A Research Report on

ANALYSING THE ROLE OF

“L.I.C”
SUBMITTED
IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF
BACHELOR’S OF BUSINESS
ADMINISTRATION (2017-2020)
UNDER THE GUIDANCE OF
MS.KANIKA GUPTA
(ASSISTANT PROFESSOR)

SUBMITTED BY
YASH KUMAR
ENROLLMENT NO: - 50690101717
[6 TH SEMESTER]

FAIRFIELD INSTTITUE OF MANAGEMENT AND TECHNOLOGY

Affiliated to Guru Gobind Singh Indraprastha University

FIMT Campus, Kapashera

New Delhi -10037

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Sensitivity: Internal & Restricted

 DECLARATION

I MR YASH KUMAR Student of Fairfield Institute of Management and

technology has completed this project on “ANALYSING THE ROLE OF
L.I.C IN COMPARISON TO FUTURE GENERALI”. In the academic
year 2017-20 The information submitted in this project is true & Original
to the best of my knowledge.

Signature of Student

(MR.YASH KUMAR)
50690101717

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 ACKNOWLEDGEMENT

It is a pleasure to have the opportunity to extend my heartiest thanks to

everybody who helped me through the successful completion of my project
report, which is a great source of learning and experience for me. My sincere
gratitude goes to “Fairfield Institute of Management and Technology”, New
Delhi for her valuable inputs and guidance throughout my project work.

YASH KUMAR

50690101717
 TABLE OF CONTENTS

CH-NO. TITLE PAGE NO. SIGNATU

RE
EXECUTIVE SUMMARY
CH-1 INTRODUCTION
1.1 About LIC 1
1.1.1 Objectives 2
1.1.2 Mission 2
1.1.3 Vision 2
1.1.4 Product Line 3-4
1.1.5 Agents of LIC 4
1.2 About Future Generali 5
1.2.1 Strength of Future Generali 5-6
1.2.2 Vision ,Mission and Values 8-10
1.2.3 Product Line 10-11
CH-2 LITERATURE REVIEW
2.1 Intro to Insurance Sector 13-14
2.2 Market Size 14-16
2.3 Investments 16-17
2.4 Government Initiatives 17-18
2.5 Regulation of IRDAI 18-22
2.6 Comparison of policies between LIC & 23-34
FUTURE GENERALI
CH-3 RESEARCH METHODOLOGY
3.1 Research Objectives 36
3.2 Scope of study 37
3.3 Data Collection 37
3.4 Research approach 37
3.5 Sampling Unit 37
3.6 Research Instruments 38
3.7 Field Work 38
3.8 Method of Analysis 38
CH-4 DATA ANALYSIS & INTERPRETATION 40-47
CH-5 FINDINGS & SUGGESTIONS
5.1 Findings 49
5.2 Recommendations 50-51
CH-6 CONCLUSION 53
ANEXURES 54-56
BIBLIOGRAPHY 57
 Executive
Summary

The objective of the project was to study and evaluate present market share and
preference of the customers of two leading company LIC and FUTURE
GENRALI. Project is focused on the comparative study of LIC and Future
Generali.
The project starts with the introduction of company and Insurance sector follows with the
market share of insurance companies in Indian insurance industry and how LIC is still
dominating the insurance sector.
To complete the project the study has been conducted which based on primary and
secondary date which is collected through survey, books magazine and websites.
The main purpose of the study to know that how and what manner people attract
towards the company and how they decide which one should be chosen.

Finding and recommendation made on the basis of survey most depicts on the point
that insurance plan and policies should be more customer centric, as many customer
are not aware about the policies and plan and are not able to decide which policies
or plan is better for them so that they can give proper knowledge to the customers.
Frequent change of customers should not be done on the routes.
 CHAPTER-1
INTRODUCTION
 ABOUT LIC

The Life Insurance Corporation of India was founded in 1956 when the Parliament
of India passed the Life Insurance of India Act that nationalised the private
insurance industry in India. Over 245 insurance companies and provident societies
were merged to create the state owned Life Insurance Corporation.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its
corporate office in the year 1956. Since life insurance contracts are long term
contracts and during the currency of the policy it requires a variety of services need
was felt in the later years to expand the operations and place a branch office at each
district headquarter. Re-organization of LIC took place and large numbers of new
branch offices were opened. As a result of re-organisation servicing functions were
transferred to the branches, and branches were made accounting units. It worked
wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only
in the year 1969-70, and it took another 10 years for LIC to cross 2000.00 crore
mark of new business. But with re-organisation happening in the early eighties, by
1985-86 LIC had already crossed 7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 113 divisional
offices, 8 zonal offices, 1381 satallite offices and the Corporate office. LIC’s Wide
Area Network covers 113divisional offices and connects all the branches through a
Metro Area Network. LIC has tied up with some Banks and Service providers to
offer on-line premium collection facility in selected cities. LIC’s ECS and ATM
premium payment facility is an addition to customer convenience. Apart from on-
line Kiosks and IVRS, Info Centres have been commissioned at Mumbai,
Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has
launched its SATELLITE SAMPARK offices. The satellite offices are smaller,
leaner and closer to the customer. The digitalized records of the satellite offices will
facilitate anywhere servicing and many other conveniences in the future.

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Objectives

 Spread Life Insurance widely and in particular to the rural areas and to the
socially and economically backward classes with a view to reaching all
insurable persons in the country and providing them adequate financial
cover against death at a reasonable cost.
 Maximize mobilization of people's savings by making insurance-
linked savings adequately attractive.
 Bear in mind, in the investment of funds, the primary obligation to its policy
holders, whose money it holds in trust, without losing sight of the interest of
the community as a whole; the funds to be deployed to the best advantage of
the investors as well as the community as a whole, keeping in view national
priorities and obligations of attractive return.
 Conduct business with utmost economy and with the full realization that
the moneys belong to the policyholders.
 Act as trustees of the insured public in their individual and collective capacities.
 Meet the various life insurance needs of the community that would arise
in the changing social and economic environment.
 Involve all people working in the Corporation to the best of their capability
in furthering the interests of the insured public by providing efficient service
with courtesy.
 Promote amongst all agents and employees of the Corporation a sense of
participation, pride and job satisfaction through discharge of their duties
with dedication towards achievement of Corporate Objective.

Mission

Ensure 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.

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 Product Line

As we know that Life Insurance is important for everyone to protect family in

case of their demise the insured money will save their family for educating
their children and marriage etc.

Term Insurance Policy

This policy is pure risk cover with the insured amount will be paid only if the
policy holder dies in the period of policy time. The intention of this policy is to
protect the policy holder’s family in case of death. For example, a person who
takes term policy of Rs.500000 for 20 years, if he dies before 20years then his
family will get the insured amount. If he survive after 20 years then he will not
get any amount from the insurance company. It is the reason why term policies
are very low cost. So, this type of policy is not suitable for savings or investment.

Whole Life Policy

As the name itself says, the policy holder has to pay the premium for whole life till
his death. This policy doesn’t address any other needs of the policy holder. Because
of these reasons this kind of policy is not very popular or insurance
company not suggesting to take this policy.
Endowment Policy

It is the most popular Life Insurance Plans among other types of policies. This
policy combines risk cover with the savings and investment. If the policy holder
dies during the policy time, he will get the assured amount. Even if he survives he
will receive the assured amount. The advantage of this policy is if the policy holder
survives after the completion of policy tenure, he receives assured amount plus
additional benefits like Bonus, etc. In this kind of policy, policy holder receives
huge amount while completing the tenure. In addition to the basic policy, insurers
offer various benefits such as double endowment and marriage/education
endowment plans. The cost of such a policy is slightly higher but worth its value.

Money Back Policy

Money Back Policy is to provide money on the occasions when the policy holder
needs for his personal life. The occasions may be marriage, education, etc. Money
will be paid back to the policy holder with the specified duration. If the policy
holder dies before the policy term, the sum assured will be given to his family. A
portion of the sum assured is payable at regular intervals. On survival the remainder
of the sum assured is payable.
 Annuities and Pension

An annuity is a series of periodic payments. An annuity contract is an insurance

policy, under which the annuity provider (insurer) agrees to pay the purchaser of
annuity (annuitant) a series of regular periodical payments for a fixed period or
during someone's life time. In an annuity, the insurer agrees to pay the insured a
stipulated sum of money periodically. The purpose of an annuity is to protect
against risk as well as provide money in the form of pension at regular intervals.
Over the years, insurers have added various features to basic insurance policies in
order to address specific needs of a cross section of people.

Agents of L.I.C. MDRT(Million dollar round table)

MDRT agent is one who procures insurance business of amount equal to one
million dollar in any calendar year that is from 1st Jan to 31st Dec.

It is club well known in LIC, in every branch there 4-5 agents who are MDRT
agents. They are considered as the most productive agents in LIC. Like in every
office the staff that perform better than his counterpart get more in terms of
Income and respect, same happens in LIC.
Since there are 4-5 MDRT agents in every branch so they are favorite agents of
their development officers, branch managers and to the managers sitting at higher
level.
As far as income is concern the first year income of an LIC MDRT advisor is somewhere
Rs.8.5 lacs.

An LIC Advisor who earns Rs 8, 45,300 as first year commission in any

calendar year that is from 1st January to 31st December is Called an
MDRT AGENT.

COT (Court of table) Agents

An LIC Advisor who earns Rs 25, 35,900 as first year commission in any
calendar year that is from 1st January to 31st December is called a COT
AGENT.

TOT (Top of the table) Agents

An LIC Advisor who earns Rs 50, 71,800 as first year commission in any
calendar year that is from 1st January to 31st December is Called an TOT
AGENT
ABOUT FUTURE GENERALI

Future Generali Life Insurance is a joint venture between three leading groups

 Future Group – A leading retailer of India

 Generali Group – A global insurance group that features among the top 50
companies of the world
 IITL (Industrial Investment Trust Limited) – A leading investment NBFC

Future Generali Life Insurance provides a complete range of simplified solutions for
the financial security of customers and enterprises, including saving, family
protections, Unit Linked Policies as well as Group products.

Future Generali Life Insurance, incorporated in sept 2007, is present in 80 locations

across the country. They have sourced over 11 lakhs policies since inception, and
over 1507 crore capital has been invested in the company till date. FG majorly aims
at being one of the most trusted insurance brands of India.
Strengths of Future Generali

 Over 12.6 lakhs customers

 We settle over 1,80,000 customers each year
 Presence in 132 locations across India
 Around 2000+ active corporate clients
 Over 6,000 agents represent us across the country
 In-house servicing arm provides fast and easy claim settlement
 Around 4,200 cashless hospitals
 ISO 9001:2008 certified for quality excellence
 A strong venture between India’s largest retailer and one of the world’s largest
insurer
 As on 31st December 2016 the company has 2,204 crore value of Assets under
Management
 Products include excellent combination of affordable Price and
outstanding innovation at the same time
Future group is an Indian private conglomerate, headquartered in Mumbai. This
company is known for having a significant prominence in Indian retail and fashion
sectors, with popular supermarkets chains like Big Bazaar and Food Bazaar,
lifestyle stores like Brand Factory, Central etc. and also having notable presence in
integrated foods and FMCG manufacturing sectors. Future Retail (initially
Pantaloons Retail India Limited) and Future Lifestyle Fashions, two operating
companies of Future Group, are among the top retail companies listed in BSE with
respect to assets, and in NSE 0with respect to market.
Future group understands the soul of Indian consumers. As one of the India’s retail
pioneers with multiple retail formats, they connect a diverse and passionate
community of Indian buyers, sellers and business. The collective impact on
business is staggering. Around 300 million customers walk into our stores each
year and choose products or services supplied by 30,000 small, medium and large
entrepreneurs and manufacturers across India and this number is yet growing with
a subsequent pace.
Future group employees 36,000 people directly from every section of our society.
They source our supplies from enterprises across the country, creating fresh
employment, impacting livelihoods, empowering local communities and fostering
mutual growth.
They believe in the “Indian dream” and have aligned our business practices to our
larger objectives of being a premier catalyst in India’s consumption-led growth
story. Working towards this end, they are ushering positive socio-economic
changesin communities to help the Indian dreams fly high and the so called “Sone
K Chidiya” sore once again. This approach remains embedded in our ethos even as
we rapidly expand our footprints deeper in India.
Generali group is the largest insurance company in Italy and the 3rd largest in the
world. It has its headquarters in Trieste. In 2010, Assicurazioni Generali Group was
the 2nd largest insurance group in the world by revenue after AXA. The company
was formed on 26th December 1831 under the name of Regia Privilegiata
Compagnia di Assicurazioni Generali Austro- Italiche

At that time, Trieste was the most important sea port of the Austro-Hungarian
Empire. The company grew in importance, becoming one of the largest insurance
operators both in Italy and in Central Europe. As of 2014, the company ranks 48th on
the Fortune Global 500 list of companies and 43rd on MITs worldwide “Smartest
Companies” ranking in 2015. The symbol of Assicurazioni Generali is derived from
the flag of the Republic of Venice, dissolved by Napoleon three decades before the
company was founded.

Today Generali operates primarily in Europe, Middle East and East Asia with large
market share in Italy, Poland, Hungary, Germany, France, Austria, Slovenia, The
Netherlands, Croatia, Serbia, Spain, Switzerland, Romania, Israel, Japan, China,
Bosnia and Herzegovina, with secondary operations in Latin America.
Generali’s United States operations are concentrated in Financial Product
Management, a result of the group’s acquisition with Business Men’s
assurance company of America in 1990.

In India, the company is represented by Future Generali, a joint venture of Future

group and Assicurazioni General. It provides both life and property causality
insurance. The life business is known as Future Generali India Life Insurance
Company Limited.
Industrial Investment Trust Limited (IITL) was incorporated in the year 1933 as an
investment trust company. IITL sought to provide its shareholders an expert advice
on investment portfolio. Original subscribers to the paid-up capital included
prominent members of the financial community in England and India including
insurance companies such as Prudential, United and Oriental and some of the most
princely families in India. IITL is listed in Bombay Stock Exchange Limited (B1SE)
and National Stock Exchange of India Limited (NSE)
IITL obtained certificate from the Reserve Bank of India in the year 2000 to carry
on as a Non-Banking Financial Company (NBFC) without accepting public
deposits. The main objectives of the holding company are to carry on the business
as an investment company and to invest in shares, stocks, bonds and debentures.
The company also undertakes activities such as Private Equity and Margin Funding
and hold prime properties. The company have been consistently paying dividend to
the shareholders over the year and also made bonuses issue 3 times.

Vision, Mission and Values Vision

Their vision is to actively protect and enhance people's lives.

 Actively
They play a proactive and leading role in improving people's lives through
insurance.

 Protect
They are dedicated towards managing and mitigating risks of individuals and
institutions.

 Enhance
Future Generali is also committed to creating value.
  People
They deeply care about our customer and our employee lives and their future.

 Lives
Ultimately, they have an impact on the quality of people's lives – they ,
safety, advice and service are instrumental in improving a person's chosen
way of life in the long term.

Mission

Our mission is to be the first choice by delivering relevant and

accessible insurance solutions.
 First choice
Logical and natural action that acknowledges the best offer in the market,
based on clear advantages and benefits.

 Delivering
They ensure achievement striving towards better performance.

 Relevant
Anticipating or fulfilling a real-life need or opportunity, tailored to
local and personal needs and habits, perceived as valuable.

 Accessible
Simple and easy to find, understand and use; always available, at a competitive
value for money.

 Insurance solutions
They aim to offer and tailor a combination of protection, advice and service.

Values

 Deliver on the promise

They tie a long-term contract of mutual trust with our people, customers
and stakeholders; all of our work is about improving the lives of our
customers.
They commit with discipline and integrity to bringing this promise to
 life and making an impact within a long-lasting relationship.

 Value our people

They value our people, encourage diversity and invest in continuous learning and
growth by creating a transparent, cohesive and accessible working environment.
Developing our people will ensure our Company's long-term future.

 Live the community

They are proud to belong to a global Group with strong, sustainable and
long-lasting relationships in every market in which they operate. Our
markets are our homes.

Product Line

Future Generali Flexi Online Term Plan

The term plan from Future Generali Life Insurance offers flexible coverage
options. It allows individuals to create their own plan which can be either a Fixed
Income Protection + Basic Life Cover plan from Future Generali Life Insurance or
an Increasing Income Protection + Basic Life Cover policy.
Under this Flexi Online Term Plan, an insured can choose between fixed income
protection and increasing income protection. In the former case, the nominees
receive a fixed income per month until a time an insured would have reached 60
years of age. Under the increasing income protection option from Future Generali
Life Insurance, the nominees receive an increased sum of money over a period to
guard against any rise in costs. The insured has an option to opt for both basic cover
as well the income protection cover under this Future Generali Life Insurance term
plan. Opting for such a plan will ensure the nominees receive a lump sum benefit
under the basic cover as well as regular monthly payments.

Future Generali Assured Income Plan

The guaranteed income plan from Future Generali Life Insurance offers a
guaranteed pay-out each year for 11 or 15 years after the premium has been paid
respectively for 11 or 15 years. In addition, Future Generali Life Insurance insured
policyholders can receive up to 4.5 times their annualised premium in the last pay-
out in a 15 year policy and up to 1.5 times the annual premium at end of the last
pay-out period in an 11 year policy.
This Future Generali Life Insurance policy offers a death benefit of 17.5 to 34.5
times of the annual premium. An 11 year policy has an entry age of 7 to 50 years
while a 15 year policy has an entry age of 5 to 50 years. The maturity age is from 18
to 65 years.

Future Generali Assured Money Back Plan

Future Generali Life Insurance’s Assured Money Back Plan is a limited premium
payment plan that offers guaranteed maturity benefits as well as money back, in
addition to life cover. A policy term can be of 15, 17,
20 and 22 years with the premium payment period ranging from 5 years for a 15
year cover to 12 years for a 22 years plan. The sum assured for this Future Generali
Life Insurance plan starts from Rs. 58,215 and there is no upper limit.

Easy Invest Online plan

This plan by Future Generali is a unique online ULIP and has an extremely easy
purchase process online. The plan offers an ample variety of loyalty additions and
investment options. The plan has been launched with intent to encourage
policyholder for long-term market-linked savings. The plan is best suitable for the
investors who are online savvy and looking for wide variety of investment options
with easy purchase route. The Easy Invest plan is only available online and can be
bought all across India.
This policy can be easily purchased online just by giving the answers of a few basic
questions. The policy will help the clients meet their financial objectives of savings,
such as accumulating retirement funds, building a corpus for children, etc. The plan
provides great returns than other investment options available in the market.

Future Generali Assure Plus

A multiple term option savings-cum-insurance plan from Future Generali Life

Insurance, the policy offers multiple terms of 15, 20 and 25 years. Anyone
between the ages of 3 and 55 years can opt for this Future Generali Life Insurance
policy. The sum assured starts from Rs. 1 lakh and goes up to Rs. 5 crore. The
policy has a limited premium paying tenure from 7, 10 or 12 years for a 15 year
policy to 12, 15, 17 or 20 years for a 25 year cover.
 CHAPTER-2
LITERATURE
REVIEW
Introduction to Insurance Sector

The story of insurance is probably as old as the story of mankind. The same instinct
that prompts modern businessmen today to secure themselves against loss and
disaster existed in primitive men also. They too sought to avert the evil
consequences of fire and flood and loss of life and were willing to make some sort
of sacrifice in order to achieve security. Though the concept of insurance is largely a
development of the recent past, particularly after the industrial era – past few
centuries – yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818.
Oriental Life Insurance Company started by Europeans in Calcutta was the first life
insurance company on Indian Soil. All the insurance companies established during
that period were brought up with the purpose of looking after the needs of European
community and Indian natives were not being insured by these companies.
However, later with the efforts of eminent people like Babu Muttylal Seal, the
foreign life insurance companies started insuring Indian lives. But Indian lives were
being treated as sub-standard lives and heavy extra premiums were being charged
on them. Bombay Mutual Life Assurance Society heralded the birth of first Indian
life insurance company in the year 1870, and covered Indian lives at normal rates.
Starting as Indian enterprise with highly patriotic motives, insurance companies
came into existence to carry the message of insurance and social security through
insurance to various sectors of society. Bharat Insurance Company (1896) was also
one of such companies inspired by nationalism. The Swadeshi movement of 1905-
1907 gave rise to more insurance companies. The United India in Madras, National
Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore
were established in 1906. In 1907, Hindustan Co-operative Insurance Company
took its birth in one of the rooms of the Jorasanko, house of the great poet
Rabindranath Tagore, in Calcutta. The Indian Mercantile, General Assurance and
Swadeshi Life (later Bombay Life) were some of the companies established during
the same period. Prior to 1912 India had no legislation to regulate insurance
business. In the year 1912, the Life Insurance Companies Act, and the Provident
Fund Act were passed. 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. But the Act discriminated between foreign and Indian
companies on many accounts, putting the Indian companies at a disadvantage.

The first two decades of the twentieth century saw lot of growth in insurance
business. From 44 companies with total business-in-force as Rs.22.44 crore, it rose
to 176 companies with total business-in-force as Rs.298 crore in 1938. During the
mushrooming of insurance companies many financially unsound concerns were
also floated which failed miserably. The Insurance Act 1938 was the first
legislation governing not only life insurance but also non-life insurance to
provide strict state control over insurance business. The demand for
nationalization of life insurance industry was made repeatedly in the past
but it gathered momentum in 1944 when a bill to amend the Life Insurance Act
1938 was introduced in the Legislative Assembly. However, it was much later on
the 19th of January, 1956, that life insurance in India was nationalized. About 154
Indian insurance companies, 16 non-Indian companies and 75 provident were
operating in India at the time of nationalization. Nationalization was accomplished
in two stages; initially the management of the companies was taken over by means
of an Ordinance, and later, the ownership too by means of a comprehensive bill.
The Parliament of India passed the Life Insurance Corporation Act on the 19th of
June 1956, and the Life Insurance Corporation of India was created on 1st
September, 1956, with the objective of spreading life insurance much more widely
and in particular to the rural areas with a view to reach all insurable persons in the
country, providing them adequate financial cover at a reasonable cost.

The insurance industry of India consists of 53 insurance companies of which 24 are

in life insurance business and 29 are non-life insurers. Among the life insurers, Life
Insurance Corporation (LIC) is the sole public sector company. Apart from that,
among the non-life insurers there are six public sector insurers. In addition to these,
there is sole national re-insurer, namely, General Insurance Corporation of India
(GIC Re). Other stakeholders in Indian Insurance market include agents (individual
and corporate), brokers, surveyors and third party administrators servicing health
insurance claims.

Out of 29 non-life insurance companies, five private sector insurers are registered to
underwrite policies exclusively in health, personal accident and travel insurance
segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich
Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd,
Religare Health Insurance Company Ltd and Cigna TTK Health Insurance Company
Ltd. There are two more specialised insurers belonging to public sector, namely,
Export Credit Guarantee Corporation of India for Credit Insurance and Agriculture
Insurance Company Ltd for crop insurance.

Market Size

Government's policy of insuring the uninsured has gradually pushed insurance

penetration in the country and proliferation of insurance schemes are expected to
catapult this key ratio beyond 4 per cent mark by the end of this year, reveals the
ASSOCHAM latest paper.

The number of lives covered under Health Insurance policies during 2015-16
was 36 crores which is approximately 30 per cent of India's total population.
The number has seen an increase every subsequent year as 28.80 crore people
had the policy in the previous fiscal.
During April 2015 to March 2016 period, the life insurance industry recorded a new
premium income of Rs. trillion (US$ 20.54 billion), indicating a growth rate of 22.5 per
cent. The general insurance industry recorded a 12 per cent growth in Gross Direct
Premium underwritten in April 2016 at Rs 105.25 billion (US$ 1.55 billion). The life
insurance industry reported 9 per cent increase in overall annual premium equivalent in
April-November 2016. In the period, overall annual premium equivalent (APE)- a
measure to
normalise policy premium into the equivalent of regular annual premium-
including individual and group business for private players was up 16 per cent to
Rs 1,25,563 crore (US$ 18.76 billion) and Life Insurance Corporation up 4 per
cent to Rs 1,50,456 crore (US$ 22.48).

India’s life insurance sector is the biggest in the world with about 360 million
policies which are expected to increase at a Compound Annual Growth Rate
(CAGR) of 12-15 per cent over the next five years. The insurance industry plans to
hike penetration levels to five per cent by 2020.

Current Market Share:-

LIC Continues to Dominate Life Insurance Segment

 As of 2016, life insurance sector has 29 private players in comparison to only four
in FY02

 With 70.4 per cent share market share in FY16, LIC continues to be the
market leader, followed by SBI (5.1 per cent), ICICI (4.9 per cent) and
HDFC (4.1 per cent)
Life Insurance Market Appears
Vibrant

The life insurance market grew from

US$
10.5 billion in FY02 to US$ 27.5 billion
in FY16.

Over FY02–FY16, life insurance premiums

expanded at a CAGR of 7.5 per cent.

The life insurance industry has the potential to grow 2-2.5 times by 2020 in
spite of multiple challenges supported by long-term trends and fundamentals
underlying household savings.

Investments

The following are some of the major investments and developments in the Indian
insurance sector:

 New York Life Insurance Company, the largest life insurance company in the US,
has invested INR 121 crore (US$ 18.15 million) in Max Ventures and Industries
Ltd for a 22.52 per cent stake, which will be used by Max for investing in new
focus areas of education and real estate.

 New York Life Investments, the global asset management division of New York
Life, along with other investors like Jacob Ballas, will own a significant minority
ownership in Centrum Capital by being one of the leading global investors in
buying the available 30 per cent stake worth US$ 50 million of Centrum Capital.

 Max Life Insurance Co Ltd and HDFC Life Insurance Co Ltd have signed a
merger agreement, which is expected to create India's largest private sector life
insurance company once the transaction is completed.

 Aviva Plc., the UK-based Insurance company, has acquired an additional 23 per
cent stake in Aviva Life Insurance Company India from the joint venture (JV)
 partner Dabur Invest Corporation for Rs 940 crore (US$ 141.3 million), thereby
increasing their stake to 49 per cent in the company.

 Insurance firm AIA Group Ltd has decided to increase its stake in Tata AIA Life
Insurance Co Ltd, a joint venture owned by Tata Sons Ltd and AIA Group from
26 per cent to 49 per cent.

 Canada-based Sun Life Financial Inc plans to increase its stake from 26 per cent to
49 per cent in Birla Sun Life Insurance Co Ltd, a joint venture with Aditya Birla
Nuvo Ltd, through buying of shares worth Rs 1,664 crore (US$ 244.14 million).

 Nippon Life Insurance, Japan’s second largest life insurance company, has signed
definitive agreements to invest Rs 2,265 crore (US$ 332.32 million) in order to
increase its stake in Reliance Life Insurance from 26 per cent to 49 per cent.

 Bennett Coleman and Co. Ltd (BCCL), the media conglomerate with multiple
publications in several
languages across India, is set to buy Religare Enterprises Ltd.’s entire 44 per cent
stake in life insurance joint venture Aegon Religare Life Insurance Co. Ltd. The
foreign partner Aegon is set to increase its stake in the joint venture from 26 per
cent to 49 per cent, following government’s reform measure allowing the increase in
stake holding by foreign companies in the insurance sector.

 GIC Re and 11 other non-life insurers have jointly formed the India Nuclear
Insurance Pool with a capacity of Rs 1,500 crore (US$ 220.08 million) and will
provide the risk transfer mechanism to the operators and suppliers under the CLND
Act.

 State Bank of India has announced that BNP Paribas Cardiff is keen to increase its
stake in SBI Life Insurance from 26 per cent to 36 per cent. Once the foreign joint
venture partner increases its stake to 36 per cent, SBI’s stake in SBI Life will get
diluted to 64 per cent.
 Government Initiatives

The Union Budget of 2017-18 has made the following provisions for the Insurance
Sector:

 The Budget has made provisions for paying huge subsidies in the premiums of
Pradhan Mantri Fasal Bima Yojana (PMFBY) and the number of beneficiaries will
increase to 50 per cent in the next two years from the present level of 20 per cent.
As part of PMFBY, Rs 9,000 crore (US$ 1.35 billion) has been allocated for crop
insurance in 2017-18.

 By providing tax relief to citizens earning up to Rs 5 lakh (US$ 7500), the

government will be able to increase the number of taxpayers. Life insurers will be
able to sell them insurance products, to further reduce their tax burden in future. As
many of these people were understating their incomes, they were not able to get
adequate insurance cover. Demand for insurance products may rise as people’s
preference shifts from formal investment products post demonetisation.

 The Budget has attempted to hasten the implementation of the Digital India
initiative. As people in rural areas become more tech savvy, they will use digital
channels of insurers to buy policies.

Regulation of IRDAI

(Insurance Regulatory and Development Authority of India)

 The IRDAI opened up the market in August 2000 with the invitation for
application for registrations. Foreign companies were allowed ownership of
up to 26%. The Authority has the power to frame regulations under Section
114A of the Insurance Act 1938, and has from 2000 onwards framed various
regulations ranging from registration of companies for carrying on insurance
business to protection of policyholders’ interests. In December 2000, the
subsidiaries of the General Insurance Corporation of India were restructured
as independent companies and at the same time, GIC was converted into a
national re-insurer. Parliament passed a bill de-linking the four subsidiaries
from GIC in July 2002.
 The Insurance Regulatory and Development Authority of India (IRDAI) is an
autonomous, statutory agency tasked with regulating and promoting the
insurance and re-insurance industries in India. It was constituted by the
Insurance Regulatory and Development Authority Act, 1999, an act of
Parliament passed by the government of India. The agency's headquarters are
in Hyderabad, Telangana , where it moved from Delhi in 2001.

 In India insurance was mentioned in the writings of Manu (Manusmrithi),

Yagnavalkya (Dharmasastra) and Kautilya (Arthashastra), which examined the
pooling of resources for redistribution after fire, floods, epidemics and famine.
The life-insurance business began in 1818[6] with the establishment of the
Oriental Life Insurance Company in Calcutta; the company failed in 1834. In
1829, Madras Equitable began conducting life-insurance business in the Madras
Presidency. The British Insurance Act was enacted in 1870, and Bombay Mutual
(1871), Oriental (1874) and Empire of India (1897) were founded in the Bombay
Presidency. The era was dominated by British companies.

 In 1914, the government of India began publishing insurance-company

returns. The Indian Life Assurance Companies Act, 1912 was the first statute
regulating life insurance. In 1928 the Indian Insurance Companies Act was
enacted to enable the government to collect statistical information about life-
and non-life-insurance business conducted in India by Indian and foreign
insurers, including provident insurance societies. In 1938 the legislation was
consolidated and amended by the Insurance Act, 1938, with comprehensive
provisions to control the activities of insurers.

 The Insurance Amendment Act of 1950 abolished principal agencies, but the
level of competition was high and there were allegations of unfair trade
practices. The Government of India decided to nationalise the insurance
industry.

 An ordinance was issued on 19 January 1956, nationalising the life-

insurance sector, and the Life Insurance Corporation was established that
year. The LIC absorbed 154 Indian and 16 non-Indian insurers and 75
provident societies. The LIC had a monopoly until the late 1990s, when the
insurance industry was reopened to the private sector.
 General insurance in India began during the Industrial Revolution in the West
and the growth of sea- faring commerce during the 17th century. It arrived as a
legacy of British occupation, with its roots in the 1850 establishment of the
Triton Insurance Company in Calcutta. In 1907 the Indian Mercantile Insurance
was established, the first company to underwrite all classes of general
insurance. In 1957 the General Insurance Council (a wing of the Insurance
Association of India) was formed, framing a code of conduct for fairness and
sound business practice.

 Eleven years later, the Insurance Act was amended to regulate investments and
set minimum solvency margins and the Tariff Advisory Committee was
established. In 1972, with the passage of the General Insurance Business
(Nationalisation) Act, the insurance industry was nationalized on 1 January
1973. One hundred seven insurers were amalgamated and grouped into four
companies: National Insurance Company, New India Assurance Company,
Oriental Insurance Company and United India Insurance Company. The
General Insurance Corporation of India was incorporated in 1971, effective on
1 January 1973.

 The re-opening of the insurance sector began during the early 1990s. In 1993,
the government set up a committee chaired by former Reserve Bank of India
governor R. N. Malhotra to propose recommendations for insurance reform
complementing those initiated in the financial sector. The committee
submitted its report in 1994, recommending that the private sector be
permitted to enter the insurance industry. Foreign companies should enter by
floating Indian companies, preferably as joint ventures with Indian partners.

 Following the recommendations of the Malhotra Committee, in 1999 the

Insurance Regulatory and Development Authority (IRDA) was constituted to
regulate and develop the insurance industry and was incorporated in April 2000.
Objectives of the IRDA include promoting competition to enhance customer
satisfaction with increased consumer choice and lower premiums while ensuring
the financial security of the insurance market.

 The IRDA opened up the market in August 2000 with an invitation for
registration applications; foreign companies were allowed ownership up to 26
percent. The authority, with the power to frame regulations under Section 114A
of the Insurance Act, 1938, has framed regulations ranging from company
registrations to the protection of policyholder interests since 2000.

 In December 2000, the subsidiaries of the General Insurance Corporation of

 India were restructured as independent companies and the GIC was converted
into a national re-insurer. Parliament passed a bill de-linking the four
subsidiaries from the GIC in July 2002. There are 28 general insurance
companies, including the Export Credit Guarantee Corporation of India and
the Agriculture Insurance Corporation of India, and 24 life-insurance
companies operating in the country. With banking services, insurance services
add about seven percent to India’s GDP.

 In 2013 the IRDAI attempted to raise the foreign direct investment (FDI) limit
in the insurance sector to 49 percent from its current 26 percent. The FDI limit
in the sector was raised to 49 percent in June 2016.

Claim Settlement Ratio

 Claim Settlement Ratio is the indicator how much death claims Life Insurance
Company settled in any financial year. It is calculated as the total number of
claims received against the total number of claims settled. Let us say, Life
Insurance Company received 100 claims and among that it settled 98, then
claim settlement ratio is said to be 98%. Remaining 2% claims the Life
Insurance Company rejected. Claim

Settlement Ratio (2018-2019)

Average claim amount settled by insurance companies
 Comparison of Policies between LIC and FutureGenerali

Term Life Insurance

 Term insurance is a life insurance product offered by an insurance company

which offers financial coverage to the policy holder for a specific time period.
In case of death of the insured individual during the policy term, the death
benefit is paid by the company to the beneficiary.
 LIC’s e-Term Plan
 This LIC online term plan is offered by the Life Insurance Corporation of
India (LIC) through its website. The LIC online term plan is a pure term plan
which promises the payment of the Sum Assured only if the life insured faces
death within the tenure of this LIC plan.
 Eligibility Details-:

Minimum Maximum
Entry Age 18 years 60 years
Maturity Age - 75 years
Policy Term 10 years 35 years
Sum Assured Rs. 25 lakhs for aggregate category No limit

Rs. 50 lakhs for non-smoker category

Premium Payment Term Equal to the term policy
Premium Payment Frequency Yearly

Sample Premium Rates:-

 The table below depicts the sample rates of premium calculated under
this LIC online term plan assuming the Sum Assured to be Rs.50 lakhs.

Age Term of the Plan

5 years 10 years 15 years 20 years 25 years

20 years 4600 4600 4650 5000 5550

30 years 5500 6000 6950 8300 9850
40 years 10,100 12,400 15,000 17,800 20,950
50 years 24,300 28,600 33,650 39,500 -

Future Generali Flexi Online Term plan

 An online term insurance plan which provide flexible benefits

Minimum Maximum
Entry Age Basic Life cover- 18 years 55 years

Income Protection- 25 years

Maturity Age Basic Life cover- 28 years 75 years

Income Protection- 45 years

Policy term 10 years 75 age at entry
Sum Assured 50 lakhs No limit
Premium payment Term Equal to policy term

Premium Payment Frequency Yearly

Sample Premium Rates:-

Age Term of the plan

10 years 20 years 30 years
18 years 3237 3365 3395
30 years 3562 3619 3982
40 years 5475 6363 8007

ULIP (Unit linked insurance policy)

 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.
 LIC’s New Endowment plus Plan:-
 A unit linked insurance plan which gives the dual benefit of capital
appreciation and insurance protection. The plan has the following
features and benefits.

Basic Sum Assured

 10 X annualized premium or 105% of the total premiums paid, whichever is higher

Minimum premium
 Rs.20,000 (yearly), Rs.13,000 (half-yearly), Rs. 8,000 (quarterly), Rs.3,000
(monthly)
Maximum premium
 No limit. Annualized premiums should be paid in multiple of Rs. 1,000 for
all modes except monthly. The premium for monthly should be in multiples
of Rs. 250.

Commencement of risk
 If the age of the Life Assured at entry is less than 8 years, the risk will
commence either one day before the completion of 2 years (of policy
commencement) or one day before the policy anniversary coinciding with or
after completion of 8 years, whichever is earlier. If the age of Life Assured is 8
years or more at entry, risk will commence immediately.

Top-up
 Not allowed
 Switching
 Policy holders can switch between fund types during the policy term. Upon
switching, the amount is switched to the new fund opted for. Four switches
are allowed in a policy year free of cost. However, subsequent switches will
incur a charge of Rs.100 per switch. Upon receipt of an application for a
switch, a policyholder’s Fund Value (after deduction of switching charge, if
any) will be transferred to the new fund.

Mortality charge
 It is the cost of cover taken at the start of a policy month by cancelling
policyholders’ Fund Value proportionately. The monthly charges are 1/12th
of annual mortality charges. Mortality charge will depend on the difference
between the Basic Sum Assured or Paid-up Sum Assured and policyholder’s
Fund Value on the date of deduction (after deduction of other charges, only
if, the Basic Sum Assured/Paid-up Sum Assured, is more than the Fund
Value).

Increase or decrease in benefits

 No increase or decrease of benefits is allowed. Policyholders can cancel the
accidental benefit rider during the policy term. If the rider is cancelled, it
cannot be revived at any time.

Settlement option
 Policyholders may choose this option one month prior to the maturity date.

Premium Payment Mode

 Regular premium can be paid either in yearly, half-yearly, quarterly or
monthly instalments. Customers should note that monthly instalments are
allowed via ECS only.

Loans
 Not allowed
 Partial withdrawal
 No partial withdrawal or switching is allowed after commencement of
settlement period. Partial withdrawal is possible only after the fifth policy
anniversary (provided all premiums are paid) subject to the following:
 For minors, partial withdrawals are allowed only if Life Assured is 18 years or above.
 Partial withdrawals can be a fixed amount or fixed number of units. Partial
withdrawal is allowed subject to a minimum balance of three annualized
premiums (from 6th to 10th policy year) or 50% of Fund value on withdrawal
date, whichever is higher. Likewise, three annualized premiums (from 11th to
20th policy year) or 25% of Fund value on the withdrawal date, whichever is
higher. A partial withdrawal charge of around Rs. 100 is deducted by cancelling
the appropriate number of units. The deduction will be made on the date on
which partial withdrawal is done. If partial withdrawal is made for two years
from the date of withdrawal, the Basic Sum Assured or Paid-up Sum Assured
will be reduced to the extent of partial withdrawal made. Upon completion of
two years from the withdrawal date, the Basic Sum Assured will be restored.

Grace Period
 A period of 30 days is allowed for payment of yearly, half-yearly and quarterly
premiums while 15 days is the grace period for monthly premiums. If the Life
Assured dies within the grace period but prior to premium payment date, the
policy will be valid. The death benefits will, therefore, be paid after deduction
of all applicable charges.

Revival
 If due premium is not paid within the grace period, policyholders will get a notice
Cooling off period
 If policy holders are not satisfied with the Terms and Conditions of the policy,
they can return it within 15 days of policy stating the reasons. LIC will then
return the amount of premium after deducting proportionate risk premium for
the period, medical examination expenses and stamp duty charges.

Eigibility details:-
 Investment Option

Fund Type Investment in government/guaranteed Equity Shares Risk factor

securities/debt

Bond Fund Not less than 60% Nil Low

Secured Not less than 45% Not less than 15% and not Low to
Fund more than 55% medium

Minimum Maximum
Entry Age 90 days 50 years
Maturity Age 18 years 60 years
Policy term 10 years 20 years
Premium amount 20,000 No limit
Sum assured Higher of 10 times the annual premium or 105% of total premiums
Paid
Premium Payment Term Equal to policy term
Premium payment Frequency Yearly, Half yearly, Quarterly and monthly

Balanced Not less than 30% Not less than 30% and not Medium

Fund more than 70%

Growth Not less than 20% Not less than 40% and not High risk
Fund more than 80%
Future Generali Easy Invest Online Plan

Future Generali Easy Invest Online Plan is a Regular Premium Unit Linked Plan
that provides you the flexibility to invest your money in varied fund options. This
plan helps save systematically over a long term, so you can easily achieve your
financial goals. This ULIP plan also provides life insurance coverage that ensures
financial security for your loved ones

Key Features

 5 investment fund options

 Systematic saving over a long term
 Loyalty Additions to boost maturity value
 Life insurance coverage along with investment
 Option of switching and redirecting funds
 Partial Withdrawals to meet any financial contingency
 Buy plan online in just a few clicks
 Flexibility to alter the premium payment mode
 Avail tax benefits
 Investment Option

Fund Name Investment Objectives Portfolio allocation Risk

Strategy
profile
Future Income Investments in To provide stable returns by -Money Market Low Risk
Fund assets of low investing in assets of Instruments: 0%-50%
risk relatively low to moderate -Fixed Income

level of risk. The interest investments: 50%-

credited will be a major
100%
component of the fund’s
-Equity Instruments:
return.
NIL

Future Balance Balance of high To provide a balanced - Money Market Moderate

Fund return and risk return from investing in Instruments: 0%-30%
Risk
balanced by both Fixed Interest - Fixed Income
stability Securities as well as in Instruments: 40%-70%
provided by Equities so as to balance - Equity Instruments:
fixed interest stability of return through 30%-60%
instruments the former and growth in
capital value through the
latter.

Future Investment in a To provide potentially high - Money Market High Risk

Maximize spread of returns to Unit holders by Instruments: 0%-40%
Fund equities. investing primarily in - Fixed Income
Diversification equities to target growth in Instruments: 10%-50%
by sector, capital value of assets. - Equity Instruments:
industry and risk
50%-90%
Future Apex Investment in a To provide potentially high - Money Market High Risk
Fund spread of returns to Unit holders by Instruments: 0%-50%
equities. investing primarily in - Fixed Income
Diversification equities to target growth in Instruments: 0%-40%
by sector, capital value of assets. - Equity Instruments:
industry and 50%-100%
risk.

Future Investment in a To generate capital - Money Market High Risk

Opportunity spread of appreciation and provide Instruments: 0%-20%
Fund equities. long term growth - Fixed Income
Diversification opportunities by investing in Instruments: 0%-15%
by sector, a portfolio predominately of - Equity Instruments:
industry and Equity and Equity related 80%-100%
risk. Instruments generally in
S&P CNX Nifty stocks and
to generate consistent

returns by investing in Debt

and Money Market
Instruments.

Benefits: - Death Benefit

In the event of death of the life assured while the policy is in-force, the Death
Benefit payable is higher of Sum Assured (less Partial Withdrawals), Fund
Value, or 105% of the total premiums paid till the date of death.
#Before age 60 years of the life insured, Base Sum Assured is reduced to the extent
of Partial Withdrawals made during the last two years prior the date of death. Upon
attaining 60 years of age, Base Sum Assured is reduced to the extent of all Partial
Withdrawals made after attaining 58 years.

Maturity Benefit

On survival of the life insured till the end of the policy term, the Total Fund
Value is payable at maturity. You can receive this benefit as a lump sum or as
periodic instalments by using ‘Settlement Option’.
Settlement Option
On maturity, you can opt to receive your money in annually, semi-annually,
quarterly or monthly instalments over a maximum period of 5 years, after the
date of maturity. You also have the option to completely withdraw the fund
value at any time during the settlement period. No life cover is applicable
during this settlement period. Partial Withdrawals and switching are not
allowed during the Settlement Period.
You have the option to get maturity benefit through Option A& Option B.

Option A: 5 annual payments for next 5 years. 20% of the available Fund Value
is payable for the first 4 annual payments. The balance Fund Value is then
payable on 5th annual payment.
Option B: 10 half yearly payments for next 5 years. 10% of the available Fund
Value is payable for first 9 payments. The balance Fund Value is then payable on
10th instalment.

Loyalty Additions

Loyalty Addition as 1.10%/1.15%/1.20% is allocated as extra units at the end of

every policy anniversary, during 10th to 14th policy year/15th to 19th policy
year/20th policy year, respectively. The last Loyalty
Addition is payable on the date of maturity. The Loyalty Additions are
payable during the last 5 policy years.

Loyalty Addition except the last loyalty addition is a percentage of simple average
of fund values on the last day of previous eight calendar quarters, before the policy
anniversary in which the loyalty additions are payable. The last loyalty addition a
percentage of simple average of fund values on the last day of previous eight
calendar quarters, before the maturity of the policy.

Switching

You can switch among 5 available fund options to suit your changing investment
needs. (12 switches are free)

Premium Re-direction

Premium Re-direction facility is available to alter future premium allocation and it

will apply to your subsequent premiums. This benefit is applicable after completion
of first policy year. The policyholder may instruct the company in writing 30 days
prior the next premium due date to avail redirection of future premiums.
 Partial Withdrawal

Partial Withdrawal is allowed from 6th policy year onwards (in case of minor
lives, life assured attains 18 years). The minimum partial withdrawal amount
allowed is Rs. 5,000 (in multiples of Rs. 1000). The fund value required after
such withdrawal should be at least two years’ annualized premium.

Loan Benefit

No loan benefit can be availed under this plan.

Surrender Value

Upon surrendering the policy with-in the lock-in period of 5 years, the Fund Value
less applicable discontinuance charges is credited to the ‘Discontinued Policy
Fund’ and it is refunded upon completion of the lock-in period. A fund
management charge of 0.50% per annum of the Discontinued Policy Fund is
applicable. The proceeds after addition of interest subject to a minimum
guaranteed interest rate of 4% per annum or as stipulated by IRDAI is payable
after the end of the lock-in period.
Upon surrendering the policy after the lock-in period of 5 years, the Fund Value as
on the date of surrender is payable immediately and the policy then terminates.

Eligibility Details:-

Factor Minimum Maximum

Age 0 year 50 years
Age at maturity 18 year 70 years
Policy tenure 10 years 20 years
Premium Paying Term Equal to policy tenure
Premium paying mode Annually & monthly
Premium Amount 40,000(Annually) & No Limit
4,000(Monthly)
Sum Assured 10 Times the annualized Premium
Free look Period 30 Days From The Receipt Of The Policy
Grace Period 30 Days (15 Days For Monthly Mode)
Plan Type Online
CHAPTER-3
Research
Methodology
Research Objective

1) To establish an interface between policy/plans makers and policy

takers, that how and in what manners they show there reaction
towards policy and plan

Through the study I try to study analyse the different plans of the two
company LIC and Future Generali.

How people choose the suitable plan for them from LIC and other different
companies according to their demographic status.

2) To know that how and in what manners the different company attract
different age group, income group and number of members in family.

3) To know how LIC is dominating the

insurance sector in India.

4) To know the market penetration of LIC on a ground level.

5) To find out the factors which influence the customers to take insurance
product from the insurance companies.

6) To know what are the mode of payment of premium.

7) To know the preferable sector in which people are willing to invest.

 Scope of the Study

The Indian life insurance sector has witnessed exponential growth over the last two
decade. While India’s favourable demographics have helped enhance market
penetration, growth has been driven by innovations in product offerings and
distribution by insurance companies since the opening up of the sector in 2000.
Amongst other factors, rapid expansion in the life sector coincided with a period
of rising household savings, a growing middle class and a rising working
population, all backed by strong economic growth. More importantly, there has
been a paradigm shift and increasingly customers have been viewing life
insurance solutions as a tool for protection and not so much as a tax saving
mechanism. Additionally, increased levels of financial literacy have contributed to
the growth of the Indian life insurance sector. The scope of the study is very wide
by all means.

Data Collection
The data are obtained from both primary and secondary sources. In first explorative
stage of the study, the secondary data were collected in the form of a review of
literature to familiarize the researcher with the various aspects of the study from
different sources like journals, magazines, books, internet and newspapers. The
primary data needed for the study were collected by using structured questionnaire.

Research Approach

The relevant data were collected by the researcher from the customers of public and
private sector insurance companies. And four insurance service providing
companies - LIC in Public Sector and Future Generali, ICICI Prudential Life
Insurance Company Limited, Birla Sun life, Tata AIA - were selected for this study
on the basis of market share in Indian life insurance market in India. The researcher
approached the customers of public and private sector insurance companies and
requested them to fill the structured questionnaire to generate the response to the
listed objectives.

Sampling Unit

The sample unit consists of customers of public and private sector insurance. The
respondents are in the age group of 18-60 years including both males and females.
 Research Instrument

A structured questionnaire was used as the research instrument for the

study. The questionnaire was designed in such a way consisting of 14
different questions. The first part of the questionnaire is demographic
profile of the customer, like the name, age, education, occupation, monthly
income.

The second part of the questionnaire elicited information from respondents

regarding major reason for opting policy, satisfaction level, number of
dependents, and what are their preference in reference to investment.

Field Work

The respondents were contacted directly by the researcher for collecting the
relevant data. Proper care was also taken to maintain the heterogeneity of
samples. The field work was carried out for a period of 27 days from 14th May
2017 to 9th June 2017.

Method of Analysis

A. Type of research design: Analytical Research

B. Data collection: Primary Sources &Secondary Sources

C. Statistical Tools: Ratio Analysis & Pie Chart

In the analysis, percentage method is adopted to analyse the demographic

profile of the respondents and other data relevant to the objectives of the study
 CHAPTER-4
DATA ANALYSIS
AND
INTERPRETATION
 Analysis of Primary data

AGE GROUP

From the Chart we know that in the agegroup of 18-24 are at 35.7% and there are more than
60% of
Respondents are above 24 years.
This conclude that the Research is done focusing settled and working Respondents.

COUNT ON OCCUPATION
From the Chart we know that the 42.3% of Respondents are Self- employed and 38.7% of
Respondents are Employed and 13% are Students.
COUNT ON EDUCATIONAL QUALIFICATION

From the chart we know that the at the PG level of education LIC of India have
44.3%. At graduate level of education LIC of India have 55.7%.Graduation level is
significantly higher that post-graduate because of the education level that people
pursue in india.

INCOME GROUP

From the chart we know that the 31.7% of Respondents have 5-10 lac annual income and
22.8% are above 10 lac who are mostly self-employed. 26.7% is the second highest
Respondents who are earning between 3-5 lac. And rest are between 1-3 lac.
Are you currently covered under any LIC investment policy?

As we can see in the chart that 64.9% of the Respondents are covered under LIC
investment policy and rest 35.1% are not.

What is your major reason for opting for an LIC investment?

% of Respondents gave their reason
as Insurance and Investment both for LIC investment and 40.3% think that LIC is only
for insurance and least 6.5% think it as Investment
Are you satisfied with your insurance policy?

As we can see
in the chart
that 65.3% of
Respondents
are satisfied
with their
insurance
policy and
rest 34.7% are
not.

How many members are there in your family

As we can see in the chart that 46.5% of respondents have between 4-6
family members, 43.9% of respondents have between 1-4 family
members and rest 9.6% have between 6 to 8.
Number of dependent member in family?

As we can see in the chart that 42.5% of respondents have between 2 to 4

dependent members in family, 53.1% of respondents have 1 to 2
dependent
members in
family and
4.4% of
respondents
have
between 4
to 6
dependent
members in
their family.

In which would you like to invest?

As we can see in this chart that most number of respondents are interested to invest
in mutual funds which is 32.7%. 29.2% of respondents are interested to invest in
shares, 26.5% of respondents are still following the traditional way of investing in
fixed deposit and only 8% of respondents are interested to invest in insurance.
Which sector would you prefer?

More than 60% of respondents are preferring public sector this might be because of
trust issues with private limited company.
But those
who are
interested in
Shares are
preferring
private sector
according to
the responses.

Do you have any Insurance policy in the following companies?

What is the mode of payment of premium?

As we can see in this chart that 35.8% of premium payment mode are online,
33.9% are through agents and rest 30.3% are on offline mode.
CHAPTER
-5
FINDINGS
AND
SUGGEST
IONS
Findings

 Life Insurance Corporation (LIC) is a substitute for the government to bail

out state-owned companies. It is a giant of the insurance sector and its size
much more than the private life insurance companies. Though the private
companies are expanding and increasing their size but are still very much
behind LIC

 There is a significance difference between the price of premiums between

Future Generali and LIC but respondents are still preferring LIC because of
its trust factor.

 Future Generali is the emerging player in insurance industry with outstanding

plans

 Now a days people are taking Insurance policy not only as an Insurance but
Investment also.

 Those who are self-employed are least interested in taking any insurance policy.

 LIC, being the oldest player in the existing insurance market, has the biggest
market share of 70.4 % which was 87.3% five years earlier. We see that
private insurance companies are penetrating in the customer base of LIC.

 There are many new entrants in this sector. There are many private insurance
companies who have reported loss in this and previous years. This is the
main reason why private insurance companies lag behind LIC in case of
business per branch. There is a big difference between them

 LIC have large number of policy holders, as it is a well-established company

in the field of insurance. Hence, it is obvious that private life insurance
organizations have low number of policyholders
Recommendation

 The study found that over a period of ten years the share of public sector
companies has dropped drastically from 96.22 per cent to 70.04 per cent.
This is indicative of the fact that there is a fall in the efficiency standards of
public sector companies in comparison with private sector companies. This
means an element of dynamism should be inculcated to reform the system.
The customers have seen to prefer the private sector because it is vibrant
and more customers oriented in its approach. The officials are friendlier and
create a good environment for customers. In these circumstances the public
sector companies should make the management and staff more customer
oriented.

 Special HR training should be imparted to all officials to all levels so

that they shed their bureaucratic approach. It is a fact that given the
choice the common customer prefers the public sector to the private
sector. So all out efforts should be made to change their approach of
officials and thus bring back the customers whom the public sector
companies have lost.

 The study reveals that the majority who purchase policies from the private
sector fall in the age group between 25-40 years. This shows that young
population are more interested in private sector. India’s statistic shows that
India is fast emerging as one amongst the youngest nations in the world.
By the year 2013, almost 60 per cent of our population in the 18-35 years
bracket. This segment is the ideal target audience for an entire range of
‘cradle to grave’ insurance plans. The evolving change in this key
demographic variable along with the significant increase in the middle
class segment of the Indian society will augur very well for the future and
would throw up enormous business opportunities for the players. So the
established players when they formulate product portfolio they should
target on these group and formulate policies that satisfy the youth.

 The study reveals that the awareness level among the people about
insurance products is low, the awareness level of various plans of
 insurance was quite limited even amongst the policy holder.

 A company’s financial health and reputation in the market depend on

efficient and judicious settlement of claims; the processing
andsettlement claims constitute one of the most important functions in
any organisation. The prompt and fair settlement of claims is the
hallmark of good services to the insuring public.

 The study reveals that in private sector 78 respondents purchased their

policies through recommendation by friends or relatives. The results show
that many people consult their friends or family members for
recommendations of good insurers before making thepurchase decision. So
family is the most important consumer-buying organisation in society and
most influential reference group. Based on the analysis, it is found that
reference group is an important factor towards the purchase of policies as
they may influence the buyer decision through their experience in dealing
with the company. So private sector insurance companies should ensure the
prompt and efficient after sales service to its customers’, so that it can retain
its customers’ loyalty and prevent them from switching to other
competitors.

 Both public and private sector general insurance companies should groom
their agency force to make them 100 per cent professionals. Special training
and motivation should provide to the agents to make them understand about
products and to deal sensitively with the emotions of their customers. Public
sector companies should provide specialtraining to individual to promote
their personnel line business so that they can reduce their underwriting loss
also.
 CHAPTER-6
CONCLUSION
 Conclusio
n

Competition has already set in and LIC and private sector players should take steps
to recapture the market by changing their strategy in the above lines. The future
growth of the insurance sector will depend on how effectively the insurers are able
to come up with product designs suitable to our context and how effectively they
are able to change the perceptions of the Indian consumers and make them aware of
the insurable risks. The future growth of insurance also depends on how service
oriented insurers are going to be. On the demand side, the rise in incomes will
trigger the growth of physical and financial assets. With the growth of infrastructure
projects, the demand for insurance to cover the project and the risks during
operations will increase. The other growth trigger is the increase in international
trade.
However, servicing of the large domestic market in India is a real challenge.
Some of these challenges pertain to the demand conditions, competition in the
sector, product innovations, delivery and distribution systems, use of technology,
and regulation.
 Annexures

Questionnaire

Q.1- NAME-

Q.2- AGE-

Q.3- OCCUPATION Self-employed other-------

employed

Q.4- Educational Qualification? Post graduate others

Graduate ----------

Q.5. AnnualIncome ? hs 2-5 lak la

1-3 lak
 hs khs

Above 10 lakhs

Q.6- Are you currently covered under any LIC investment policy?

a) Yes

b) No

Q.7- What is your major reason for opting for an LIC investment?

a) Insurance

b) Investment

c) Both

d) Others

Q.8- Are you satisfied with your insurance policy?

a) Yes

b) No

Q.9- How many members are there in your family?

a) 1 to 4

b) 4 to 6

c) 6 to 8

d) Above 8
Q.10- Number of dependent member in family?

a) 1 to 2

b) 2 to 4

c) 4 to 6

d) 6 to 8 and above

Q.11- In which would you like to invest?

a) Fixed Deposit

b) Post Office

c) Mutual Fund

d) Shares

e) Insurance policy

Q.12- Which sector would you prefer?

a) Public

b) Private
Q.13- Do you have any Insurance policy in the following companies?

a) LIC

b) Tata AIA

c) Birla Sun life

d) Future Generali

e) Any Others-
 Bibliography

Brochures/Information booklet
 Product List of L.I.C.
 Product List of Future Generali
 L.I.C Annual Report
 Future Generali Annual Report

Book Source

Lamb/Hair/Sharma/Mc Daniels- MKTG (Principles of Marketing)

Newspapers/Magazines

 The Economic Times

Insurance Post
Websites http://www.nestkeys.com/
http://businessworld.com/

http://economictimes.indiatimes.com/

http://www.licindia.in/

https://life.futuregenerali.in/

https://www.irdai.gov.in/

http://knowledgedigest.com

Others

Profile of Indian Insurance Companies by IRDAI Different Survey on Insurance sector

conducted by IIRC