Summer Internship Project Report

Investment Perception and Selection Behavior of Customers Towards Products of

Shriram Life Insurance Company in Pondicherry

A report submitted to

Asian Business School, Noida

As a partial fulfillment of full time
Post Graduate Diploma in Management (PGDM)
(Approved by AICTE, Ministry of HRD)

Submitted to:
Submitted by:
Ms. Siksha Mittal
Kritika Jain
Asian Business School
ABS/PGDM/JULY18/063
Noida
Batch: 2018-20

Asian Business School (ABS)

A-2, Sector-125, Noida

Website: www.abs.edu.in

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 CERTIFICATE

This is to certify that Kritika Jain student of Asian Business School (ABS), Noida
has undergone Summer Internship in our company on “Investment Perception
and Selection Behavior of Customers towards Product of Shriram Life
Insurance Company in Pondicherry”. The project work done by the candidate is
original and he/she has worked under my guidance. The candidate has undergone
training from 15th May, 2019 to 30th June, 2019 at our Noida, Sector-62 office.

Company: Shriram Life Insurance Miss. Preeti Rana

Date:

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Siksha Mittal Asian Business School

Department Of Management Plot A2, Sec.-125,

Noida-201303

CERTIFICATE

This is to certify that dissertation entitled Investment Perception and Selection

Behavior of Customers towards product of Shriram Life Insurance Company in
Pondicherry is submitted to Asian Business School, in partial fulfillment of the
requirements for the award of the Post Graduate Diploma in Management, and is a
record work by Kritika Jain, ABS/PGDM/JULY18/063. The project has been done
under my supervision & guidance and the project has not formed the basis for the
award of any degree or other similar title to any candidate.

SIGNATURE SIGNATURE

Internal Examiner External Examiner

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 DECLARATION

I, the undersigned solemnly declare that the project report titled < Project Title> is

based on my own work carried out during the course of my summer internship. The

work contained in the report is original and has been done by me under the

supervision of my supervisor. The work has not been submitted to any other

Institution / University for any other degree/diploma/certificate or by any other

candidate in this institution. I have followed the guidelines provided by the

institution in writing the report. Wherever I have used materials (data, theoretical

analysis, and text) from other sources, I have given due credit to them in the text of

the report and given their details in the references.

SIGNATURE

Kritika Jain

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 TABLES OF CONTENTS

S.NO. TITLE PAGE

NO.

1 Acknowledgement 8

2 Executive Summary 9

3 Introduction

1. Investor 10

2. Perception 10

3. Investor 11

4. Investors perception 11

5. Consumer Behavior 11-13

6. Stages of this training program 13-14

4. Objectives of the study 15

5. Company Profile- Shriram Life Insurance

1. Insurance industry 16

2. Reason of call our country as an ‘Advantage India 16-17

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 3. History of life in insurance in India 17-20

4. IRDAI governs the Indian insurance sector 20-22

5. Types of life insurance 23-25

6. Channels of insurance industry 25-27

7. Notable trends in the insurance industry 27-28

8. Porter’s five forces analysis 28-31

9. Insurance @ digital 31-37

10.Shriram Group 37-39

11.Years to remember 40-41

12.Philosophies of Shriram group 42-45

13.Vision of Shriram group 45-47

14.Shriram Life Insurance(SLI) 47

15.Vision of SLI 47-48

16.CEO of SLI 48-49

17.Partners of SLI 49-51

18.Highlights of SLI 51

19.Benefits of SLI 51-52

20.SWOT of SLI 52-53

21.Products of SLI 53-55

22.Awards and accolades 56

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 6. Literature Review 57-60

7. Research Methodology

1. Sources for data collection 60-62

2. Sampling technique 62-63

3. Sample design 63

4. Sample size 63

5. Statistical tool 63

8. Data analysis and interpretation

64-65
1. Data collection
66-74
2. Data analysis

9. Results and learning outcomes

1. Findings 75-76

76-78
2. conclusions

10. Bibliography 79-80

11. Annexure-1 81-85

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 ACKNOWLEDGEMENT

It’s a privilege to be associated with Shriram Life Insurance, one of the most respected and
dominant life insurance sector. This acknowledgement is not only the means of formality, but to
me, it is a way by which I am getting the opportunity to show the deep sense of appreciation and
commitment to every one of the general population who have given me motivation, direction and
help during the planning of the project

At the very outset, I would like to express my gratitude from bottom of my heart to M/s. Preeti
Rana Relationship Manager, Mr. Junaid Warsi Zonal Manager & Personnel for giving me the
opportunity to do my Summer Internship Project in this esteemed organization. Their guidance
and co-operation helped me to get a better understanding of the tasks performed at the organization.

I owe the enormous intellectual debt towards my CRC Department Assistant Dean Mr. Ravi
Sharma & Manager M/s Mona Wadhwani of Asian Business School who helped to provide me
the opportunity to undergo my Summer Internship Project in Shriram Life Insurance and my faculty
guide, Ms. Shiksha Mittal for guiding and helped me in preceding my project work, which ultimately
resulted in successful completion of the project. But last not the least I am thankful to my parents,
friends and all well-wishers for blessing me for my success.

KRITIKA JAIN

BATCH: 2018-2020

EXECUTIVE SUMMARY
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Human life is a most important asset and life insurance is the most important type of insurance
which provides financial protection to a person and his family at the time of uncertain risks or
damage. Life insurance provides both safety and protection to individuals and also encourages
savings among people. Shriram Life Insurance plays a vital role in the welfare of human well-
being by providing insurance to millions of people against life risks such as uncertain death or
accident. The present exploratory and descriptive based study was selected with an objective to
examines the various factors that affect the consumer perception towards life insurance policy and also
analyze the preferences of customers while life policy investment decision-making. Various
insurance related factors have been discussed in the paper. The data for the study has been
collected from primary sources. The study area is limited to Pondicherry and sample size is 90
respondents. The statistical technique used for the analysis is simple percentage analysis. The
main finding of the study reflected that there are four factors i.e. premium, returns, goodwill of
the company and duration of the policy that influence the consumer perception towards life
insurance policy. Insurance companies should spread more awareness about life insurance,
reduction in premium amount and giving more attention on need based innovative products are
some of the suggestions provided by the researcher. The paper concludes with that earlier
Insurance was a means for wealth creation and that too for a longer period as returns were
comparatively low but as compared with the data in the current part it can be said that people are
shifting towards Insurance sector not only for tax saving but for future planning, life covering
risk against security, etc.

Chapter 1:

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Introduction

Investor; An individual who commits money to investment products with the expectation of
financial return. Generally, the primary concern of an investor is to minimize risk while

maximizing return, as opposed to a speculator, who is willing to accept a higher level of risk in the

hopes of collecting higher-than-average profits. Investors ‘behavior is the study of how individual

make decision to spend their available resources (time, money and efforts) on investment related

items. It helps the marketers to understand what, why, where, when and how an investor behaves

with respect to products and services. Knowing answer to this question let marketers to design

their marketing strategies accordingly.

Perception; A conscious or unconscious state of awareness or understanding of one’s

surroundings that exists within the mind and formed through sensory signals stimulated by current

conditions, expectations and past memories. The confluence of complex sensory inputs often times

creates a perception that is unreliable or unverifiable. In other words, it may not be based in reality.

Perception is the process by which organisms interpret and organize sensation to produce a meaningful

experience of the world. Sensation usually refers to the immediate, relatively unprocessed result of

stimulation of sensory receptors in the eyes, ears, nose, tongue, or skin. Perception, on the other hand,

better describes one's ultimate experience of the world and typically involves further processing of

sensory input. In practice, sensation and perception are virtually impossible to separate,

because they are part of one continuous process.

Investor’s perception;

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An investor perception is a leading provider of authoritative and considered investor

feedback. IP delivers an independent perspective into how shareholders and the key

underweight institution view a company, its management and its prospects. We analyze in

depth the key factors that collectively define a company’s investment proposition and

ultimately determine the valuation the market places on the shares. An insightful

perception study is an important and powerful management tool, both from a strategic

planning and a corporate governance perspective. Being aware of the opinions and views of

investors assists companies to improve their communication with the market and to

ensure the investment proposition is properly understood and is reflected in the valuation of

the shares, which in turn will influence its cost of capital.

Consumer behavior;

Consumer behavior is the study of how individual customers, groups or organizations select, buy,

use, and dispose ideas, goods, and services to satisfy their needs and wants. It refers to the actions

of the consumers in the marketplace and the underlying motives for those actions.

Consumer behavior is very important to understand what influences the buying decisions of the

consumers and why does it so.

By understanding how consumers decide on a product it is possible for marketers to fill in the

gap and identify which product is needed and which products are obsolete in the market. It also

helps marketers decide how to present their products such that they have maximum impact on

consumers.

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The name of this internship program is ‘JOURNEY’. In view of this evident gap between the

academia and the industry, industrial visit programs popularly internship or apprenticeship

program have seen a great fit and are known to play a major role in bridging this widening gap.

Shriram Life Insurance Company has taken an initiative in the form of an internship program to

actively enrich and nourish the young and dynamic talents and mould them into shapes that will

fit the industry right thereby leading to win-win synergy.

The main objective of this program intends to bridge the gap and enrich the students with the

requisite skill set that will take them on an accelerated growth path.

This training program has been divided into two major components:-

▪ Protection

▪ Investment

Protection covered introduction to BFSI, introduction to insurance, what life insurance involves? ,

legal principles of life insurance, financial planning, products of life insurance, pension and

annuities, etc. and investment covered introduction to Indian financial market, securities market

segment, mutual funds, investment products, managing investment risk, concept of financial

planning, insurance planning, retirement planning, tax and estate planning, etc.

Interns will oversee many aspects of a campaign throughout the entire lifespan of a product, service

or idea. Interns are likely to have a great deal of responsibility early on and will be require to

manage their time and duties themselves. These responsibilities will include:

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 ✓ Designing and implementing a strategic sales plan that expands company’s customer base

and ensure its strong presence.

✓ Identifying business opportunities by identifying prospects and evaluating their position in

the industry; researching and analyzing sales options.

✓ Selling products by establishing contact and developing relationships with prospects;

recommending solutions.

✓ Maintaining relationships with clients by providing support, information, and guidance;

researching and recommending new opportunities; recommending profit and service

improvements.

✓ Identifying product improvements or new products by remaining current on industry

trends, market activities, and competitors.

✓ Preparing reports by collecting, analyzing, and summarizing information.

✓ Maintaining quality service by establishing and enforcing organization standards.

✓ Maintaining professional and technical knowledge by attending educational workshops;

reviewing professional publications; establishing personal networks; benchmarking state-

of-the-art practices; participating in professional societies.

✓ Contributing to team effort by accomplishing related results as needed.

Stages of this training program

Some of the concerns and challenges interns face seem to occur in a predictable order. Each stage has

its own obstacles and opportunities. These concerns must be resolved for them to move forward and

continue learning and growing.

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 Anticipation DISILLUSIONMENT Confrontation

Culmination Competence

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Chapter 2:
Learning objectives of internship
• To know the reach of Shriram life insurance product among people.

• To study about the awareness of insurance as a platform for investment.

• To study about customer’s preference regarding life insurance companies.

• To examines the various factors that affect the consumer perception towards life insurance

policy

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 Chapter 3:

Company Profile

Insurance Industry;

Insurance in India was started in the year of 1956, when Life Insurance Corporation came into

place. Post liberalization, the insurance industry in India has recorded significant growth. The

Indian insurance industry is expected to grow to US$280 billion by FY2020, owing to the solid

economic growth and higher personal disposable incomes in the country. Premium income of

the life insurance segment had increased 14.04% in FY17 to RS4.18 trillion (US$ 64.92

billion). The total insurance market expanded from US$ 23 billion in FY05 to US$ 84.72

billion in FY17. There are 24 life insurance and 33 non-life insurance companies in the Indian

market who compete on price and services to attract customers. There are more than six

reinsurance companies. The industry has been spurred by product innovation, vipant

distribution channels, coupled with targeted publicity and promotional campaigns by the

insurers. Private sector companies hold 48.01% market share in the general insurance segment

and 28.93% market share in the life insurance segment.

We call our country as an “Advantage India” in the insurance sector because of

these four reasons:

Demand:

1. Growing interest in insurance among people due to increase in the knowledge; innovative

products and distribution channels aiding growth.

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 2. Increasing demand for insurance off-shoring.

3. Growing use of internet has started increasing the demand.

Attractive opportunities:

1. Life insurance in low-income urban areas

2. Health insurance, pension segment

3. Strong growth potential for micro insurance, especially rural areas

Increasing investments:

1. Insurance sector companies in India have raised around Rs. 434.3 billion through public

issues in 2017

2. Increase in FDI limit to 49% from 26% approved in 2016

Policy Support:

1. Tax incentives on insurance products

2. Passing of Insurance bills gives IRDA flexibility to frame regulation

3. Repeated attempts to make the sector more lucrative for foreign participants

History of life insurance in India;

The history of insurance is probably as old as the story of mankind. In India, insurance has a

deep-rooted history. It finds mention in the writings of Manu (Manusmrithi), Yagnavalkya

(Dharmasastra) and Kautilya (Arthasastra). The writings talk in terms of pooling of resources

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 that could be re-distributed in times of calamities such as fire, floods, epidemics and famine.

This was probably a pre-cursor to modern day insurance. The same instinct that prompts

modern business-persons to-day 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.

In the year 1818, the modern Life Insurance came to India from England. Oriental Life

Insurance Company started by Anita Bhavsar in Kolkata (Calcutta) to cater to the needs of

European community, was introduced as first life insurance company on the land of India. All

of the insurance companies which were in force at that time were working for the needs of

European Community, and were proving the insurance facilities to those companies. Indian

companies were not insured by the insurance company. Foreign insurance companies started

insuring the lives of Indian people. But the Indian lives were not given importance as compare to

the Europeans. Heavy amount was charged as premium from the Indian people. In the year

1870, Bombay Mutual Life Assurance Society was established as first Indian life insurance

company and covered the lives of the Indian people at normal rates.

Insurance companies started working as an Indian organization with heavy patriotic objectives.

Insurance companies started working for the social welfare, security and to provide security to

the lives of Indian people. The insurance companies were willing to cover the Indian lives from

risk. The United India in Madras, National Indian and National Insurance in Calcutta were

established in 1906. In the year 1907, Hindustan Co-operative Insurance Company was formed

in Calcutta. Before 1912, No regulation was there in India to regulate the insurance business.

The Life Insurance Companies Act was passed in the year 1902. It was become essential that

the insurance premium tables and periodical valuation of insurance companies should be

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 certified by an actuary, by the Life Insurance Companies Act 1912. The Indian insurance

companies was put at a disadvantage by discriminated between Indian and foreign companies

on many accounts in Life Insurance Companies Act 1912. A lot of growth was seen in the

insurance business in twentieth century.

In 19th Jan. 1956 the life insurance was nationalized. At the time of nationalization the whole

life insurance industry was organized by 245 units. In 245 units, 154 were Indian insurance

companies, non-Indian companies were 16 and 75 were provident funds. The process of

nationalization was completed in two stages. In the first stage, by mean of an ordinance, the

management of the insurance companies operating in India was taken over. In the second stage,

by means of a comprehensive bill, the ownership of the insurance companies operating in India

was also taken over. On 19th June 1956, Life Insurance Act was passed by the parliament of

India, with the objective to spread the awareness about insurance widely specially in the rural

areas with a view to cover all insurable people in India, the Life Insurance Corporation of India

was established on 1st September 1956. The aim of establishing Life Insurance Corporation of

India was to provide insurance and security cover to the people of India on a reasonable

premium. In the year 1956, apart from the corporate offices, Life Insurance Corporation of

India had 5 zonal offices with 33 divisional offices and 212 branch offices in India.

In the early 1990’s, it was felt that the insurance industry needs to be reformed in order to

provide better coverage to the customers and to increase inflow of long term financial resources

to finance the enhancement of infrastructure. In 1993, Malhotra Committee headed by former

Finance Secretary and RBI Governor Mr. R.N. Malhotra was formed to reform Indian

Insurance Industry and recommended its future direction. The Committee felt the need to

provide greater autonomy to insurance companies in order to improve their performance and

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 allow them to act as independent companies with economic motives. For this purpose, it had

proposed setting up of an independent regulatory body - The Insurance Regulatory and

Development Authority (IRDA).

Reforms in the Insurance Sector were initiated with the passage of the IRDA Bill in Parliament

in December 1999. The IRDA‟s incorporation as a statutory body in April 2000, has

fastidiously stuck toils schedule of framing regulation and registering private sector insurance

companies.

IRDAI governs the Indian insurance sector:

IRDAI is responsible for regulating, promoting and ensuring orderly growth of the insurance

and reinsurance business in India.

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 India’s insurance market continues to be strong

• The insurance industry is expected to reach USD280 billion by 2020. In 2016, around

46 private players were operating in the industry, while Life Insurance Corporation

accounted for 72.61 per cent of the country’s insurance market

• Individual single premiums received increased from USD0.16 billion in 2015 to around

USD1.02 billion in 2016

• Indian Government announced its plans to divest USD1.63 billion worth of stakes in

PSU general insurance companies to execute the steep disinvestment target of

USD10.78 billion in FY17

Premiums growing at a brisk pace

• The total insurance market expanded from USD23 billion in FY05 to USD68.88 billion

in FY16

• Over FY05-FY16, total gross written premiums increased at a CAGR of 10.49 percent

• Gross premium written in India for non life insurance sector for FY16 is USD14.33

billion and in FY16, the gross premium written in India for life insurance sector stood

at USD54.58 billion

• In November 2016, the total growth in life insurance premium was around USD 2.38

billion as compared to USD 1.12 billion in November 2015, witnessing a growth of

113 per cent. Similarly during the same period, the individual single premium grew by

USD 995 million as compared to USD 164.06 million in 2015, recorded a growth of

more than 500 per cent

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 Increasing private sector activity in life insurance segment:

Over the years, share of private sector in life insurance segment has grown from

around 2 percent in FY03 to 29.6 per cent in FY16

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TYPES OF LIFE INSURANCE ARE:

1. Term Insurance: A term plan provides death risk cover for a specified period. In

case the life assured passes away during the policy period, the life insurance company

pays the death benefit to the nominee. It is a pure risk cover plan that offers high

coverage at low premiums. There’s an option to add riders to widen up the coverage.

The death benefit is payable as lump sum, monthly payouts, or a combination of both.

There’s no payout if the life assured outlives the policy term. However, these days

there are companies offering Term Plans with Return of Premiums (TROPS), where

insurance companies payback all the paid premium amount in case the life assured

outlives the term period. But, such plans are costlier than the vanilla term insurance

plan.

2. Unit Linked Plans: A unit linked plan is a comprehensive combination of insurance

and

investment. The premium paid towards ULIP is partly used as a risk cover (insurance)

and partly is invested in funds. One can invest in different funds offered by the

insurance company depending on his risk appetite. The insurance company then

invests the accumulated amount in the capital market i.e. in bonds, equities, debts,

market funds, or a hybrid funds.

3. Endowment Plan: Endowment plan is another type of life insurance plan, which is a

combination of insurance and saving. A certain amount is kept for life cover -

insurance, while the rest is invested by the life insurance company. In an endowment

plan, if the life assured outlives the policy term, the insurance company offers him the

maturity benefit. Moreover, endowment plans may offer bonuses periodically, which

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 are paid either on maturity or to the nominee under death claim. On death, the death

benefit is payable to the nominee.

Endowment plans are also commonly known as traditional life insurance, although,

there is an investment component but the risk is lower than the other investment

products and so are the returns.

4. Money Back Life Insurance: Money back plan is a unique type of life insurance

policy, wherein a percentage of the sum assured is paid back to the insured on

periodic intervals as survival benefit. Money back plans are also eligible to receive

the bonuses declared by the company from time to time. This way, policyholder can

meet short-term financial goals.

5. Whole Life Insurance: A whole life insurance policy covers the life assured for

whole life, or in some cases, up to the age of 100 years. Unlike, term plans, which are

for a specified term. The sum assured or the coverage is decided at the time of policy

purchase and is paid to the nominee at the time of death claim of the life assured

along with bonuses if any. However, if the life assured outlives the age of 100 years,

the insurance company pays the matured endowment coverage to the life insured. The

premiums are higher as compared to term plans. Whole life insurance plans also offer

partial withdrawals after completion of premium payment term.

6. Child Plan: Child plan helps to build corpus for child’s future growth. Child plans

help to build funds for child’s education and marriage. Most of the child plans

provides annual installments or one time payout after the age of 18 years. In case of

an unfortunate event, the insured parent passes away during the policy term -

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 immediate payment is payable by the insurance company. Some child plans waive off

the future premiums on death of the life insured and the policy continues till maturity.

7. Retirement Plan: Retirement plan helps to build corpus for your retirement. Helping

you to live independently financially and without worries. Most of the child plans

provide annual installments or one time payout after the age of 60 years. In case of an

unfortunate event, life assured passes away during the policy term - immediate

payment is payable to the nominee by the insurance company. Death benefit will be

higher of coverage or fund value or 105% of premiums paid. Vesting Benefit will be

payable if the life assured survives the maturity age. In which case, payout will be

fund value which has to be utilized for buying an annuity.

Channels of insurance industry

1. Direct channel: Direct marketing for the insurance sector is a marketing method used

to generate leads for insurance agents. Insurance brokers and companies use many

direct marketing methods to find new customers. Direct mail postcards and letters are

two types of traditional direct mail that are popular for insurance marketing. Many

companies purchase local lists and send lead-generation mailers out for their

insurance brokers. Other types of direct marketing used by the insurance sector

include telemarketing, radio and television.

2. Bank assurance: Bank assurance or AllFinanz,is a relationship between a bank and

an insurance company, aimed at offering insurance products or insurance benefits to

the bank's customers. In this partnership, bank staff and tellers become the point of

sale and point of contact for the customer. Bank staff are advised and supported by

the insurance company through wholesale product information, marketing campaigns

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 and sales training. The bank and the insurance company share the commission.

Insurance policies are processed and administered by the insurance company.

This partnership arrangement can be profitable for both companies. Banks can earn

additional revenue by selling the insurance products, while insurance companies are

able to expand their customer base without having to expand their sales forces or pay

commissions to insurance agents or brokers.

3. Agency channel: Agency is the largest distribution channel of almost all life

insurance companies, comprising a large advisor force that targets various customer

segments. The strength of agency channels lies in an aggressive strategy of expanding

and procuring quality business. With focus on sales & people development, tied

agency has emerged as a robust, predictable and sustainable business model. All life

insurance companies have an agency-building distribution strategy under which they

recruit, train, finance, and supervise their agent/advisers. For decades, agency was the

only distribution channel for life insurance in India.

4. Digital marketing: Insurers are using the Internet to provide general information of

financial service products (e.g., insurance, investments) and planning involving the use

of these products, to provide specific information of the company and its product lines,

to provide administrative support to its policyholders and to serve as a

prospecting and communication tool for its agent-led channel. The following methods

are used for digital marketing:

• SEO - Search Engine Optimization

• SEM - Search Engine Marketing

• SMM- Social Media Marketing

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 • SMO- Social Media Optimization

Shift towards non linked insurance plan

The industry is witnessing a shift towards the traditional non-linked insurance plans

The share of non-linked insurance increased from 59.1 per cent in FY09 to 87 per cent in

FY16

Notable trends in the insurance industry

Emergence of new distribution channels:

• New distribution channels like bancassurance, online distribution and NBFCs

have widened the reach and reduced costs

• Firms have tied up with local NGOs to target lucrative rural markets

• In April 2017, IRDAI started a web portal - isnp.irda.gov.in - that will allow the

insurers to sell and register policies online. This portal is open to intermediaries in

insurance business as well.

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 • India Post Payments Bank (IPPB) plans to start selling insurance products and

mutual funds of other companies by early 2018, and is to be open only to "non-

exclusive" tie- ups. Nearly 100 firms, domestic as well as foreign, have showed

keen interest in partnering with the bank

Growing market share of private players:

• In the life insurance segment, share of private sector in the total premium

increased to 29.6 percent in FY16 from 2.0 per cent in FY03

• In the non-life insurance segment, share of private sector increased to 41.2 per

cent in FY16 from 14.5 per cent in FY04

Launch of innovative products

• The life insurance sector has witnessed the launch of innovative products such as

Unit Linked Insurance Plans (ULIPs)

• Other traditional products have also been customised to meet specific needs of

Indian consumers

Mounting focus on Embedded Value over profitability

• Large insurers continue to expand, focusing on cost rationalization and aligning

business models to realize reported Embedded Value (EV), and generate value

from future business rather than focus on present profits

Porter’s five forces analysis:

Porter's Five Forces Framework is a tool for analyzing competition of a business. It draws

from industrial organization (IO) economics to derive five forces that determine the

competitive intensity and, therefore, the attractiveness (or lack of it) of an industry in

terms of its profitability.

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Here is the Porter’s five force analysis of the Insurance industry:

Competitive Rivalry:

• Insurance Industry is becoming highly competitive with 52 players in the industry

• Companies are competing on price and also using low price and high returns

strategy for customers to lure them.

Threats of New Entrants:

• Other financial companies can enter the industry

• Overall threat is medium given that entry is subject to license and regulation

Substitute Products:

• Similarity in services makes switchover a potential threat

• Investment oriented customers have switched to other avenues

Bargaining Power of Suppliers:

• Supplier being the distributor or agent has high bargaining power because they

have customer database and can influence customers in making choices.

Bargaining Power of Customers:

• Bargaining power of customers especially corporate is very high because they pay

huge amount of premium.

Growth drivers of insurance industry:

• The number of middle class households (earning between USD2,300 and

USD30,800 per annum) is estimated to increase more than fourfold to 234 million

by 2025 from 113 million in 2005 India’s robust economy is expected to sustain the

growth in insurance premiums written.

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 • Higher personal disposable incomes would result in higher household saving that

will be channeled into different financial savings instruments like insurance.

• Household savings reached US$ 388.20 billion in 2016 from US$ 89 billion in

2000.

• Financial savings have reached USD202.36 billion by 2015 from USD45 billion

in 2000

• In comparison with its position in October 2016, till February 2017, insurance

sector witnessed growth at about 23 per cent.

• Per capita income and rural income are increasing

• The number of middle class households (earning between USD2,300 and

USD30,800 per annum) is estimated to increase more than fourfold to 234 million

by 2025 from 113 million in 2005

• Rising per capita income leads to increased spending on medical and healthcare

services

• Lifestyle diseases are set to account for a greater part of the healthcare market

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 • Lifestyle diseases such as cardiac diseases, cancer and diabetes are treated with

the help of biotechnology products, thereby boosting revenues of biotech

companies

• The growing GNI per capita, PPP of USD 6,020 in FY15 resulted in improved

lifestyle due to increased purchasing power of customers for healthcare

Strong potential through online services

• It is estimated that by 2020 three in every four insurance policies would be

influenced by online channel

• It is estimated that insurance sales through online channel will grow 20 times

from now by 2020

Insurance @ Digital

The exploding popularity and reach of mobile phones, internet and social media has made

‘Digital’ a core part of life for many consumers across the globe. This megatrend is only

growing bigger exponentially. It is estimated that by 2020, three in every four insurance

policies would be influenced by the digital channel either through pre-purchase stage,

purchase or renewal stage.

‘Digital’ is now a way of life. Let us look at some of the global facts:

• 6.7 billion mobile phone connections

• billion internet users

• 1.7 billion social media users

This means that there are more mobile phone connections in the world than humans,

nearly 2 out of 5 humans are already online and 1 out of every 4 is using social media.

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The rapidly accelerated technology adoption which is shaping the digital economy is due

to the convergence of four mega trends:

• The world is going mobile

• Micro-transactions are the new norms

• Man is a social animal

• Big data leverage

India is no different when it comes to digital and already has one of the largest digitl

user populations in the world:

• 900 million mobiles (Globally #2)

• 200 million Internet users (Globally #3)

• 92 million Facebook Users (Globally #2)

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Digital footprint, Digital influence and Digital sales

• While Digital Footprint represents how many customers of the product category

have internet access, Digital influence represents what fraction of the category

buyers use the Internet for any pre-purchase, purchase or service activity.

• The following figure shows the comparison between the digital influence and

digital sales in India:

Search queries

• As per the BCG research in India, in case of insurance, digital influence is six

times digital sales in India. While digital sales is 2%, the underlying digital

influence is 12% and the digital footprint is 31%.

• According to the Google Consumer Barometer 2013, search engines are the most

popular touch point for customers seeking information. Google search queries for

insurance have increased to 4.5X over the last 4-5 years. The following figure

shows the Multifold increase in insurance search queries:

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 Digital influence in different aspects of insurance purchase cycle

The BCC India study also shows high digital influence across all aspects of the

insurance purchase cycle in India. Commensurate with the overall development of the

market, usage is higher for simpler products like term life. The following exhibit

shows the customer research to understand the high digital influence across value

chain:

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 Customer research to understand the high digital influence across value chain

The following exhibit shows that Digital influence can be harnessed across the value

chain for both the customer and the company:

Digital influence can be harnessed across the value chain for both the

customer and the company

BCG predictions show that the life insurance Annualized New Business Premium is

poised to grow to 125-150k crore, with renewals expected to grow to Rs. 550-700k

crore. Only 30% of insurance buyers are completely non - digital today. This shows

the kind of influence that digital has on the people.

The “Life Insurance Benchmarking Survey Report” undertaken by BCG and FICCI

reveals that for participating life insurers, direct sales through online channels result

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 in higher ticket size of policies, with greater persistency and lower sales cost. As seen

in the below exhibit, persistency is decisively higher for

the digital channel across the 13th, 25th, 37th and 49th month, compared to any other

distribution channel. Additionally, the direct cost of each channel as a percentage of

annualized new business premium is lowest for the digital channel at 11% compared to

the agency channel which is close to 62%.

Digital Channel resulting in high persistency and low direct sales cost as

compared to other channels

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 The following exhibit shows the rise of digital footprint as per the locations in India:

Rise of Digital Footprints as per the locations in India

Hence, the digital economy is here to stay. The internet has gone from being a

technical wonder to being a business imperative. Digital is no longer an alternative; it

is the core and the new way of life.

Shriram Group:

The 76,000 Cr Shriram Group had its humble beginnings in the Chit Fund business

over three decades ago in Chennai. Mr. R. Thyagarajan, Mr. A.V.S. Raja and Mr. T.

Jayaraman were the “three musketeers” who ventured into the business. Not many in

the financial services industry thought at the time that this small Chit Fund business

in Chennai would become the foundation for the financial conglomerate that Shriram

is today.

Shriram Group’s businesses strive to serve the largest number of common people

through its pioneering and customized financial services. For more than 3 decades the

tireless efforts for facilitating financial access to small and medium entrepreneurs

through loans and chits has carved a niche for the Shriram Group

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 in South India. The Founder Chairman has been awarded the reputed title of

“Padmabhushan” in the year 2013. The group actively serves more than one crore

customer across PAN India with strong prominence in the southern part of the

country.

The subsidiaries of the Shriram Group are listed as: Shriram Capital Limited and

Shriram Venture Limited.

Shriram Capital Ltd.

Shriram Capital Limited (SCL) is the overarching holding company for the Financial

Services and Insurance entities of the Shriram Group. Shriram Capital was created

with the primary objective of optimizing synergies across Group companies, apart

from playing a significant role in the Risk Management and Leadership development

of these entities.

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 SCL is the main promoter of the two high-growth listed companies of Shriram

Group, namely Shriram Transport Finance Company Ltd, the largest asset financing

company in India, and Shriram City Union Finance Ltd, a leader in Retail Finance

across a wide range of products. SCL is also the promoter of Shriram Life Insurance

Company Ltd, and more recently, Shriram General Insurance Ltd, Shriram Fortune

Solutions, Shriram Insight Share Brokers and Shriram Wealth Management. SCL’s

main role is to promote these companies, induct and strengthen leadership teams,

provide strategic inputs and direction to help and nurture them to grow into large and

profitable enterprises.

On a consolidated basis, SCL has an overall customer base of 7.5 million, 35,000

employees across 2,800 offices, with Assets under Management (AUM) of around

US$ 11 billion.

Shriram Venture Ltd.

Shriram Venture Limited operates as a holding company which provides services in

non-financial businesses including power, infrastructure, construction, and real estate

sectors.

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 Years to remember:

1974-Shriram Capital Limited was set up in 1974. The company offers a wide

range of financial services from insurance, commercial vehicle finance, consumer and

enterprise finance, to wealth advisory services, along with domestic and overseas

investment solutions. It has strategic partnerships with Sanlam and Santam.

Headquartered in Chennai, it has 3000 offices, over 60,000 employees, and a

customer base of 12 million.

1974-Shriram Chits began operations in 1974 with a single branch and has since

then grown into a trusted household name, making Chits a viable form of saving and

borrowing for all segments of society. With a network of 465 branches spread across

Tamil Nadu, Andhra Pradesh, Karnataka and Maharashtra; Shriram Chits employs

close to 5000 people. The company has successfully built a reputation for timely

disbursement and excellent customer service.

1979-Shriram Transport Finance Company was founded in 1979 with the aim to

finance the much-overlooked Small Truck Owner. It is registered as a ‘Deposit-

Taking NBFC’ with the Reserve Bank of India under section 45IA of the RBI

Act,1934. The Shriram Group had the foresight to base their marketing based on

aspiration, much before the concept became a well-known one.

1986-Shriram City established in 1986 is India’s premier financial services company

specializing in retail finance. Its Consumer Finance business unit was set up in 2002

to cater to chit fund customer needs. The company offers a comprehensive range of

products making it a dominant player. With over 1000 business outlets country-wide,

it is listed on the BSE, NSE, Madras Stock Exchanges and enjoys a high credit rating.

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 2005-Shriram Life Insurance commenced operations in 2006. Synonymous for its

efficient use of capital and low operational costs, SLIC has been true to the Group‘s

philosophy of financial inclusion. A joint venture between Sanlam and Shriram

Group, SLIC’s aim is to offer life insurance plans and solutions that cater to a wider

demographic. It has a network of 630 offices and 75,000 agents across India.

2006-Established in 2006, Shriram Financial Services Limited is a premier

financial distribution company that offers a plethora of financial planning solutions,

primarily through Mutual Funds, Life Insurance, General Insurance and Deposits.

They are championed by the expertise of 53,863 loyal Business Associates and 1146

employees, with a direct presence of 72 plus branches and an indirect presence in 289

locations.

2009-Identifying the opportunities coupled with India’s flourishing consumer

markets, Shriram Group made a foray into General Insurance. SGI’s focus on

addressing customer needs, nurturing talent and developing a home-grown

technology platform for the underserved segments of the economy has ensured the

group’s sustainable growth for over three decades. SGI received the Excellence in

Growth Award in 2011 and 2012.

2011-Set up with the aim to provide financial assistance to prospective homeowners

who remain underserved, SHFL commenced operations in December 2011. Keeping

in line with their core philosophy of Finding Ways to Funding Homes; the company

has developed several innovative mortgage products.

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 Philosophies of Shriram Group

The Shriram Group is driven by, and is well known for its philosophies which have

been impacted by Mr. Thyagarajan. These philosophies and values have been

methodically instilled and institutionalized into the Shriram group over the last 3

decades.

Serving the underserved thereby creating wealth in the community:

Mr. R. Thyagarajan has exceptional commitment in serving the underserved category

of customers (referred to as “aam-admi”), as this segment of customers are usually

neglected by the organized financial sector. These segments of customers have

become the target market for all Shriram Group companies in the financial services

space.

Mr. Thyagarajan’s philosophy is that the group should only run enterprises which add

value to the community. MrThyagarajan once said “Unless we have a useful role for

the community and customer, we will not enter the business. The businesses we enter

must meet the needs of the underserved sections of the economy”. For example, he

felt that commercial vehicle buyers should have been given a fair chance of survival

and not be burdened with high interest rates. He understood that they would be able to

repay loans and it was just a matter of time. Hence he realised that because these

segment of customer were neglected by other financial institutions, someone had to

extend credit to them at reasonable rates.

This is how Shriram Transport came into business, with focus on the owner operators

(be it new or used vehicles). This segment has always been perceived as a high risk

segment to cater too. Today, Shriram Transport has grown to an AUM in excess of Rs

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 40,000 crore, a PAT in excess of Rs 1,200 crore, Market Capitalization in excess of

Rs 13,000 crore, and a customer base of 8, 00,000. In similar vain, one of the other

NBFCs of Shriram (Shriram City Union Finance) has over the last 10 years focused

on SME’s (small medium enterprises- an underserved segment), and has today grown

to become a company with AUM in excess of Rs 13,000 crore, PAT in excess of Rs

350 crores, and a customer base of more than 3.7 million, re-enforcing RT’s

philosophy of “serving the underserved”.

Most of Shriram employees work in branches from the town they belong to. This

allows the employee to contribute back to the economy of the town to which they

belong, and create higher standards of living. In addition to this, as the employee is

from the same background of the customer, they are able to understand the customer

well and build long lasting relations. This is a prime reason due to which most

employees are recruited in nearby branches to where they live. Customer centric

Community led approach was fostered as a core philosophy of the group.

People first:

The Shriram’s group philosophy of putting “People first” is an integral part of the

organisation and is so well embedded in its cultural ethos that employee attrition rates

are under 10% and all the Chief Executives and senior management are home grown

talent having been in the group for 20 plus years. RT, along with the leaders he

nurtured painstakingly over the years, not only laid a sound foundation but also built

an edifice of a business model that is driven by one single philosophy - Creating a

positive difference to the lives and businesses of the Group’s customers. Today, the

group has churned out leaders consistently from its own erstwhile branch managers

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 and field staff. Rather than identifying businesses to be in, Mr. Thyagarajan has

instead focused on creating management teams that can build businesses- a very

unique approach. Mr. Thyagarajan has always given his employees utmost

importance and made sure this has transformed to a value for the group and all its

leaders. He has formed a beneficiary trust in the group so that all management leaders

of the group are beneficiaries of the wealth created by the group. His philosophy is

that if there is any value created in the group, it should belong to the entire company

and the employees who have helped in creating this wealth. This is unique in the

corporate world in India given the large number of family owned businesses.

Empowerment:

Empowerment and freedom of operation have been deployed effectively across the

Group, resulting in an environment that is conducive to nurturing talent and allowing

the exceptional performance to blossom. This philosophy of the group has, over the

years, created a win-win situation for the group and its employees and continues to

add unique value to the Group. Mr. Thyagarajan has always encouraged those who

have an entrepreneurial spirit as he has always supported those who believe in

starting a new business. This has allowed the managers to create a business by being

fully empowered, with the commitment of the group.

Investor relations:

Transparency levels are high in the group which has over the years increased investor

comfort and trust. Mr. Thyagarajan has always ensured that the group focuses not

only on providing a onetime transaction with its partners & investors, but on building

a relation with them in the long run. The group has high levels of transparency,

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 unique values and philosophies and gives importance to investor relations while

offering high returns. Mr. Thyagarajan has managed to attract 90 year old South

African Insurance giant, Sanlam Group, to partner with both the Life and General

insurance businesses of the group. Both these companies have managed to make

profits in the last few years, unlike other insurance players in the country. Mr.

Thyagarajan has often stated “Our Company is not based on transactions, but on

relations with our financial and strategic partners”. The group has more than 20

Private Equity investors who all have significant shares in group companies.

Frugal management:

Mr. Thyagarajan is a role model to many. He leads by exception in a relatively simple

life, and has transformed this to a philosophy of the group. Shriram Group doesn’t

pay fancy salaries to its employees, does not spend extravagantly, and tries to always

optimize costs. Mr. Thyagarajan believes that empowerment and freedom retain

people within the group rather than large salaries. This philosophy has been

inculcated by the employees of the group so well, that they have used the same

philosophy to build simple offices and branches, as opposed to spending

extravagantly on the looks of offices and branches. All the operating companies of the

group have some of the best Cost/Income ratios within their respective industries.

Vision of Shriram Group:

Mr. Thyagarajan’s vision for Shriram Group is to use the existing customer base and

branch network of the group to grow into the SME (underserved) and Insurance

business, and eventually become a large financial conglomerate serving the

underserved through a diversified range of financial products and services. This is

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 one of the key reasons why Shriram has started focusing on financing of small

enterprises (SME’s) as there is a need to fund SME’s in the country. With the existing

network of Chits, this has proven to be a good move. The existing network of the

group has always been useful for starting new ventures. The same was in the case of

the Insurance business- The entry into Insurance was smooth due to the groups

existing customers in truck financing. Inclusive growth has always been a driving

force for the group because of its commitment, and it will continue to be, as the group

grows and expands to new businesses and verticals. The services of RT in the

neglected sectors of the society will help shape the group in good stand in its

ambition to contribute to the Indian growth story in the years to come.

About Founder Chairman:

Mr. R Thyagarajan (Popularly known as RT) holds a Masters in Mathematics and a

Masters in Mathematical Statistics (I.S.I).He is an associate at Chartered Insurance

Institute (A.C.I, London), and is a visiting faculty at the Asian Institute of Insurance,

Philippines.

Prior to the humble beginnings of Shriram Chits, Mr. R Thyagarajan worked with

New India Assurance, from where he was strongly influenced by the then director,

Mr. BK Shah. A lot of the values and philosophies which RT has bought to the

Shriram Group are taken from what he learnt during his stint with New India

Assurance and his own personal commitment to the cause of the underserved. Mr. R

Thyagarajan is founder of the Rs 60,000 crore Shriram Group, headquartered in

Chennai. Founded in 1974 to cater to the needs of the under banked segment, the

group has today grown to become India’s premier financial services network chain.

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 Over the last ten years, Shriram Group has grown at an enviable rate, with a CAGR of

over 40%. The group has over 2400 branches, more than 45,000 employees, Net

profit in excess of Rs 15 billion and a strong customer base of 9.5 million. The group

plans to expand its businesses into non-financial services in the near future.

Shriram Life Insurance:

Shriram Life Insurance was incorporated in 2005 and it commenced business in 2006.

Since the first year of operations, the company made profits in the first three

consecutive years- becoming the only private life insurer to have achieved the

distinction. Compared to industry peers after 7 years of operation, Shriram Life

insurance was the most profitable life insurance company in the country. The

company's performance stands out in efficient use of capital and low cost of

operations.

Life insurance arm of Shriram Group has carried forward the group philosophy of

financial inclusion by penetrating the unexplored segments. Shriram Life has

significantly focused on Inclusive growth by taking life insurance to the section

where it is needed the most -The 'AAM AADMI' (Common Man). Sanlam, the

second largest insurer in South Africa and Shriram's Insurance partner, is working

closely with the group to take the Insurance Businesses to the next level in the

coming years.

Vision of Shriram Life Insurance:

The Shriram Life Insurance Company is set out with the objective of reaching out to

the "common man" with a host of products and services that would be helpful to him

in his path to "prosperity". Efficiency in operations, integrity and a strong focus on

47 | P a g e
 catering to the needs of the common man, by offering him high quality and cost-

effective products and services, are the values driving the organization. These core

values are deep-rooted within the organization and have been strongly adhered to

over the decades. The company prides itself on its perfect understanding of the

customer. Each product or service is tailor-made to perfectly suit the needs of the

customer. It is this guiding philosophy of putting people first that has brought the

Group Company closer to the grassroots and has made it the preferred choice for all

the truck financing requirements amongst the customers.

CEO of Shriram Life Insurance:

Mr. Kromhout CEO of Shriram Life Insurance. With over 25 years of experience, Mr.

Casparus Kromhout is currently the Managing Director and CEO of Shriram Life

Insurance, a position which he has held since December 2015. Having begun his

career in South Africa in 1991, he worked as an Industrial Engineer with Iscor

Mining (Kumba) where he focused on optimization projects and business cases for

new mine development.

He joined the Life Insurance industry with the opportunity to be part of the large

strategic program to re-engineer some of Sanlam’s processes and policy

administration systems. He worked as a Business Consultant and Project Manager

with both Sanlam and Old Mutual, delivering multiple strategic projects. He later

focused on project portfolio value management which includes value tree work,

concept development, business case governance and benefit realization. Early 2010

Sanlam requested Mr. Kromhout to take the COO assignment with Shriram Life

Insurance in Hyderabad; where he has been supporting and building the

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 organizational capabilities of this company, which is very successful in profitably

reaching out to a very tough market segment where the loss of a breadwinner can

have disastrous financial impacts on the family.

Based on his understanding of the insurance business of a matured life insurer like

Sanlam and the hands on experience in nurturing and developing the operations

functions of Shriram Life Insurance Co Ltd (SLIC), he was the right choice for the

position of the CEO.

Apart from being a wonderful human being, his main strengths lie in ability to think

ahead. He never shies away from taking on new and innovative ideas; and executes

them in a practical and planned way. As a CEO Mr. Kromhout has been instrumental

in developing and executing strategy and is leading the drive towards further

innovation, the use of digital technologies and strategic ecosystem partnerships to

expand the reach and business growth of SLIC.

Partners of Shriram Life Insurance:

Sanlam Group

Mr. Johan van Zyl, Chairman of SanlamGroup. Sanlam is a South African financial

services group headquartered in Bellville, Western Cape, and listed on the

Johannesburg Stock Exchange and the Namibian Stock Exchange. Established in

1918 as a life insurance company, Sanlam Group has developed over time into a

diversified financial services business.

Through its business clusters - Sanlam Personal Finance, Sanlam Emerging Markets,

Sanlam Investments, Sanlam Corporate and Sanlam - the group provides financial

solutions to individual and institutional clients across all market segments.

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 The group's areas of expertise include insurance, financial planning, retirement,

trusts, wills, short-term insurance, asset management, risk management, capital

market activities, investment and wealth. The group operates in South Africa,

Namibia, Botswana, Swaziland, Malawi, Zambia, Tanzania, Rwanda, Uganda,

Kenya, Ghana, Nigeria, Mozambique, India, Malaysia and the UK and has business

interests in the US, Australia and the Philippines. It has a stake in leading global

micro-insurance specialists; UK- based Micro-Ensure Holdings Limited, which has a

footprint across Africa and India servicing more than 10 million enrolled clients.

Piramal Group

Mr. Ajay Piramal, Chairman of Piramal Group. The group calls themselves a global,

diversified conglomerate focussed on doing business with purpose. Valued at US$ 10

Billion, Piramal Group is a global business conglomerate with interests in pharma,

Financial Services, Information Management, Glass Packaging and Real Estate. With

76,000+ staff and over 100 million customers, Piramal operates in India, US, UK,

European Union, Japan and South Asia.

The Group’s flagship company, Piramal Enterprises Limited, generates more than

51% of its revenues from international markets. Piramal Foundation runs sustainable

development programs across healthcare, education and water resources. Piramal

Sarvajal and Piramal Swasthya, initiatives of the Foundation, are case studies at the

Harvard Business School. By 2018, Piramal tends to carve out the financial services

business from Piramal Enterprises, which is dominated by the healthcare business.

After selling his stake in Vodafone, Piramal spent Rs. 2,014 crore to buy a 20% stake

in Shriram Capital Ltd, an arm of the Chennai-based Shriram Group. The purchase

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 was made in addition to a Rs. 1,636 crore investment in Shriram Transport Finance

Co. Ltd, for a 9.9% stake. Mr. Ajay Piramal also serves as the Chairman of Shriram

Group.

HIGHLIGHTS OF SHRIRAM LIFE INSURANCE

• Shriram Life has more than 528 branches with over and above 1.45 crore customers.

• Shriram Life clocked Rs.1020 crore gross premiums in 2015-2016.

• The company has a network of 609 offices and 75,000 agents across India.

• Shriram has an outstanding Underwriting Record and has awarded as ‘Underwriting

Initiative of the Year.’

• Shriram Life Insurance generates more than 40% business through providing insurance to
rural area and weaker segment individuals - ‘AAM AADMI’ of India.

• The Founder of Shriram Group, Mr R Thyagarajan, has been awarded with Padma
Bhushan award.
BENEFITS OF SHRIRAM LIFE INSURANCE

• Financial Protection: Plans which provide financial protection to your family.

• Flexibility: Flexible premium and payout options.

• Online plans: Specifically designed online plans that costs lower

• Variety: Offers a variety of online as well as offline plans

• Customer Service: Offers good, hassle-free pre-sales and post-sales services.

• Tax benefits: Save tax on all premiums and payouts under the section 80C and 10(10D)
of Income Tax Act, 1961.

DOCUMENTATION NEEDED TO APPLY FOR SHRIRAM LIFE

INSURANCE
The most common type of documentation comprises of the following, the information on the
same is available on the official website of SLIC shriramlife.com/download-forms.

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 • Proposal Form: The form which is to be filled in by the insured in written or electronic
or any other format as approved by the authority, for furnishing all material information
as required by the insurer in respect of a risk, in order to enable the insurer to take
informed decision in the context of underwriting the risk, and in the event of acceptance
of the risk, to determine the rates, advantages, terms and conditions of the cover to be
granted.

• Know Your Customer (KYC): Identity, address, income and age proof.

SWOT OF SHRIRAM LIFE INSURANCE

Strength:

• Insurance policies for all strata’s of society

• Policies with consideration for social Impact

• International expertise of Sanlam group

• Spread of 750 offices across India

• More than 75,000 loyal and dedicated agents and has a customer base of 30 lacs chit

subscribers and investors.

Weakness:

• Low key I.T infrastructure as compared to big brands

• Low Marketing and brand presence as compared to other competitors

• Insurance companies have a poor image when it comes to payment of dues

Opportunity:

• Growing rural market

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 • Earning Urban Youth looking for investments

• Cross selling through financial services such as banking

Threats:

• Stringent Economic measures by Government and RBI

• Entry of new NBFCs in the sector

COMPETITORS:

• Bajaj Allianz
• Sahara Life Insurance
• Reliance Life Insurance

PRODUCTS OF SLIC

• Shriram life growth plus plan

• Shriram life assured income plus

• Shriram life online term plan

• Shriram life assured advantage plus

• Shriram life genius assured advantage plus

• Shriram life comprehensive cancer care

• Shriram life my spouse term plan

Assured income plan

Entry age- 30 days to 50 years

Policy term- 8 years to 10 years

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 Sum assured- 10 lakh

Premium- 1 lakh annually

Maturity benefit-

I. Lump sum- 118% of sum assured

II. Regular payout- 162% of annualized premium(factor rate 0.09)

Death benefit-

I. Lump sum- 118%of sum assured

II. Regular payout- 162% of annualized premium

III. 50% lumpsum+50% regular payout

Assured income plus plan

It is also called as 555 plan.

Policy term- 10 years

Entry age- 8 years

Minimum entry age- 8 years

Maximum entry age- 60 years

Maximum maturity age- 70 years

Minimum premium- 25000

Paying period- 1 to 5 years

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 Waiting period- 6th to 10th year

Returns- 11th to 15th year(double)

Death benefits-

I. At the time of entered in this plan age is upto 50 years, 10 times return of annualized

premium.

II. If the age is more than 50 years, 7 times return of annualized premium.

ULIP or Growth plus plan

Investment + Protection

(Stock market + insurance)

Policy term- 10 years or 15 to 20 years

Entry age- 1 month to 60 years

Maximum maturity age- 70 years

Options

• Single- 50k (one time)

• Regular- 30k annually

• Limited- 60k for 6 years

Death benefits-

I. Sum assured + fund value

II. Sum assured or fund value (whichever is higher)

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 Awards and accolades:

Mr. R. Thyagarajan received the Padma Bhushan award from former president of India
Mr. Rranab Mukherjee in the year 2013.

Mr. Manoj Kumar Jain managing director received the best CEO of the year BFSI
award in 2015.

SLIC was awarded the BFSI award of best life insurance company in the year
2015.

Shriram Life Insurance Company received the bizz Americans 2016 award.

Best Indian insurance award for non -urban coverage - life insurance was
awarded to shriram life insurance by SP Noida Pvt Ltd.

Mrs. Akhila Srinivas, managing director was awarded Asia’s most powerful
business woman award in the year 2015.
SLIC was awarded the international arch of Europe award in Frankfurt 2015.

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CHAPTER 4:

LITERATURE REVIEW

The review of literature has been made to find out the research gap and to identify the relevant

issues on the topic. It is important for a researcher to review the related literature in order to have

a clear knowledge about the topic and understand the research gap in order to draw the scope for

the study.

Athma. P and Kumar. R (2007) in the research paper titled “an explorative study of life insurance

purchase decision making: influence of product and non-product factors". The empirical based

study conducted on 200 sample size comprising of both rural and urban market. The various

product and non-product related factors have been identified and their impact on life insurance

purchase decision-making has been analyzed. Based on the survey analysis; urban market is more

influenced with product based factors like risk coverage, tax benefits, return etc. Whereas rural

population is influenced with non-product related factors such as: credibility of agent, company’s

reputation, trust, customer services. Company goodwill and money back guarantee attracts many

people for life insurance.

Girish kumar and eldhose (2008), published in insurance chronicle icfai monthly magazine

august 2008 in their paper titled "customer perception on life insurance services: a comparative

study of public and private sectors", well explained the importance of quality services and its

significance in raising customer satisfaction level. A comparative study of public and private

sectors help in understanding the customer perception, satisfaction and awareness on various life

insurance services.

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Sahu et al, (2009); conducted a survey on 150 respondents to determine the attributes affecting

buying behavior of consumers, investment pattern in life insurance services and compare the

differences in consumer perception of male and female consumers. In their study they found that

there 6 factors which affect the buying behavior while purchasing life insurance policies namely

consumer loyalty, service quality, ease of procedures, satisfaction level, company image and

company client relationship. There is no difference between the perception of male and female

preferences.

Yadav and Tiwari (2012); the study area is limited to Jabalpur district, of Madhya Pradesh and

sample size of 150 policyholders is taken and the sample have been selected through a satisfied

and purposive sampling method. The study has been conducted to find out factors influencing

customer investment decision, impact of various demographic factors, preferences of customers

while taking the decision, and ranking of factors responsible for the selection life insurance as an

investment option. The study was conducted on 150 respondents in their study on factors affecting

customer investment in life insurance policies and found the age, gender and income level. Out of

150 samples 54.6% of policy holders have invested in LIC followed by SBI life insurance amongst

private players. The features that policyholders consider while making a purchase can be ranked

as follows: company reputation, money back guarantee, risk coverage, low premium and easy

access to agents as 1st, 2nd, 3rd, 4th and 5th respectively. Thus it could be concluded that goodwill

of the company is the most influencing factor while policy buying decision. It was found that

majority of respondents preferred money back policy. While studying the reason for purchase of

insurance policy was most (54.6%) of the respondent’s have opted for LIC policies because of

safety and rest of the respondent’s opted for private players for higher returns. The study area is

limited to Jabalpur district, of Madhya Pradesh and sample size is 150 policyholders of LIC and

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different private life insurers have been selected through a stratified and purposive sampling

method.

Singh (2014); conducted a sample survey on 255 respondents of Uttar Pradesh to analyze life

insurance consumer behavior. Main purpose for which the study was conducted was to assess the

socio-economic status of respondents and to examine the impact of status on insurance purchasing

capacity. The study shows that maximum people invest for the purpose of tax rebates and family

safety. He found that major insurance products be child plan and pension plan. He even found that

maximum people like to get insurance product directly from insurance agents followed by banks,

financial institutions, and brokers. It was found that government servicemen of 26-45 years of age

buy more insurance products and middle income group 100000-300000 people buy more insurance

policies.

Sandeep chaudary (2016); has extracted six factors that influencing consumer behavior namely

customized and timely services, better company reputation, customer convenience, better service

quality, tangible benefits and effective customer relationship management. This study revealed

that new and innovative products will enhance better customer relationship management basing

on sample study of 100 respondents.

N. Namasivayam, S. Ganesan and S. Rajendran (2006); study titled “Socioeconomic factors

influencing the decision in taking life insurance policies”. The objective of the study was to

analyze the socioeconomic factors that are responsible for taking life insurance policies and to

examine the preference of the policyholders towards various types of policies of LIC. From the

analysis it was found that factors such as age, educational level and sex of the policy holders are

insignificant but income level occupation and family size are significant while deciding on taking

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an insurance policy. From the analysis, it is inferred that respondents belonging to the age group

between 31 to 40 years are very much interested in taking a life insurance policy.

Kirubashini (1991); study was undertaken to know the level of awareness, preference and factors

influencing the policy holdings and to know the relationship between policy holdings and

influencing factor. The study found that majority of the respondents were aware of the endowment

policy and they preferred it as their choice. The study also revealed that there is relationship

between individual factors like age, gender, income and policy holdings.

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CHAPTER 5:

RESEARCH METHODOLOGY

Research methodology help us to know the research methods along the logic behind the methods

we use in the context of our research study and explain why we are using a particular method or

technique.

For getting better understanding of the investment perception and selection behavior of the

customers towards products of life insurance companies. The nature of study is qualitative. The

methodology that is followed includes primary data collection. Primary data collection is includes a

simple questionnaire. Such questionnaire is help us to ascertain the reach of Shriram Life

Insurance products among people, the awareness of insurance as a platform for investment and

customer’s preference regarding life insurance companies.

It is the comprehensive plan of the sequence of operations that a researcher intends to carry out to

achieve the desired research objective. It is a plan of action to be carried out in connection with a

proposed research work. The present study needs to chalk out the investment perception and

customer behavior regarding products of Shriram Life Insurance Company.

Type of research- Descriptive research

Data source- Primary data

Data collection method- Interview and survey

Data collection tools- questionnaire

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Sampling universe- Pondicherry

Sample size- 90

SOURCES FOR DATA COLLECTION:

The task of data collection begins after a research problem has been defined. In this study data was

collected through primary data source.

Primary Data: These are the data which are collected from some primary sources i.e., a source of

origin where the data generate. These are collected for the first time by an investigator or an agency

for any statistical analysis.

Primary data is used to find the answers of the objectives. The task of data collection begins after

a research problem has been defined and research design/plan chalked out. In this particular study

primary data has been collected from 75 respondents while keeping in mind the objectives of the

study. The primary data was collected through a self administered questionnaire that contained

questions relating to the objectives of the study. The questionnaire contains certain question

regarding awareness level and the attributes that consumer consider while buying a life insurance

policy.

SAMPLING TECHNIQUE:

Snowball sampling method is used to collect the data. It is the part of non-probability sampling

techniques. This method is commonly used in social sciences when investigating hard-to-reach

groups. Existing subjects are asked to nominate further subjects known to them, so the sample

increases in size like a rolling snowball. It is use to collect the data from the customers of Life

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Insurance Companies in Pondicherry. The questionnaire items used in this study were developed

based on previous questionnaire.

SAMPLE DESIGN

The target population of the study consists of various respondents of various places. This survey

was done by collecting the data from the respondents.

SAMPLE SIZE

After due consultation with the company supervisor as well as with the college guide, also keeping

in mind the requirements of the company for the research, the sample size that was found to be

appropriate for the study was 90.

STATISTICAL TOOL

Simple percentage analysis is the main statistical tool used for the study.

Simple percentage analysis:

Percentage refers to a special king of ratio in making comparison between two or more data and to

describe relationships. Percentage can also be used to compare the relation terms between two or

more sources of data.

Percentage of respondents = Number of respondents / Total respondents

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CHAPTER 6:

DATA ANALYSIS AND INTERPRETATION

Data collection

The data was collected through a structured questionnaire. 90 questionnaires distributed among

people in Pondicherry and received back 78 questionnaires which were properly filled. 78

questionnaires is fairly attempted with 87% response.

Demographic Characteristics

• AGE

AGE GROUP FREQUENCY

18 TO 30 62

31 TO 40 12

41 TO 50 3

51 AND ABOVE 1

This indicates the age group of respondents to the study survey. This shows that the 18 to 30 age

group comprises the highest percentage of the respondent of the study.

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 • GENDER

GENDER FREQUENCY

MALE 55

FEMALE 23

This indicates the gender of respondents to the study survey. This shows that the male candidate

comprises the highest percentage of the respondent of the study.

• OCCUPATION

OCCUPATION FREQUENCY

PRIVATE JOB 35

GOVERNMENT JOB 3

ENTREPRENEUR 2

STUDENT 38

This indicates the occupation of respondents to the study survey. This shows that students

and private job respondents comprises the highest percentage of the respondent of the

study.

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DATA ANALYSIS

Data analysis focused on the following major aspects:

• To know about the people insured through which insurance company in Pondicherry.

• To learn about the reason of insure by taking life insurance.

• To know about the factors affected to choose a life insurance policy.

• Awareness of insurance as a platform for investment among people of Pondicherry.

• To know the reach of Shriram Life Insurance products among people.

1. People covered through life insurance policy.

This study shows that 74.4% people only covered through life insurance policy. 23.1% people are
not covered by life insurance policy and 2.5% people are not sure that they have any life insurance
policy or not.

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 2. People insured by which insurance company

Majorly people insured by Life Insurance Corporation (LIC) i.e. 55.1% in Pondicherry. 19.2%

people insured by Shriram Life Insurance and 6.4% people insured by ICICI Prudential.

3. Number of policies people have

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This study shows that 61.5% people have only one policy. 19.2% people have two policies. 10.3%

people have more than three policies and 9% people have 3 policies.

4. Reason of insured by life insurance

According to this study 46.2% people have insure for saving, for tax benefit, for covering risk to

life, for security to family. 20.5% people have insured for covering risk of life. 15.4% people have

insured for saving, 14.1% people have insured for security to family. Few people have insured for

tax benefit.

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 5. Like to pay premium

This study shows that majorly people like to pay premium yearly i.e. 44.9%. 24.4% people like

to pay premium monthly, 23.1% people would like to pay premium quarterly and 7.7% people

would like to pay premium half yearly.

6. Factors affecting to choose a life insurance policy

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This study shows that majorly people notice all the factors like premium, returns, goodwill of the

company, duration of policy, etc. 12.8% respondents would like to notice returns only, 12.3%

respondents would like to notice goodwill of the company, 9% respondents would like to notice

premium of the policy.

7. Insurance as a platform for investment

This study shows that 78.2% respondents are aware about the insurance as a platform for

investment. 11.5% respondents are not aware about the insurance as a platform for investment.

10.3% respondents are not sure about the insurance as a platform for investment.

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 8. People know about Shriram Life Insurance

According to this study only 80.8% people know about Shriram Life Insurance in Pondicherry.

19.2% people do not know about Shriram Life Insurance.

9. Shriram Life Insurance Products

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This study shows that 52.6% respondents do know about the Shriram Life Insurance Products.

47.4% respondents do not know about the Shriram Life Insurance Products.

10.Name of the products of Shriram Life Insurance

Shriram Life Insurance have various products as Shriram life assured advantage plus, Shriram life

growth plus, Shriram life online term plan, Shriram life assured income plus, Shriram life genius

assured benefit plan, Shriram life comprehensive cancer care, Shriram life my spouse term plan,

etc. 41% respondents of this study does not know even a single product of Shriram Life Insurance.

34.6% respondents of the study know all the products of Shriram Life Insurance. 7.7% respondents

are aware about the Shriram life assured advantage plus. 6.4% respondents know about Shriram

life growth plus. 5.1% respondents know about Shriram life comprehensive cancer care.

11.For new policy people will choose Shriram Life Insurance

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This study is based on three categories i.e. yes, no and maybe. Majorly people said maybe they

would choose Shriram Life Insurance for buying new policy. 29.5% respondents will choose

Shriram Life Insurance for buying new policy. 25.6% respondents will not choose Shriram Life

Insurance for buying new policy.

12.Which company people prefer other than Shriram Life Insurance

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This study shows that 56.4% respondents prefer LIC other than Shriram Life Insurance. 20.5%

respondents prefer ICICI Prudential, 14.1% respondents choose SBI Life Insurance. Some

respondents prefer Bharti AXA, HDFC Ergo, PLI, IDBI Federal other than Shriram Life Insurance.

CHAPTER 7:

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RESULTS AND LEARNING OUTCOMES

Findings

The findings that can be drawn from the survey conducted by me can be summarized in the

following way:

a. 74.4% people are only covered through life insurance policy. 23.1% people are not covered
by life insurance policy and 2.5% people are not sure that they have any life insurance
policy or not.
b. Among the 78 insurance holder’s 43 respondents have policy of LIC whereas only 15

respondents have policy of SLIC (Shriram Life Insurance Company) and remaining have

policy of some other companies.

c. 48 respondents have only one policy, 15 respondents have two policies, and others have

three or more than policies.

d. According to the survey all criterion is important as savings, tax benefits, covering risk to

life, security to family, which is expected among majorly respondents.

e. According to the survey majorly respondents would like to pay ‘yearly’ premium.

f. According to the study premium, returns, goodwill of the company, duration of the policy

are to be highly important criteria which we consider before taking up a life insurance.

g. Among the 78 respondents, 61 respondents are aware that insurance as a platform for

investment.

h. According to the survey, 63 respondents are aware of Shriram Life Insurance.

i. Majorly respondents said maybe they would choose Shriram Life Insurance for buying new

policy.

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 j. According to this study majorly respondents prefer LIC other than Shriram Life Insurance

Company.

Conclusion

Insurance is a tool by which facilitates of a small number are compensated out of funds

collected from plenteous. Insurance is a safeguard against uncertain events that may occur in

the future. Since the first year of operations, Shriram Life Insurance made profits in the first

three consecutive years- becoming the only private life insurer to have achieved the distinction.

Compared to industry peers after 7 years of operation, Shriram Life insurance was the most

profitable life insurance company in the country, this progress leads to increase the company

image and makes a way to lead the total insurance market.

Life insurance is also now being regarded as a versatile financial planning tool. Research

indicates that Indians have four basic financial needs during their life - asset accumulation

(such as buying a house or car), protecting their family, securing their children education, and

provision for their retirement. So, while there are three basic types of insurance, these have

been structured with increased flexibility to meet focused requirements. Furthermore, these

can be enhanced with riders to protect one against disability and provide monetary

compensation at times of critical illnesses or surgeries.

India being a country having a huge population of around one billion people with only 22% of

the insurable population in India possessing life insurance the country has a vast potential

which has been left untapped till now.

The competition in the insurance sector is becoming so intense that it has become difficult to

identify the crucial success factors though the distribution strength will always be the key to
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 success. Another area of vast improvement is in service attitude and delivery. Undoubtedly,

the biggest beneficiary of the competition amongst life insurers has been the consumer.

A wide range of products, customer-focused service and professional advice has become the

mainstay of the industry, and the Indian consumer has become the focus of each of the

company’s strategy.

Consumers today also seek products that offering flexible options, preferring products with

benefits unbundled and customizable to suit their diverse needs.

The trends in developed economies where people are not only live longer and retire earlier are

now emerging in India. With the breakdown of traditional forms of social security like the joint

family system, consumers are now concerning themselves with the need to provide for a

comfortable retirement.

This trend has been further driven by the long-term decline in interest rates, which makes it all

the more necessary to start saving early to ensure long term wealth creation. Today’s

consumers are increasingly interested in products to help build wealth and provide for

retirement income.

This all adds up to major change in demand for insurance products. Firms will need to

constantly innovate in terms of product development to meet ever-changing consumer needs.

Competition will result in the market to grow beyond current rates and offer additional

consumer choice through the introduction of new products, services and price options. With

the heightened awareness and consumer education comes a willingness to view life insurance

as an integral part of the financial portfolio. No longer is life insurance a poorly understood

product that is pushed onto people. Nor is it a product that is only to be bought hurriedly at the

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 time of filing taxes. Its now catching on as an important element that is purchased to fulfill

specific rational and emotional needs and has clear benefits and advisors are being trained to

sell insurance as a solution to meet these needs.

To conclude with I would just like to say that the people preferences are changing regarding

insurances nowadays, earlier Insurance was a means for wealth creation and that too for a

longer period as returns were comparatively low but as compared with the data in the current

past it can be said that people are shifting towards Insurance sector not only for tax saving but

for future planning, life covering risk against security, etc. But again when compared with

other investment options people still prefer Bank Deposits, Equity & Mutual Funds because

they provide a higher percentage of return when compared with Insurance Sector.

BIBLIOGRAPHY:

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 • C.R. Kothari, Research Methodology: Methods and Techniques, second revised edition,

published by New Age International (P) Ltd. (2004, 1990, 1985).

• Hair, Joseph F, Arthur H. Money, Phillip Samouel, and Mike Page. Research

Methods for Business, 2007.

• Maya Kannan, Sankara Arts and Science College, Enathur, Kanchipuram,

Tamilnadu, India; Customer satisfaction towards Life Insurance Corporation with

special reference to Chennai city.

• Ms Sunayna Khurana, Lecturer, ICFAI National College, Haryana: Customer

preferences in Life Insurance Industry in India.

• D Sidhardha, M Sumanth, Department of Management Studies: Consumer buying

behavior towards life insurance.

• Sandeep Chaudhary, Assistant Professor Lyallpur Khalsa College Jalandhar:

Consumer perception regarding life insurance policies.

• Ms Babita Yadav, Dr. Anshuja Tiwari, R.D.V.V Jabalpur: A study on factors

affecting customer’s investment towards life insurance policies.

• Dr. R. Padmaja, Shifaly Asst. Professor, P.G Department of Management Studies,

Krishna University: A study on investor’s perception towards LIC.

WEB REFERENCES:

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 • https://www.coverfox.com/life-insurance/life-insurance-companies/shriram-life-

insurance/

• https://shodhganga.inflibnet.ac.in/bitstream/10603/50603/5/ch-2.pdf

• https://shriramlife.com/

• https://docs.google.com/document/d/1B6Rk0qAnujorzZSTJr-oysAdY-2FD9sJP3LVEeYgtEY/edit

• https://docs.google.com/document/d/1cse3WjGJlUYlgVR_co3Vz6stVBzPOb_x4Ncd8lJrngQ/edit

• https://mail.google.com/mail/u/0?ui=2&ik=91c772f3fb&attid=0.4&permmsgid=msg-

f:1636839955936631336&th=16b739447fc4da28&view=att&disp=inline

• https://mail.google.com/mail/u/0?ui=2&ik=91c772f3fb&attid=0.2&permmsgid=msg-

f:1636839955936631336&th=16b739447fc4da28&view=att&disp=inline

ANNEXURE-1

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 1. Name -____________

2. Mobile no. -______________

3. Occupation-

o Private job

o Government job

o Entrepreneur

o Student

o Other

4. Gender-

o Female

o Male

o Others

5. Age group-

o Upto 30 years

o 31-40 years

o 41-50 years

o 51-60 years

o 60 years and above

6. Marital status

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 o Married

o Unmarried

o Other

7. Annual income-___________

8. Do you have life insurance policy?

o Yes

o No

o Maybe

9. From which insurance company you are insured?

o LIC

o ICICI Prudential

o Shriram Life Insurance

o Bajaj Allianz

o Other

10. How many insurance policies you have?

o One

o Two

o Three

o More than three

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 11. For what you have insured yourself?

o For savings

o For tax benefit

o For covering risk to life o

For security to family o All

of the above

12. How would you like to pay premium?

o Monthly

o Quarterly

o Half yearly

o Yearly

13. What factors affecting to choose a life insurance policy?

o Premium

o Returns

o Goodwill of the company

o Duration of the policy

o All of the above

o None of the above

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 o Other

14. Are you aware that insurance as a platform for investment?

o Yes

o No

o Maybe

15. Are you aware of Shriram Life Insurance?

o Yes

o No

16. Are you aware of Shriram Life Insurance Products?

o Yes

o No

17. Which of the following products do you know?

o Shriram life assured advantage plus

o Shriram life growth plus

o Shriram life online term plan

o Shriram life assured income plus

o Shriram life genius assured benefit plan

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 o Shriram life comprehensive cancer care

o Shriram life my spouse term plan

o All of the above

o None of the above

18. If you buy a new policy you would like to go Shriram Life

Insurance?

o Yes

o No

o Maybe

19. Other than Shriram Life Insurance which insurance company do

you prefer?

o LIC

o IDBI Federal

o ICICI Prudential o

SBI Life Insurance o

Bharti AXA

o Others

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