INTRODUCTION

OVERVIEW OF THE INDUSTRY

BEGINNING OF INSURANCE
Almost 4,500 years ago, in the ancient land of Babylonia, traders used to bear risk of the caravan trade by giving loans that had to be later repaid with interest when the goods arrived safely. In 2100 BC, the Code of Hammurabi granted legal status to the practice. That, perhaps, was how insurance made its beginning. Life insurance had its origins in ancient Rome, where citizens formed burial clubs that would meet the funeral expenses of its members as well as help survivors by making some payments. As European civilization progressed, its social institutions and welfare practices also got more and more refined. With the discovery of new lands, sea routes and the consequent growth in trade, Medieval guilds took it upon themselves to protect their member traders from loss on account of fire, shipwrecks and the like. Since most of the trade took place by sea, there was also the fear of pirates. So these guilds even offered ransom for members held captive by pirates. Burial expenses and support in times of sickness and poverty were other services offered. Essentially, all these revolved around the concept of insurance or risk coverage. That's how old these concepts are, really. In 1347, in Genoa, European maritime nations entered into the earliest known insurance contract and decided to accept marine insurance as a practice. The first step. Insurance as we know it today owes its existence to 17th century England. In fact, it began taking shape in 1688 at a rather interesting place called Lloyd's Coffee House in London, where merchants, ship-owners and underwriters met to discuss and transact business. By the end of the 18th century, Lloyd's had brewed enough business to become one of the first modern insurance companies. Insurance and Myth...

Back to the 17th century. In 1693, astronomer Edmond Halley constructed the first mortality table to provide a link between the life insurance premium and the average life spans based on statistical laws of mortality and compound interest. In 1756, Joseph Dodson reworked the table, linking premium rate to age.

Enter companies...
The first stock companies to get into the business of insurance were chartered in England in 1720. The year 1735 saw the birth of the first insurance company in the American colonies in Charleston, SC. In 1759, the Presbyterian Synod of Philadelphia sponsored the first life insurance corporation in America for the benefit of ministers and their dependents. However, it was after 1840 that life insurance really took off in a big way. The trigger: reducing opposition from religious groups.

The growing years...

The 19th century saw huge developments in the field of insurance, with newer products being devised to meet the growing needs of urbanization and industrialization. In 1835, the infamous New York fire drew people's attention to the need to provide for sudden and large losses. Two years later, Massachusetts became the first state to require companies by law to maintain such reserves. The great Chicago fire of 1871 further emphasized how fires can cause huge losses in densely populated modern cities. The practice of reinsurance, wherein the risks are spread among several companies, was devised specifically for such situations. There were more offshoots of the process of industrialization. In 1897, the British government passed the Workmen's Compensation Act, which made it mandatory for a company to insure its employees against industrial accidents. With the advent of the automobile, public liability insurance, which first made its appearance in the 1880s, gained importance and acceptance? In the 19th century, many societies were founded to insure the life and health of their members, while fraternal orders provided low-cost, members-only insurance. Even today, such fraternal orders continue to provide insurance coverage to members as do most labour organizations. Many employers sponsor group insurance policies for their employees, providing not just life insurance, but sickness and accident benefits

and old-age pensions. Employees contribute a certain percentage of the premium for these policies. The Insurance sector in India has gone through a number of phases and changes, particularly in the recent years when the Govt. of India in 1999 opened up the insurance sector by allowing private companies to solicit insurance and also allowing FDI up to 26%. Ever since, the Indian insurance sector is considered as a booming market with every other global insurance wanting to have a lion s share. Currently, the largest life insurance company in India is still owned by the government.

New insurance schemes in India

UNIVERSAL HEALTH INSURANCE SCHEME
Oriental Insurance Company has been nominated by Govt. of India to provide Universal Health Insurance Scheme to the people who are below poverty line in the States of Delhi, Haryana, Himachal, J & K, Punjab, Rajasthan, U.P., Uttranchal & Chandigarh(UT). Scope of Cover: This policy has three covers as under:

1. Medical reimbursement: The Policy provides reimbursement of hospitalization

expenses upto Rs.30,000/- to an individual/family with sub-limits (Maximum per illness Rs.15000/-. The benefit of the family will operate on floater basis i.e. the total reimbursement of Rs.30,000/- can be availed of individually or collectively by members of the family.

2. Personal Accident Cover: Coverage for Death of the Earning Head of the family
due to accident : Rs.25,000/-.

3. Disability Cover: If the earning head of the family is hospitalized due to an

accident/illness a compensation of Rs.50/- per day will be paid per day of hospitalization upto a maximum of 15 days after a waiting period of 3 days. Age limit: 3 months to 65 years. Premium Payable: For an individual For a family upto 5 Rs.165/-per annum Rs.248/- per annum

(including the first 3 dependant children) For a family upto 7 Rs.330/- per annum

(including the first 3 dependent children and dependent parents)

Main Exclusions

All pre-existing diseases, and diseases contracted during the first 30 days from the commencement date of the policy. Some of the diseases such as Cataract, Benign Prostatic Hypertrophy, Hysterectomy, , Hernia, Hydrocele, Piles, Sinusitis, Congenital Internal Disease are not covered in the first year of the policy. Corrective, cosmetic or aesthetic dental surgery or treatment. Cost of spectacles, contact lens and hearing aid.

 

Claim Settlement: Claim settlement to be done through Third Party Administrators (TPAs) mentioned in the schedule or by the Insurance Company and to be made cashless as far as possible through listed hospitals.

The pensioner will get pension during his entire lifetime. The Life Insurance Corporation of India's Varishtha Pension Bima Yojana is a government subsidised scheme for Indian citizens aged 55 years and above in the Union Budget 2003-04.

The much-awaited scheme was finally unveiled on July 14.

Eligibility
y y

Indian citizens aged 55 years and above are eligible. Proof of age (school leaving certificate, driving license, passport) is required. If any of the standard methods of proving age is not available, then a self-declaration of one's age can be made on a stamp paper before a notary.

Benefits
y y y

Pension will be paid on a monthly -- or quarterly or half yearly or yearly -- basis, as desired by the pensioner. In the event of the pensioner's demise, the premium paid by him will be returned to the nominee.

Pension amount and premium

y

Minimum pension will be Rs 250 and maximum pension will be Rs 2,000 per month.

y y y

For a monthly pension of Rs 250, a one-time premium (payable in lump sum) of Rs 33,355 will have to be made. For a monthly pension of Rs 2,000, a one-time premium of Rs 277,490. If one opts for the maximum pension of Rs 2,000 a month, the one-time premium is reduced to Rs 266,670, a benefit of Rs 11,000. An investment of Rs 100,000 would give a pension of Rs 750 monthly. Premium to be paid by cheque, demand draft or banker's cheque payable on the branch of the bank which is member of the local clearing house.

Ceiling of maximum premium applies for family as a whole. (Family comprises spouse, minor children and dependents). The difference between the actual yield earned by the LIC on the funds invested under the scheme and the assured return of 9 per cent would be reimbursed to the LIC by the government.

Taxation
The pension earned, however, is not tax-free. Tax payable by the pensioner will depend on the income slab s/he belongs to. This pension will be added to the other income, if any, and tax, if applicable, will be levied thereon. The Union Budget for 2003-04 raised the tax rebate for senior citizens to Rs 20,000. As a result, their annual income of up to Rs 153,000 is now exempt from income tax. In the case of senior citizens on pension the effective exemption limit would become Rs 183,000 because of the standard deduction of Rs 30,000. They could get further relief by taking advantage of the tax rebate available under Section 88 of the Income Tax Act. Self-declaration filed by senior citizens in regard to no deduction of tax at source is also accepted.

OBJECTIVES
To determine customer-buying behavior with a focus on market segmentation for BAJAJ ALLIANZ Life Insurance.

 To determine reasons behind opting for an insurance.

 To provide the company with information of customer's Insurance policy if they have any and reasons for opting for that particular policies.

 To know the most preferred policy.

 To determine customers perception towards private insurance companies and their expectation form private insurance companies.

 To analyse the needs and profits through the insurance company.

 To study the problems faced by the insurance company.

 To study the competition faced by the insurance company.

 To study the service provided by BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD.

RESEARCH METHODOLOGY
Questionare Design / Formulatuion
Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done.I used the closeended questionare.

DATA SOURCES
During preparation of the Project Report many different kinds Of Data were required which included both Primary and Secondary Sources.

Primary Sources: Questionnaires - A sample questionnaire was provided to around 50 different people which was used to Derive Results and Analyze customer needs for Insurance and ho far they have been satisfied with the Services and Returns Provided BAJAJ ALLIANZ LIFE INSURANCE as well as other companies. A sample of the questionnaire along with Results from Findings and Analysis are given Later in the Project

Secondary Sources: Journals Various Journals published by B-Schools as well as Business houses have provided vital statistical as well as Theoretical Data which have been very helpful

Newspapers and Magazines Economic Times as Well as Magazines such as Business Today have provided useful Information on Developing Indian Insurance Sector as well as how the trend and demand of customers has changed over a period of time. Internet and Other Media Sources WWW has the latest data and interviews which helped me in determining the scope pf my project as well as make it as up to date as possible.

SAMPLE DESIGN
Sampling Unit: The marketing researcher must define the target population that will be sampled.I had used the various people and some of these are the customers of inurance companies.

Time Frame: It is the period of time for which the survey or study is to be done. I have done survey for 2 weeks.

Sampling Method: Sampling method followed was judgmental sampling. The customer was selected on a random basis from different parts of NOIDA. Sampling Technique Used Since the information required was not of a very technical nature and also looking at the scope of the project and the extent of the target segment, the sampling technique employed was Convenience Sampling. I administered the questionnaires. Sample size: The sample size was restricted to only 50, which comprised of mainly peoples from different regions of sonipat due to time constraints.

LIMITATION
 There may be biases on part of the interviewee while filling the questionaire.  There may be biases on the part of the company executive while providing the information.  Time was the biggest constraints as many atimes it was possible to get the respondents interviewedbut all efforts were made to get the relevant.