Project Report On

Consumer Perception Regarding Life Insurance

In Partial Fulfilment of the Requirement for the

Award of Degree of

Master of Business Administration (MBA)

Submitted To: Submitted By:

Rohit Kumar Miss. Pankhuri

Roll No. 1812768 Assistant Professor

St. Soldier Management & Technical Institute

JALANDHAR (2018-2020)

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 Table of Content
Sr. Chapters Page No.
No.
Student Declaration

Faculty Declaration

Company Certificate

Acknowledgement

 Introduction to Training Company

1. Chapter-1

Introduction to Company

2. Chapter-2

Introduction to Research Topic

3. Chapter-3

Need, Objective, Scope of the Study

4. Chapter-4

Review of Literature

5. Chapter-5

Research Methodology

6. Chapter-6

Data Analysis and Interpretation

7. Chapter-7

Suggestions

8. Chapter-8

Findings & Conclusion

Appendix (Questionnaire)

Bibliography

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 CHAPTER-1

INTRODUCTION
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 INTRODUCTION 

The origin and practice of insurance is probably lost forever in the mists of
antiquity. References to the practice similar to insurance are found in the ancient
Indian texts of Rig-Veda. Rig-Veda refers to the concept of Yogakshema-loosing
meaning the well being, prosperity and security of people.”Archaelogical
excavation at the site of Aryan civilization has yielded evidences of a practice
similar to insurance, insuring loss of profits in industry. The codes of Hammurabi
and Manu had recognized the importance and advisability of some practice akin
to provision for. 

The earliest element of insurance contracts is found in the bottomery bounds

( also called Respondent bonds) issued by the traders and the merchants in area as
early 4th century BC.The bottomery loans were monetary advance on a ship for
period of the voyage. The loans were repayable with a rate of interest on arrival

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of the ship safety at its destination. If the ship failed to arrive safely at the
destination then the obligation to pay the loan was cancelled. Thus the agreed rate
of interest to be paid formed a rudimentary way of paying the premium. The
Radian merchant also had a practice akin to general average wherein all losses
were shared by contribution from all interests. But the real beginning of an
insurance contract was in the 14th century when Italian traders trading with
Indian traders via land routs development the concept of Bottomery Bonds
further and bifurcating it into two separate contracts. The first contract dealt with
advance of money to be repaid on safe arrival of the ship or the caravan and the
second, policy of assurance, which paid amount stated in case of loss. This
practice slowly spread to northern Europe and finally found a base in Lombard
Street in London. Gradually insurance become a vital component of any
mercantile transaction emanating from Lombard Street and thus spared across the
world with the rise of British Empire .in London the ship captain and merchants
normally used to congregate in coffeehouses and taverns to transact business.
One of these, Lloyds (founded by Edward Lloyds in 1860) as a very special place
in insurance history as the practice of individual underwriting took shape here.

In 1911 the underwriter at Lloyds were empowered to transect other classes of

business apart from Marine insurance. Even today Lloyds    is regarded as one of
the greatest international insurance centers. Today no financial or trade
transaction is completed without adequate insurance coverage providing the most
comprehensive protection to all aspects of the transaction. The polices available
for individuals are very sophisticated providing much defense against vagaries of
nature and commerce. 

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 MEANING OF INSURANCE
 
The business in insurance is related to the protection of the economic value of the
assets. Every asset has a value. The assets would have been created through the
efforts of the owner, in the exception that, either through the income generated
there froe or some other output, Some of his needs would be met. In the case of
motorcar, it provides comfort and convenience in transportation. There is no
direct income. There is normally expected lifetime for the assets during which
time are expected to perform. The owner, aware of this, can also manage his
affaires that by the end of that lifetime, a substitute is made available to insure
that the value or income is not lost. However, if the asset gets lost earlier, being
destroyed or made non functional, through an accident or other unfortunate event
the owner and those deriving benefits there from suffer; insurance is mechanism
that helps to reduce such adverse consequences.

Life Insurance

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It is the business of effecting contract of insurance upon human life, including
any contract where by payment of money is assured (except death by accident) or
that happening of any specified contingencies dependent on human life, like
death at specific age. The contract would be the subject to the payment of
premiums for the term. 

Insurance as a Social Security Tool

 The United Nations Declaration of human Rights 1948 provides that

“Everyonehas a right to a standard of living adequate for the health and wellbeing
of himself and his family, including food, clothing,  
housing and medical care and necessary social services and the right to security
in the event of unemployment, sickness, disability, widow hood or other lack of
live hood in circumstances beyond his control”. 

In India, social security finds a place in our Constitution, Article 41 requires the
state, within the limits of it’s economic capacity and development, to make
effective provision for securing the right to work, to education and to provide
public assistance incase of unemployment, old age, sickness and disablement and
in other cases of undeserved want. Parts of the State’s obligations to the poorer
sections are met through the mechanism of life insurance. As per the law and the
directions of the regulatory authorities, insurance companies in India are obliged
to extend insurance benefits to economically weaker sections of the society in the
unorganized sector. 

Role of Insurance in Economic Development

The L.I.C. is not an exception. All good life insurance companies have huge
funds, accumulated through the payments of small amounts of premium of
individuals. These funds are invested in ways that contribute substantially for the
economic development of the countries in which they do business.

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                      A life insurance company will have large funds. These amounts are
collected by way of premiums. Every premium represents a risk that is covered
by that premium. In effect therefore, these vast amounts represent pooling of
risks. The funds are collected and held ine benefit of policy holders.

Principle of life insurance

1.     A life insurance policy is a contract, in terms of the Indian contract act,
1872. A contract is an agreement between two or more parties to do, or not to do,
so as to create a legally binding relationship. A simple contract must have
following essentials Offer and acceptance  Consideration Capacity to contract
Consensus ad idem Legality of object Capability of performance Intention to
create legal relationship

2. Insurance is specialized type of contract. Apart from the usual essential of

valid contract, insurance contract are subject to two additional principles viz.
principle of at most good faith & principles of insurable interest. These apply to
all insurances, both life and non-life. 

3. Commercial contracts are normally subjective to principle caveat emptor i.e.

let the buyer beware. There is no need to take the statement on trust. Proof can be
asked for.

4. Most of the facts relating to health, habit, personal history, family history, etc.,
which from the bases of life insurance contract, are known only to the proposer.
The insurer can not know them, if the proposer does not disclose them.
Theunderwriter can ask for medical report  

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5. A summary of the doctrine of utmost good faith was given in case of Rozanes
vs Bowen in 1928 as follows it is the duty of the assured to make a full disclosure
to the underwriter without being asked, of all material circumstances.

6. There are certain circumstances, which need not to be disclosed. They are

•   Facts of common knowledge, which every one is supposed to know. 

•     Facts of Law

•     Facts which a survey would have revealed.

•    Facts which could be reasonably discovered, by reference to previous policies

and records available with the insurer.

7. The duty of disclosure in life insurance operates till the risk commences.
Circumstances, which may have arisen after the risk has commenced, do not
affect the validity of the contract, make relevant stipulations to that effect

8. The breach of the principle of utmost good faith may arise due to
misrepresentation or non-disclosure. Misrepresentation or non-disclosure should
be Substantially false and known to the proposer as false

•  Not known to the second party

•  Concerned with facts, which are material to the acceptance or assessment of the
risk or material to the benefits obtained, by the propose 
•  Calculated to induce the other party to enter into a contract on its own terms.

9. The duty of full disclosure rests on both parties. It is easier to see where the
proposes might be in breach of the duty rather than insurer. In practice there
could be breaches of duty on the insurer or the agent making representations to
the insurer.

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10. The Insurance Act, 1938 does not define insurable interest. Court judgments
have established the circumstances in which insurable interest is deemed to exist.
Other clarifications relevant for life insurance are

•     A husband has insurable interest in the life of his wife and vice-versa. 
•     An employer has insurable interest in his employee to the extent of the value
of his services.

•     An employee has insurable interest in the life of his employer to the extent of
his remuneration for the period of his notice. 
•     A creditor has an insurable interest in the life of the debtor, to the extent of
the debt.

•     Partners have insurable interests in the lives of each other. 

•     A surety has an insurable interest in the life of his co surety to the extent of
the debt and also on the life of the principal debtor. 
•     A company has an insurable interest in the life of a key valuable employee. 

11. The legal position about children’s assurance is not quite clear. It is presumed
that parents have insurable interest in the life of child as a child i.e. so long as he
is a child. Therefore, most of the L.I.C’s children’s policies incorporate a vesting
clause, whereby the policy vests in the child on attainment of majority. 

 
12. Because of the principle of indemnity, there could be difficulties in setting
claims in general insurance. Assessments of losses made by qualified surveyors
are often disputed. The damaged parts that have been replaced, called salvage,
may have some resalable value. The insurer may have the option to settle the
claim by way of repair, reinstatement or replacement. In the case of liability or

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damages (for pain and mental agony etc.), the level of indemnity vague and
indeterminable. Such problems denote exist in life insurance.

 
13. The life insurance business deals with risks relating to life of human beings.
The circumstances (perils) that create the loss or damage (risks) are mainly two,
death and old age. Insurance does not prevent either. It can mitigate the
consequences in those circumstances.

 
14. Retention of the risk is an alternative. This is possible by having one’s own
resources to take care of the needs, like putting aside savings to be used ‘for the
rainy day’. Big organizations like the State Road Transport Corporation or the
Railways may find it cheaper to bear the risks themselves. Stricly, however, in a
joint family system, there is sharing by others in the family. That is the principle
of insurance.

 
15. Risks arise because there are needs to be fulfilled. The risks attached to the
early death arise because of the needs to maintain the family that is left behind. If
there were no needs, there would be no risks. Insurance is therefore related to the
needs of individuals. Different plants are designed with different benefits, so that
they may cater to the different needs of the people. While selling life insurance,
therefore, it is necessary to be aware of the needs of people.

⇔Insurance can work as an effective savings tool if it is planned for the long
term.

By Narayanan Krishnamurthy

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When you need a hedge against life uncertainties or to protection for your
financial dependents in case of your death, you automatically buy an appropriate
insurance policy. but of late, life insurance plans have become more than just a
hedge .they are know seem as good saving tools. This means that now you are
begin to incorporate insurance plans when you draw your financial plans as early
as possible to get the most out of its long –term benefits. Insurance is a great
saving tool if you want long term fiscal discipline. But do not lose sight of the
main objective of any insurance – protection for your dependents. it is just an
arrangement to meet your pure insurance needs.

⇔ Rosanne jayakar says that new products, innovation distribution and better use
of technology are helping the new breed of private life insurers take market share
away of from the monopolist of yesterday. earlier it is used to be the nationalized
companies i.e. the govt. owned insurance companies that had an edge over any
other company. With the privatization of insurance sector and with the entrance
of enemy players, the world of insurance served to have a cut throat competition
with the private sector gaining an ever increasing edge over the public sector.

 Next to Indian insurance

By Sumit Kundu

The insurance landscape in India is undergoing major change. Closed to foreign

competition since nationalization in 1956, the life insurance industry had been
protected from competitive pressures. Now, with the re-opening of the sector,
several new players have entered the scene.

The game is old but the rules are new and still developing. Ensconced in a
monopoly run from the nationalization days beginning in 1956, the insurance
industry has indeed awakened: to a deregulated environment in which several
private players have partnered with multinational insurance giants.

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However, despite its teeming one billion population, India still has a low
insurance penetration of 1.95 per cent, 51st in the world. Despite the fact that
India boasts a saving rate of around 25 per cent, less than 5 percent is spent on
insurance

Competition will surely cause the market to grow beyond current rates, create a
bigger "pie," and offer additional consumer choices through the introduction of
new products, services, and price options. Yet, at the same time, public and
private sector companies will be working together to ensure healthy growth and
development of the sector. Challenges such as developing a common industry
code of conduct, contributing to a common catastrophe reserve fund, and
chalking out agreements between insurers to settle claims to the benefit of the
consumer will require concerted effort from both sectors.

The market is now in an evolving phase where one can expect a lot of actions in
coming days. The current impediments for foreign participation - like 26% equity
cap on foreign partner, ill defined regulatory role of IRDA (Insurance Regulatory
development Authority- the watchdog of the industry) in pension business etc.-
are expected to be removed in near future. The early-adopters will then have a
clear advantage compared to laggards in gaining the market share and market
leadership. The will need to make sure right now that all their infrastructure is in
place so that they can reap the benefit of an "unlimited potential

Life Insurer in Public Sector

1. Life Insurance Corporation of India

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Life Insurers in Private Sector

1. ICICI Prudential Life Insurance

2. HDFC Standard Life
3. Birla Sunlife
4. SBI Life Insurance
5. Kotak Old Mutual Life Insurance
6. Aviva Life Insurance
7. Reliance Life Insurance
8. Bajaj Allianz Life
9. Tata AIG Life
10. Metlife India Life Insurance
11. ING Vysya Life Insurance
12. Max Newyork Life Insurance
13. Sahara Life Insurance

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1.2 Indian Insurance Sector - A Brief History

The insurance sector in India dates back to 1818, when Oriental Life Insurance
Company was incorporated at Calcutta. Thereafter, few other companies like
Bombay Life Insurance Assurance Company, in 1823 and Tritron Insurance
Company, for General Insurance in 1850 were incorporated. Insurance Act was
passed in 1928 but it was subsequently reviewed and comprehensive legislation
was enacted in 1938. The nationalism of life insurance business took place in
1956 when 245 Indian and foreign insurance provident societies were first
merged and then nationalized. It paved the way towards the establishment of Life
Insurance Corporation (LlC) and since then it has enjoyed a monopoly over the
life insurance business in India. General Insurance followed suit and in 1968, the
Insurance Act was amended to allow for social control over the general insurance
business. Subsequently, in 1973, non-life insurance business was nationalized
and the General Insurance Business (Nationalization) Act, 1972 was
promulgated. The General Insurance Corporation (GIC) in its present form was
incorporated in 1972 and maintains a very strong hold over the non life insurance
business in India.

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Due to concerns of:

(a) Relatively low spread of insurance in the country

(b) The efficient and quality functioning of the public sector insurance companies
and
(c) The untapped potential for mobilizing long-term contractual savings funds for
infrastructure, the (Congress) government set up an Insurance Reforms
committee in April 1993. The committee submitted its report in January 1994,
recommended a phased program of liberalization, and called for Private sector
entry and restructuring of the LlC and GIC. The United Front government moved
an insurance bill but it did not pass. The BJP government moved an insurance bill
again in 1998, which had also to be referred back to a select committee of
Parliament. But now the Parliament has given a nod to the Insurance Regulatory
and Development Authority (IRDA) bill with some changes in the original
structure.

1.3 PURPOSE AND NEED OF INSURANCE

1. Assets are insured, because they are likely to be destroyed or made non-
functional through an accidental occurrence. Such possible occurrences are called
perils. Fire, floods, breakdowns, lighting, earthquakes etc. are perils that the asset
is exposed to.

2. The risk only means that there is a possibility of loss or damage. It mayor may
not happen. There has to be an uncertainly about the risk. Insurance is done
against the contingency that it may happen. Insurance is relevant only if there are

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uncertainties. If there is no uncertainty about the occurrence of an event, it cannot
be insured against.

3. Conceptually, the mechanism of insurance is very simple. People who are

exposed to the same risks come together, agree that, if anyone of the members
suffers a loss, the others will share the loss, and make good to the person who
lost. All people who send goods by ship are exposed to the same risk related to
water damage, ship sinking, piracy, etc. those owing factories are not exposed to
these risks, but they are exposed to different kinds of risks like fire, hailstorms,
earthquakes, lighting, burglary, etc. like this different kinds of risks can be
identified and separate groups made including those exposed to such risks. By
this method, the risk is spread among the community and the likely big impact on
one is reduced to smaller manageable impacts on all.

4. The manner in which the loss is to be shared can be determined before hand. It
may be proportional 0 the likely loss that each person is likely to suffer, which is
indicative of the benefit he would receive if the peril benfell him. The share could
be collected from the members after the loss has occurred or the likely shares
may be collected in advance, at he time of admission to the group. Insurance
companies collect in advance and create a fund from which the losses are paid.

5. A human life is also an income-generating asset. This asset also can be lost
through unexpectedly early death or made non functional through sickness and
disabilities caused by accidents. Accidents mayor may not happen. Death will
happen, but the time is uncertain. If it happens around the time of one's
retirement, when it could be expected that the income would normally cease, the
person concerned could have made some other arrangements to meet the

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continuing needs. However, if it happens much earlier when the alternate
arrangements to meet the continuing needs, insurance is necessary to help those
dependents on the income.

6. In the case of a human being, he may have arranged for his needs after his
retirement. These would have been made based on some expectations like he may
live for another 15 years, or that his children will look after him. If any of these
expectations do not become true, the original arrangement would become
inadequate and there could be difficulties. Living too long can be much a
problem as dying too young.
These are risks, which need to be safeguards against, insurance takes care.

7. Insurance does not protect the asset. It does not prevent its due to the peril. The
peril cannot be avoided through Insurance: The peril can sometimes be avoided,
through better safety and damage control management. Insurance only tries to
reduce the impact of the risk on the owner of the asset and those who depend on
that asset. It compensates, may not be fully, the losses. Only economic or
financial losses can be compensated.

8. The concept of insurance has been extended beyond the coverage of tangible
assets. Exporters run the risk of the importers in the country defaulting as well as
losses due to sudden changes in currency exchange rates, economic policies or
political disturbances. These risks are now insured. Doctors run the risk of being
charged with negligence and subsequent liability to bear. These are insured.
Thus, insurance is extended to intangibles. In some countries, the voice of a
singer or the legs of a dancer may be insured, although the advantage of spread
may not be available in these cases.

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9. Satisfaction of economic needs requires generation of income from some
source. If the property, which is the source of such income, were lost fully or
partially, permanently or temporarily, the income too would stop. The purpose of
insurance is to safeguard against such misfortunes by making well the losses of
the unfortunate few, through the help of the fortune many, which were exposed to
the same risk but saved from the misfortune. Thus the essence of insurance is to
share losses and substitute certainly by uncertainty.

1.4 TYPES OF INSURANCE

1. Life Insurance
2. Non-Life Insurance

1. Life Insurance
Life Insurance is a contract for payment of a sum of money to the person assured
(or failing him/her, to the person entitled to receive the same) on the happening
of the event insured against. Usually the contract provides for the payment of an
amount on the date of maturity or at specified dates at periodic intervals or at
unfortunate death, if it occurs earlier. Among other things, the contract also
provides for the payment of premium periodically to the Corporation by the
assured. Life Insurance is universally acknowledged to be an institution, which
eliminates risk, substituting certainly for uncertainly and comes to the timely aid
of the family in the unfortunate event of death of the breadwinner. By and large,
life insurance is civilization's partial solution to the problems caused by death.
Life insurance, in short, is concerned with two hazards that stand across the life
path of every person: that of dying prematurely leaving a dependent family to
support.

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Life Insurance Companies are:
A. Life Insurance Corporation of India
B. ICICI Prudential Insurance Company
C. HDFC Standard Life Insurance Company
D. Allianz Bajaj Life Insurance Company
E. Birla Sun Life Insurance Company

2. Non-Life Insurance
Non-Life Insurance Companies are:
A. National Insurance Company
B. New India Assurance Company
C. United India Insurance Company
D. Oriental Insurance Company

F. Tata AIG General Insurance Company

LlC was formed on August 1, 1956 by Government of India b rationalizing the

then existing private insurance companies. At the time, the objective of
nationalization of the life insurance was to canalize the funds of LlC for the
benefit of the people of India. LIC invests not less than 75% of its funds in
Central Government Securities, State Government Securities, and the balance is.
Invested by LlC in private sector.

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The central office of LlC is located at Mumbai. There are 7 zone offices and 200
divisional offices in LlC spread all over the count!) The zonal office in LlC
controls between 3 to 7 divisional offices Intrun divisional offices monitor, guide
and control the branch offices Most of the functioning of LlC like issuing
policies, collection premiums and payments of maturity and death claims is done
a1 Branch Office Level, only cases which fall beyond the financial powers of
branch offices are referred to divisional offices for approval. LlC also has another
wing called "Pension and Group Insurance whose accounts are maintained
separately and are also shown I sportily in the detailed financial highlights of
LlC. The group insurance business and servicing is handled separately by
Pension & Group Schemes Department of LlC at Divisional Office Level. LlC
follows the usual practice of closing its accounts on 31 st March of every year.
LlC being a giant, takes about 4 accounts of LlC have to be submitted to
Parliament every year.

As the accounts of the LlC are finalized some time during August September the
bonus rates on with profit policies are declared only in October (usually). Till
1996 LlC was following a uniform bonus rates for Endowment and Whole Life
Policies. But it is observed that LlC has changed its earlier policy and from 1996
onwards it is declaring different rates of bonuses depending on the term/policy
etc.
Its main assets are its staff strength of 1.24 lakh employees and 2048 branches
and over six-lakh agency force. LlC has hundred divisional offices and has
established extensive training facilities at all levels. At the apex, is the
Management Development Institute, seven Zonal Training Centers and 35 sales
Training Centers. At the industry level, along with the Government and the GIC,
it has helped establish the National Insurance Academy. It presently transacts
individual life insurance businesses. group insurance businesses, social security

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schemes and pensions, grants housing loans
Through it’s subsidiary; and markets savings and investment products through its
mutual fund. It pays off about Rs. 6,000 crore annually to 5.6 million
policyholders.

Nowadays IRDA is forcing LIC to withdraw its Money Back Policy.

ICICI Prudential Life Insurance Company Limited was incorporated on July 20,
2000. The authorized capital of the company is Rs. 2300 million and the paid up
capital is Rs. 1500 Million. The company is a joint venture of ICICI (740/0) and
Prudential PLK UK (26%).

The company was granted Certificate of Registration for carrying out Life
Insurance Business, by the Insurance Regulatory and Development Authority on
November 24,2000. It commenced commercial operations on December 19,2000,
becoming one of the first few private sector players to enter the liberalized arena.

Till March 31,2002 the company has issued 100,000 polices translating into a
premium income of around Rs. 1,200 Million and a sum assured of over Rs.
15,000 Million. The company recognizes that the driving force for gaining
sustainable competitive advantage in this business is superior customer

22
experience and investment behind the brand. The company aims to achieve this
by striving to provide world-class service levels through. constant innovation in
products, distribution channels and technology based delivery. The company has
already taken significant steps to achieve this goal.

Prudential PLC:
Prudential PLC was found in 1848. Since then it has grown to become one of the
largest providers of a wide range of savings products for the individual including
life insurance, pensions, annuities, unit trusts and personal banking. It has a
presence in over 15 countries. and caters to the financial needs of over 10 million
customers. It manages assets of over US$ 259 billion (Rupees 11,39.600 crores
approx.) as of December 31, 1999.259 billion (Rupees 11,39,600 crores approx.)
as of December 31,1999. Prudential PLC has had its presence in Asia for the past
75 years catering to over 1 million customers across 11 Asian countries.

Prudential is the largest life insurance company in the United Kingdom (Source:
S&P's UK Life Financial Digest, 1998). Asia has always been an important
region for Prudential and it has had a presence in Asia for over 75 years. In fact
Prudential's fist overseas operation was in India, way back in 1923 to establish
Life and General Branch agencies. In the US, Prudential owns Jackson National
Life, one of the leading life insurance companies. Prudential controls
approximately 4% of all the listed shares on the second largest stock exchange in
the world, the London Stock Exchange, making it one or the largest –institutional
investors in the UK.

Prudential is focused on the internet generation and is one of the first financial
service organizations to use the internet on a fully integrated basis. In October
1998, Prudential launched a "branchless" bank based on the internet. Unusually

23
titled as “egg: I. The bank has in a short span of its existence become a leading
banking service provider in the UK. Infect in the first six months of its existence
it garnered over 5 billion (US$ 8 billion) in deposits from over 500,000 customer.
Development of superior products and services that offer value for money and
security while producing superior financial returns enables Prudential to
maximize the value of its shareholder's investment and to establish lasting
relationships with customers and policy holders. ICICI and Prudential came
together in 1993 to provide mutual fund products in India and today are the
largest private sector mutual fund company in India.

HDFC standard Life first came together for a possible joint venture, to enter the
life insurance market, in January 1995. In October 1995 the companies signed a 3
year joint venture agreement. Around this time Standard Life purchased a 5%
stake in HDFC, further strengthening the relationship. The next three years were
filled with
uncertainty, due to changes in government and ongoing delays in getting the
IRDA (Insurance Regulatory and Development authority) Act passed in
parliament. Despite this both companies remained finally committed to the
venture. In October 1998, the joint venture agreement was renewed and
additional resource made available.
Around this time Standard Life purchased 2% of Infrastructure Development
Finance Company Ltd. (IDFC). Standard Life also started to use the services of
the HDFC Treasury department to advise them upon their investments in India.

24
Towards the end of 1999, the opening of the market looked very promising and
both companies agreed the time was right to move the operation to the next level.
Therefore, in January 2000 an expert team from the UK joined a hand picked
team & form HDFC to fonn the core project team, based in MumbaLAround this
time Standard Life purchased a further 50/0 stake in HDFC and a 50/0 stake in
HDFC Bank. ] n a further development Standard Life agreed to participate in the
Asset Management Company promoted by HDFC to enter the mutual fund
market The Mutual Fund was launched on 20th July 2000.

Incorporation of HDFC Standard Life Insurance Company Limited:

The company was incorporated on 14th August 2000 under the name of HDFC
Standard Life Insurance Company Limited. Their monition from the beginning
was to be the first private company to re-enter the life insurance market in India.
On the 23rd of October 2000, this ambition was realized when HDFC Standard
Life was the first life company to be granted a certificate of registration. HDFC is
the main shareholders in HDFC Standard Life, with 81.40/0, while Standard Life
owns 18.6010. Given Standard Life's existing investment in the HDFC Group,
this is the maximum investment allowed under current regulations. HDFC and
Standard Life have a long and close relationship built upon shared values and
trust. The ambition of HDFC Standard Life is to mirror the success of the parent
companies and be the yardstick by which all other insurance companies in India
are measured.

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Allianz Bajaj Life Insurance Co. Ltd. company is a joint venture between Allianz
AG and Bajaj Auto Limited. Characterized by global presence with a local focus
and driven by customer orientation to establish high earnings potential and
financial strength, Allianz Bajaj Life Insurance Co. Ltd. was incorporated on 12th
March 2001. The company received the Insurance Regulatory and Development
Authority (IRDA) approval to conduct Life Insurance business in India. Allianz
Bajaj Bajaj Auto Ltd. the flagship company of Bajaj Group was incorporated in
1945 as Bachraj Trading Corporation. Initially it started by assembling two and
three wheelers in collaboration with Piaggio of Italy. After the expiry of the
agreement in 1971, the two and three wheelers acquired the brand name of Bajaj.
The strength of the company lies in its strong brand image and ability to offer
value for money products leveraging on its large-scale operations. Bajaj is one of
India's largest two and three - wheeler manufacturer and the fourth largest
manufacturer of two-wheeler in the world. with
an annual turnover oars. 42.16 billion.

Allianz group was founded in 1890 and is one of the world's leading insurance
companies with over 100 years' experience in insurance and related services. It is
also the largest insurer in Europe. Allianz group has multi-local structure and
presence in over 70 colli 1 tries. -~ ~"'~'T'- ~~ at X'n'Janz group Include genera
insurance
(Property, engineering, manne, motor, casualty and miscellaneous Management,
life & health insurance, Asset Management and Pension Funds Management.
Com hill Insurance in the United Kingdom, Fireman's Fund in the United States
of America, AGF in France, RAS s.p.a in Italy, MMf in Australia are some

26
companies under Allianz group. Rated 'AM' by S&P it has assets over 670 billion
OM (Rs. 17,160 billion) under its management with employee strength of over
1,05,700.

The company is the result of a joint venture between the Aditya Birla Group and
Sun Life Financial, a leading international financial services organization. The
Aditya Birla Group is the second largest Dusiness house in India, with a turnover
exceeding Rs 260 billion and an asset base in excess of Rs 180 billion. The
group's market capitalization is approximately Rs 150 billion. It has 7 lakh
investors and employs around 72,000 people. It is a multinational conglomerate
lin ifs own right, with 75 diversified business units in India and Iverseas.un Life
Financial has evolved from a single mutual fund life insurance company into one
of the most highly rated insurance and alth management institutions in the world.
Sun Life Financial group rs a wide range of financial solutions to individuals and
corporate these are in the areas of life, health and disability;. pension funds plans;
investment management; annuities and savings; trust, erage and ing. Sun Life
Assurance Company of Canada, Sun Life's primary 'ance and, is among the
largest international financial services izations in the world, with assets under
management of over

The two groups have had a partnership in India for a long time in the areas of
asset management I retail distribution and stock brocking. It was

natural therefore that when the insurance sector was opened up in India, the
partnership was extended to life insurance. Thus was born Birla Sun Life
Insurance Company Ltd.

27
 CHAPTER-2

OBJECTIVE OF
STUDY

28
OBJECTIVES OF THE STUDY

1. To explore and collect the information about the insurance sector in India.

2. To find out the perception of customers towards insurance companies through

marketing variables.

3. To analyze the preference of the customers and the importance they assign to
different attributes.

4. To examine the satisfaction level of the respondent customers and agents

regarding the customer services offered by the company.

5. To determine the position of different companies in the minds of people.

6. To get the information regarding future of insurance.

29
 REVIEW OF LITERATURE

IBN-CNN made a Public Opinion Survey in 2003 in major metro polititan

cities regarding the life insurance. They just want to know about the figures that
how many people in our country are insured. They found the very interesting
figures. According the public opinion only 25-30% of the total population is
insured in major metro Politian cities. Rest is unaware about the insurance.

The extant literature has found the satisfaction-loyalty link by moderating

variables. A study by Bloemer and Kasper (1995) went beyond this simple main
effect between satisfaction and loyalty. They found that the relationship between
customer satisfaction and loyalty was moderated by respondents on the brand
choice.

Mitttal and Kamakura (2001) also address the link between

satisfactions and repurchase behavior. Their major finding indicate that despite
identical rating on satisfaction, due to respondent characteristics such as age,
education, marital status, sex, and area of residence, significant difference was
observed in repurchase behavior.

Past researches have cited the factors affecting customer satisfaction and
loyalty (Sirdeshmukh Singh, Sabol 2002) and have also discussed the

30
relationship between them (Bitner1995; Chaudhuri and Holbrook 2001). Our
research has focused on the relationship between costumer satisfaction and
loyalty was moderated by private label strategy.

JeremyB.Mazur
2001
Insurance redlining occurs when insurance companies discriminate against a
class of consumers on the basis of factors beyond the consumers' control. These
factors can include a homeowner's race, sex, marital status, income, or residence
in a particular community. Before the 1968 Federal Fair Housing Act prohibited
race-based discrimination in housing, insurance companies actively engaged in
unfair discrimination against neighborhoods on the basis of racial composition.
Today, insurers have taken affirmative steps to correct past practices and now
underwrite policies through the use of supposedly objective criteria. Despite the
industry's claims, consumer advocates argue that the insurance industry continues
to use underwriting guidelines that have a disparate impact on minority
neighborhoods.
This report outlines two studies conducted by the Texas Office of Public
Insurance Counsel that demonstrate a lack of availability of homeowner's
insurance in low-income and minority neighborhoods in Texas. The report
examines the effect of certain underwriting guidelines used by insurers on the
level of coverage in these communities. It also discusses additional factors that
contribute to the lack of homeowner's coverage, including the high cost of
insurance for low-income families, lack of consumer education, and the lack of
insurance agents located in minority and low-income neighborhoods. The final
chapter proposes solutions to reduce redlining and increase homeowner's

31
insurance coverage in Texas. Those efforts include state-administered assistance
programs, marketing and outreach by insurance companies in underinsured
neighborhoods, and industry partnerships with nonprofit groups to provide
solutions to insurance coverage. The report also discusses the possible benefits of
state subsidies to insurers that agree to insure low-income and minority areas, and
the potential impact of deregulation of the insurance industry.

Chapter-3

RESEARCH
METHODOLGY

32
 RESEARCH METHODOLOGY

Designing a research plan involves data sources, Research approach, Research

instruments, Sampling plans etc.

 Population: The population of the study is Students, Professionals,

Servicemen and household

 Sampling Technique: The sampling method used in the present study is

random sampling technique.

◘ Data collection method:

Both primary and secondary data has been used in the present study

 Primary Data: - Primary data is collected during the study with the
questionnaire on the basis of which analysis, interpretation and findings of the
study has been concluded.

33
 Secondary Data: - Secondary data is collected from the different periodicals,
books and articles published in Newspapers, Magazines and journals viz. India
Today, News Panorama, Journal of Indian Marketing and different websites.

◘ Research Approach:

The research used in this study is survey research.

◘ Research Instrument:

The instrument used for research is undisguised, structured questionnaire because

it is the most economical, Flexible and easy to understand device used for
collection of data.

◘ Data Analysis Techniques: The primary data collected from the individual is
analyzed by using different mathematical and statistical techniques such as:
Percentage and Weighted Average Mean.

34
 CHAPTER-4

DATA ANALYSIS
&
35
INTERPETATION

DATA INTERPRETATION AND ANALYSIS

Awareness of life Insurance

Number of Respondents =100

QUES 1:-AWARENESS OF LIFE INSURANCE

AWARENESS NUMBER OF
RESPONDENTS
Yes 100
No 1000

100
GRAPH 1 AWARENESS OF LIFE INSURANCE
80
Yes
60
No
40

20 0

0 36
NUBER OF RESPONDENT
 INTERPRETATION
Thus we can conclude that 100 % people are aware of Life Insurance
Sector.

Awareness of Life Insurance Companies

Number of Respondent = 100

QUES 2: AWARENESS OF LIFE INSURANCE COMPANIES.

NAME OF COMPANIES NUMBER OF RESPONDENTS

Life insurance corporation of 100
India
HDFC Standard Life Insurance 73
ICICI Prudential
100 life lnsurance 81
100
Sirla Sunlife Insurance 81 34 Life insurance
73 corporation of INDIA
Bajaj80AUianz 45 HDFC Standard Life
Insurance
60
GRAPH 2 AWARENESS OF LIFE
45 INSURANCE COMPANIES
ICICI Prudential life
34 insurance
40
Birla Sunlife Insurance
20
Bajaj Allianz
0 37
NUMBER OF RESPONDENTS
 INTERPRETATION
Thus we conclude that 100% respondents are aware about LlC and 73%
about HDFC and 81 % about ICICI and 34% about Birla Sunlife and 45%
about Bajaj Allianz.

Information Source for Consumer

Number of Respondent=100

QUES.3: INFORMATION SOURCE FOR CONSUMERS

INFORMATION SOURCE NO. RESPONDENTS

Television 40

Newspaper 30

Business Magazine 40 15
40
Agents 10
35 30
Family Friends
30 5
Television
25 Newspaper
GRAPH 3 INFORMATION
20
SOURCE FOR CONSUMERS
Business Magazine
15
15 10 Agents
10 5 Family Friends
5
0 38
NO.RESPONDENTS
INTERPRETATION
The Most preferable the source t=of information as per the respondent are
Television and Newspaper and least preference are given to family friends and
Agents.

Company Preferred
Number of respondents= 100

QUES. 4 COMPANY PREFERRED

NAME OF COMPANIES NO. OF RESPONDENT
Life insurance corporation of 25
India
HDFC Standard Life Insurance 15
ICICI Prudential Life Insurance 25
Birla Sunlife Insurance 1
Bajaj Allianz 4
LlC , ICICI 19
LlC , HDFC , ICICI 3
LlC , HDFC 7
LlC , Bajaj 1
Total 100

GRAPH 4 COMPANY PREFERRED

39
 50
50
Life insurance
corporation of India
40
HDFC Standard Life
Insurance
30
ICICI Prudential Life
Insurance
20
Birla Sunlife Insurance
10
10 5 4
1 Bajaj Allianz
0
NO.OF RESPONDENTS

INTERPRETATION

The above Graph show that the majority of the respondent prefer LlC, ICICI and
LIC both and few respondent go for Bajaj Allianz and Birla Sunlife
Factors influencing buying behavior
Number of respondents= 100
QUES. 5 FACTOR INFLUENCING

Factors No. of Res pondents

Attractive scheme 33
Brand Image 47
Popularity 15
Word of mouth 5

GRAPH 4.5 FACTOR INFLUENCING

47
50

40
33 Attractive scheme
30 Brand Image
Popularity
20 15 Word of mouth
Bajaj Allianz
10 5 4

0 40
1
 INTERPRETATION
Here we can see that the most preferable factor which influencing buying
behavior of the consumer is the brand image and attractive schemes. The least
one are the popularity and the word of mouth.

Will you shift over to any new Insurance company?

Number of respondents= 100

QUES. 6 SHIFT

SHIFT RESPONSES RESPONDENTS (%) AGE)

Yes 31
No. 69
Total 100

GRAPH . 6 SHIFT
69
70
60
50 No
Yes
40 31 .
30
20
10
0 41
RESPONDENTS
(%AGE)
 INTERPRETATION
In this graph we can see that the majority of respondents said that they
will not shift over to new insurance company.

Satisfied with the opted insurance policy?

Number of Respondent = 100

QUES. 7 SATISFACTION LEVEL

RESPONSES RESPONDENTS (Ofc, AGE)

Yes 87

No 13
Total 100

GRAPH 7 SATISFACTION LEVEL

87
100

80
Yes
60
No
40 13
20
42
0
RESPONDENTS (%AGE)
 INTERPRETATION
Here we can see that majority of respondents are with the opted insurance
companies. But 13% are not because of various reasons such as low interest,
high premium, lack of claim settlement.

WHETHER PEOPLE HAVE PLANS TO BUY

INSURANCE WITHIN A YEAR.
QUES. 8
People are willing to buy No of respondents Percentage
insurance in coming future
Yes 20 20 %
No 80 80 %

GRAPH.8

43
 Wether people are willing to buy
Insurance in coming future.

20
Yes
No
80

Interpretation:
Out of a set of 100 respondents 80% of them do not have any plans of buying
Insurance within a year whereas 20% of them do have plans within a year.

FINDINGS

1.) According to the survey majority of the people are aware about the life
insurance.

2.) According to the survey people are more aware about

L I C and ICICI prudential than Birla sun Life Insurance Company.

44
3.) Majority of the target population have insurance policy.

4.) Majority of the people are influenced by television and newspaper

advertisement.

5.) According to the survey 50% of the target population is preferred L I C and
least preference are given to birla sun life insurance.

6.) Brand image is the major factor that influences the buying behavior.

7.) According to the survey 69% of the target population is not interested to
switch over to new insurance company.

8.) Television is a major source of information of consumers.

9.) According to the survey majority of the population are satisfied with the
insurance policy as are opted by them.

10.) According to people perception L I C and I C I CI are more reliable than

any other insurance company.

LIMITATION OF STUDY

However the project will be suffered with following limitations:

 Biased opinion of customers could not be ruled out during the survey.

 Due to shortage of time and resources the sample size of 100 respondents
has been taken for the study, so the current study may not hold true picture.

45
  The negative perception of people regarding collection of information’s.

 Lack of knowledge on the part of respondents may affect the results of the
study.

 The study is limited to jalandhar city, so study may not hold true for any
other population.

SUGGESTION & RECOMMENDATION

1.) The company should provide timely information regarding renewal of

policy.

46
 2.) The company should emphasis on unit linked plans, so that the company
provides more returns to consumers.

3.) The company should concentrate on their deductible

charges, because in the first and second year, these are quite much than
remaining years.

4.) The advisors of the company should be fully aware about each and every
plans of the company.

5.) Pension plans needs to be more advertise so that aged people

. Move towards it.
6.) Company should disclose every information about their
Product to the customer.

47
 BIBLOGRAPHY

BIBLOGRAPHY

48
  Achieving Financial Security For You And Your Family Through
Today‘s Insurance Products  by Baldwin Ben G.
 Changes in the Life Insurance Industry  by Cummins J David.
 Changes in the Life Insurance Industry  by Cummins J David.
 Financial Management of Life Insurance Companies  by Cummins J
David.
  Life Insurance Theory  by Vylder Florent De.

WEBSITE
http://www.indiainfoline.com/insurance/comp/profile.htm
http://in.insurance.yahoo.com/insurance.html
http://licindia.com/profile.htm
http://hdfcinsurance.com
http://birlasunlife.com
http://www.allianzbajaj.co.in

QUESTIONNAIRE

49
 DEAR RESPONDENT

I am the student of C T INSTITUTE OF MANAGEMENT, JALANDHAR

doing M.B.A. and conducting my project regarding the Investor preference
regarding Insurance Insurance I will be very thankful to you if you provide me
the required information:

Personal details:-

Name: - _____________________________

Gender: - Male { } Female { }

Occupation: - _________________________

Address: - ____________________________

Contact no: - __________________________

1. Are you aware life Insurance?

Yes No

2. Are you aware of the following Insurance Companies?

(Tick. / as many as applicable):

a Life Insurance Corporation of India

b HDFC Standard Life Insurance
c. ICICI Prudential Life Insurance
d. Bajaj Allianz Life Insurance
e. Birla Sunlife Insurance
f. Any Other

3. Do you have any life insurance policy?

50
 Yes No

4. Which Companies Policy had you opted from the following:

a Life Insurance Corporation of India

b. HDFC Standard Life Insurance
c. ICICI Prudential Life Insurance
d. Bajaj Allianz Life Insurance
e. Birla Sunlife Insurance
f. Any Other

5. What are the factors from the following, which influence your buying
behavior?

a. Attractive Schemes
Brand Image
b.
Popularity
c.

d. Word of Mouth
e. Any Other

6. Are you satisfied with opted insurance policy?

Yes No

7. If you had a chance to opt for the Insurance Policy from any Insurance
Company, will you shift to another Insurance Company:
Yes No

51
8. Whether the people willing to buy insurance in future ?
Yes No

9.IfYes
why___________________________________________________________
_______________________________________________________
_____________
_______________________________________________________
_____________

10. If No why

____________________________________________________________
_______

____________________________________________________________
________

11. Acc to your point of view give the position (rank) to the following
Insurance companies:
a Life Insurance Corporation of India
b HDFC Standard Life Insurance
c ICICI Prudential Life Insurance

52
 d Bajaj Allianz Life Insurance
e. Birla Sunlife Insurance
f. Any Other

12. Any suggestion or recommendation?

_______________________________________________________
_______________________________________________________
_______________________________________________________
__________________________________________
.

Thanks for your valuable time given to me. I assure you that the information
provided by you will remain confidential. Thanks for your cooperation.

53