. On one hand it can
increase fraud; on the other it can help societies and individuals prepare for
 catastrophes and mitigate the effects of catastrophes on both households
and societies.
Insurance can influence the probability of losses through moral hazard,
insurance fraud, and preventive steps by the insurance company. Insurance
scholars have typically used moral hazard to refer to the increased loss due
to unintentional carelessness and insurance fraud to refer to increased risk
due to intentional carelessness or indifference.[20] Insurers attempt to
address carelessness through inspections, policy provisions requiring
certain types of maintenance, and possible discounts for loss mitigation
efforts. While in theory insurers could encourage investment in loss
reduction, some commentators have argued that in practice insurers had
historically not aggressively pursued loss control measures—particularly
to prevent disaster losses such as hurricanes—because of concerns over
rate reductions and legal battles. However, since about 1996 insurers have
begun to take a more active role in loss mitigation, such as through
building codes.

Methods of insurance

According to the study books of The Chartered Insurance Institute, there

are variant methods of insurance as follows:
1. Co-insurance – risks shared between insurers
2. Dual insurance – having two or more policies with overlapping coverage
of a risk (both the individual policies would not pay separately – under a
concept named contribution, they would contribute together to make up
the policyholder's losses. However, in case of contingency insurances such
as life insurance, dual payment is allowed)
3. Self-insurance – situations where risk is not transferred to insurance
companies and solely retained by the entities or individuals themselves
4. Reinsurance – situations when the insurer passes some part of or all risks
to another Insurer, called the reinsurer

Insurers' business model

 Play media

Accidents will happen (William H. Watson, 1922) is a slapstick silent film about the
methods and mishaps of an insurance broker. Collection EYE Film Institute
Netherlands.

Underwriting and investing

The business model is to collect more in premium and investment income

than is paid out in losses, and to also offer a competitive price which
consumers will accept. Profit can be reduced to a simple equation:
Profit = earned premium + investment income – incurred loss –
underwriting expenses.
Insurers make money in two ways:
• Through underwriting, the process by which insurers select the risks to
insure and decide how much in premiums to charge for accepting those
risks
• By investing the premiums they collect from insured parties
The most complicated aspect of the insurance business is the actuarial
science of ratemaking (price-setting) of policies, which uses statistics and
probability to approximate the rate of future claims based on a given risk.
After producing rates, the insurer will use discretion to reject or accept
risks through the underwriting process.
At the most basic level, initial ratemaking involves looking at the
frequency and severity of insured perils and the expected average payout
resulting from these perils. Thereafter an insurance company will collect
historical loss data, bring the loss data to present value, and compare these
prior losses to the premium collected in order to assess rate adequacy. Loss
ratios and expense loads are also used. Rating for different risk
characteristics involves at the most basic level comparing the losses with
"loss relativities"—a policy with twice as many losses would therefore be
charged twice as much. More complex multivariate analyses are
sometimes used when multiple characteristics are involved and a
univariate analysis could produce confounded results. Other statistical
methods may be used in assessing the probability of future losses.
Upon termination of a given policy, the amount of premium collected
minus the amount paid out in claims is the insurer's underwriting profit on
that policy. Underwriting performance is measured by something called the
"combined ratio", which is the ratio of expenses/losses to premiums.[23] A
combined ratio of less than 100% indicates an underwriting profit, while
anything over 100 indicates an underwriting loss. A company with a
combined ratio over 100% may nevertheless remain profitable due to
investment earnings.
Insurance companies earn investment profits on "float". Float, or available
reserve, is the amount of money on hand at any given moment that an
insurer has collected in insurance premiums but has not paid out in claims.
Insurers start investing insurance premiums as soon as they are collected
and continue to earn interest or other income on them until claims are paid
out. The Association of British Insurers (gathering 400 insurance
companies and 94% of UK insurance services) has almost 20% of the
investments in the London Stock Exchange.
In the United States, the underwriting loss of property and casualty
insurance companies was $142.3 billion in the five years ending 2003. But
overall profit for the same period was $68.4 billion, as the result of float.
Some insurance industry insiders, most notably Hank Greenberg, do not
believe that it is forever possible to sustain a profit from float without an
underwriting profit as well, but this opinion is not universally held.
Naturally, the float method is difficult to carry out in an economically
depressed period. Bear markets do cause insurers to shift away from
investments and to toughen up their underwriting standards, so a poor
economy generally means high insurance premiums. This tendency to
swing between profitable and unprofitable periods over time is commonly
known as the underwriting, or insurance, cycle.

Claims

Claims and loss handling is the materialized utility of insurance; it is the

actual "product" paid for. Claims may be filed by insureds directly with the
insurer or through brokers or agents. The insurer may require that the
claim be filed on its own proprietary forms, or may accept claims on a
standard industry form, such as those produced by ACORD.
Insurance company claims departments employ a large number of claims
adjusters supported by a staff of records management and data entry clerks.
Incoming claims are classified based on severity and are assigned to
adjusters whose settlement authority varies with their knowledge and
experience. The adjuster undertakes an investigation of each claim, usually
in close cooperation with the insured, determines if coverage is available
under the terms of the insurance contract, and if so, the reasonable
monetary value of the claim, and authorizes payment.
The policyholder may hire their own public adjuster to negotiate the
settlement with the insurance company on their behalf. For policies that
are complicated, where claims may be complex, the insured may take out a
separate insurance policy add-on, called loss recovery insurance, which
covers the cost of a public adjuster in the case of a claim.
Adjusting liability insurance claims is particularly difficult because there is
a third party involved, the plaintiff, who is under no contractual obligation
to cooperate with the insurer and may in fact regard the insurer as a deep
pocket. The adjuster must obtain legal counsel for the insured (either inside
"house" counsel or outside "panel" counsel), monitor litigation that may
take years to complete, and appear in person or over the telephone with
settlement authority at a mandatory settlement conference when requested
by the judge.
If a claims adjuster suspects under-insurance, the condition of average may
come into play to limit the insurance company's exposure.
In managing the claims handling function, insurers seek to balance the
elements of customer satisfaction, administrative handling expenses, and
claims overpayment leakages. As part of this balancing act, fraudulent
insurance practices are a major business risk that must be managed and
overcome. Disputes between insurers and insureds over the validity of
claims or claims handling practices occasionally escalate into litigation
(see insurance bad faith).

Marketing

Insurers will often use insurance agents to initially market or underwrite

their customers. Agents can be captive, meaning they write only for one
company, or independent, meaning that they can issue policies from
several companies. The existence and success of companies using
insurance agents is likely due to improved and personalized service.
Companies also use Broking firms, Banks and other corporate entities (like
Self Help Groups, Microfinance Institutions, NGOs, etc.) to market their
products.

Types
Any risk that can be quantified can potentially be insured. Specific kinds
of risk that may give rise to claims are known as perils. An insurance
policy will set out in detail which perils are covered by the policy and
which are not. Below are non-exhaustive lists of the many different types
of insurance that exist. A single policy that may cover risks in one or more
of the categories set out below. For example, vehicle insurance would
typically cover both the property risk (theft or damage to the vehicle) and
the liability risk (legal claims arising from an accident). A home insurance
policy in the United States typically includes coverage for damage to the
home and the owner's belongings, certain legal claims against the owner,
and even a small amount of coverage for medical expenses of guests who
are injured on the owner's property.
Business insurance can take a number of different forms, such as the
various kinds of professional liability insurance, also called professional
indemnity (PI), which are discussed below under that name; and the
business owner's policy (BOP), which packages into one policy many of
the kinds of coverage that a business owner needs, in a way analogous to
how homeowners' insurance packages the coverages that a homeowner
needs.

Auto insurance

A wrecked vehicle in Copenhagen

 Auto insurance protects the policyholder against financial loss in the event
of an incident involving a vehicle they own, such as in a traffic collision.
Coverage typically includes:
• Property coverage, for damage to or theft of the car
• Liability coverage, for the legal responsibility to others for bodily injury or
property damage
• Medical coverage, for the cost of treating injuries, rehabilitation and
sometimes lost wages and funeral expenses

Gap insurance

Gap insurance covers the excess amount on your auto loan in an instance
where your insurance company does not cover the entire loan. Depending
on the company's specific policies it might or might not cover the
deductible as well. This coverage is marketed for those who put low down
payments, have high interest rates on their loans, and those with 60-month
or longer terms. Gap insurance is typically offered by a finance company
when the vehicle owner purchases their vehicle, but many auto insurance
companies offer this coverage to consumers as well.

Health insurance

Main articles: Health insurance and Dental insurance

Great Western Hospital, Swindon

Health insurance policies cover the cost of medical treatments. Dental
insurance, like medical insurance, protects policyholders for dental costs.
In most developed countries, all citizens receive some health coverage
from their governments, paid for by taxation. In most countries, health
insurance is often part of an employer's benefits.

Income protection insurance

 Workers' compensation, or employers' liability insurance, is compulsory in some
countries
• Disability insurance policies provide financial support in the event of the
policyholder becoming unable to work because of disabling illness or
injury. It provides monthly support to help pay such obligations as
mortgage loans and credit cards. Short-term and long-term disability
policies are available to individuals, but considering the expense, long-
term policies are generally obtained only by those with at least six-figure
incomes, such as doctors, lawyers, etc. Short-term disability insurance
covers a person for a period typically up to six months, paying a stipend
each month to cover medical bills and other necessities.
• Long-term disability insurance covers an individual's expenses for the long
term, up until such time as they are considered permanently disabled and
thereafter Insurance companies will often try to encourage the person back
into employment in preference to and before declaring them unable to
work at all and therefore totally disabled.
• Disability overhead insurance allows business owners to cover the
overhead expenses of their business while they are unable to work.
• Total permanent disability insurance provides benefits when a person is
permanently disabled and can no longer work in their profession, often
taken as an adjunct to life insurance.
• Workers' compensation insurance replaces all or part of a worker's wages
lost and accompanying medical expenses incurred because of a job-related
injury.

Casualty insurance
 Casualty insurance insures against accidents, not necessarily tied to any
specific property. It is a broad spectrum of insurance that a number of other
types of insurance could be classified, such as auto, workers compensation,
and some liability insurances.
• Crime insurance is a form of casualty insurance that covers the
policyholder against losses arising from the criminal acts of third parties.
For example, a company can obtain crime insurance to cover losses arising
from theft or embezzlement.
• Terrorism insurance provides protection against any loss or damage caused
by terrorist activities. In the United States in the wake of 9/11, the
Terrorism Risk Insurance Act 2002 (TRIA) set up a federal program
providing a transparent system of shared public and private compensation
for insured losses resulting from acts of terrorism. The program was
extended until the end of 2014 by the Terrorism Risk Insurance Program
Reauthorization Act 2007 (TRIPRA).
• Kidnap and ransom insurance is designed to protect individuals and
corporations operating in high-risk areas around the world against the
perils of kidnap, extortion, wrongful detention and hijacking.
• Political risk insurance is a form of casualty insurance that can be taken
out by businesses with operations in countries in which there is a risk that
revolution or other political conditions could result in a loss.

Life insurance
Amicable Society for a Perpetual Assurance Office, Serjeants' Inn, Fleet Street,
London, 1801
Life insurance provides a monetary benefit to a decedent's family or other
designated beneficiary, and may specifically provide for income to an
insured person's family, burial, funeral and other final expenses. Life
insurance policies often allow the option of having the proceeds paid to the
beneficiary either in a lump sum cash payment or an annuity. In most
states, a person cannot purchase a policy on another person without their
knowledge.
Annuities provide a stream of payments and are generally classified as
insurance because they are issued by insurance companies, are regulated as
insurance, and require the same kinds of actuarial and investment
management expertise that life insurance requires. Annuities and pensions
that pay a benefit for life are sometimes regarded as insurance against the
possibility that a retiree will outlive his or her financial resources. In that
sense, they are the complement of life insurance and, from an underwriting
perspective, are the mirror image of life insurance.
Certain life insurance contracts accumulate cash values, which may be
taken by the insured if the policy is surrendered or which may be borrowed
against. Some policies, such as annuities and endowment policies, are
financial instruments to accumulate or liquidate wealth when it is needed.
In many countries, such as the United States and the UK, the tax law
provides that the interest on this cash value is not taxable under certain
circumstances. This leads to widespread use of life insurance as a tax-
efficient method of saving as well as protection in the event of early death.
In the United States, the tax on interest income on life insurance policies
and annuities is generally deferred. However, in some cases the benefit
derived from tax deferral may be offset by a low return. This depends upon
the insuring company, the type of policy and other variables (mortality,
market return, etc.). Moreover, other income tax saving vehicles (e.g.,
IRAs, 401(k) plans, Roth IRAs) may be better alternatives for value
accumulation.
Burial insurance
Burial insurance is a very old type of life insurance which is paid out upon
death to cover final expenses, such as the cost of a funeral. The Greeks and
Romans introduced burial insurance c. 600 CE when they organized guilds
called "benevolent societies" which cared for the surviving families and
paid funeral expenses of members upon death. Guilds in the Middle Ages
served a similar purpose, as did friendly societies during Victorian times.
 Property

This tornado damage to an Illinois home would be considered an "Act of God" for
insurance purposes

Property insurance provides protection against risks to property, such as

fire, theft or weather damage. This may include specialized forms of
insurance such as fire insurance, flood insurance, earthquake insurance,
home insurance, inland marine insurance or boiler insurance. The term
property insurance may, like casualty insurance, be used as a broad
category of various subtypes of insurance, some of which are listed below:

US Airways Flight 1549 was written off after ditching into the Hudson River
• Aviation insurance protects aircraft hulls and spares, and associated
liability risks, such as passenger and third-party liability. Airports may also
appear under this subcategory, including air traffic control and refuelling
operations for international airports through to smaller domestic
exposures.
• Boiler insurance (also known as boiler and machinery insurance, or
equipment breakdown insurance) insures against accidental physical
damage to boilers, equipment or machinery.
• Builder's risk insurance insures against the risk of physical loss or damage
to property during construction. Builder's risk insurance is typically
written on an "all risk" basis covering damage arising from any cause
(including the negligence of the insured) not otherwise expressly excluded.
Builder's risk insurance is coverage that protects a person's or
organization's insurable interest in materials, fixtures or equipment being
used in the construction or renovation of a building or structure should
those items sustain physical loss or damage from an insured peril.[28]
• Crop insurance may be purchased by farmers to reduce or manage various
risks associated with growing crops. Such risks include crop loss or
damage caused by weather, hail, drought, frost damage, insects, or disease.
[29] Index based crop insurance uses models of how climate extremes affect

crop production to define certain climate triggers that if surpassed have

high probabilities of causing substantial crop loss. When harvest losses
occur associated with exceeding the climate trigger threshold, the index-
insured farmer is entitled to a compensation payment.
• Earthquake insurance is a form of property insurance that pays the
policyholder in the event of an earthquake that causes damage to the
property. Most ordinary home insurance policies do not cover earthquake
damage. Earthquake insurance policies generally feature a high deductible.
Rates depend on location and hence the likelihood of an earthquake, as
well as the construction of the home.
• Fidelity bond is a form of casualty insurance that covers policyholders for
losses incurred as a result of fraudulent acts by specified individuals. It
usually insures a business for losses caused by the dishonest acts of its
employees.

Hurricane Katrina caused over $80 billion of storm and flood damage
• Flood insurance protects against property loss due to flooding. Many U.S.
insurers do not provide flood insurance in some parts of the country. In
 response to this, the federal government created the National Flood
Insurance Program which serves as the insurer of last resort.
• Home insurance, also commonly called hazard insurance or homeowners
insurance (often abbreviated in the real estate industry as HOI), provides
coverage for damage or destruction of the policyholder's home. In some
geographical areas, the policy may exclude certain types of risks, such as
flood or earthquake, that require additional coverage. Maintenance-related
issues are typically the homeowner's responsibility. The policy may
include inventory, or this can be bought as a separate policy, especially for
people who rent housing. In some countries, insurers offer a package
which may include liability and legal responsibility for injuries and
property damage caused by members of the household, including pets.
• Landlord insurance covers residential and commercial properties which
are rented to others. Most homeowners' insurance covers only owner-
occupied homes.
• Marine insurance and marine cargo insurance cover the loss or damage of
vessels at sea or on inland waterways, and of cargo in transit, regardless of
the method of transit. When the owner of the cargo and the carrier are
separate corporations, marine cargo insurance typically compensates the
owner of cargo for losses sustained from fire, shipwreck, etc., but excludes
losses that can be recovered from the carrier or the carrier's insurance.
Many marine insurance underwriters will include "time element" coverage
in such policies, which extends the indemnity to cover loss of profit and
other business expenses attributable to the delay caused by a covered loss.
• Supplemental natural disaster insurance covers specified expenses after a
natural disaster renders the policyholder's home uninhabitable. Periodic
payments are made directly to the insured until the home is rebuilt or a
specified time period has elapsed.
• Surety bond insurance is a three-party insurance guaranteeing the
performance of the principal.
 The demand for terrorism insurance surged after 9/11
• Volcano insurance is a specialized insurance protecting against damage
arising specifically from volcanic eruptions.
• Windstorm insurance is an insurance covering the damage that can be
caused by wind events such as hurricanes.
CHAPTER NO. 2 : RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the problem. It is

a game plan for conducting research. In this we describe various steps
that are taken by the researcher.

“All progress is born of inquiry. Doubt is often better than

overconfidence, for it leads to inquiry and inquiry leads to invention.”

Research in a common parlance is a search for knowledge. Research is an

art of scientific and systematic investigation. Thus research comprises
defining and redefining problems, formulating hypothesis or suggested
solutions; collecting, organizing and evaluating data, making deductions
and reaching conclusions. Research methodology is the arrangement of
condition for collection and analysis of data in a manner that aims to
combine relevance to the research purpose with economy in procedure.
Research Methodology is the conceptual structure within which research
is conducted. It constitutes the blueprint for the collection measurement
and analysis of the data.

Research methodology is a framework for the study and is used as a

guide in collecting and analyzing the data. It is a strategy specifying
which approach will be used for gathering and analyzing the data. it also
includes time and cost budget since most studies are done under these
two constraints. The research methodology includes overall research
design, the sampling procedure, the data collection method and analysis
procedure.
TYPE OF RESEARCH USED:-

✓ Descriptive Research

In the study descriptive research design has been used. As descriptive

research design is the description of state of affairs, as it exists at present.
In this type of research the researcher has no control over the variables;
he can only report what has happened or what is happening

Descriptive research designs are those design which are concerned with
describing the characteristics of particular individual or of the group. In
descriptive and diagnostic study the researcher must be able to define
clearly what he wants to measure and must find adequate method for
measuring it.

METHOD OF DATA COLLECTION

After the research problem has been identified and selected the next step
is to gather the requisite data. While deciding about the method of data
collection to be used for the researcher should keep in mind two types of
data i.e. primary and secondary.

Primary Data

The primary data are those, which are collected afresh and for the first
time, and thus happened to be original in character. We can obtain
primary data either through observation or through direct communication
with respondent in one form or another or through personal interview.

Methods used in primary data collection-

 ✓ Observation method

✓ Interview method

✓ Questionnaire method

Secondary Data

The secondary data on the other hand, are those which have already been
collected by someone else and which have already been passed through
the statistical processes. When the researcher utilizes secondary data then
he has to look into various sources from where he can obtain them. For
e.g. books, magazine, newspaper, internet, publications and reports.

In this study data have been taken from various secondary sources like:

o Internet

o Books

o Magazines

o Newspapers

o Journals
 ! Sources

The success of any Insurance company depends on how well they are able
to align with the objectives and needs of individual customers, and is able
to provide proper solutions to them. To know how a company is
performing and whether they have any cutting edge advantage over
competitors, an intensive study of the market is absolutely necessary.

In order to understand the performance of different companies in the

market, we did two types of surveys, primary survey and secondary survey.

! Primary survey

Primary survey included:-

! Visiting websites and fixing appointments with their agents.

! Creation of database of prospective clients from different sources

calling them up to fix appointment and then visiting them.

! Prepare a questionnaire for the market survey .

! Meeting different people to know their views, perception and

preference of different insurance companies.

! Secondary survey
Secondary survey included of consulting books, magazines, journals,
internet and also taking reference from:-

Library.
Internet. 

Karvy the Finapolis.

! Methodology

We would go in for a qualitative research as our objective is to judge the

perception and preference of different insurance products. The research
would be done from primary data.

o Sample Design

Target population: The target population for the research would be people
who are in the age group beyond 40 and age group between 25 to
40.We targeted this group of population because these populations are the
potential customers of insurance.

o Sampling Frame: The research would be conducted in Maharashtra.

The survey has been conducted among the potential customers of

karvy from different sectors as karvy deals in many sectors of
business.

o Sampling Technique: The sampling technique that is adopted is the

simple random sampling wherein every element in the target
population has an equal chance or probability of getting selected in the
sample. That means every unit of the population who is more is in the
above mentioned age group, have an equal chance of getting selected
 o Sample Size: I did a survey among 60 people by taking two categories
in consideration of 30 each; that is

1.) Age group beyond 40

2) Age group between 25 to 40

o Data Collection: The research would be conducted from the source of

primary data collection. Secondary data would help us in knowing the

trends prevailing in the insurance market and would help us in
analyzing and interpretation of the primary data.

COMPARATIVE ANALYSIS

Birla Sun Life Insurance Life Insurance Corporation Of

India

1. Name of the Policy :

Saral Jeevan plan Jeevan Saral plan

2 .Purpose:
BSLI Saral Jeevan plan comes with a Jeevan Saral plan comes with a bouquet of
bouquet of benefits, which fulfill needs of benefits, which fulfill needs of life cover.
life cover and investment at an affordable
rate.

3. Type of Policy :
Unit linked endowment plan Traditional plan
4. Returns and added Benefits :
1. An easy and simple plan
2. Earn efficient returns
3. Match your risk profile at every
stage
4. Death benefits with a plus, that is,
sum assured plus the fund value.
5. Unmatched liquidity
6. At the end of policy term you get
fund value.
7. The policy can be surrendered at
any time during the tenure of the
policy subject to surrender charge.
The charge will be zero after 4th
policy year.
1. Maturity benefit is total premium +
bonus (approx Rs 50/thousand)
2. Death benefit is 250 times of
monthly premium
3. The policy can be surrendered at
any time during the tenure of the
policy subject to surrender charge.
The charge will be zero after 4th
policy year.

5. Payment of Premium :

Pay the premiums on an annual, semi- Pay the premiums on an annual, semi-
annual, quarterly or monthly mode. annual, quarterly or monthly mode.

6. Eligibility :

18 to 55 years of age. 18 to 70 years of age

7. Term of Maturity :
There is an option of three policy terms 10 There is an option of three policy terms 10
years, 15 years and 20 years. years, 15 years and 20 years.

8. Tax Benefits :

Avail of tax benefit under section 80C and Avail of tax benefit under section 80C and
section 10(10 D) of the Income Tax Act, section 10(10 D) of the Income Tax Act,
1961. 1961.

Birla Sun Life Insurance Tata AIG Life Insurance

1. Name of the Scheme :

Gold-plus II plan Invest assure apex

2 .Purpose:
A simple, hassle free plan it helps you strike The plan provides a platform ensuring the
the right proportion between protection and upside potential of the equity markets while
savings. safeguarding the investor’s interest by
offering a guaranteed maturity unit price
(GMUP).

3. Type of Policy :
This is a non-participating unit linked savings This is a unit linked life insurance plan.
plan.
4. Returns and added Benefits :
1. Match your risk profile at every
stage.
2. Unlimited partial withdrawals after
3 policy years, free of cost.
3. The policy can be surrendered at
any time during the tenure of the
policy subject to surrender charge,
the charge will be zero after 4th
policy year.
4. At the end of the policy term you
get the fund value.
5. On death the nominee will get the
greater of (a) the fund value or (b)
the sum assured reduced for partial
withdrawals.
6. Minimum sum assured: 5*annual
premium.
5. Payment of Premium :
1. Can make partial withdrawal only
after completion of 3 years. A
maximum of 4 partial withdrawals is
allowed in one policy year. No
charges are applicable.
2. Minimum sum assured: 5 times the
annualized premium.
3. Maximum sum assured: 60 times the
annualized premium.
4. The policy can be surrendered any
time after 3 policy years by a written
notice, subject to deduction of the
applicable surrender charges.
5. On death the nominee will get higher
of: the sum assured or the fund
value.
6. On maturity the nominee will get
higher of the fund value or the
guaranteed maturity unit price
multiplied by the number of units.
Premium is paid for a period of 3 years with Premium is paid for a period of 3 years with
the flexibility to reduce premium (subject to the option to reduce, subject to minimum

minimum of Rs.10000) from the second limit, which is higher of 75% of the first

policy year onwards without reduction in sum year regular premium paid or Rs.90000.the

assured. sum assured remains same even if reduction

in premium is affected.

6. Eligibility :
18 to 70 years of age. 18 to 70 years of age.

7. Term of Maturity :
The policy term is 8 years. The policy term is 10 years.

8. Tax Benefits :
Avail of tax benefit under section 80C and Avail of tax benefit under section 80C and
section 10(10 D) of the Income Tax Act, section 10(10 D) of the Income Tax Act,
1961. 1961.

9. Additional Coverage :
Nil • Tata AIG life accidental death
benefit rider.
• Tata AIG life accidental death and
dismemberment rider
• Tata AIG life critical illness rider.
National Insurance Company Ltd. Reliance General Insurance

1. Name of the Scheme :

The National health plan Reliance health wise policy.

2 .Purpose:
To provide financial support , spiraling To provide financial support, spiraling
cost of health care, protect your savings cost of health care, protect your savings
from unforeseen circumstances. from unforeseen circumstances

3. Type of Policy :
Family floater coverage available up to 6 Covers your family on a floater basis
members of a family including dependent applicable to a maximum number of four
children under the age of 25 years and persons that is you, your spouse and two
dependent parents below 65years. dependent children under the age of 21
years.

4. Benefits :
 1. Covers pre-existing diseases
( e x c l u d i n g c h e m o t h e r a p y,
radiotherapy and dialysis.)
2. Maternity coverage (nine months
waiting period applicable.)
3. Cashless policy
4. Critical illness buffer cover:
additional coverage up to Rs.
75000 per family for
hospitalization in case of heart
surgery, neuro surgery, organ
transplant, cancer, road traffic
accidents.
5. No medical test required
5. Payment of Premium :
Premium has to be paid yearly and the Premium has to be paid yearly and the
amount depends on the sum insured and amount depends on the sum insured and
the number of dependents in the family
6. Eligibility :
3 months to 65 years of age
7. Term of Maturity :
1. Covers pre-existing diseases after
two/four continuous renewals.
2. Day care treatment expenses
covered
3. Cashless facility
4. Pre-post hospitalization covered
5. Double sum insured is
automatically available as soon
as any of the listed critical illness
is diagnosed.
6. Discount on renewal premium for
claim free policy.
the number of dependents in the family
3 months to 65 years of age.
One year, that is, the policy has to be One year, that is, the policy has to be
renewed yearly. renewed every year.

8. Tax Benefits :

Avail of tax benefit under section 80D of Avail of tax benefit under section 80D of
Income Tax Act, 1961. Income Tax Act, 1961
CHAPTER NO. 3 : LITERATURE REVIEW

Muhammad Yunus, a Nobel Prize winner, introduced the concept of

Microfinance in Bangladesh in the form of the "Grameen Bank".
The National Bank for Agriculture and Rural Development (NABARD)
took this idea and started the concept of microfinance in India. Under this
mechanism, there exists a link between SHGs (Self-help
groups), NGOs and banks. SHGs are formed and nurtured by NGOs and
only after accomplishing a certain level of maturity in terms of their
internal thrift and credit operations are they entitled to seek credit from
the banks. There is an involvement from the concerned NGO before and
even after the SHG-Bank linkage. The SHG-Bank linkage programme,
which has been in place since 1992 in India, has provided about 22.4 lakh
for SHG finance by 2006. It involves commercial banks, regional rural
banks (RRBs) and cooperative banks in its operations.

➢ Society is Focusing on: Development of Self Help Group for

Women-

In India, Self Help Groups or SHGs represent a unique approach to

financial intermediation. The approach combines access to low-cost
financial services with a process of self management and development
for the women who are SHG members. SHGs are formed and supported
usually by NGOs or (increasingly) by Government agencies. Linked not
only to banks but also to wider development programmes, SHGs are seen
to confer many benefits, both economic and social. SHGs enable women
to grow their savings and to access the credit which banks are
increasingly willing to lend. SHGs can also be community platforms
from which women become active in village affairs, stand for local
election or take action to address social or community issues (the abuse
of women, alcohol, the dowry system, schools, and water supply).

➢ Goals-

Self-help groups are started by non-governmental organizations (NGOs)

that generally have broad anti-poverty agendas. Self-help groups are
seen as instruments for a variety of goals including empowering women,
developing leadership abilities among poor people, increasing school
enrollments, and improving nutrition and the use of birth control.
Financial intermediation is generally seen more as an entry point to these
other goals, rather than as a primary objective. This can hinder their
development as sources of village capital, as well as their efforts to
aggregate locally controlled pools of capital through federation, as was
historically accomplished by credit unions.

➢ NABARD's 'SHG Bank Linkage' program-

Many self-help groups, especially in India, under NABARD’S SHG

Bank Linkage program, borrow from banks once they have accumulated
a base of their own capital and have established a track record of regular
repayments.

This model has attracted attention as a possible way of delivering micro-

finance services to poor populations that have been difficult to reach
directly through banks or other institutions. "By aggregating their
 individual savings into a single deposit, self-help groups minimize the
bank's transaction costs and generate an attractive volume of deposits.
Through self-help groups the bank can serve small rural depositors while
paying them a market rate of interest."

➢ Advantages of financing through SHGs

! An economically poor individual gains strength as part of a group.

! Besides, financing through SHGs reduces transaction costs for both
lenders and borrowers.
! While lenders have to handle only a single SHG account instead of a
large number of small-sized individual accounts, borrowers as part of an
SHG cut down expenses on travel (to & from the branch and other
places) for completing paper work and on the loss of workdays in
canvassing for loans.

➢ Evolution of Self Help Groups in India

In India, soon after independence, there has been an aggressive effort on

the part of the government, which was concerned with improving the
access of the rural poor to formal credit system. Some of these measures
have been institutional, while some others were through implementation
of focused programmes for removal of rural poverty. Reaching out of the
far-flung rural areas to provide credit and other banking services to the
hitherto neglected sections of the society is an unparallel achievement of
the Indian banking system. The main emphasis is the spread of the
banking network and introductions of new instruments and credit
packages and programmes were to make the financial system responsive
to the credit the weaker sections in the society comprising small and
marginal farmers, rural artisans, landless agricultural and non-
agricultural laborers and other small borrowers falling below poverty
line.
Consequently, by the implementation of several poverty alleviation
programmes, the number of people below the poverty line has declined
from 272.7 million in 1984-85 to 210.8 million in 1989-90, in
1991-2000, which constitutes over 21 percent of the population.
The institutional credit system needs to meet the challenges of delivering
credit to an ever-increasing number of rural people who need greater
access to formal credit. It may have to reinforce its own structure at the
grass root level and also have to devise new ways of reaching out of the
rural poor.
As a result, the experience of implementation of the above discussed
poverty alleviation programmes lead to the introduction of the Integrated
Rural Development Programme (IRDP) on 2nd October, 1980 with the
specific objective of raising the poor rural families above the poverty
line. Such families considered credit support from banks as an important
input in taking up economic and gainful activities.
In spite of these impressive achievements in the expansion of the credit
delivery system and special programmes, nearly half the indebted rural
households are still outside the ambit of the institutional system. They
approach the moneylenders for meeting their consumption and
production in the absence of institutional support. Some of the poor who
have not been reached even by the vast network of the institutional credit
 delivery system, have organized themselves into self help groups (SHGs)
and many such groups have come into existence either spontaneously or
with the active involvement of the voluntary agencies which motivated
the rural poor to pool their meager financial resources for meeting their
small and frequent consumption and production credit needs.

! ABOUT INSURANCE INDUSTRY

"Insurance is a contract between two parties whereby one party called

insurer undertakes in exchange for a fixed sum called premiums, to pay the
other party called insured a fixed amount of money on the happening of a
certain event."Insurance is a protection against financial loss arising on the
happening of an unexpected event. Insurance companies collect premiums
to provide for this protection. A loss is paid out of the premiums collected
from the insuring public and the Insurance Companies act as trustees to the
amount collected. For Example, in a Life Policy, by paying a premium to
the Insurer, the family of the insured person receives a fixed compensation
on the death of the insured. Similarly, in a car insurance, in the event of the
car meeting with an accident, the insured receives the compensation to the
extent of damage. It is a system by which the losses suffered by a few are
spread over many, exposed to similar risks.

! Logic of insurance

It is a 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 companies
collect premiums to provide for this protection. A loss is paid out of the
amount premiums collected from the insuring public and the Insurance
Companies act as trustees to the collected.

! Need of insurance

Insurance is desired to safeguard oneself and one's family against possible

losses on account of risks and perils. It provides financial compensation
for the losses suffered due to the happening of any unforeseen events. By
taking life insurance a person can have peace of mind and need not worry
about the financial consequences in case of any untimely death. Certain
Insurance contracts are also made compulsory by legislation. For example,
Motor Vehicles Act 1988, stipulates that a person driving a vehicle in a
public place should hold a valid insurance policy covering “Act" risks.
Another example of compulsory insurance pertains the Environmental
Protection Act, wherein a person using or to carrying hazardous substances
(as defined in the Act) must hold a valid public liability (Act) policy.

! Insurance in India

Insurance is a federal subject in India and has a history dating back to

1818. Life and general insurance in India is still a nascent sector with huge
potential for various global players with the life insurance premiums
accounting to 2.5% of the country's GDP while general insurance
premiums to 0.65% of India's GDP. The Insurance sector in India has gone
through a number of phases and changes, particularly in the recent years
when the Govt. of India in 1999 opened up the insurance sector by
allowing private companies to solicit insurance and also allowing FDI up
to 26%. Ever since, the Indian insurance sector is considered as a booming
market with every other global insurance company wanting to have a lion's
share. Currently, the largest life insurance company in India is still owned
by the government.

! History of Insurance in India

Insurance in India has its history dating back till 1818, when Oriental Life
Insurance Company was started by Europeans in Kolkata to cater to the
needs of European community. Pre-independent era in India saw
discrimination among the life of foreigners and Indians with higher
premiums being charged for the latter. It was only in the year 1870,
Bombay Mutual Life Assurance Society, the first Indian insurance
company covered Indian lives at normal rates.

At the dawn of the twentieth century, insurance companies started

mushrooming up. In the year 1912, the Life Insurance Companies Act, and
the Provident Fund Act were passed to regulate the insurance business. The
Life Insurance Companies Act, 1912 made it necessary that the premium
rate tables and periodical valuations of companies should be certified by an
actuary. However, the disparage still existed as discrimination between
Indian and foreign companies. The oldest existing insurance company in
India is National Insurance Company Ltd, which was founded in 1906 and
is doing business even today. The Insurance industry earlier consisted of
only two state insurers: Life Insurers i.e. Life Insurance Corporation of
India (LIC) and General Insurers i.e. General Insurance Corporation of
India (GIC). GIC had four subsidiary companies.

With effect from December 2000, these subsidiaries have been de-linked
from parent company and made as independent insurance companies:
Oriental Insurance Company Limited, New India Assurance Company
Limited, National Insurance Company Limited and United India Insurance
Company Limited.

! Life Insurance Corporation Act, 1956

Even though the first legislation was enacted in 1938, it was only in 19
January 1956, that life insurance in India was completely nationalized,
through a Government ordinance; the Life Insurance Corporation Act,
1956 effective from 1.9.1956 was enacted in the same year to, inter-alia,
form LIFE INSURANCE CORPORATION after nationalization of the 245
companies into one entity. There were 245 insurance companies of both
Indian and foreign origin in 1956. Nationalization was accomplished by
the govt. acquisition of the management of the companies. The Life
Insurance Corporation of India was created on 1 September, 1956, as a
result and has grown to be the largest insurance company in India as of
2006 .

! General Insurance Business (Nationalization) Act, 1972

The General Insurance Business (Nationalization) Act, 1972 was enacted

to nationalize the 100 odd general insurance companies and subsequently
merging them into four companies. All the companies were amalgamated
into National Insurance, New India Assurance, Oriental Insurance, and
United India Insurance which were headquartered in each of the four
metropolitan cities.

! Insurance Regulatory and Development Authority (IRDA) Act,

1999

Till 1999, there were not any private insurance companies in Indian
insurance sector. The Govt. of India then introduced the Insurance
Regulatory and Development Authority Act in 1999, thereby de-regulating
the insurance sector and allowing private companies into the insurance.
Further, foreign investment was also allowed and capped at 26% holding
in the Indian insurance companies. In recent years many private players
entered in the Insurance sector of India. Companies with equal strength
started competing in the Indian insurance market. Currently, in India only
2 million people (0.2 % of total population of 1 billion), are covered under
Medi claim, whereas in developed nations like USA about 75 % of the
total population are covered under some insurance scheme. With more and
more private players in the sector this scenario may change at a rapid pace.

! Different Insurance Companies

Insurance is an upcoming sector, in India the year 2000 was a landmark

year for life insurance industry, in this year the life insurance industry was
liberalized after more than fifty years. Insurance sector was once a
monopoly, with LIC as the only company, a public sector enterprise. But
nowadays the market opened up and there are many private players
competing in the market. There are fifteen private life insurance companies
has entered the industry. After the entry of these private players, the market
share of LIC has been considerably reduced. In the last five years the
private players is able to expand the market (growing at 30% per annum)
and also has improved their market share to 18% For the past five years
private players have launched many innovations in the industry in terms of
products, market channels and advertisement of products, agent training
and customer services etc.

The various life insurers entered India:-

1. Bajaj Allianz Life Insurance Company Limited

2. Birla Sun Life Insurance Co. Ltd

3. HDFC Standard life Insurance Co. Ltd

4. ICICI Prudential Life Insurance Co. Ltd.

5. ING Vysya Life Insurance Company Ltd.

6. Max New York Life Insurance Co. Ltd

7. Met Life India Insurance Company Ltd.

8. Kotak Mahindra Old Mutual Life Insurance Limited

9. SBI Life Insurance Co. Ltd

10. Tata AIG Life Insurance Company Limited

11. Reliance Life Insurance Company Limited.

12. Aviva Life Insurance Co. India Pvt. Ltd.

13. Sahara India Life Insurance Co, Ltd.

14. Shriram Life Insurance Co, Ltd.

15. Bharti AXA Life Insurance Company Ltd.

16. Future General Life Insurance Company Ltd.

17. IDBI Fortis Life Insurance Company Ltd.

18. Canara HSBC Oriental Bank of Commerce Life Insurance Co. Ltd

19. AEGON Religare Life Insurance Company Limited.

20. DLF Pramerica Life Insurance Co. Ltd.

21. Star Union Dai-ichi Life Insurance Comp. Ltd.

! The various other general Insurance Companies are as under:-

a. National Insurance Company Limited.

b. Reliance General Insurance.

c. Star Health Plus Insurance.

d. Oriental Insurance Company.

e. United India Insurance Company Ltd.

f. New India Assurance Company Ltd.

g. Bajaj Allianz General Insurance Company Ltd.

h. Universal Sompo Insurance Company Ltd.

i. Future General Insurance Company Ltd.

j. ICICI Lombard General Insurance Ltd

! ADVANTAGES OF LIFE INSURANCE

 a. Protection against risk of untimely death

Life insurance is a product, which offers protection against the risk

of death the full sum assured is made available under a life assurance
policy, whereas under other savings schemes, the total accumulated
savings alone will be available.

ii) Protection during old age

Life insurance can also be used as a means of saving for one’s

future. There are a number of life insurance policies, which in addition to
life cover also provide the means of investing one’s income. The sum as
per the policy will be received only after a period of time. This amount
thus provides for the old age.

iii) Forced savings

Payment of life insurance premiums is compulsory and becomes

a habit. Savings in other scheme can be easily withdrawn and may be used
for less worthy purpose. Termination of a life insurance policy by the
policyholder usually results in substantial loss in benefits under the policy
to the policyholder. One is thus encouraged to save and keep one’s policy
alive.

iv) Educational requirements and charity

The object of insurance may be to serve as a security to

educational funds in respect of loans advanced for educational purpose or
to provide donations to charitable institutions like hospital and school.
 v) Nomination and assignment

The life insured can name the person or persons to whom the
policy money would be payable in the event of his death .the proceeds of a
life insurance policy can be protected against the claims of the creditors of
the life insured by effecting a valid assignment of the policy. The
beneficiaries are fully protected from creditors expect to the extent of any
interest in the policy retained by the insured.21Marketability and
suitability for borrowing

After 3 years, if the policyholder finds that he is unable to continue

payment of premiums he can surrender a policy for a cash sum. A life
insurance policy is accepted as a security for a commercial loan.

vi) Loans from the insurance company

A policy holder can take a loan from his insurance company

against the Security of his life insurance policy provided the terms of the
terms of his policy allow such a loan. This loan can be taken usually after a
period of 3 years from commencement of the policy and is a percentage of
its surrender value.

vii) Investment options

The unit link products gives comprehensive insurance solutions

that cater to an individual’s dual need of earning potentially high returns as
well as stay for life. Thus there is an option to invest money in the products
that combine the best of insurance and investment. In a volatile market
 conditions it is possible to secure both as one can hedge the investment
with saver investment vehicles that provide a diversified portfolio.

viii) Tax benefits

The Indian income tax act provides tax concessions to the

policyholder both on payment of premium and on the maturity amount.
Under sec 88 the tax benefits on premium paid by an individual for life
insurance policies on his own life\on the life of spouse \children minor or
major, including married daughters.

Under sec 6 of the married women’s property act if a married man

takes a policy of life insurance on his own life and expenses on the face of
it to be for the benefit of his wife or of his wife and children or any of
them, then it shall be deemed to be a trust for the benefit of his wife and
children or any of them, According to the interest so expressed and shall
not so long as any object of trust remains be subject to the control of the
husband or to his creditors or form part of his estate. An insurance policy
taken by a married man in the above manner is ideal way to protect the
interest of his wife and children, even after his untimely death.

! TYPES OF INSURANCE PRODUCTS

! Term assurance plan- In insurance language this is a “pure risk cover” and
can be described as an insurance or risk management product in its purest and
simplest form. In case of your untimely death, your dependents will receive
the risk-cover amount or the ‘sum assured’. On the other hand, there is no
survival benefits if you survive the policy term, and you also do not get back
the premiums paid.
! Endowment assurance plans- It is a traditional investment-cum-insurance
plan. In other words, it provides both life cover (in the event of death of life
insured) or maturity benefits if he/she survives the policy term. Endowment
plans are typically front-loaded. Therefore it makes sense for you to remain in
the policy for at least 12-15 years.

! Money-back policy- It is a variant of the endowment assurance policy-the

difference is that you get the survival benefits intermittently over the life of
the policy. Thus taking care of his lump-sum monetary requirements to
enable him to meet his financial goals and major commitments. The maturity
benefit is the sum assured value less the survival benefits already paid under
the policy, plus bonuses accrued, if any. In case of untimely death the
nominee will receive the entire sum assured without considering the payouts
already made to you before the unfortunate death.

! Whole life plan- This policy provides the life assurance cover for almost
the entire life. Most of the insurance companies provide protection up to the
age of 100 years. The sum assured is paid to you once you reach this age,
and the policy is terminated. In this payment of premium is for whole life,
and the sum assured is paid to your nominee in the event of your death. In
other words, this is equivalent to a term plan over your lifetime.

! Pension plan- A pension plan can be looked as more of an investment

product offered by insurers to cater to the “golden” retirement years of an
 individual. Also referred to as retirement plans, these are designed to ensure
that you are financially independent during your retirement years. Most of
the pension plans also provide an optional life assurance cover in them.

! Child plan- It basically aims at ensuring the achievement of life goals of

your child. The goal can be higher education, financial help in
establishing a business or profession, or even marriage. In a child plan,
the life assured can be the parent or the child. The beneficiary for the
policy, however, is the child. As a child is a minor, the life insurance
contract is between the parent and the insurance company. In case of
early death of the parent, the premium payment is waived off by the
insurance company and the policy continues as originally planned.

! Unit Linked Insurance Plan- ULIPs have been the darling of insurance
companies, intermediaries and the insured population alike over the last five
years. The main reason for this popularity is the twin advantage of a pure life
cover (insurance component) and a range of investment funds or options
(savings component) to match your risk profile. While the pure life cover
provides the much needed financial security to your dependents in the event
of your untimely death, the savings component allows you to participate in
the capital markets and build wealth over the long-term tenure of the policy.

CHANGING FACE OF INDIAN INSURANCE INDUSTRY

Indian life-insurance market is the target market of all the companies who
either want to
extend or diversify their business. To tap the Indian market there has been
tie-ups between the major Indian companies with other International
insurance companies to start up their business. The government of India
has set up rules that no foreign insurance company can setup their business
individually here and they have to tie up with an Indian company and this
foreign insurance company can have an investment of only 24% of the
total start-up investment. Indian insurance industry can be featured by:

o Low market penetration.

o Ever growing middle class component in population.
o Growth of customer’s interest with an increasing demand for better
insurance products.
o Application of information technology for business.
o Rebate from government in the form of tax incentives to be insured.

Today, the Indian life insurance industry has a dozen private players, each
of which are making strides in raising awareness levels, introducing
innovative products and
Increasing the penetration of life insurance in the vastly underinsured
country. Several of private insurers have introduced attractive products to
meet the needs of their target customers and in line with their business
objectives

! INDIA: THE NEXT INSURANCE GIANT

Market Performance & Forecast: In 2000, Indian insurance market size
was $21.71 billion. Between 2000 and 2007, it had an increase of 120%
and reached $47.89 billion. Between 2000 and 2007, total premiums
maintained an average growth rate of 11.96% and the CAGR growth
during this time frame has been 11.96%. It was one of the most consistent
growth patterns we have noticed in any other emerging economies in Asian
as well as Global markets.

90

68

LIFE INSURANCE
45
NON-LIFE INSURANCE

23

0
! 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 


INDIAN INSURANCE MARKET

Indian economy is the 12th largest in the world, with a GDP of $1.25
trillion and 3rd largest in terms of purchasing power parity. With factors
like a stable 8-9 per cent annual growth, rising foreign exchange reserves,
a booming capital market and a rapidly expanding FDI inflows, it is on the
fulcrum of an ever increasing growth curve.
Insurance is one major sector which has been on a continuous growth
curve since the revival of Indian economy. Taking into account the huge
population and growing per capita income besides several other driving
factors, a huge opportunity is in store for the insurance companies in India.
According to the latest research findings, nearly 80% of Indian population
is without life insurance cover while health insurance and non-life
insurance continues to be below international standards. And this part of
the population is also subjected to weak social security and pension
systems with hardly any old age income security. As per our findings,
insurance in India is primarily used as a means to improve personal
finances and for income tax planning; Indians have a tendency to invest in
properties and gold followed by bank deposits. They selectively invest in
shares also but the percentage is very small 4-5%. This in itself is an
indicator that growth potential for the insurance sector is immense. It’s a
business growing at the rate of 15-20% per annum and presently is of the
order of $47.9 billion.

India is a vast market for life insurance that is directly proportional to the
growth in premiums and an increase in life density. With the entry of
private sector players backed by foreign expertise, Indian insurance market
has become more vibrant. Competition in this market is increasing with
company’s continuous effort to lure the customers with new product
offerings. However, the market share of private insurance companies
remains very low -- in the 10-15% range. Even to this day, Life Insurance
Corporation (LIC) of India dominates Indian insurance sector. The heavy
hand of government still dominates the market, with price controls, limits
on ownership, and other restraints.

! Major Driving Factors

 ! Growing demand from semi-urban population

! Entry of private players following the deregulation

! Rising demand for retirement provision in the ageing population

! The opening of the pension sector and the establishment of the new
pension regulator

! Rising per capita incomes among the strong middle class, and
spreading affluence

! Growing consumer class and increase in spending & saving capacity

! Public private partnerships infrastructure development

! Dearth of innovative & buyer-friendly insurance products

! Success of Auto insurance sector

! Emerging Areas

! Healthcare Insurance & Pension Plans

! Mutual fund linked insurance products

! Multiple Distribution Networks .i.e. Bank assurance

The upward growth trend started from 2000 was mainly due to
economic policies adopted by the then Indian government. This year saw
initiation of an era of economic liberalization and globalization in the
Indian economy followed by several reforms and long-term policies that
created a perfect roadmap for the success of Indian financial markets. On
the basis of several macroeconomic factors like increase in literacy rate &
per capita income, decrease in death rate and unemployment, better tax
rebates, growing GDP etc., we estimate that the Indian insurance sector
will grow by $28.65 billion and reach $76.54 billion by 2011 with a CAGR
(compounded annual growth rate) of 12.44% and a growth of 59.82%.

! VALUING THE INVALUABLE

Both under insurance and over insurance can often be attributed to the lack
of proper understanding of the exact insurance needs for oneself and the
family, and the failure to spot and cover all liabilities properly and
adequately, or being over-conservative in this regard.

! Under Insurance

Under insurance, typically occurs when the existing financial liabilities

and insurance needs are fully taken care of. In the event of the untimely
death of the only (or the main earning) member of the family, his financial
liabilities would obviously fall on his dependents, leaving them in a state
of financial distress that could threaten their need of sustenance.

! Over Insurance

Conversely, there are also instances where individuals indulge in life

insurance covers that far exceed in value than what is actually required.
This is a classic case of over insurance, which leads to an unnecessarily
higher premium payment, leaving you much poorer. It results in
unnecessary expenditure that could otherwise be wisely invested
elsewhere.

The need for an adequate insurance cover is never static and keeps on
varying with changes in the life stages and important events of an
individual. The table below provides an insight into the various life stages
and events when life insurance cover usually requires a revision.
Life stage Requirement for a life insurance cover
Start work life An individual usually does not have any dependent like spouse
or children, thus allowing the need to take a life cover. However,
if your parents are dependents then you need to take appropriate
life cover on their behalf.

Moreover, you may have taken a loan to finance your higher

education or professional studies or purchase a car. You should
take a suitable insurance cover so that in the event of your
untimely death, the burden of EMI payments does not pass to
your parents or other members of the family.

Recently married Marriage requires a revision of your insurance needs. This can
take a form of increase in life cover, taking into considerations
an expected increase in expenses and repayment of liabilities, if
any. Also, an insurance cover on the life of the spouse, although
for a lesser amount, can be considered.

However, if both the husband and the wife are working, the
extent and value of life insurance coverage on both lives will
depend on their respective remuneration packages, personal
liabilities, as well as extent of financial dependence on one
another.
Birth of children The arrival of a child brings with it a great amount of
responsibility. At this stage, a revision of insurance needs is
based mainly on securing the financial needs of the child up to
the time he/she has grown up and settled in life.

P u r c h a s e o f a Purchasing a house is a major financial decision not only on

house, car, etc regard to the choice of property but also in regard to the
commitment for repayment of the loan availed to finance the
property. Therefore, you should take out a mortgage redemption
plan to the extent of the outstanding loan amount.

Purchasing a car through a vehicle loan, too, calls for a life cover
of the borrower to the extent of the outstanding loan. The same
holds good for any other asset or event which has been financed
by a loan.

L o a n t a k e n f o r The loan taken to set up or enhance your profession or business

business/profession should be fully covered.

! BUSTING SOME INSURANCE MYTHS

With a range of products flooding the market, people today are more
confused about insurance than ever. Here are a bagful of myths floating
around and I have made an effort to bust a few of the significant ones.

a. I don’t want to put my hard-earned money into a pure term assurance

plan if I don’t even get back all the premiums paid on survival of the
term.

o A pure term assurance plan is a risk mitigation tool and not an

investment product. In the event of your untimely death during the
policy term, your dependents get a “sum assured” to enable them to
continue living their existing lifestyle, repay loan liabilities and meet
long-term financial goals. To achieve this, you only need to pay a
premium amount that is a fraction of the “sum assured”. Moreover
unlike investments, where it takes years to build a suitable corpus, the
“sum assured” on your insurance policy is payable, in the event of your
untimely death, from the date of its commencement.

b. It would be enough if only the main breadwinner of the family takes

life insurance.

o While the main breadwinner should take out a life insurance policy on
a priority basis; the other members of the family should also be covered.
If the wife is working, then she should be covered to the extent of loss of
income to the family in the event of her untimely death. On the other
hand, even if she is not working, she should be covered, albeit for a
smaller sum, because her contribution to the family, in form of
household services, has monetary value.

c. I will get back all my premiums when I surrender my endowment

policy prematurely.

o You couldn’t be more wrong! You only get back the “surrender
value”, which is based on the “paid-up value” is a proportion of the
original “sum assured” based on the number of years for which premium
was paid against the total premium-paying years. The paid-up value of
the policy is also calculated and available as per the policy conditions.
 d. Insurance is primarily useful as a tax-saving instrument.

o Again, this is a huge misconception! While you do get attractive tax

breaks, the primary objective of insurance is risk mitigations followed
by wealth creation for the long term. Many people end up taking this
myth too seriously, particularly without considering the costs and
benefits involved.

e. After three years, I can walk away from any ULIP, along with the
accrued investment or the fund value.

o Sure, you can do that! However, you need to remember that a ULIP, at
least in the initial years, is very different from a mutual fund. While a
mutual fund only charges o nominal fund management charge every
year, a ULIP is front loaded. That means a significant chunk of your
premium is allocated across various charges in the initial years of the
policy and only the balance gets invested in a fund of your choice. As
these charges taper off and average over time, it makes sense to stay in a
ULIP for at least 15 years. Therefore, if your investment horizon is just
3-5 years, you better off in a mutual fund, and you can take out a
separate term assurance plan for the required risk cover.

FINANCIAL STATEMENT ANALYSIS

Financial statement is an organized collection of data according to

logical and consisted accounting procedures. Its purpose is to convey an

understanding of some financial aspects of a business form. It may reveal a

series of activities over a given period of time, as in the case of an income

statement.

The focus of the financial analysis is on key figures in the financial

statements and the significant relationships exist between them. The

analysis of financial statements is a process of evaluating relationships

between component parts of financial statements to obtain a better

understanding of the firm’s position and performance.

Financial Analysis:

Financial analysis is the process of identifying the financial

strengths and weakness of the firm by property establishing relationships

between the item of the balance sheet and the profit and loss account.

Financial analysis can be undertaken by management of the firm, or by

parts outside the firm.

Financial statements are indicators of the two significant factors:

1. Profitability

2. Financial Soundness

Analysis and interpretation of financial statements therefore refers to

such a treatment of the information contained in the income statement and

the balance sheet so as to afford full diagnosis of the profitability and

financial soundness of the business.

The term “analysis” means methodical classification of the data given

in the financial statements. The term “interpretation” means “ explaining

the meaning and significance of the data so simplified.

Types of financial Analysis

Financial analysis can be classified in to different categories

depending upon.

(a) The material used

(b) The modus operand of analysis

On the basis of materials used. According to this basis financial analysis

can be of two types.

a) External Analysis

Those who are outsider for the business do this analysis. The outsiders

include investors, credit agencies. government agencies and other creditors

who have no access to the internal records of the company. These persons

mainly depends upon, the published financial statements. Their analysis

serves only a limited purpose. The position of this analysis has improved

in recent times on account of increased governmental control over

companies and governmental regulations regulations requiring more

detailed disclosures of information by the companies in their financial

statements.

b) Internal analysis:

This analysis is done by persons who have access to the books of

account and other information to the books of accounts related to the

business., Executives and employees of the organization or by officers

appointed for this purpose by the government or the court under powers

vested in them can therefore do such an analysis. The analysis in done

depending upon the objective to be active depending upon the objective to

be achieved through this analysis.

On the basis of modus operandi according to this, financial analysis

can also be two types.

a) Horizontal Analysis

In case of this type of analysis financial statements for a number of

years are reviewed and analyzed. The current year’s figures are compared

with the standard or base year. The analysis statement usually contains
figures for too or more years and the changes are shown regarding each

item from the base year usually in the form of percentages. such as

analysis given the management considerable insight into levels and areas

of strength and weakness. Since this type of analysis is based on the date

from year to year rather than on one date, it is also termed as ‘Dynamic

Analysis?

b) Vertical Analysis:

In case of this type of analysis a study is made of the quantitative

relationship of the various items in the financial statements on a particular

type, such an analysis is useful in comparing the performance of servral

companies in the same group, or divisions or departments in the same

company. Since this analysis depends on the data for one period, is nor

very conductive financial position. It is also called ‘Static Analysis’ as it

frequently used to ratios developed on one date or for one accounting

period. Tools or Techniques used for Analysis:

1. Ratio Analysis

2. Method of least Squares (Trend Values)

3. Comparative statement Analysis.

These are explained in bring as follows.

1. Ratio Analysis:

Ratio Analysis is widely used tool of financial analysis. It is defined as

the systematic use of ratio to interpret the financial statements so that the

strength and weakness of a firm as well as its historical performance and

current financial condition can be determined. The term ratio refers to the

numerical or quantitative relationship between two items/ Variable. This

relation can be expressed as.

a. Percentages

b. Fractions

c. Proportion of numbers.

Accounting ratios showed the relationship in mathematical terms

between two interrelated accounting figures. This is the most important

tool available to financial analysis for their work.

Ratio analysis is a process of identifying the financial strengths and

weakness of the firm. This may be accomplished either through a trend

analysis of the firm’s ratios over a period of time or through a comparison

of the firm’s ratios with its nearest competitors and with the industry

averages. The four most important financial dimensions which a firm

would like to analyze are: liquidity, Leverage, Activity and Profitability.

Nature of Ratio Analysis:

A Financial ratio is a relationship between tow accounting numbers.

ratios help to make a qualitative judgment about the firm’s financial

performance.

Financial Ratio:

Financial Ratio is a relationship between two financial variables. It

helps to ascertain the financial condition of a firm.

Types of financial Ratios:

➢ Liquidity ratios

➢ Leverages ratios

➢ Activity ratios

➢ Profitability ratios

Liquidity Ratio:

Liquidity Ratio measure the firm’s ability to meet current obligations,

and are calculated by establishing relationships between current assets and

current liabilities.

Leverage ratio:
 Leverage ratios measures the proportion of outsider’s capital in

financing the firm’s assets, and is calculated by establishing relationships

between borrowed capital and equity capital.

Activity Ratio:

Activity ratio reflects the firms efficiency in utilizing its assets in

generating sales and is calculated by establishing relationships between

sales and assets.

Profitability Ratio:

Profitability ratios measure the overall performance of the firm by

deterring the effectiveness of the firm ingenerating profit, and are

calculated by establishing relationships between profit figures on the one

hard, and sales and assets on the other.

Utility of Ratio Analysis

Assessment of the firm’s financial conditions and capabilities.

! Diagnosis of the fir’s problems, weakness and strengths.

! Credit analysis
 ! Comparative analysis

! Time series analysis

Cautions in using ratio analysis

➢ Standards of comparisons

➢ Company differences

➢ Prices level

➢ Different definition

➢ Changing situations

➢ Past data

Standard of Comparison:

➢ Time series analysis

➢ Inter-firm analysis

➢ Industry analysis

➢ Preformed financial statement analysis

Advantages of Ratio Analysis:

 1. It helps in analysis of the situation i.e. analysis on the financial

situation and performance.

2. Inter-firm and Inra-firm comparison is both possible on the basis of

accounting ratio

3. Accounting Ratio not only indicates the present position but they also

indicate the cause leading up to the position of a large extent

COMPANY PROFILE

Karvy Stock Broking Ltd.

The karvy group was formed in 1983 at Hyderabad, India. KARVY, is a

premier integrated financial services provider, and ranked among the top
five in the country in all its business segments, services over 16 million
individual investors in various capacities, and provides investor services to
over 300 corporates, comprising the who is who of Corporate India. 



KARVY covers the entire spectrum of financial services such as Stock
broking, Depository Participants, Distribution of financial products like
mutual funds, bonds, fixed deposit, Merchant Banking & Corporate
Finance, Insurance Broking, Commodities Broking, Personal Finance
Advisory Services, placement of equity, IPOs, among others. Karvy has a
professional management team and ranks among the best in technology,
 operations, and more importantly, in research of various industrial
segments.

Karvy computer share limited is India’s largest registrar and transfer

agent with a client base of nearly 500 blue chip corporate, managing over 2
crores accounts. Karvy stock brokers limited, member of national stock
exchange of India and the Bombay stock exchange, rank among the top
five stock brokers in India with over six lakh active account it ranks among
the top five depositary participants in India, registered with NSDL and
CSDL, karvy commorade, member of NCDEX and MCX ranks among the
top three commodities brokers in the country. A Karvy insurance broker is
registered as a broker with IRDA and ranks among the top five insurance
agent in the country. Registered with AMFI as a corporate agent, karvy is
also among top mutual fund mobilize with over Rs 5000 crores under
management. Karvy realty services, which started in 2006, have quickly
established itself as a broker, who adds value in the realty sector. Karvy
global offer niche off to off shoring services to U.S clients.

Karvy has 575 offices in 375 locations across India and overseas at
Dubai and New York. Over 9000 highly qualified people staff karvy.

! Quality Objectives

Karvy will :

o Build in-house processes that will ensure transparent and harmonious

relationships with its clients and investors to provide high quality of

services.
o Establish a partner relationship with its investor service agents and

vendors that will help in keeping up its commitments to the

customers.

o Provide high quality of work life for all its employees and equip them

with adequate knowledge & skills so as to respond to customer's

needs.

o Continue to uphold the values of honesty & integrity and strive to

establish unparalleled standards in business ethics.

o Use state-of-the art information technology in developing new and

innovative financial products and services to meet the changing needs

of investors and clients.

o Strive to be a reliable source of value-added financial products and

services and constantly guide the individuals and institutions in

making a judicious choice of same.

o Strive to keep all stake-holders(shareholders, clients, investors,

employees, suppliers and regulatory authorities) proud and satisfied.

! Achievements
o Among the top 5 stock brokers in India (4% of NSE volumes)
o India's No. 1 Registrar & Securities Transfer Agents

o Among the top 3 Depository Participants

o Largest Network of Branches & Business Associates

o ISO 9002 certified operations by DNV

 o Among top 10 Investment bankers

o Largest Distributor of Financial Products

o Adjudged as one of the top 50 IT uses in India by MIS Asia

o Full Fledged IT driven operations.

! Quality Policy

To achieve and retain leadership, Karvy shall aim for

complete customer satisfaction, by combining its human and
technological resources, to provide superior quality financial services.
In the process, Karvy will strive to exceed Customer's expectations.

INSURANCE AT KARVY

At karvy Insurance Broking Ltd. we provide both life and non-life

insurance products to retail individual, high net worth client and corporate
with the opening up of the insurance sector and with a large number of
private players in the business, we are in a position to provide tailor made
policies for different segments of customers. In our journey to emerge as a
personal financial advisor, we will be better positioned to leverage our
relationship with the product providers and place the requirements of our
customers appropriately with the product providers. With Indian market
seeing a sea change, both in term of investment pattern and attitude of
investors, insurance is no more seen as only a tax saving product but also
as an investment product. By setting up a separate entity we would be
positioned to provide the best of the products available in this business to
our customers.

Our wide national network, spanning the length and breadth of

India, further supports these advantages. Further, personalized service is
provided here by a dedicated team committed in giving hassle-free service
to the clients.

Now as I have made a comparative analysis between the products of

various insurance companies, so its necessary to know something about
those companies:-

Birla Sun Life Insurance

Birla sun life Insurance Company limited is a joint venture between the
Aditya Birla group, one of the largest business houses in India and Sun
Life Financial Inc., as leading international financial services organization.
The local knowledge of the Aditya Birla group combined with the
expertise of Sun Life Financial Inc., offer a formidable protection for your
future. The Aditya Birla group has a turnover of Rs. 1,33,875 corers (as on
31st march 2008). It has over 100,000 employees across all its units
worldwide. It is led by its chairman – Mr. Kumar Mangalam Birla. Some
of its key companies are Hindalco, Grasim and Aditya Birla Nuvo.

Sun Life Financial Inc. and its partners, have operations in key markets
worldwide. These include Canada, U.S, U.K, Hong Kong, the Philippines,
Japan, Indonesia, India, china and Bermuda. Sun Life Financial Inc. has
assets under management of over us$ 404.7 BILLION (as on 31st March,
2008). It is a leading performer in the life insurance market in Canada.

Birla sun life insurance (BSLI) has been operating for 7 years. It has
contributed significantly to the growth and development of the life
insurance industry in India. It pioneered the launch of unit linked life
insurance plans amongst the private player in India. It pioneered the launch
of united linked life insurance plans amongst the private players in India. It
was the first player in industry to sell its policies through the
Bancassurance route and through the internet. It was the first private sector
player to introduce a pure term plan in the Indian market. BSLI has
covered more than 2 million lives since it commenced operations.

!
Life Insurance Corporation 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." 





Vision

A trans-nationally competitive financial conglomerate of significance to
societies and Pride of India. Every day we wake up to the fact that more
than 220 million lives are part of our family called LIC.

We are humbled by the magnitude of the responsibility we carry and
realize that the lives that are associated with us are very valuable indeed.
Although this journey started five decades ago, we are still conscious of
the fact that, while insurance may be a business for us, being part of
millions of lives every day for the past 52 years has been a process called
TRUST.
!

National Insurance Company Limited

National Insurance Company Limited was incorporated in 1906 with its

registered office in Kolkata. Consequent to passing of the General
Insurance Business Nationalisation Act in 1972, 21 Foreign and 11 Indian
Companies were amalgamated with it and National became a subsidiary of
General Insurance Corporation of India (GIC) which is fully owned by the
Government of India. After the notification of the General Insurance
Business (Nationalisation) Amendment Act, on 7th August 2002, National
has been de-linked from its holding company GIC and presently operating
as a Government of India undertaking.

National Insurance Company Ltd (NIC) is one of the leading public sector
insurance companies of India, carrying out non life insurance business.
Headquartered in Kolkata, NIC's network of about 1000 offices, manned
by more than 16,000 skilled personnel, is spread over the length and
breadth of the country covering remote rural areas, townships and
metropolitan cities. NIC's foreign operations are carried out from its
branch offices in Nepal.

National transacts general insurance business of Fire, Marine and

Miscellaneous insurance. The Company offers protection against a wide
range of risks to its customers. The Company is privileged to cater its
services to almost every sector or industry in the Indian Economy viz.
Banking, Telecom, Aviation, Shipping, Information Technology, Power,
Oil & Energy, Agronomy, Plantations, Foreign Trade, Healthcare, Tea,
Automobile, Education, Environment, Space Research etc.

National Insurance is the second largest non life insurer in India having a
large market presence in Northern and Eastern India.

Tata AIG life-A New Look at Life

Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint
venture company, formed by the Tata Group and American International
Group, Inc.
 The Tata Group holds 74 percent stake in the insurance venture with AIG
holding the balance 26 percent. Tata AIG Life provides insurance solutions
to individuals and corporate. Tata AIG Life Insurance Company was
licensed t operates in India on February 12, 2001 and started operations on
April 1, 2001.

Tata AIG Life offers a broad array of life insurance coverage to both
individuals and groups, providing various types of add-ons and options on
basic life products to give consumers flexibility and choice.

Reliance General Insurance

Reliance General Insurance is the fastest growing private sector general

insurance company in India with innovative product offerings and
customer service standards that are benchmarked to the best insurance
practices in the world.
Reliance General Insurance offers a range of products for corporate and
individual customers. With a focus on customer-centric products, multiple
distribution channels and technology, reliance general insurance aims to
increase its presence in the retail sector.

Reliance General Insurance is 100% subsidiary of reliance capital limited,

which is one of the India’s leading and fastest growing private sector
financial services companies. It ranks among the top three private sector
financial companies and banking groups in terms of net worth.

Reliance capital has interests in asset management and mutual funds, life
insurance, general insurance, private equity and proprietary investments,
stock broking and other activities in financial services. Reliance capital is a
part of the Reliance – Anil Dhirubhai Ambani Group.

IDBI Federal Lifesurance® Whole Life Savings Insurance

Plan




We all want to live long and see our future generations grow and prosper.
However, not many of us plan for the long life that we wish for, either
because we do not know how to go about it or because we believe it is an
arduous task.
Presenting, IDBI Federal Lifesurance Whole Life Savings Insurance Plan
(hence referred to as Lifesurance Whole Life) which helps you plan for a
long and worry-free life in a simple and convenient way
ULiP (Unit Linked Insurance Plan)
ULIP is a life insurance product, which provides risk cover for the policy
holder along with investment options to invest in any number of qualified
investments such as stocks, bonds or mutual funds. As a single integrated
plan, the investment part and the protection part can be managed according
to specific needs and choices.

IDBI Federal Wealthsurance Future Star Insurance Plan 




!

Your child is a star in your eyes and you constantly encourage your child
to excel in academic and extra-curricular activities. You are doing
whatever it takes to ensure that your child shines like a star when she
grows up. But have you done everything that is needed to secure a child’s
future? Facilitating the best for him, from education to talent development
courses, everything is going to cost a lot tomorrow. To add to this concern
is the uncertainty of life. Of course, you would like your child to fulfil his
dreams, no matter what! IDBI Federal Wealthsurance Future Star
Insurance Plan* is designed with the understanding that your desire to see
him shine like a star is unconditional
IDBI Federal Wealthsurance Growth Insurance Plan 




As a smart and dynamic individual, you have always charted your own
path through life. So when it comes to investing your hard-earned money,
you definitely want to stay in complete control. 



Presenting, IDBI Federal Wealthsurance Growth Insurance Plan (hereafter
referred to as Wealthsurance Growth), which lets you build your wealth,
exactly the way you want. With this plan, you get complete flexibility in
steering your investments, basis your financial goals in life. What’s more,
your family stays financially secured with a life cover!

IDBI Bank Ltd

It continues to be, since its inception, India’s premier industrial
development bank. It came into being as on July 01, 1964 to
support India’s industrial backbone. Today, it is amongst India’s
foremost commercial banks, with a wide range of innovative
products and services, serving retail and corporate customers.
The Bank offers its customers an extensive range of diversified
services including project finance, term lending, working capital
facilities, lease finance, venture capital, loan syndication,
corporate advisory services and legal and technical advisory
services to its corporate clients as well as mortgages and
personal loans to its retail clients.

Federal Bank
It is one of India’s leading private sector banks, with a dominant
presence in the state of Kerala. It has a strong network of over
1,247 branches and 1,485 ATMs spread across India. The bank
provides over four million retail customers with a wide variety
of financial products. Federal Bank is one of the first large
Indian banks to have an entirely automated and interconnected
branch network.

Ageas
It is an international insurance group with a heritage spanning
190 years. Ranked among the top 20 insurance companies in
Europe, Ageas has chosen to concentrate its business activities in
Europe and Asia, which together make up the largest share of the
global insurance market. These are grouped around four
segments: Belgium, United Kingdom, Continental Europe and
Asia and served through a combination of wholly owned
subsidiaries and partnerships with strong financial institutions
and key distributors around the world. Ageas operates successful
partnerships in Belgium, the UK, Luxembourg, Italy, Portugal,
Turkey, China, Malaysia, India and Thailand and has subsidiaries
in France, Hong Kong and the UK. Ageas is the market leader in
Belgium for individual life and employee benefits, as well as a
leading Non-Life player through AG Insurance. In the UK, Ageas
is the sixth largest Non-Life insurer with a number 3 position in
cars insured and has a strong presence in the over 50’s market.
 CHAPTER NO. 4 :

DATA ANALYSIS, INTERPRETATION and

PRESENTATION

We have presented below the findings and analysis of the questionnaire

addressed to the respondents to gauge the attitude and perception of the
people towards insurance.

a. Respondents having life Insurance

The question was asked to the respondents to know how many of the
respondents had a life insurance policy.

!
From the survey it was found out that 85% of the respondents i.e. 51
persons out of 60 had a life insurance policy whereas 15% i.e. 2.25 persons
of the respondents didn’t had a life insurance policy.

b. Insurance policy taken from which company?

The question was asked to the respondents so as to get to know from

which insurance company they have bought the policy

The finding which came out from the survey was that 40% of the
respondents i.e 24 persons out of 60 who have a life insurance cover
bought life insurance from Life Insurance Corporation of India (LIC). LIC
is the most preferred brand in the insurance industry because it is the only
government company which offers insurance. People prefer to buy
insurance from LIC because of the security being one of the prime factors.
In the figure we can also see that nowadays people mindset have changed
towards insurance and are opting for private company for insurance cover
or policy.

c. From whose suggestion have the respondents taken a policy?

It was asked to gain an insight from the respondents that on whose

suggestion did they opt for a life insurance cover or policy.

!
After the survey it was found that most of the respondents took policy or
life insurance cover from the suggestions of their friends or family.And
only 23 respondents took policy on the recommendation of the
agents.Other sources like banks, corporate tie-ups and etc. plays a minute
role in reaching out people for insurance policies.

d. Type of plan

The respondents were asked which type of plan they go in for when they
take up insurance cover or policy.

!
After the survey it was found that term plan was the most preferred plan.
Next on the list was endowment plan. Pension plan and health plan are the
least preferred by customers .

Preference of insurance sector according to age group:-

Age group beyond 40

Graphical presentation
30

23

15

0
! LIC TATA AIG BIRLA RELIANCE AVIVA OTHERS
PIE-CHART

percentage

L.I.C
TATA AIG
BIRLA
RELIANCE
AVIVA
OTHERS

Age Group Between 25 – 40

 FINDINGS

After the survey it was found that still major portion of customers go for
public insurance companies, but with the entry of more and more private
companies the scenario is changing rapidly, people with a need of more
and better returns are opting for private companies, and this can be
justified by the increasing market share of private companies in the Indian
insurance sector.

There are various ways in which private companies are found much more
lucrative than public companies and the facts which support this statement
are as follows:-

1. Versatility of products.

2. Efficient fund managers.

3. Better customer services.

4. More returns.

5. Regular follow up.

6. Quicker settlement
 CHAPTER NO. 5 :

CONCLUSIONS and SUGGESTIONS

! People are not aware of the life insurance. Most of them know only
one company which provides life insurance i.e. LIC. So awareness
campaign should be run so that people are aware of different life
insurance companies in India.

! People should be educated about the different types of products or

plans offered by the life insurance companies. Most of them don’t
know much of the different types of plan or products.

! It was felt that most of the people took life for tax savings or just to
cover up their life, not as an investment avenue. Life Insurance
companies need to advertise in such a manner that people start
investing in life insurance like the way they invest in the stock market

! Now at the time of global turmoil insurance company had to hold on

to the policyholders trust which might lead the company to the path of
success
! Insurance companies should try to adopt different strategies to market
their products or plan. Companies should not primarily focus on the
agents for their business.
 CONCLUSION

! Insurance is one sector that witnessed continuous growth owing to the

reforms in 2000. The insurance sector is likely to attain a size of Rs.
2,00,000 crore ($ 51.2 billion) in 2009-10. In life insurance, the
business grew by 23.3% to Rs. 93,000 crore in 2007-08
(Source:Assocham). The sector alone employs close to 30 lakh people
(including agents and direct employees).

! A well-functioning insurance market plays an important role in

economic development and financial stability of developing
economies such as India’s. First, it inculcates and encourages the habit
of saving. Second, it provides a safety net to rural and urban enterprise
and productive individuals.

! The life insurance market in India is on a growth path. In spite of this,

the country lags far behind the others in awareness about life
insurance. The challenge is to spread awareness about life insurance
and it true benefits. The industry has to convince people to park their
hard earned money in long-term insurance and not just look at it as a
tax saving instrument.
 LIMITATIONS

a. Useful Financial insights are not easily available.

b. Due to time constraint sufficient research on all the investment tools is

difficult.

c. The survey sample is not very large for analysis

.
d. Properly convincing people to invest in insurance products is
challenging.

e. Due to recession there is liquidity crunch in the market.

f. There might have been tendencies among the respondents to amplify or

filter their responses under the testing conditions
.
g. The research is confined to Kolkata and does not necessarily shows a
pattern applicable to other parts of the country.
 CHAPTER NO. 6 :

BIBLIOGRAPHY

1. The monthly fact sheet available from the company for studying the
features of products.

2. Online information from the various websites namely:-

! www.lic.co.in

! www.wikipedia.com

! www.tata-aig-life.com

! www.birlasunlife.com

! www.irdaindia.org

! www.google.com

! www.wikipedia.com
 ANNEXURE

QUESTIONNARIES

1. Sex :

2. Age :

3. Occupation :

4. Income :

5. Marital status :

6. No. of family members :

7. Mobile no. :

8. Are you insured yes/no

9. If yes , then with life/ non-life/both

10.In which company ________________

11.How you rank your insurance company?

|----------------|-----------------------|------------------|---------------------|

Excellent Very Good Good Fair Bad

12. Who suggested you to take the Insurance Policy?

Friends Family Agents

 Others, please specify

13. In which of the insurance plan have you invested the money?

Term Plan Endowment plan Money Back Plan

Children Plan Pension plan ULIP (Unit Linked

Insurance Plan)

Health Plan Others please

specify_______________________________

14. Rank the insurance co. according to your preference:

a) LIC/GIC _____

b) BIRLA _____

c) TATA AIG _____

d) AVIVA _____

e) RELIANCE _____

f) _______ _____

15. Where does government insurance co. need to improve?

a) Service

b) Return

c) Information
 d) Varity

e) Easy claim

16. Reason behind the preference of your insurance company?

__________________________________________________________________
__________________________________________________________________
______