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(Year 2022-2023)
PROJECT GUIDE
SUBMITTED BY
THAKER
D.S.P.M’S
University of Mumbai
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DECLARATION
I hereby declare that this report submitted in partial fulfillment of the requirement of the award
for the marks of Master of Financial Management (MFM) to IES Management College is my
original work and not submitted for award of any degree or diploma, fellowship or for similar
titles or prizes.
I further certify that I have no objection and grant the rights to IES Management college to
publish any chapter / project if they deem fit the journals/Magazine and newspapers etc. without
my permission.
Place : Mumbai
Date :
CERTIFICATE*
The matter presented in this report has not been submitted for any other purpose in this Institute.
Date : Date :
TABLE OF CONTENTS
QUESTIONNAIRE 93-96
CHAPTER – 1
EXECUTIVE
SUMMARY
The main purpose of the study is to be identified the investor’s investing perception and
attitude towards life insurance at Mumbai city which will help the company to make the
marketing strategy. The study will help the company to make strategies and new products / plan
and emphasize on their weaker areas. And also the brand image of various companies will be
known which will helps the company to find out where their competitor stands in the minds of
the people. And also the most of the people are invested in the insurance. Majority of the people
are need safety investment and also to get the more returns.
Research Objective
1) To examine the awareness of customers to life insurance
2) To know the satisfaction level of customers.
3) To identify the expectations of customers towards LIC
4) To study the needs of customers.
5) To know the opinion regarding benefits provided by life insurance.
6) To compare LIC with competitors.
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CHAPTER - 2
INTRODUCTION
“The Business of Insurance is related to the protection of the economic values of the assets”.
Every human being has the tendency to save to protect him from risks or events of future.
Insurance is one form of savings where in people try to assure themselves against risks or
uncertainties of future. It is assurance against risks or events or losses. People can save their
earnings either in the form gold, fixed assets like property or in banking and insurances. All the
savings of people of a country account for gross domestic savings. In India, although savings rate
is high but people prefer to invest either in gold or fixed assets so that they can make money out
of it. Hence insurance sector is still untapped in India.
CONCEPT OF INSURANCE
Life has always been an uncertain thing. To be secure against unpleasant possibilities, always
requires the utmost resourcefulness and foresight on the part of man. To pray or to pay for
protection is the spirit of the humanity. Man has been accustomed to pray God for protection and
security from time immemorial. In modern days Insurance Companies want him to pay for
protection and security. The insurance man says "God helps those who help themselves";
probably he is correct.
Too many people in this country are not in employment; and work for too many no longer
guarantees income security. Several millions are part-time, self-employed and low-earning
workers living under pitiable circumstances where there is no security cover against risk. Further
the inherent changing employment risks, the prospect of continual change in the work place with
its attendant threats of unemployment and low pay especially after the adoption of New
Economic Policy and the imminent lifecycle risks - a new source of insecurity which includes the
changing demands of family life, separation, divorce and elderly dependents are tormenting the
society. Risk has become central to one's life. It is within this background life insurance policy
has been introduced by the insurance companies covering risks at various levels. Life insurance
coverage is against disablement or in the event of death of the insured, economic support for the
dependents. It is a measure of social security to livelihood for the insured or dependents. This is
to make the right to life meaningful, worth living and right to livelihood a means for sustenance.
Therefore, it goes without saying that an appropriate life insurance policy within the paying
capacity and means of the insured to pay premium is one of the social security measures
envisaged under the Indian Constitution. Hence, right to social security, protection of the family,
economic empowerment to the poor and disadvantaged are integral part of the right to life and
dignity of the person guaranteed in the constitution.
Man finds his security in income (money) which enables him to buy food, clothing, shelter and
other necessities of life. A person has to earn income not only for himself but also for his
dependents, viz., wife and children. He has to provide legally for his family needs, and so he has
to keep aside something regularly for a rainy day and for his old age. This fundamental need for
security for self and dependents proved to be the mother of invention of the institution of life
insurance.
NATURE OF INSURANCE
a) Risk sharing and risk transfer:
Insurance is used to share the financial losses that might occur to an individual or his family on
the happening of specified events. The loss arising from such events are shared by all the insured
in the form of premium. Example: suppose in a village, there are 250 houses, each valued at Rs.
200000. Every year one house gets burnt, resulting into a total loss of Rs 200000. If all the 250
owners come together and contribute Rs.800 each, the common fund would be Rs200000.This is
enough to pay to the owner whose house gets burnt. Thus the risk of one owner is spread over
250 house owners of the village.
2. There is a certain amount of compulsion to go through the plan of savings. In other forms, if
one changes the original plan of savings, there is no loss. In insurance, there is a loss.
3. Certain cannot claim the life insurance moneys. They can be protected against attachments by
courts.
4. There are tax benefits, both in income tax and in capital gains.
5. Marketability and liquidity are better. A life insurance policy is property and can be
transferred or mortgaged. Loans can be raised against the policy. The following tenets help
agents to believe in the benefits of life insurance. Such faith will enhance their determination to
sell and their perseverance.
6. Life insurance is not only the best possible way for family protection. There is no other way.
7. Insurance is the only way to safeguard against the unpredictable risks of the future. It is
unavoidable.
8. The terms of life are hard. The terms of insurance are easy.
9. The value of human life is far greater than the value of property. Only insurance can preserve
it.
10. Life insurance is not surpassed by many other savings or investment instrument, in terms of
security, marketability, stability of value or liquidity.
11. Insurance, including life insurance, is essential for the conservation of many businesses, just
as it is in the preservation of homes.
14. Life insurance perpetuates life, liberty and the pursuit of happiness.
SEMANTICS
1. Risk: It is defined as an uncertainty of a financial loss. It is the unintentional decline in or
disappearance of value arising from contingency.
3. Whole life policy: It is the policy under which the amount of policy will be paid only on death
of the insured. Premiums may be payable throughout the life or for a limited period.
4. Endowment policy: Endowment policies entitle the insured to receive the amount of the
policy on his reaching a certain age and premiums also stops. If death occurs earlier, amount of
the policy will be paid at that time and payment of premium will also stop at that time.
6. Reinsurance: It refers to placing a part of the risk by an insurer with another insurer. The
object is to reduce the possible loss to be borne by the original insurer, who pays premiums at the
ordinary rates to the reinsurer. Reinsure must pay commission to the original insurer.
9. Insurance density: Insurance density is defined as per capita expenditure on insurance premium
i.e. premium per capita.
10. Actuary: The actuary is a specialist who combines an understanding of risks and
mathematical technique to develop financial products to manage these risks, price these products.
He helps in designing insurance plans and then evaluates the financial risk of the company which
it takes while selling an insurance policy.
TYPES OF INSURANCE
Insurance is broadly divided in two segments, based on the nature of insurance, those are:
1. Life Insurance &
2. Non-Life Insurance or General Insurance.
HISTORY OF INSURANCE
For now we know the meaning of insurance, different types of insurance. Now let us know the
history and reasons for and behind different types of insurance.
Insurance has existed for thousands of years. The first ever type of insurance was Property
Insurance. It became popular about 3000 BC in China. It all started when Chinese merchants, as
well as their investors, wanted to ensure that they would see a profit from their goods that they
shipped overseas. In the event that a ship was lost at sea, an insuring partner would reimburse the
owners of the ship and goods. To pay for the loss the merchant would be sold into slavery to the
insurer until the debt was repaid. This was so because, a merchant could not afford to pay for the
lost goods or even to buy a ship unless someone invested.
Property insurance was also seen in Babylon as well. In Babylon, merchants and investors
entered into a contract, in which the supplier of money for a trade agreed to cancel the loan if the
trader was robbed of his goods. The trader who borrowed the money paid an extra amount for
this protection in addition to the usual interest. As for the lender, collecting these premiums from
many traders made it possible for him to absorb the losses of the few. Later this contract was
extended to include provisions for a family's home and even the death of the insured, where life
insurance came into existence. Slowly this concept started to spread across other places like
Greek, Roman.
Since ancient times, communities have pooled some of their resources to help individuals who
suffer loss. Like, about 3500 years ago, Moses instructed the nation of Israel to contribute a
portion of their produce periodically for "the alien resident and the fatherless boy and the
widow. Later
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the origin of credit insurance, which was included in the Code of Hammurabi, a collection of
Babylonian laws said to predate the Law of Moses. Credit insurance means, in ancient times the
ship owners obtained loans from investors to finance their trading expeditions. In case, if a ship
was lost, the owners were not responsible to pay back the loans to the investors. The risk to the
lenders was covered by the interest paid by numerous ship owners, since many ships returned
safely.
By the middle of the 14th century, marine insurance was one of the most popular types of
insurance among nations of Europe. Things changed dramatically in the 17thcentury in Europe.
In 1666, the Great Fire of London bought the need for fire insurance .The Great Fire of London
burned for four days and nights. It destroyed 436 acres, 13,200 houses, 89 churches (including
Saint Paul's Cathedral), the Custom House, the Royal Exchange and dozens of other public
buildings. Only six people were victims in the flames, but hundreds died from shock and
exposure.
By 1688, Edward Lloyd was running a coffeehouse in London. Where, London merchants and
bankers met informally to do business. There financiers who offered insurance contracts to
seafarers wrote their names under the specific amount of risk that they would accept in exchange
for a certain payment, called premium. These insurers came to be known as underwriters.
Finally, in 1769, Lloyd's became a formal group of underwriters that in time grew as an
insurance company.
The concept of insurance developed at a fast pace with the growth of British commerce in the
17th and 18th century. The first stock companies to engage in insurance were chartered in
England in the year 1720.
In 1735, the first insurance company in the American colonies was founded at Charleston. Later
in the year 1787, fire insurance corporations were formed in New York. Then later in the year
1759, the life insurance corporation was started in Philadelphia, America.
The New York fire which occurred in the year 1835 was the main reason to draw attention to
create reserves to meet unexpected losses. In the year 1837, Massachusetts was the first state to
require companies by law to maintain such reserves. After 1840, life insurance entered a boom
period.
The Workmen's Compensation Act of 1897 in Britain required employers to insure their
employees against industrial accidents. Public liability insurance, fostered by legislation, made
its appearance in the 1880s.It attained major importance with the advent of the automobile. Until
the 1950s, most insurance companies in the United States were restricted to provide only one
type of insurance, but then legislation was passed to permit fire and casualty companies to
underwrite several classes of insurance. Many firms have since expanded and also were
responsible for many mergers.
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From this brief accounting of history we can see how insurance came into existence. Fortunately
for us we no longer have to sell ourselves into slavery if our car is stolen nor we have to be
scared of losses due to absence of reserves. However we can be confident that we will be
compensated for our loss. Without people wanting to secure their investments and great tragedies
throughout history we may not have insurance as we know it today resulting in peace of mind.
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 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. Ancient
Indian history has preserved the earliest traces of insurance in the form of marine trade loans and
carriers’ contracts. Insurance in India has evolved over time heavily drawing from other
countries, England in particular.
The insurance industry in India over the past century has gone through big changes. In India this
industry reveals the 360 degree turn. 360 degree turn means that it started in India from being an
open competitive market to nationalization and back to a liberalized market again. Insurance
industry in India started as a fully private system with no restriction on foreign participation in
the Nineteenth Century.
Before independence, a few British insurance companies dominated the Market. Life insurance
was first set up in India through a British company called the Oriental Life Insurance Company
(In Calcutta) in 1818, followed by the Bombay Assurance Company in 1823 and the Madras
Equitable Life Insurance Society in 1829. All of these companies operated in India but did not
insure the lives of Indians. They were there insuring the lives of Europeans living in India. Some
of the companies that started later did provide insurance for Indians. But, they were treated as
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"substandard" and therefore had to pay an extra premium of 20% or more. Bombay Mutual Life
Assurance Society heralded the birth of first Indian life insurance company in the year 1870, and
covered Indian lives at normal rates. Starting as Indian enterprise with highly patriotic motives,
insurance companies came into existence to carry the message of insurance and social security
through insurance to various sectors of society. The first general insurance company, Triton
Insurance Company Ltd., was established in 1850. It was owned and operated by the British.
Bharat Insurance Company (1896) was also one of such companies inspired by nationalism. The
Swadeshi movement of 1905-1907 gave rise to more insurance companies. The United India in
Madras, National Indian and National Insurance in Calcutta and the Co-operative Assurance at
Lahore were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its
birth in one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in
Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were
some of the companies established during the same period. Prior to 1912 India had no legislation
to regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the
Provident Fund Act were passed.
The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and
periodical valuations of companies should be certified by an actuary. But the Act discriminated
between foreign and Indian companies on many accounts, putting the Indian companies at a
disadvantage.
The first two decades of the twentieth century saw lot of growth in insurance business. From 44
companies with total business-in-force as Rs.22.44 crore, it rose to 176 companies with total
business-in-force as Rs.298 crore in 1938. During the mushrooming of insurance companies
many financially unsound concerns were also floated which failed miserably. The Insurance Act
1938 was the first legislation governing not only life insurance but also non-life insurance to
provide strict state control over insurance business. The demand for nationalization of life
insurance industry was made repeatedly in the past but it gathered momentum in 1944 when a
bill to amend the Life Insurance Act 1938 was introduced in the Legislative Assembly. However,
it was much later on the 19th of January, 1956, that life insurance in India was nationalized.
About 154 Indian insurance companies, 16 non-Indian companies and 75 provident were
operating in India at the time of nationalization.
Nationalization was accomplished in two stages; initially the management of the companies was
taken over by means of an Ordinance, and later, the ownership too by means of a comprehensive
bill. The Parliament of India passed the Life Insurance Corporation Act on the 19th of June 1956,
and the Life Insurance Corporation of India was created on 1st September, 1956, with the
objective of spreading life insurance much more widely and in particular to the rural areas with a
view to reach all insurable persons in the country, providing them adequate financial cover at a
reasonable cost. And then the general insurance business was nationalized in 1972. Only in
1999 private
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insurance companies have been allowed back into the business of insurance with a maximum of
26% of foreign holding.
LIC had 5 zonal offices, 33 divisional offices and 212 branch offices, apart from its corporate
office in the year 1956. Since life insurance contracts are long term contracts and during the
currency of the policy it requires a variety of services need was felt in the later years to expand
the operations and place a branch office at each district headquarter. Re-organization of LIC took
place and large numbers of new branch offices were opened. As a result of re-organization
servicing functions were transferred to the branches, and branches were made accounting units.
It worked wonders with the performance of the corporation. It may be seen that from about
200.00 crores of New Business in 1957 the corporation crossed 1000.00 crores only in the year
1969-70, and it took another 10 years for LIC to cross 2000.00 crore mark of new business. But
with re-organization happening in the early eighties, by 1985-86 LIC had already crossed
7000.00 crore Sum Assured on new policies.
Today LIC functions with 2048 fully computerized branch offices, 113 divisional offices, 8
zonal offices, 1381 satellite offices and the corporate office. LIC’s Wide Area Network covers
113 divisional offices and connects all the branches through a Metro Area Network. LIC has tied
up with some Banks and Service providers to offer on-line premium collection facility in
selected cities. LIC’s ECS and ATM premium payment facility is an addition to customer
convenience. Apart from on-line Kiosks and IVRS, Info Centre’s have been commissioned at
Mumbai, Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, New Delhi, Pune and many
other cities. With a vision of providing easy access to its policyholders, LIC has launched its
SATELLITE SAMPARK offices. The satellite offices are smaller, leaner and closer to the
customer. The digitalized records of the satellite offices will facilitate anywhere servicing and
many other conveniences in the future.
After the independence, the industry went to the other extreme. It became a state-owned
monopoly. The industry started to witness a problem like fraud. Hence many regulations were
put in place to reduce and control the problems in the industry. After which Insurance was
nationalized. In 1956, the then finance minister S. D. Deshmukh announced nationalization of
the life insurance business and then the general insurance business was nationalized in 1972.
Only in 1999 private insurance companies have been allowed back into the business of insurance
with a maximum of 26% of foreign holding.
LIC continues to be the dominant life insurer even in the liberalized scenario of Indian insurance
and is moving fast on a new growth trajectory surpassing its own past records. LIC has issued
over one crore policies during the current year. It has crossed the milestone of issuing
1,01,32,955 new policies by 15th Oct, 2005, posting a healthy growth rate of 16.67% over the
corresponding period of the previous year.
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From then to now, LIC has crossed many milestones and has set unprecedented performance
records in various aspects of life insurance business. The same motives which inspired our
forefathers to bring insurance into existence in this country inspire us at LIC to take this message
of protection to light the lamps of security in as many homes as possible and to help the people in
providing security to their families.
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Outside the United States, the insurance industry is divided into life and nonlife (or general
insurance), rather than life/annuity and property/casualty. Swiss Re’s 2018 world insurance
study is based on direct premium data from 147 countries, with detailed information on the
largest 88 markets. World insurance premiums rose 1.5 percent in 2018, adjusted for inflation, to
$5.2 trillion, reaching the $5 trillion mark for the first time. 2018’s rise was above the 1.2 percent
growth recorded in 2008 to 2017. Nonlife premiums grew 3.0 percent in 2018, adjusted for
inflation, faster than the 2.2 percent growth from 2008 to 2017. Life insurance premiums grew
0.2 percent in 2018, falling behind the 0.6 percent rise in 2008 to 2017, adjusted for inflation.
Total premiums
Nonlife % change
Life premiums from prior % of total
Rank Country premiums (2) Amount year world premiums
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(US$ billions)
18
19
Top 10 Countries by Total Insurance Premiums per Capita and Percent of Gross Domestic
Product (GDP), 2018 (1)
Cayman
1 $11,642 1 Taiwan 20.88%
Islands
United
6 Taiwan 5,161 6 10.61
Kingdom
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LIFE INSURANCE
Life Insurance Corporation of India (LIC) is an Indian State owned insurance group
and Investment Corporation owned by the Government of India.
The Life Insurance Corporation of India was founded in 1956 when the Parliament of India
passed the Life Insurance of India Act that nationalized the insurance industry in India. Over 245
insurance companies and provident societies were merged to create the state owned Life
Insurance Corporation.
As of 2019, it had total life fund of 28,28,320.12 crore and total number of policies sold
coming in at 214.33 lakh that year (2018-19). LIC settled 259.54 lakh claims in 2018-19. LIC
has 29 crore policy holders.
Growth as a monopoly
From its creation, the Life Insurance Corporation of India, which commanded a monopoly of
soliciting and selling life insurance in India, created huge surpluses and by 2006 was
contributing around 7% of India's GDP.
The corporation, which started its business with around 300 offices, 5.7 million policies and
a corpus of INR 45.9 crores (US$92 million as per the 1959 exchange rate of roughly 5 for
US$1),[7] had grown to 25,000 servicing around 350 million policies and a corpus of
over 800,000 crore (US$120 billion) by the end of the 20th century.
In August 2000, the Indian Government embarked on a program to liberalize the insurance sector
and opened it up for the private sector. LIC emerged as a beneficiary from this process with
robust performance, albeit on a base substantially higher than the private sector.
In 2013 the first year premium compound annual growth rate (CAGR) was 24.53% while total
life premium CAGR was 19.28% matching the growth of the life insurance industry and
outperforming general economic growth.
Operations
Today LIC functions with 2048 fully computerized branch offices, 8 zonal offices, around 113
divisional offices, 2,048 branches and 1408 satellite offices and the Central Office; it also has 54
customer zones and 25 metro-area service hubs located in different cities and towns of India. It
also has a network of 1,537,064 individual agents, 342 Corporate Agents, 109 Referral Agents,
114 Brokers and 42 Banks for soliciting life insurance business from the public.
Now LIC also has the 1899 branches of IDBI bank at its disposal thus it can carry out its
insurance business through these branches of the bank.
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Slogan
LIC's slogan Yogakshemam vahaamyaham is in Sanskrit which loosely translates into English as
"Your welfare is our responsibility". This is derived from ancient Hindu text, the Bhagavad
Gita's 9th chapter, 22nd. The slogan can be seen in the logo, written in Devanagari script. This
line means "I carry what they lack, and I preserve what they have" (refers to Krishna speaking to
Arjuna), when taken in context of the entire verse.
The Economic Times Brand Equity Survey 2012 rated LIC as the No. 6 Most Trusted
Service Brand of India.
From the year 2006, LIC has been continuously winning the Readers' Digest Trusted brand
award.
Voted India's Most Trusted brand in the BFSI category according to the Brand Trust Report
for 4 continuous years - 2011-2014 according to the Brand Trust Report.
7th Annual Greentech HR Platinum Award 2017 for Training Excellence (3rd time in a row)
Certificate of Appreciation by the Jury of BML Munjal Award 2017
Golden Peacock National Training Award in Training for the year 2018 (3rd time in a row)
Global Best Employer Brand Award 2017 for Excellence in Training
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Agency strength
The total number of Agents on our Roll is 11,48,811 as at 31.03.2018 as against 11,31,181 as on
31.03.2017. The number of Active Agents is 10,71,945 as at 31.03.2018 as compared to
10,46,484 as on 31.03.2017.
Initiatives
Golden Jubilee Foundation LIC Golden Jubilee Foundation was established in 2006 as a
charity organization. This entity has the aim of promoting education, alleviation of poverty, and
providing better living conditions for the under privileged. Out of all the activities conducted by
the organization, a Golden Jubilee Scholarship award is the best known. Each year, this award is
given to the meritorious students in standard XII of school education or equivalent, who wish to
continue their studies and have a parental income less than 100,000 (US$1,400).
Holdings
LIC holds shares worth about 2.33 lakh crore in all the Nifty companies put together, but it
lowered its holding in a total of 27 Nifty companies during the quarter.
The cumulative value of LIC holding in these 27 companies fell by little over 8,000 crore during
the quarter shows the analysis of changes in their shareholding patterns.
Individually, LIC is estimated to have sold shares worth 500-1,000 crore in each of Mahindra
& Mahindra, HDFC Bank, ICICI Bank, Tata Motors, L&T, HDFC, Wipro, SBI, Maruti Suzuki,
Dr Reddy’s and Bajaj Auto.
The insurance behemoth also trimmed holdings in Ambuja Cements, Cipla, TCS, Lupin and
Asian Paints. A marginal decline was also witnessed in its stakes in companies such as IDFC,
Hindustan Unilever, Grasim, ACC, BPCL, Bank of Baroda, Punjab National Bank, Sun Pharma
and Tata Power.
On the other hand, LIC further ramped up its stake in a total of 14 Nifty constituents with
purchase of shares worth an estimated 4,000 crore. The major companies where LIC has raised
its stake include Infosys, RIL, Coal India Ltd and Cairn India. Other such companies are ITC,
Power Grid Corp, NTPC, Siemens, Bharti Airtel and Hero MotoCorp.
The state-run insurer also marginally hiked its exposure in Ultratech, Gail India, Ranbaxy, Kotak
Mahindra Bank and HCL Technologies, while its shareholding remained almost unchanged in
companies like ONGC, Tata Steel, BHEL and Reliance Infra.
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Among the Nifty companies, LIC’s holding in terms of value in 2012 were estimated to be the
highest in ITC (27,326 crore), followed by RIL (21,659 crore), ONGC (17,764 crore), SBI
(17,058 crore), L&T (16,800 crore), and ICICI Bank (10,006 crore).
The share price drop in ITC on 18 July 2017 had caused LIC a major loss of around 7000 Crores.
LIC now also holds 51% stake in IDBI bank thus making it the only insurer in India to own a
bank
, since regulations prohibit insurers from holding more than 15% stake in any company ,LIC will
have to decide a timeline for paring its stake in IDBI bank also LIC will have to pare its stake in
LIC housing finance Ltd as a company cannot be promoter of 2 finance companies carrying out
same housing finance business so either LIC has to sell its stake in LIC housing or close down
housing business of IDBI bank.
GENERAL INSURANCE
In the United Kingdom, insurance is broadly divided into three areas: personal lines, commercial
lines and London market.
The London market insures large commercial risks such as supermarkets, football players and
other very specific risks. It consists of a number of insurers, reinsurers, P&I Clubs, brokers and
other companies that are typically physically located in the City of London. Lloyd's of London is
a big participant in this market. The London market also participates in personal lines and
commercial lines, domestic and foreign, through reinsurance.
Commercial lines products are usually designed for relatively small legal entities. These would
include workers' compensation (employer’s liability), public liability, product liability,
commercial fleet and other general insurance products sold in a relatively standard fashion to
many organizations. There are many companies that supply comprehensive commercial
insurance packages for a wide range of different industries, including shops, restaurants and
hotels. Personal lines products are designed to be sold in large quantities. This would
include autos (private car), homeowners (household), pet insurance, creditor insurance and
others.
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ACORD, which is the insurance industry global standards organization, has standards for
personal and commercial lines and has been working with the Australian General Insurers to
develop those XML standards, standard applications for insurance, and certificates of currency.
AWARDS
In 2012, The General and Ken Roberts Productions received three Telly Awards in the
Animation category. A Silver Award was won for the Baseball ad, and Bronze Awards were won
for Football and Snowboard.
"India's strong economy and evolving regulatory regime continue to support growth for its
insurance and reinsurance sectors," Moody's said in a report titled Insurance - India: Continued
regulatory evolution is credit positive for India's insurance sector.
Moody's said it expects India's real GDP to expand by 7.4 per cent and 7.3 per cent in fiscal 2019
and 2020, making the Indian economy one of the world's fastest-growing.
Liberalization of the reinsurance sector - with the admission of foreign reinsurers since 2017 and
IRDAI's steps to ensure that they can compete with incumbents - will specifically benefit the
non- life sector. Regulatory reforms will also improve the sector's capital strength, Moody's said.
In 2015, IRDAI raised the ceiling on foreign ownership of Indian insurers to 49 per cent from 26
per cent, encouraging global players to buy holdings NSE 0.10 % in local entities.
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Besides, the government's launch of a new program in 2018 to provide health insurance for 100
million families is credit positive as it will help grow health premiums and provide insurers with
cross-selling opportunities, it noted.
State-run insurance giant, Life Insurance Corporation (LIC) has further increased its dominance
in India's life insurance market with a 6 per cent increase in the market share between Aprils to
September 2019. In the overall insurance market in India, LIC's share now stands at 72 per cent
where several state-run life insurers are increasingly outdoing their private competitors in getting
new businesses.
LIC registered the growth of 18 per cent in September 2019 as compared to last year and an
impressive growth of 42 per cent in the first half of FY20, the latest data released by insurance
regulators IRDAI showed.
"Recent months have seen strong new business growth for LIC taking its market share to 72%…
Retail business has shown strong traction with a 22 percent growth in the first half of the fiscal,
on the back of new launches in the individual single premium segment," according to a report by
brokerage Jefferies.
However, the ongoing economic slowdown seems to have finally caught up with the insurance
sector. Individual Annual Premium Equivalent (APE) declined 3% in September as against the
same period last year September as compared to 11-27% year on year growth in April to August
2019.
APE is a metric which is used when the sales contain both single premium and regular premium
businesses. Also, APE is a measure used for comparison of life insurance revenue by
normalizing policy premiums into the equivalent of regular annual payments.
According to the brokerage report by Kotak Securities, "Even the high-growing HDFC Life
declined after five months of consistent high growth. SBI Life and Max Life continued to
moderate for the second consecutive month." The report also said that, "Net inflows to equity
mutual funds dropped sharply month-on-month as well."
During the same period, new business by life insurers grew 15 per cent in September as against
last year, while registering a growth of 35 per cent between April and September, as per the
sources. Against the average industry growth, private sector life insurers could only register a
growth of 9 per cent in September as against last year, the data showed.
"New Business Premium (NBP) and total Annualized Premium Equivalent (APE) grew at a
slower pace of 9 per cent and 4 per cent, respectively, in Sep'19 for private life insurers," as per
a report
26
by ICICI Securities. As per the brokerage, SBI Life and Bajaj Allianz were the outstanding
performers of the first half of fiscal 2019 while HDFC Life registered faltering numbers in the
reported period.
"HDFC Life (HDLI) reported 16 per cent and 20 per cent decline in total and individual APE
which would be on account of a high base and possible decline in guaranteed savings products
under declining interest rates," ICICI Security report said. "Bajaj Allianz and SBI Life were
relative outperformers in September. SBI Life maintained leadership in the number of individual
policies which grew 13 per cent compared to 5 per cent for private life insurers."
NATIONALIZATION
THE LIFE INSURANCE CORPORATION OF INDIA: 1956
This was the first step taken towards the nationalization of life insurance business in India. On
20th January, 1956 all life insurance companies were taken over by 43 nominated custodians.
The custodians were experienced senior executives of private insurance companies, reporting
directly to the Finance Ministry. From the word go, the complex task of running the industry on a
permanent basis and continuing the services to policy holders without interruption were their
major concerns. The actual work of integration had to await legislation. The custodians managed
the insurance companies till 1-09-1956, when Life Insurance Corporation was established under
the general direction and control of the Ministry of Finance. The Ordinance provided for the
transfer of the control of 154 Indian insurers, 16 non-Indian insurers and 75 provident societies.
These arrangements were designed to ensure that no inconvenience whatsoever was caused to the
policy holders. With the Government take over the management aimed towards the evolution of
a common uniform premium rate, policy conditions and service and working procedures and
above all to help promote team spirit. The corporation, a body corporate shall consist of not
more than
15 members appointed by the Central Government, one of them being appointed by the
government as chairman. The capital of the corporation was at Rs 5 crore provided by the central
government.
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The formation of the Malhotra Committee in 1993 initiated reforms in the Indian insurance
sector and is considered as one of the milestones in the history of Insurance in India.
The aim of the Malhotra Committee was to assess the functionality of the Indian insurance
sector. This committee was also in change of recommending the future path of insurance in
India.
The Malhotra Committee attempted to improve various aspect of the insurance sector, making
them more appropriate and effective for the Indian market.
The Insurance Regulatory and Development Authority Act of 1999 brought about several crucial
policy changes in the insurance sector of India. It led to the formation of the Insurance
Regulatory and Development Authority (IRDA) in 2000.
The goals of the IRDA are to safeguard the interests of insurance policyholders, as well as to
initiate different policy measures to help sustain growth in the Indian insurance sector.
In 1994, the committee submitted the report and some of the key recommendations included:
(1) STRUCTURE
Government stake in the Insurance Companies to be brought down to 50%.
Government should take over the holdings of GIC and its subsidiaries so that these
subsidiaries can act as independent corporations.
All the insurance companies should be given greater freedom to operate
(2) COMPETETION
Private Companies with minimum paid up capital of Rs.1 bn should be allowed to enter
the industry.
No Company should deal in both Life and General Insurance through a single entry.
Foreign Companies may be allowed to enter the industry in collaboration with the
domestic companies.
Postal Life Insurance should be allowed to operate in the rural market.
Only one State Level Life Insurance Company should be allowed to operate in each state.
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(4) INVESMENTS
Mandatory Investments of LIC Life Fund in government securities to be reduced
from75% to 50%.
GIC and its subsidiaries are not to hold more than 5% in any company (There current
holdings to be brought down to this level over a period of time).
The committee emphasized that in order to improve the customer service and increase the
coverage of insurance industry should opened up to competition. But at the same time, the
committee felt the need to exercise caution as any failure on the part of new players could ruin
the public confidence in the industry. Hence, it was decided to allow competition in a limited
way by stipulating the minimum capital requirement of Rs. 100 crores. The committee felt the
need to provide greater autonomy to insurance companies in order to improve their performance
and enable them to act as independent companies with economic motives. For this purpose, it
had proposed setting up an independent regulatory body.
29
LIBERALIZATION
OPENING UP OF INSURANCE SECTOR – 1999 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 since its incorporation as a statutory body in April 2000 has
fastidiously stuck to its schedule of framing regulations and registering the private sector
insurance companies. The other decision taken simultaneously to provide the supporting systems
to the insurance sector and in particular the life insurance companies was the launch of the
IRDA's online service for issue and renewal of licenses to agents. The approval of institutions for
imparting training to agents has also ensured that the insurance companies would have a trained
workforce of insurance agents in place to sell their products, which are expected to be introduced
by early next year. Since being set up as an independent statutory body the IRDA has put in a
framework of globally compatible regulations. In the private sector 14 life insurance companies
have been registered.
HISTORY
1818 with the establishment of the Oriental Life Insurance Company in Calcutta; the company
failed in 1834. In 1829, Madras Equitable began conducting life-insurance business in the
Madras Presidency. The British Insurance Act was enacted in 1870, and Bombay Mutual (1871),
Oriental (1874) and Empire of India (1897) were founded in the Bombay Presidency. The era
was dominated by British companies.
In 1914, the government of India began publishing insurance-company returns. The Indian Life
Assurance Companies Act, 1912 was the first statute regulating life insurance. In 1928 the Indian
Insurance Companies Act was enacted to enable the government to collect statistical information
about life- and non-life-insurance business conducted in India by Indian and foreign insurers,
including provident insurance societies. In 1938 the legislation was consolidated and amended by
the Insurance Act, 1938, with comprehensive provisions to control the activities of insurers.
The Insurance Amendment Act of 1950 abolished principal agencies, but the level of
competition was high and there were allegations of unfair trade practices. The Government of
India decided to nationalize the insurance industry.
An ordinance was issued on 19 January 1956, nationalizing the life-insurance sector, and the
Life Insurance Corporation was established that year. The LIC absorbed 154 Indian and 16
non- Indian insurers and 75 provident societies. The LIC had a monopoly until the late 1990s,
when the insurance industry was reopened to the private sector.
General insurance in India began during the Industrial Revolution in the West and the growth of
sea-faring commerce during the 17th century. It arrived as a legacy of British occupation, with
its roots in the 1850 establishment of the Triton Insurance Company in Calcutta. In 1907 the
Indian Mercantile Insurance was established, the first company to underwrite all classes of
general insurance. In 1957 the General Insurance Council (a wing of the Insurance Association
of India) was formed, framing a code of conduct for fairness and sound business practice.
Eleven years later, the Insurance Act was amended to regulate investments and set minimum
solvency margins and the Tariff Advisory Committee was established.
In 1972, with the passage of the General Insurance Business (Nationalization) Act, the insurance
industry was nationalized on 1 January 1973. One hundred seven insurers were amalgamated and
grouped into four companies: National Insurance Company, New India Assurance Company,
Oriental Insurance Company and United India Insurance Company. The General Insurance
Corporation of India was incorporated in 1971, effective on 1 January 1973.
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The re-opening of the insurance sector began during the early 1990s. In 1993, the government set
up a committee chaired by former Reserve Bank of India governor R. N. Malhotra to propose
recommendations for insurance reform complementing those initiated in the financial sector. The
committee submitted its report in 1994, recommending that the private sector be permitted to
enter the insurance industry. Foreign companies should enter by floating Indian companies,
preferably as joint ventures with Indian partners.
Following the recommendations of the Malhotra Committee, in 1999 the Insurance Regulatory
and Development Authority (IRDA) were constituted to regulate and develop the insurance
industry and were incorporated in April 2000. Objectives of the IRDA include promoting
competition to enhance customer satisfaction with increased consumer choice and lower
premiums while ensuring the financial security of the insurance market.
The IRDA opened up the market in August 2000 with an invitation for registration applications;
foreign companies were allowed ownership up to 26 percent. The authority, with the power to
frame regulations under Section 114A of the Insurance Act, 1938, has framed regulations
ranging from company registrations to the protection of policyholder interests since 2000.
In December 2000, the subsidiaries of the General Insurance Corporation of India were
restructured as independent companies and the GIC was converted into a national re-insurer.
Parliament passed a bill de-linking the four subsidiaries from the GIC in July 2002. There are 28
general insurance companies, including the Export Credit Guarantee Corporation of India
and the Agriculture Insurance Corporation of India, and 24 life-insurance companies operating in
the country. With banking services, insurance services add about seven percent to India’s GDP.
In 2013 the IRDAI attempted to raise the foreign direct investment (FDI) limit in the insurance
sector to 49 percent from its current 26 percent. The FDI limit in the sector was raised to 100
percent according budget 2019.
STRUCTURE
Section 4 of the IRDAI Act 1999 specifies the authority's composition. It is a ten-member body
consisting of a chairman, five full-time and four part-time members appointed by the government
of India. At present (1 Sept, 2018), the authority is chaired by Dr. Subhash C. Khuntia and its
full- time members are Mrs. T. L. Alamelu, K. Ganesh, Pournima Gupte, Praveen Kutumbe and
Sujay Banarji.
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FUNCTIONS
The functions of the IRDAI are defined in Section 14 of the IRDAI Act, 1999, and include:
33
The year 1999 saw a revolution in the Indian insurance sector, as major structural changes took
place with the ending of government monopoly and the passage of the Insurance Regulatory and
Development Authority (IRDA) Bill, lifting all entry restrictions for private players and allowing
foreign players to enter the market with some limits on direct foreign ownership. Though, the
existing rule says that a foreign partner can hold 26%equity in an insurance company, a proposal
to increase this limit to 49% is pending with the government. Since opening up of the insurance
sector in 1999, foreign investments of Rs. 8.7 billion have poured into the Indian market and 21
private companies have been granted licenses.
Innovative products, smart marketing, and aggressive distribution have enabled fledgling private
insurance companies to sign up Indian customers faster than anyone expected. Indians, who had
always seen life insurance as a tax saving device, are now suddenly turning to the private sector
and snapping up the new innovative products on offer.
The life insurance industry in India grew by an impressive 36%, with premium income from new
business at Rs. 253.43 billion during the fiscal year 2004-2005, braving stiff competition from
private insurers. This report, Indian Insurance Industry: New Avenues for Growth 2012, finds
that the market share of the state behemoth, LIC, has clocked21.87% growth in business at
Rs.197.86 billion by selling 2.4 billion new policies in 2004-05. But this was still not enough to
arrest the fall in its market share, as private players grew by 129% to mop up Rs. 55.57 billion in
2004-05 from Rs. 24.29 billion in 2003-04.
Though the total volume of LIC's business increased in the last fiscal year (2004-2005) compared
to the previous one, its market share came down from 87.04 to78.07%. The 14 private insurers
increased their market share from about 13% to about22% in a year's time. The figures for the
first two months of the fiscal year 2005-06 also speak of the growing share of the private
insurers. The share of LIC for this period has further come down to 75 percent, while the private
players have grabbed over 24 percent. There are presently 12 general insurance companies with
four public sector companies and eight private insurers. According to estimates, private
insurance companies collectively have a 10% share of the non-life insurance market. Though the
focus of this market research report is on the potential growth on the Indian Insurance Sector, it
also talks about the market size, market segmentation, and key developments in the market after
1999.
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INTRODUCTION TO LIC
Life Insurance Corporation of India (LIC) (Hindi: भारतीय जीवन बीमा ि नगम) is the largest
state-owned insurance group in India, and also the country's largest investor. It is fully owned by
the Government of India. It also funds close to 24.6% of the Indian Government's expenses. It
has assets estimated of 13.25 trillion (US$264.34 billion). It was founded in 1956 with the
merger of 243 insurance companies and provident societies.
Headquartered in Mumbai, financial and commercial capital of India, the Life Insurance
Corporation of India currently has 8 zonal Offices and 113 divisional offices located in different
parts of India, around 3500 servicing offices including 2048 branches, 54 Customer Zones, 25
Metro Area Service Hubs and a number of Satellite Offices located in different cities and towns
of India and has a network of 13,37,064 individual agents, 242 Corporate Agents, 79 Referral
Agents, 98 Brokers and 42 Banks (as on 31.3.2011) for soliciting life insurance business from
the public.
Over its existence of around 50 years, Life Insurance Corporation of India, which commanded a
monopoly of soliciting and selling life insurance in India, created huge surpluses, and contributed
around 7 % of India's GDP in 2006. The Corporation, which started its business with around 300
offices, 5.7 million policies and a corpus of INR 459 million (US$ 92 million as per the 1959
exchange rate of roughly Rs. 5 for a US $ , has grown to 25000 servicing around 350 million
policies and a corpus of over 8 trillion (US$159.6 billion).
HISTORY
The Oriental Life Insurance Company, the first corporate entity in India offering life insurance
coverage, was established in Calcutta in 1818 by Bipin Behari Dasgupta and others. Europeans
in India were its primary target market, and it charged Indians heftier premiums. The Bombay
Mutual Life Assurance Society, formed in 1870, was the first native insurance provider.
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The first 150 years were marked mostly by turbulent economic conditions. It witnessed, India's
First War of Independence, adverse effects of the World War I and World War II on the
economy of India, and in between them the period of worldwide economic crises triggered by the
Great depression. The first half of the 20th century also saw a heightened struggle for India's
independence. The aggregate effect of these events led to a high rate of bankruptcies and
liquidation of life insurance companies in India. This had adversely affected the faith of the
general public in the utility of obtaining life cover.
OBJECTIVES OF LIC
Spread Life Insurance widely and in particular to the rural areas and to the socially and
economically backward classes with a view to reaching all insurable persons in the
country and providing them adequate financial cover against death at a reasonable cost.
Maximize mobilization of people's savings by making insurance-linked savings
adequately attractive.
Bear in mind, in the investment of funds, the primary obligation to its policyholders,
whose money it holds in trust, without losing sight of the interest of the community as a
whole; the funds to be deployed to the best advantage of the investors as well as the
community as a whole, keeping in view national priorities and obligations of attractive
return.
Conduct business with utmost economy and with the full realization that the moneys
belong to the policyholders.
Act as trustees of the insured public in their individual and collective capacities.
Meet the various life insurance needs of the community that would arise in the changing
social and economic environment.
Involve all people working in the Corporation to the best of their capability in furthering
the interests of the insured public by providing efficient service with courtesy.
Promote amongst all agents and employees of the Corporation a sense of participation, pride and
job satisfaction through discharge of their duties with dedication towards achievement of
Corporate Objective.
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MISSION/VISION
Mission
"Ensure and enhance the quality of life of people through financial security by providing
products and services of aspired attributes with competitive returns, and by rendering resources
for economic development."
Vision
"A trans-nationally competitive financial conglomerate of significance to societies and Pride of
India."
OPERATIONS
NATIONALISATION IN 1956
In 1955, parliamentarian Feroze Gandhi raised the matter of insurance fraud by owners of
private insurance agencies. In the ensuing investigations, one of India's wealthiest businessmen,
Ramkrishna Dalmia, owner of the Times of India newspaper, was sent to prison for two years.
The Parliament of India passed the Life Insurance of India Act on 19 June 1956 creating the
Life Insurance Corporation of India, which started operating in September of that year. It
consolidated
37
the business of 245 private life insurers and other entities offering life insurance services; this
consisted of 154 life insurance companies, 16 foreign companies and 75 provident companies.
The nationalization of the life insurance business in India was a result of the Industrial Policy
Resolution of 1956, which had created a policy framework for extending state control over at
least 17 sectors of the economy, including life insurance.
PRESENT SCENARIO
38
The general insurance business in India is currently at Rs. 78000 crore (US Dollar 11.7 billion)
premiums per annum and is growing at a healthy rate of 17 percent.
India’s insurance market legs behind other economies in the baseline measure of insurance
penetration. At only 3.9 percent, India is well behind the 11.9 percent for Korea, 11.5 percent for
the UK 11.1 percent for Japan, 7.5 percent for the US. Indian insurance industry is expected to
grow to the US$ 280 billion by financial year 2020.
Government has approved the ordinance to increase Foreign Direct Investment (FDI) limit in
Insurance sector from 26 per cent to 49 per cent which would further help attract investments in
the sector. As per Union Budget 2019-20, 100 per cent foreign direct investment (FDI) will be
permitted for insurance intermediaries.
In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth US$ 903
million. Enrolments under the Pradhan Mantri Suraksha Bimas Yojana (PMSBY) reached
130.41 million in 2017-18. National Health Protection Scheme was announced under Budget
2018-19 as a part of Ayushman Bharat. The scheme will provide insurance cover of up to Rs
500,000 (US$ 7,723) to more than 100 million vulnerable families in India. Crop insurance
segment contributed
8.6 per cent to gross direct premiums of non-life insurance companies in FY20 (up to June 2019).
Overall insurance penetration in India reached 3.69 percent in 2017 from 2.71 percent in 2001. In
FY19 (up to Jan 2019), gross direct premiums of non-life insurers reached Rs. 1.39 trillion (US$
19.28 billion), showing a year-on-year growth rate of 12.65 percent.
Market Size
Government's policy of insuring the uninsured has gradually pushed insurance penetration in the
country and proliferation of insurance schemes. Gross premiums written in India reached Rs 5.53
trillion (US$ 94.48 billion) in FY18, with Rs 4.58 trillion (US$ 71.1 billion) from life insurance
and Rs 1.51 trillion (US$ 23.38 billion) from non-life insurance. Overall insurance penetration
(premiums as % of GDP) in India reached 3.69 per cent in 2017 from 2.71 per cent in 2001.
In FY19 (up to October 2018), premium from new life insurance business increased 3.66 per
cent year-on-year to Rs 1.09 trillion (US$ 15.46 billion). In FY19 (up to October 2018), gross
direct premiums of non-life insurers reached Rs 962.05 billion (US$ 13.71 billion), showing a
year-on- year growth rate of 12.40 per cent.
39
New product offerings: In September 2018 HDFC ERGO launched a new product
called E@Secure: a cyber-insurance policy to protect individuals and families from
cyber-attacks.
The following are some of the major investments and developments in the Indian insurance
sector.
Insurance sector companies in India raised around Rs 434.3 billion (US$ 6.7 billion)
through public issues in 2017.
In 2017, insurance sector in India saw 10 merger and acquisition (M&A) deals worth
US$ 903 million.
India's leading bourse Bombay Stock Exchange (BSE) will set up a joint venture with
Ebix Inc. to build a robust insurance distribution network in the country through a new
distribution exchange platform.
LIC of India acquired 51% stake in IDBI Bank by investing Rs. 14500 crores. This deal was the
part of a bailout package for the sinking bank is expected to provide a win-win situation to both
the partners.
40
1. Foreign Direct Investment (FDI) limit for the insurance sector increased from 26% to 49%.
2. Life insurance companies operational for 10+ years are now allowed to go public by IRDA
3. Government plans to divest a significant stake in PSU general insurance companies in order to
execute the steep disinvestment target
4. Several flagship schemes have been launched by the government to boost the insurance sector.
5. In September 2018, National Health Protection Scheme was launched under Ayushman Bharat
to provide coverage of up to Rs 500,000 (US$ 7,723) to more than 100 million vulnerable
families. The scheme is expected to increase penetration of health insurance in India from 34 per
cent to 50 per cent.
6. IRDAI has allowed insurers to invest up to 10 per cent in additional tier 1 (AT1) bonds that
are issued by banks to augment their tier 1 capital, in order to expand the pool of eligible
investors for the banks.
7. The Insurance Regulatory and Development Authority of India (IRDAI) plans to issue
redesigned initial public offering (IPO) guidelines for insurance companies in India, which are to
looking to divest equity through the IPO route.
Flagship schemes:
Pradhan Mantri Jan Suraksha Bima Yojana: This scheme focuses on providing affordable
insurance to people below the poverty line, in rural areas
Pradhan Mantri Jeevan Jyoti Bima Yojana: This initiative provides life insurance for
people employed in the unorganized sector
Atal Pension Yojana: This guarantees pension Coverage to all citizens in the unorganized
sector who join the National Pension System (NPS)
Ayushman Bharat Yojana: Each beneficiary family will receive medical insurance cover
of INR 5 lakh, which they can use to get treatment at public or private hospitals.
Over 47.9 million famers were benefitted under Pradhan Mantri Fasal Bima Yojana
(PMFBY) in 2017-18.
41
Road Ahead
The future looks promising for the life insurance industry with several changes in regulatory
framework which will lead to further change in the way the industry conducts its business and
engages with its customers.
The overall insurance industry is expected to reach US$ 280 billion by 2020.
Life insurance industry in the country is expected grow by 12-15 per cent annually for the next
three to five years.
Demographic factors such as growing middle class, young insurable population and growing
awareness of the need for protection and retirement planning will support the growth of Indian
life insurance.
References: Media Reports, Press Releases, Press Information Bureau, Union Budget 2017-18,
Insurance Regulatory and Development Authority of India (IRDA), Crisil
Disclaimer: This information has been collected through secondary research and IBEF is not
responsible for any errors in the same
42
Endowment Plan
» LIC's Jeevan Pragati
» LIC's Jeevan Labh
» LIC's Single Premium Endowment Plan
» LIC's New Endowment Plan
» LIC's New Jeevan Anand
» LIC's Jeevan Rakshak
» LIC's Limited Premium Endowment Plan
» LIC's Jeevan Lakshya
» LIC's Aadhaar Shila
» LIC's Aadhaar Stambh
RIDER
» LIC's Linked Accidental Death Benefit Rider
» LIC's Accidental Death and Disability Benefit Rider
» LIC's Accident Benefit Rider
» LIC’s New Critical Illness Benefit Rider
» LIC's NEW TERM ASSURANCE RIDER - (UIN: 512B210V01)
43
In the first five months of the current financial year, first-year premiums of life insurance
companies grew by 39.84% (year-on-year) at Rs 1.05 lakh crore as compared to Rs 75,588.35
crore in April-August of 2018-19.
Life Insurance Corporation of India (LIC) continued to grow at a faster pace compared to private
insurance players, shows the data from the Insurance Regulatory and Development Authority of
India (IRDAI). Market participants say that, growth in insurance was largely due to the surge in
group non-single business and individual single premium business in the April-August period.
The data from IRDAI shows that, private players saw first year premiums at Rs 28,480.43 crore
in April-August, 2019 as against Rs 22,886.48 crore in the previous financial year, a growth of
24.44%. First year premiums for LIC stood at Rs 77,220.97 crore in the first five months of
current financial year compared to Rs 52,701.86 crore in the previous financial year, a surge of
46.52%. Even for the month of August, new business premiums for the life insurance industry
grew by 26.37% at Rs 23,554.94 crore compared to Rs 18,639.29 crore seen in August last year.
Tarun Chugh, MD and CEO, Bajaj Allianz Life Insurance said, “Despite the market volatility,
we have had a positive swing in our growth numbers, and this not only reiterates our customers
trust in the brand, but is also reflective of how life insurance is now being viewed by them. “It’s
interesting to see that the industry has been able to make stable growth in these times, yet again
indicating that for long term life goals, life insurance is one of the strongest investments to make,
no matter how the markets are doing.”
First year premiums for Bajaj Allianz for the period of April-August stood at Rs 1,728.41 crore
as against Rs 1,433.23 crore in the previous financial year, indicating a growth of 20.60%.
Insurers like HDFC Life, ICICI Prudential Life Insurance, Kotak Mahindra Life Insurance, Max
Life, PNB Metlife, SBI Life and Tata AIA Life saw growth in their first year premiums.
In terms of segments, group single policies saw new business premiums for April-August period
at Rs 45,007.60 crore as against Rs 43,220.97 crore in the previous financial year, a growth of
4.13%. While group non-single first year premiums stood at Rs 19,370.60 crore as compared to
Rs 432.94 crore in the last fiscal. Individual single premium and individual non-single premium
grew by 71.98% and 12.22% respectively in April-August period.
44
45
Life Insurance industry in India showed a growth of 10.73% in Total First Year Premium
collection compared to previous year. In the meantime, 1.73% was the growth shown in Number
of Policies (NOP) and 11.63% on Sum Assured underwritten in the corresponding period.
The premium growth percent registered this year was marginally lower compared to the previous
year. Notably, the premium growth was 10.99% in 2018-19 against the current year growth of
10.73%.
Here I am going to list out top ever life insurance companies in India. It’s very difficult to choose
the top rank company on these life insurance companies because every insurance brand is good
and their policies are beneficial for the policyholder. Here I am just suggesting you top 20 best
lists of Insurance companies. It’s always depending on you to choose the best life insurance
companies after doing proper market research to understand your budget and goal.
46
Who doesn’t know LIC? Yes, everyone! This is one of the top class life insurance companies
ever in India. LIC has founded in 1st September 1956 with headquarters Mumbai. This is the
oldest insurance company in India. Shri V.K Sharma is the chairman of this firm and this
insurance company deals with several products like Life insurance, Investment management,
Mutual fund, Health Insurance and much more. LIC comes at the top position in terms of highly
growing insurance brand in India and most trusted one too.
Popular Plans
LIC Jeevan Akshaya
LIC E-term Plan
LIC New Children’s plan
LIC Jeevan Saral
ICICI Prudential Life Insurance Company is one of the most preferred life insurance
companies in India. This company was founded on 12th December 2000 with headquarters in
Mumbai. This is a public type insurance company which offers amazing insurance plans. MR
N.S Kannan is the Chief executive officer and Managing Direct of this company. If you need a
good life insurance plan then you can definitely go with this company’s policy.
47
Popular Plans
ICICI Pru Heart Cancer Protect
ICICI Prudential Smart Health Cover
ICICI Pru iProtect Smart
ICICI Pru Life Raksha
If you are looking for some outstanding life insurance plans then Reliance Life Insurance
Company is always the best choice for you. This is one of the best life insurance companies
which offer insurance products on retirement, investment, individuals as well as groups. Ashish
Vohra is the CEO of this life insurance company and the total asset of this company is almost
150 billion rupees.
Popular Plans
Reliance Protection plan
Reliance term plan
Unit-linked plan
Reliance Retirement plan
Reliance smart pension Plan
48
Bajaj Allianz Life Insurance is one of the renowned life insurance companies in India which
deals with several classy insurance and investment products. This company was founded in the
year 2001 with headquarter Pune. Tarun Chugh is the current MD and CEO of this insurance
company. This is a joint venture between Allianz SE and Bajaj Finserv Limited. Now this
company has almost 759 branches all over India. You can get several beneficial products from
this insurance firm.
Popular Plans
Young Assure Plan
Save Assure Plan
Life Long ASSURE Plan
iSecure Loan plan
Retire Rich
Birla Sun Life Insurance is another popular and trusted life insurance company where you can
purchase your life insurance. This is a joint venture of Aditya Birla group and popular Sun Life
49
Financial INC. This is an insurance brand which has a high aim of providing world class
financial security to its customers and that’s the reason people love this insurance company.
Nowadays this company is dealing with several beneficial products like Group plans, rural plans,
Child plans, saving plans, protection plans and much more.
Popular Plans
BSLI Protector plus plan
BSLI Protector Ease
BSLI Secure Plus Plan
BSLI Vision Endowment Plan
SBI Life Insurance is a popular and trustworthy brand for people in India. This is a joint venture
of BNP Paribas and State bank of India. SBI holds almost 70.1% ownership and rest is in the
name of BNP Paribas which is a French multinational bank. This insurance company was started
in 2001 and at the initial stage this company was dealing from banc assurance but now it has its
own agency and it deals with several life insurance products.
Popular Plans
SBI LIFE-eShield
SBI LIFE-smart money planner
SBI LIFE-Smart Humsafar
SBI LIFE-CSC Saral Sanchay
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Max Life Insurance which formerly known as Max New York Life Insurance Company Limited
is a reputed insurance company in India. In the year 2000, this company was entered into the
insurance business and started service in 2001. Analjit Singh is the chairman of Max Life
insurance who is also the founder of Max Health. This is a joint venture of Max Finance service
and Mitsui Sumitomo Insurance Company. Till now Max Life has more than 3000 life insurance
customer in India and it also provides several plans like child plans, Strategy plans, Growth
plans, Term Plans and much more.
Popular Plans
Max Life Online Term plan
Max Life Premium Return Protection plan
Max Life Super Term Plan
Guaranteed Lifetime income plan
Shiksha Plus Super
HDFC Standard Life Insurance is a highly reputed long-term life insurance provider of India.
Mumbai is the head quarter of this life insurance company. This is a life insurance firm with the
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joint venture between HDFC and Standard life Aberdeen PLC. HDFC insurance company deals
with several products in which you will get Pension plans, protection, health plans, investment
plans, and savings plan.
Popular Plans
HDFC Standard Life Insurance Term Plan
HDFC Endowment Plan
HDFC Retirement Plan
HDFC Life child Plan
Tata AIA life insurance is a joint venture of AIA group and Tata son’s ltd. According to a recent
record, this insurance company has almost INR 1397 crore premium business collections for the
year 2017-2018. The settlement ratio of this company is quite high than its competitor which is
almost 98%. This company always aims to provide hassle-free and smooth insurance solutions
with a better plan.
Popular Plans
Tata AIA Life Insurance iRaksha Supreme
Tata AIA Life Insurance Maha Raksha Supreme
Tata AIA Life Insurance iRaksha TROP
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Exide Life Insurance Company which formerly known as ING Vysya Life Insurance Company is
an Indian owned company. Exide Industries is the owner of this insurance company. It deals its
product via several channels like corporate agency, Bancassurance and direct channels. Till the
date, this insurance company has more than 15 lakh customers and almost INR 11,015 crores
assets.
Popular Plans
Exide Life term insurance plan
Exide life term smart term plan
Exide life term rider
Exide life secured income insurance regular pay
If you are looking for a leading life insurance company then you can go with PNB Metlife. This
is a life insurance company which was started its service since 2001. This insurance company
has three shareholders like Metlife international Holdings LLC, Punjab National Bank and
Jammu & Kashmir Bank limited. Ashish Kumar Srivastava is the CEO and Principal Officer of
PNB Met life India Insurance Company.
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Popular Plans
PNB MetLife Mera heart and cancer care
PNB Metlife Serious Illness rider
PNB Metlife Mera Term Plan
PNB Metlife Accidental Death benefit rider plus
Aviva India Life Insurance was started in the year 2002 July as a joint venture of two famous
groups one is Dabber and Aviva Plc. As per the record, Aviva India life insurance Company
consist of Dabur group has 51% of the stake and Aviva plc has 49% of stack partnership. This is
the first Insurance Company which introduced modern unitized with profit policies and Unit-
linked policies. It offers several attractive insurance plans to its customers and some of these are
given below.
Popular Plans
Aviva i-term smart
Aviva i-life Total
Aviva Heart Care
Aviva Extra Cover
Aviva Health Secure
Aviva i-shield
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Bharti Axa life Insurance company limited is a joint venture between two popular brands like
Bharati Enterprises and AXA group. These both groups are listed on top business groups in
India. This Insurance Company started its service in 2006 with its headquarter in Mumbai. Mr.
Sandeep Ghosh is the chief executive officer of Bharti AXA life insurance. You can get several
amazing and lucrative insurance offers from this company. Let’s know some of the best plans for
this insurance group.
Popular Plans
Bharati AXA Samriddhi Plan
Bharati AXA Life Elite Advantages Plan
Bharati AXA Life Aajeevan Sampatti+Plan
Bharati AXA Life secure Income plan
IDBI Federal life insurance was started in the year on 2006 and now it’s offering several
amazing insurance plans for its customers. This is an insurance company with the three-way joint
venture banks like IDBI Bank, Federal Bank, and Ageas. In December 2007, this insurance
company received the license from IRDAI and started its insurance service officially. The head
quarter of
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this insurance company is in Mumbai. Vighnesh Shahane is the all-time director and CEO of this
life insurance company.
Canara HSBC OBC is one of the reliable and famous life insurance companies ever. It was
launched in June 2008. This is an insurance company which is a joint venture of some reputed
and leading public sector banks like Oriental bank of commerce (23%), Canara Bank (51%) and
HSBC insurance holdings limited (26%). This insurance firm always focuses on fulfilling the
customers need and provides plans accordingly.
Popular Plans
iSelect Term Plan
iInvestshied Plan
Smart Junior Plan
Smart Suraksha Plan
Jeevan Nivesh Plan
Samridh Bhavishya
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When it comes to top 20 life insurance companies in India you can’t neglect DHLF Pramerica.
This is one of the fastest growing life insurance companies in India and it’s headquarter is in
Gurgaon. This company was founded in 1984 by Shri Rajesh Kumar Wadhawan. DHLF is a joint
venture of Dewan Housing Finance Corporation Ltd and Prudential International Insurance
Holdings, Ltd.
Popular Plans
DHFL Pramerica family fast
DHFL Pramerica family income
DHFL Pramerica True Shield
DHFL Pramerica U Protect
DHFL Pramerica life cancer + heart shield
If you need the best insurance plan for you then AEGON Life Insurance Company is always a
better option for you. In 2008, AEGON Life has founded with headquarters in busy city
Mumbai. AEGON Life insurance company was known as AEGON Religare Life Insurance
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Company. This insurance company is a joint venture of The Times Group and Dutch AEGON
N.V firm. It offers Term life insurance, health insurance, savings, and other investment plans.
Popular Plans
iTerm insurances Plans
iReturn Insurance Plan
Future Protection Insurance Plan
Rising Star Insurance Plan
Jeevan Shanti Insurance Plan
“India First” is a popular joint venture life insurance company in India. This is a joint venture
between two Indian public sector banks like Andhra Bank, Bank of Baroda and one UK’S firm
which is legal & general. The share percentages between these three are like 30%, 44%, and 26%
respectively. In November 2009, India First bank was incorporated and Mumbai headquarters of
this life insurance company. Ms. R.M, Vishakha is the MD& CEO of this famous insurance
brand. India first Life Insurance sells various products like insurance plans, life insurance, group
policies, and investment funds.
Popular plans
Insurance Khata
India first guaranteed retirement plan
Indian First Any time plan
India First Happy India Plan
India First Life Little Champ
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Shriram Life is a well-recognized joint venture life insurance company. This is a combined life
insurance company of Sanlam Company, South Africa and Shriram Group of companies. This
company offers several outstanding insurance plans for its customers which can secure their
future. Shriram Life Insurance Company was founded in the year 2005, soon got popularity
within few days only for its lucrative policy plans.
Popular plans
Shriram Life Jana Sahay
Group Traditional employee benefit plan
Pradhan Mantri Jeevan Jyoti Bima Yojana plan
Life unit-linked insurance plans
Life pension Plans
Edelweiss Tokio is a premium life insurance company established in the year 2011. In India, this
life insurance company runs as a joint venture between Tokio Marine and Edelweiss. In Japan,
Tokio Marine is one of the oldest life insurance companies. As of now, Tokio Marine has a 26%
share in this joint venture. This insurance company was approved by IRDAI in January 2016
and gets the chance to enhance its 49% stake.
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Popular Plans
Group Protection plans
My life+ term plan
Wealth builder
Critical care+
Edusave
Retirement Plans
Final words
Above given 20 best insurance companies in India lists are the best if you are looking for the
best life insurance plan for your better future. If you are going to choose the right policy, you
need to understand your aim and budget. Study all the policies of different firms and go for the
best according to your judgment. Hope you guys get good knowledge on top 20 life insurance
companies in India.
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Following the acceptance of the Life Insurance of India Act in 1965 the government of India
decided to float their own company for Life Insurance which resulted in the formation of LIC of
India. This move also resulted in the nationalization of the insurance sector in India, prior to
when it was a bunch of private companies. More than 240 private insurance companies and
provident societies merged to form the Life Insurance Corporation.
Strength:
Strengths are defined as what each business does best in its gamut of operations which can give
it an upper hand over its competitors. The following are the strengths of LIC are:
India’s largest Insurance service provider: LIC currently has pan India operations with
2048 fully computerized branch offices, 8 zonal offices, around 113 divisional offices,
2,048 branches and 1381 satellite offices and corporate offices. The entire country is
classified under 54 customer zones and 25 metro-area service hubs based across various
cities and towns of India. Currently, LIC has 1,337,064individual agents, 242 Corporate
Agents, 89 Referral Agents, 98 Brokers and 42 Banks for selling life insurance to the
general public.
Brand Image: LIC has a strong branding in India. Its tagline Yogakshemam
Mahamyaham which means welfare for all is well recognized. The Economic Time Brand
Equity Survey of the year 2015 voted LIC as the most trusted Insurance provider in India.
Fund Base: LIC has a huge found base of around 150 billion USD and is also India’s
biggest investor making it immensely powerful in the domain of finance in India.
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A network of Agents: LIC has around 1,337,064 individual agents, 242 Corporate
Agents, 89 Referral Agents, 98 Brokers and 42 Banks across India who cover each nook
and corner of the country.
Weakness
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some
of the key weaknesses of LIC are:
Culture: LIC has been strongly associated with the government and thus follows a very
slack and slow paced work culture. This works as a weakness when compared to modern-
day private insurance players who are adept at strategy.
Poor advertisement strategy: In comparison to its private counterparts LIC does not
spend too much on advertisement and this shows in the quality of ads that they release.
Too many restrictions: The Company has a lot of restriction imposed on it being a
government entity and there are always red tape challenges. This makes decision
making slow at LIC.
Labour overheads: LIC has a huge employee’s strength and most of them work from
their own setups. Paying their salaries and managing theme is often a huge challenge for
the company.
Opportunities
Opportunities refer to those avenues in the environment that surrounds the business on which it
can capitalize to increase its returns. Some of the opportunities include:
Cyber security: There are many cases of information threats and breaches in security
systems. Thus at an age where cyber security is a threat Insurance policies against this can
prove to be a huge opportunity.
Online Services: As online services grown people have started looking more into options
like insurance and the awareness levels are also higher than the earlier days. This presents
an opportunity for providers like LIC which are labor intensive to cut down costs by
replacing people with technology.
Shift from protection to prevention: There is a general shift of trend from protection to
prevention which is a pointer for insurance companies who should now be focusing on risk
prevention than risk mitigation policies.
More disposable income: Insurance today is seen not as a protection but also as a form of
investment. By capitalizing on this new approach insurance companies can design
new products.
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Threats
Threats are those factors in the environment which can be detrimental to the growth of the
business. Some of the threats include:
Competition: With privatization of insurance LIC has lost its older glory and today faces
stiff competition from private insurance players who have brought in more glamour into
the industry.
Change of governments: With every new government the fiscal and monetary policies
change with the result that policies need to be reworked accordingly. This creates a lot of
hassles.
Technology: Today most financial services make technology an integral; part of their
business through online banking and financial broking services online. However, LIC still
has a lot to achieve in terms of staying abreast with technology.
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HYPOTHESIS
NULL HYPOTHESIS
Customers of LIC of India of Mumbai district have negative perception towards the products
offered by the L.I.C.
ALTERNATE HYPOTHESIS
Customers of LIC of India of Mumbai district have positive perception towards the products
offered by the L.I.C.
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65
CHAPTER - 3
REVIEW OF LITERATURE
The state sponsored Life Insurance Corporation (hereinafter referred to as LIC) of India was the
Sole player in the Indian life insurance market before 2000. With the entry of private players,
LIC has lost considerable market share to private players although both market size and
Insurance premia, are on the rise. In India life insurance products were/are bought more as
Investments for tax savings rather than risk protection. The brand preference in this category has
never been explored in depth. It has been largely assumed that life insurance is an unsought
product and customer satisfaction a ‘paradox’. The proposition that has been examined is that
Customer satisfaction can provide business opportunities in this under penetrated market. It can
be a vehicle for identifying new avenues for cross selling, up selling and referrals. It also
attempts to identify the dimensions of service quality which are important to a customer.
SERVQUAL scale was used to discern the different dimensions of service quality and mean
Scores were used to find out if there is any gap between customer expectations and perceptions.
Retaining a customer is four times cheaper than acquiring a new one. The retention of the
customers is of utmost importance in the insurance industry in specification. Insurance business
is of the relationship building process. Were one customer leads to the building of other one. A
satisfied customer is like a word of mouth advertisement for the company. The needs of the
existing customers should be identified and satisfied well rather than only concentrating at the
new accounts. All possible measures needs to take to retain the customers as it is lesser costlier
as well as provides stability to the business. It wasn’t too long back when the good old
endowment plan was the preferred way to insure oneself against an eventuality and to set aside
some savings to meet one’s financial objectives. The traditional endowment policies were
investing funds mainly in fixed interest.
Government securities and other safe investments to ensure the safety of capital. Thus the
traditional emphasis was always on security of capital rather than yield. However, with the
inflationary trend witnessed all over the world, it was observed that savings through life
insurance were becoming unattractive and not meeting the aspirations of the policyholders. The
policyholder found that the sum assured guaranteed on maturity had really depreciated in real
value because of the depreciation in the value of money. The investor was no longer content with
the so called security of capital provided under a policy of life insurance and started showing a
preference for higher rate of return on his investments as also for capital appreciation. It was,
therefore found necessary for the insurance companies to think of a method whereby the
expectation of the policyholders could be satisfied. The object was to provide a hedge against the
inflation through a contract of insurance. Decline of assured return endowment plans and
opening of the insurance sector saw the advent of ULIPs on the domestic insurance horizon.
Today, the Indian life insurance market is riding high on the unit linked insurance plans.
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At national as at individual level the excess of income after consumption level savings as funds
for investment. Surplus funds can be invested in either real asset or in financial assets. Purpose of
investment is to protect one’s wealth against erosion of value due to inflation and to earn risk
adjusted return. There are three motives which drive people to purchase insurance products in
India. _ Desire to cover risk _ Tax benefit _ Saving motives It is argued that in this paper that in
the changing scenario for the insurance sector there is going to be a good opportunities for
insurance sector to expand its market base. For this purpose there is need to improve the features
of the insurance products to make them more liquid or short term schemes could be increased. It
is shown that although rewards implied by the insurance products particularly by the tax benefits
are quite close to those observed in banks and small saving scheme of the governments. The
performance of mutual funds which come in many different types is found to be reasonable
compared to the risk involved. The survey indicates that it may not be very difficult to win over
the confidence of small investors towards insurance policies if good marketing techniques are
adopted to educate the targeted population about the uses of insurance policies from investment
point of view.
Insurance is one product which is not demanded by a customer, but supplied to him by massive
education and drive marketing. Insurance ought to be bought not sold. The new concept of
demand side innovation focuses more on customer’s social and economic reality striving to
deliver maximum value to the customer at an affordable price. Therefore, when the customer
becomes the primary focus including him in the invention process becomes mandatory. But,
there are certain areas of insurance innovations where the customers cannot be involved. A case
in point is the recent insurance product invention called Telemetric Auto Insurance. It’s a
product by the Progressive Auto Insurance, which monitors the driving behavior of its auto
insurance policyholder. The new machine grabs information and automatically transmits it to the
insurer. This information received is regularly analyzed to judicially conclude the intensity of
risk the person is exposed and the corresponding premium he is eligible to pay. This is an
example of supply side innovation, where it is strictly not possible to include the customer in the
innovation process. Though, there are instances where the customer is involved in the testing
phase, his inclusion in the conception phase makes an innovation demand-driven.
REVIEW OF LITERATURE:
This chapter presents the review of literature to identify and understand the implications of
different issues related to consumer perception and satisfaction towards public and private life
insurances companies in India. The literature on life insurance industry in India includes books,
compendia, theses, dissertations, study reports and articles published by academicians and
researchers in different periodicals. The review of this literature gives an idea to concentrate on
the unexplored area and to make the present study more distinct from other studies. The literature
available is presented below:
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1. Baal N. and Sandhog H. S. (August 2011), a study on Life Insurance Corporation of India
(LIC) the capital demanding business, supplies the most important financial instruments to
customers directed at safety as well as long term savings. The present study by examines the
parts affecting agent’s perception towards Life Insurance Corporation of India. Moreover,
analysis of one way arrangement has also been performed to test the important results to show
that no important differences exist among various groups of respondent regarding to their
apprehension towards Life Insurance Corporation of India.
2. Baal N. and Sandhog H. S. et al (August 2011), with the access of so many players in the
field and the consistent competitive activism, the choate area of the service sector is observing a
multi- dimensional, purposeful, consumer-friendly approach, shedding off the apathy that had
come to be affiliated with the sector. The findings of the study imply that the gap scores do not
amalgamate into five dimensions of service quality rather, than the perception scores merge into
three dimensions.
3. Meera C. and Eswari M. (November 2011), in modern aggressive environment services are
ameliorate accumulating more denotation. Nowadays, greater absorption is paid to all the bank
customer touch points, address to optimize the reciprocal and user friendly services. The aim of
the study by is to crumb the customers bliss towards cross selling of insurance products and other
services accomplished by private sector banks.
4. Singh H. and Loll M (December 2011), states that life insurance is one of the fastest growing
and emerging markets in India. Insurance diffusion in rural area – the insurance industry has an
acceptation grant in socio-economic development. Objective of the present study is to appraise
the opportunities for insurers in the rural market and what would be new action to tap the highly
underinsured rural area.
5. Friar F. and Khanbashi M. et al (December 2011), this study is one of the most conscious
actions taken in alluring and gratifying needs of customers is chattering a charismatic
information mechanism and feedback process between organization and customers. The aim of
this study by, is finding of the variation between anticipation of the employees and customers
towards service quality in insurance industry of Iran. The study revealed that there is cogent
difference between the anticipation of staff and customers towards the tangibles dimension while
the anticipation of both the groups towards the other dimensions is homogenous.
6. Sharma M. and Vijay T. S. et al (January 2012), the animus of this study is to assay the
brunt of demographic factors on the level of satiety of investor’s contra insurance policies. The
study entraps the impact of demographics factors on the satisfaction of investors towards
insurance policies. This paper also evaluates cogent relationship between demographic factors
and overall satisfaction of the customers towards the insurance policies.
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7. Gautam V and Kumar M (March 2012), the present research is an effort, to allegorize the
attitudes of Indian consumers towards the insurance services. The study has been made by
accumulating the antiphon of consumers through structured questionnaire on five point Liker
scale. The decree of the present study may act as an important aspect for the insurance
companies in Indian market to flounce marketing strategies established on socio demographic
and economic factors.
8. Ansari Z. A. (March 2012) in the present study examines the attitude of individuals towards
different kinds of risks and scope they prefer in Saudi Arabia. The study by further examine how
the use of insurance particularly the binding insurance has altered the perception towards risks
and their future behavior towards buying other insurance policies and also what features the
users of insurance suggest in their insurance policy contract. The study is based on primary data
collected aimlessly from current users of binding insurance policies that is motor insurance and
health insurance and life insurance.
10. Bodla B. S. and Chaudhary K. (May 2012), present study by, looks for to determine the
expected and anticipated service quality level along with gaps on the origin of service quality
model by Suresh Chandar et al (2001) in one of the superior private sector company, ICICIPLI –
ICICI Prudential Life Insurance Company. Though altogether private sector has importantly
apprehended the market share at first but now days and most of the private sector companies are
assaying for customary expansion in business and market share and the picked company is one
of them.
11. Das S. K. (June 2012), a study on insurance has been as essential part of financial services
system and acknowledged as a vital element of a country’s financial health and mark of progress.
Insurance suppliers for the financial security of citizens and proposes valuable investment
advices and serves as a persuasive step towards both individual and national financial stability. It
is found that high operating cost, exertion break even, confluence of accounting standard etc. are
the main issues of life insurance companies in India.
12. Borah S. (November 2012), the study done by was in Jorhat branch on the concomitant
notion of marketing accentuates on the gratification of customers. Marketing actualize and end
with the customers. The study on customer satisfaction on products of private sector insurance
company with reference to Kotak Mahindra life insurance company ltd revealed that most of the
customers are gratified and are satisfied with the same.
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13. L Sreenivas. D. and B Anand M. (December 2012), in the Indian Lexicon, the insurance
convention among the general public during the independence decade was infrequent but yet was
an extraordinary furtherance in the Indian insurance industry soon after the economic reforms a
con due to healthy race from many national as well as international private insurance players.
The study entrap by, was a way to try to determine the investors understanding towards public
and private life insurance companies in India with special regards to Karnataka.
14. V Ravi and Gulati K et al (2012), the financial ameliorate posture a lot of confrontation
before the Indian insurance sector, one of the considerable demos faced by insurance companies’
accord with the customer complacency and adherence. The study revealed the considerable
observations in customers’ expectations and perceptions from insurance services thus knowing
dissatisfaction among insurance company customers.
15. Babu P. R. (February 2013) in his study by, on the private sector life insurance companies
have been making briskly clump in terms of increasing their augmentation and market share
since year 2000. The Indian life insurance system is having cogent base on mixed economic
system where in the public sector engaged a monopolistic position in life insurance business.
Private players play an extensive aspect in life insurance business more energetic and customer
friendly.
16. Bihani P. and Bhowal A. (April 2013), has said that life insurance industry is in an
augmentation aspect and cyclic advancements are going on with respect to products and services.
The most alluring finding of the study was the severity of customer solution experienced is more
that degree of customer solution expected.
17. Purusothaman U. R. (July 2013) has said that India has extensively been known for the
divergence of its culture, for the amplitude of its people and for the accessibility of geography.
Its basin of technical skills, its base of an English speaking populace with an increasing
disposable income and its blooming market have all co adjure and accredit India engrosses as an
operable partner to global industry. Hence, the study revealed that India ranks fifth on the overall
index, as the number of points is more desirable on the country economy development index and
the real estate market index, but fairly low on the regulatory index.
18. Padhi B. (August 2013), a study on Indian insurance market was nationalized in 1956 and
LIC of India was setup. LIC of India adored monopoly on Indian Insurance market for more than
4 decades. The study by will reveal the performance of particular private insurance companies in
the segments like number of policies floated number of money collected through premium and
the annual expansion in the specific areas from 2001 to 2012.
19. Rajan J. and Gomatheeswaran M. (August 2013), a study by this scholar states that
complete and persuasive banking system is required for a healthy economy. In the recent years
new trends have raised in the banking sector. The correlative study conducted by on public and
private sector banks limelight on the level of customer satisfaction on bancassurance services.
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20. Gaikwad A. S. and Vibhute S.G. (August 2013), a study about Indian insurance industry is
in an unsettled situation. This study by, will ease the insurance companies to know the opinions
of customers concerning insurance industry and particularly opinions towards traditional and
ULIP plan. Along with this, the company and advisors would empathy the accurate demand of
samples, the limit of customer satisfaction. Factors customer acknowledge while choosing the
policy and opinions on advisors advocacy by which company and advisors can draft their sales
program, sales speech, local strategies and the like.
21. Kathirvel N. and Radhamani S. (September 2013), study on the insurance industry forms
an essential part of the Indian financial market, with insurance companies being cogent with
institutional investors. The study by, conclude the study as an attempt to calculate the various
parameters as perspective by the policy holders and to provide assistance to the insurance
company in serving its policy holders in a much better and smooth way.
22. Mahajan K. (November 2013), study about India after liberalization, has been advancing
the culture of investment in financial works; which has uncloaked up huge change for insurance
firms to capture these opportunities the insurance firms have come up with cautious marketing
plans, so that, it helps them to accomplish their objectives at one end and assist the Indian
customer to travel from unknown to known product zone.
23. Damtew K. and Pagidimarri V. (December 2013), different policy holders by are basic for
insurers for their life and wealth in today’s opposing business environment .Customers can
purchase various and more policies from the same provider and restore their agreements before
end date if they have belief on their relevant providers. This reverie aims to analyze the role of
trust in building customer faithfulness in the insurance sector. In order to earn this aim, non-
experimental reverie was made for this reverie and to evoke policy holder’s perception,
systematic questionnaires were designed and then research is made and outcomes are described.
24. Ali L. and Chatley P. (2013), Bancassurance as an aqueduct of selling insurance has fast
ameliorated impulse in the Indian insurance scene. Hence conveying that future of bancassurance
can be bright in India too if the aggravating ascend companies can channelize their achievements
cogently is for corporate image taking the place by size of operations and customer satisfaction
and adeptness in sales process.
25. Prakash N. and Sugumaran G. (January 2014), in their research work stated that India
which has a behemoth population abominable and are not tapped by life insurance market, which
in turn concocted an favorable circumstances for the Indian and foreign nationals to entrust in
this market. For the customers of the private sector, the apical mean value to egress the
customer’s needs and wants.
26. Choudhari P. S. (January 2014), study indicates that the age of information technology,
customers are not only fully alert of their needs and requirements, expectations and information
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technology enabled services but also conserve day to day communication with the different kinds
of service provider in their life for their own interest and getting their services in various ways.
In this paper the researcher tried to find out whether there exist any cogent service quality gap in
between insurer’s perception of customers service expectation and customers’ expectations of
quality of services provided by the LIC of India in Burdwan district.
27. Thirupathi T. (January 2014), Life Insurance Corporation of India (LIC) is the largest
insurance group and investment company in India. They prefer private insurance sectors because
they provide them the banking facility and a lot of value added services so it will be beneficial
both to common public and the LIC if it offers banking facility to the policy holders and the
common public. The study revealed that the policy holders have bought out the expectations of
the policyholders and their preferences. It has also offered suggestions that can be implemented
for the benefit of the common public and the government.
28. Mehta D. and Tripathi A. (February 2014), in his study has stated that insurance sector in
India is sprouting at a very swift stride. With the entrant of new and more and more private
sector the feuding within the industry is becoming very fierce. Thus, today to survive in the
market the very vital element for any company is to take notice of the customer’s satisfaction to
maintain, cherish and attract their potential clients.
29. Ahmed A. and Kwatra N. (March 2014), this papers aims at judging the quality of
insurance services in India through customer’s determination and how this can be used to
increase the demand for insurance which is at present low in India. The study by revealed among
other things that the total number of death claim settled by an insurance company is the most
important factor considered by the customers of insurance companies in India in their judgment
and calculation of quality of the policies they are holding. The study therefore advises that the
culture of deferment in premium payment or non-payment should be gridlocked and
organizations should look in going to see the acumen why the payment of premium is a
difficulty.
30. Janjua P. Z. and Akmal M. (March 2014), Islamic finance and insurance are in
international market particularly after world economic since 2008. This study by is a study to
ascertain customer’s satisfaction for the services of common and Islamic insurance companies in
Pakistan. The findings advices a cogent betterment in the service quality of common and Islamic
insurance industry specifically, the common insurance companies require to pay extra heed on
young people, private employees and lower income groups, whereas the Islamic insurance
companies have to put more efforts to better Shariah compliance and to allure self –employed
and higher income groups.
31. Bapat H. B. and Soni V. et al (April 2014), reverie states the requirement for insurance is
as old as commerce and trading that exists in the world. Uncertainty is built in to life, commerce,
trading etc. where insurance will provide protection to it. The reverie finds out their present
levels of the products offering on the basis of Servqual scope. This reverie provides sagacity
to the
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practicing administrator to recognize the gap in take influence by aims the expected quality
product.
32. Bhowal A. and Pankaj B. (April 2014), Life insurance industry is in growing juncture and
daily new developments are going on in regards to products and services. Given the empirical
research methods and specially contriving scaling technique, the study resulted that the
difference between the degree of customer cost conventional from the insurance and the degree
of the customer cost experienced is statistically not cogent.
33. Choudhari P. S. (April 2014), due to the aftermath of the various elements of the
globalization, customers socio-economic culture has heretofore been changed and human
interactions are now cogently being recouped by the interactions of human – technology where
in service sector, the information technology is playing the role in supplying quality of services
to the customers in order to amuse the customers in the present competitive market. In this study,
devout observation was taken place about the propitiating impact of the information technology
on the anticipated service quality and customer satisfaction link in life insurance services.
34. Ch. S. (May 2014), study reflects that presently more than 40% of the businesses of the
insurance companies are done through the bancassurance medium. The finding of the study
reveals that the insurance company can actualize almost all the benefits of bancassurance through
selling their product by using the database of banks and their branch aperture. In India 70 percent
of the population are not under the inclusion of insurance distinctively in rural areas.
35. Barik B. and Patra R. (June 2014), in his study stated that the Indian life insurance sector is
amplifying at an accelerate rate. The study revealed that life insurance business in India needs a
special care as compared to other business, both theory and practice to be integrated to provide
the best services to the policy holders. Hence, this study by the researchers has been done with an
intention to help with suggestion and recommendation that will help both academician and
industry personnel to re-engineer their thought in insurance sector.
36. Chand M. (June 2014) studies the main change of life insurance industry in India is the
gapping up to private and global players. The study will reveal the aspect of private insurance
players in the areas and like number of policies glided, amount of premium money collected,
agent or broker commission expenses, and operating expenses from 2001 -2012.
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38. Dash B. and Mohanty B et al (November 2014), this research reverie by is focused on
effect of customer relationship management fashion on insurance sector in Odisha market. In this
reverie customer’s belief have been gathered through a structured questionnaire to comprehend
the effectiveness of CRM implementation in association with the companies like Aviva, LIC of
India, ICICI Prudential, Birla Sun Life and Reliance.
39. Satya K. K.V. R. and Radha B. et al (December 2014), the study done by has an objective
to study osmosis and enlargement of insurance industry. The sector was widened homogenous
enlargement after liberalization but during last four years, contraction in business sales or
earnings is recorded. In 2005, private sector has opened many offices and LIC opened many in
numbers during 2009.
40. Jothi A. L. (December 2014), after the privatization of Indian insurance industry, exhaustive
competitive environment came into live and companies commenced selling manifold product
mix to allure the customers and accomplish their needs and clinch satisfaction through
customer’s positive apprehension. The aim of this research study by is to interrogate whether
demographic characteristics have impress on the perception of customer towards the quality of
services performed by life insurance players.
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CHAPTER - 4
RESEARCH DESIGN AND METHODOLOGY
Methodology is a systematic way of solving a problem. It includes the research methods for
solving the problem.
Type of research
Descriptive cum Exploratory research
Data source
Primary and Secondary data
Sampling universe
Mumbai City
Sample size
200
SAMPLE DESIGN
The target population of the study consists of various respondents of Mumbai city. This
survey will be 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 will be 200.
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SAMPLING TECHNIQUE
The sampling technique that adapted to conduct the survey was ‘Convenience Sampling’
and the area of the research was concentrated in the city of Mumbai. The survey was conducted
by visiting different places like colleges, corporate offices, respondent’s home etc.
DATA SOURCE
The task of data collection begins after a research problem has been defined. In this study
data will be collected through both primary and secondary data source.
PRIMARY DATA
A primary data is a data, which is collected for gathering information first time and to
analyze the problem. In this study the primary data was collected among the consumers using
questionnaire.
SECONDARY DATA
Secondary data consist of information that already exists somewhere, having been
collected for some other purpose. In this study secondary data was collected from company
websites, magazines and brochures.
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CHAPTER - 5
DATA ANALYSIS AND INTERPRETATION
1) Age Group
Interpretation
According to the graph given above out of 200 respondents 50 % are below 30 years of age, 32%
are between age group of 31-40 years, 16% are between the age group of 41-50 years, 2 % are
between the age group of 51-60 years and none above 60 years, which describes that LIC
policies have got maximum faith among the youths.
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2) Gender
Interpretation
According to the graphs given above out of the total 200 respondents included in the study 68 %
were males and 32 % were females, which clearly defines the gender biasness, that the males
have more liking towards the LIC policies.
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3) Marital Status
Interpretation
According to the graphs given above out of the total 200 respondents included in the study 77%
were married and 23 % were unmarried, hence we can say married persons are more interested in
the investment criteria’s offered by LIC.
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Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 37%
were having one policy of LIC, 51% had two policies and 12 % more than two, which clearly
defines the faith of the people towards LIC policies.
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5) Mode of Payment
Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 11%
have opted for monthly payments, 11% opted for quarterly payment, 27% opted for half-yearly
payment and 51% opted for yearly payments of the premium.
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6) Educational Qualification
Interpretation
According to the graphs given above out of the total 200 respondents included in the study 16%
were undergraduate, 23% were graduate, 47% were post graduate and 14 % were doctorate,
which clearly indicates the liking of the educated sectors towards LIC policies.
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7) Occupation
Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 10 %
were students, 45% were from service class, 24% were Self-employed and 21 % were from other
category, which clearly indicates the liking of the service class people in LIC policies and
services.
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8) Annual Income
Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 33%
were having income below 1 lac, 60% were having income between 1-5 lacs, 4% had income
range of 5-10 Lac and 3% were having income above 10 lac, which clearly defines the hold of
LIC among the largest segment i.e. average middle class.
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Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 34%
liked short term investment, 51% liked long term investment and 15% liked both types, which
gives an opportunity for LIC to give due emphasis on short-term investment policies.
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Total Yes No
200 164 36
Percentage 82 18
Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 82 %
were satisfied by the LIC policies and services rest 18 % were not satisfied.
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Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 42 %
have invested on the brand name, 23 % on its ways to handle grievances, 20 % on the basis of
timely claim settlements and rest 15% as LIC is government owned sector so the customers are
secure.
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Total Whole Life Endowment Plus Money Back Pension Fund Others
200 34 56 68 32 10
Percentage 17 28 34 16 5
Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 17%
have invested in Whole life, 28% in endowment plus 34% in Money back, 16% in Pension fund
and rest 5% in other policies. It’s an alarming signal for LIC to concentrate on policies and make
more lucrative for customers, which comes under other categories.
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Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 7%
like policy of 5 years, 42% liked policies ranging from 5-15 years, 38% liked in the range of 15-
25 years and rest 13% liked policies of 25 years.
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Interpretation
According to the graphs given above out of the total 200 respondents included in the study, 62%
were satisfied by the services offered by LIC, 28% were partially satisfied and rest 10% were not
satisfied.
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15) If you buy a new policy would you like to go for LIC?
Total Yes No
200 164 36
Percentage 82 18
Interpretation
According to the graphs given above out of the total subjects 200 included in the study, 82% said
that if they will buy new policy they will definitely go with LIC only 18% said no regarding
further investment with LIC.
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Total Yes No
200 176 24
% 88 12
Interpretation
According to the graphs given above out of the total respondents 88% have got positive
perception towards LIC whereas 12% have got negative perception towards LIC, which fulfills
the motive of our study that customers of LIC have got faith in it and want to stuck with it in
near future, they feel that their investment is secure and hassle free returns they will get at due
time.
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CHAPTER - 6
FINDINGS, SUGGESTIONS AND CONCLUSION
FINDINGS
The findings that can be drawn from the survey conducted by us can be summarized in the way
Bank Deposits are the most preferred investment alternative which is available to people
followed by alternatives such as Insurance, Real Estate, Gold and Silver, Mutual etc. The scheme
mostly preferred by insurance holders was life protection schemes like death benefits followed
by money growth plans like wealth creation and high return plans. It was found that nearly 50%
of the respondents usually save less than 15% and the kind of investment mostly preferred by the
respondents were both long and short term. According to the survey safety is the most important
criterion which is accepted among all the respondents towards their investment alternatives
followed by Return, Brand Name, Tax Benefits, Liquidity and Capital Growth. According to the
study company image is to be the highly important criteria, which we consider before taking up a
life insurance this is mainly because people expect safety and security for their money which
they invest, followed by the factor Premium which we pay to the insurer and then Bonus and
Interest paid by the company, services etc.
It is clear that the majority i.e. more than half of investor’s investing in insurance are the young
people in the age group of 20-40. It can be said that males dominate in having life insurance
policies. The majority of people having life insurance are employed. The most preferred plan
among the investor’s is unit linked plans because of its high returns. Almost 80% of the policies
sold has the periodicity of 5-25 years. It is very much clear that the awareness level of the
customers of LIC is much higher. A greater number of customers of LIC are either fully or
partially satisfied but there is not much significant difference across sectors in terms of service
quality satisfaction level. Employees or agents of LIC are easily accessible and customers were
happy with the ethics, knowledge provided by them and helpful gestures they offer them as when
required. Most of the respondents of LIC feel that formalities for opening a policy are not
complex and do not take much time to start with and Two fifth of the customers of LIC are fully
satisfied with its grievance redress mechanism. It is an opportunity for LIC that more than four
fifth of the customers of LIC feel that there is no delay in claim settlement also a large number of
customers of LIC feel that their agent provides them with the correct and relevant information
and it is evident that individual risk coverage is the most preferred criteria among the investors
sectors, Hence the rationale behind investment is more or less same. Last it was clearly a
mandate given to LIC that 88% of the respondents have got positive perception towards LIC and
if they again go for the new policy, they will stuck to LIC of India only as after investing with
them they feel that their money is safe, secure and they don’t have to run here and there for the
claim settlements.
We see that due to excellent service quality and attractive offers private insurance companies
have started getting a number of customers. They are growing rapidly. Though, LIC is also
increasing its customer base but private insurance companies are moving at a fast pace. Though
the income
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of private insurance companies is negligible when compared with LIC but then also the pace
with which they are increasing their income is tremendous. LIC is certainly having a large
customer base. Market share for LIC in the last financial year has increased 6% from financial
year 2010- 2011, at that time it was 72% and now it is 78%.
LIC is much ahead of private insurance companies in this field. They are undoubted champions
in insurance when it comes to profit earning. New business is increasingly going towards private
insurance companies but still the customer base of LIC is very strong. In issuing new policies per
branch also, they are ahead of private insurance companies though not by very large margin.
Customer base of LIC is very strong and still business per branch, profit per branch or premium
per branch, they are leading much ahead of private insurance companies.
The findings that can be drawn from the survey conducted by me can be summarized in the way
Bank Deposits are the most preferred investment alternative which is available to people
followed by alternatives such as Insurance, Real Estate, Gold and Silver, Mutual etc. The scheme
mostly preferred by insurance holders was life protection schemes like death benefits followed
by money growth plans like wealth creation and high return plans. It was found that nearly 50%
of the respondents usually save less than 15% and the kind of investment mostly preferred by the
respondents were both long and short term. According to the survey safety is the most important
criterion which is accepted among all the respondents towards their investment alternatives
followed by Return, Brand Name, Tax Benefits, Liquidity and Capital Growth. According to the
study company image is to be the highly important criteria, which we consider before taking up a
life insurance this is mainly because people expect safety and security for their money which
they invest, followed by the factor Premium which we pay to the insurer and then Bonus and
Interest paid by the company, services etc.
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SUGGESTIONS
1. To increase the level of insurance penetration LIC may focus on bringing products that
suit to the rural customers.
2. The company if possible should invest in advertising, conduct road shows, and spend
money on hoardings, so that it can better propagate awareness about its various lesser
known products.
3. LIC should also tie up with several other banks apart from the existing ones to sell its
products i.e. through banc assurance
4. The company has the option of tying up with local NGO’s for selling its rural insurance
products.
5. Customer friendly documentationi.e.it should be made easier and faster.
6. LIC should keep a check that its agents equally promote all its products.
7. LIC may provide additional funds to its development officers and agents.
8. All the hidden charges should clearly be stated in the form and explained by the agent
and LIC should provide better training to its agents.
9. Claim settlement process should be made fast and must not involve lengthy decision
making process.
10. Some special focus should be laid on individual risk coverage while designing the products.
11. People becoming more aware and demanding so there is scope for a whole lot of
innovative products.
12. To sell insurance products through electronic Medias.
13. The lack of comprehensive social security system combined with a willingness to save
means that Indian people demand for pension products will be large. Thus, it has become
an opportunity for the life insurance industry.
14. Easy accesses to development in the more advance market provide further opportunity to
upgrade their working. Technological, financial or specific area based avenues of
absorbing improved system are also now more easily available. So, that insurance
companies working efficiently and fast service.
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CONCLUSIONS
Insurance is a tool by which fatalities 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.
Company image is the highly important criteria that consumers consider before taking up a life
insurance. This is mainly because people expect safety and secure for their money which they
invest, followed by the factor Premium which we pay to the insurer and then Bonus and Interest
paid by the company, services etc.
LIC dominates the Indian insurance industry. In today’s competitive world, customer satisfaction
has become an important aspect to retain the customers, not only to grow but also to serve.
Increased competition, wide range of product offerings and multiple distribution channels cause
companies to value satisfied and highly profitable customers. Customer service is the critical
success factor in a company and providing top notch customer service differentiates great
customer service from indifferent customer service.
The entry of private sector insurance companies into the Indian insurance sector triggered off a
series of changes in the industry. Even with the stiff competition in the market place, it is evident
from the study that products offered by the LIC are creative, innovative and of the liking of the
customers, moreover they are satisfied by the true knowledge provided by the company or agents
and they are easily accessible, Flexible payment schemes with no hidden cost, there is no undue
delay in claims settlement, customers are highly satisfied by the grievance redressal mechanism,
and in the near future if they will go for the policy they will stuck to LIC of India, which shows
the great faith and positive perception of the customers towards LIC of India.
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QUESTIONNAIRE
Dear respondent,
This questionnaire is aimed at understanding your perception about Life Insurance Corporation
of India .Your response will be dealt with strict confidentiality and it will be used only for
academic purpose. Thank you for spending your valuable time to fill this questionnaire.
Name:
1) Age Group
a) Below 30
b) 31 – 40 years
c) 41 – 50 years
d) 51 – 60 years
e) 60 years and above
2) Marital Status
a) Married
b) Unmarried
4) Mode of Payment
a) Monthly
b) Quarterly
c) Half-Yearly
d) Yearly
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5) Educational Qualification
a) Undergraduate
b) Graduate
c) Post Graduate
d) Doctorate
6) Occupation
a) Student
b) Service
c) Self Employed
d) Others
7) Annual Income
a) Below 1 Lac
b) 1 Lac – 5 Lac
c) 5 Lac – 10 Lac
d) Above 10
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10) State your expectation on investment alternatives by ticking according to its importance
Capital Growth
Liquidity
Return
Tax Benefit
11) What parameters you have looked into at the time of buying policy from LIC of India
Premium
Charges
Policy Term
Rider Benefits
Accessibility
Company Image
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17) If you buy a new policy would you like to go for LIC?
a) Yes
b) No
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