CHAPTER- 1 INTRODUCTION

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INTRODUCTION TO TATA AIG LIFE
Tata AIG Life Insurance Company Limited (Tata AIG Life) is a joint venture company, formed by Tata Sons and AIA Group Limited (AIA). Tata AIG Life combines Tata’s pre-eminent leadership position in India and AIA’s presence as the largest, independent listed pan-Asia life insurance group in the world spanning 15 markets in Asia Pacific. Tata Sons holds a majority stake (74%) in the company and AIA holds 26% through an AIA Group company. Tata AIG Life Insurance Company Limited was licensed to operate in India on February 12, 2001 and started operations on April 1, 2001. TATA INDIA LTD AIG LIFE INSURANCE CO. LTD

OBJECTIVES OF THE STUDY
 To find the market share of various life insurers in India  To suggest additions to the current product portfolio  To recognize the popular insurance plans  To showcase the influence of advertising  To suggest ideal policy term and premium for insur

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Brief history of insurance sector:

The insurance sector in India has completed all the facets of competition –from being an open competitive market to being nationalized and then getting back to the form of a liberalized market once again. The history of the insurance sector in India reveals that it has witnessed complete dynamism for the past two centuries approximately. With the establishment of the Oriental Life Insurance Company in Kolkata, the business of Indian life insurance started in the year 1818.

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Important milestones in the Indian life insurance business:

1912: The Indian Life Assurance Companies Act came into force for regulating the life insurance business.

1928: The Indian Insurance Companies Act was enacted for enabling the government to collect statistical information on both life and non-life insurance businesses.

1938: The earlier legislation consolidated the Insurance Act with the aim of safeguarding the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies were taken over by the central government and they got nationalized. LIC was formed by an Act of Parliament, viz. LIC Act, 1956. It started off with a capital of ` 5 crore and that too from the Government of India.

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Important milestones in the Indian general insurance business:

1907: The Indian Mercantile Insurance Ltd. was set up which was the first company of its type to transact all general insurance business.

1957: General Insurance Council, an arm of the Insurance Association of India, framed a code of conduct for guaranteeing fair conduct and sound business patterns.

1968: The Insurance Act improved for regulating investments and set minimal solvency levels and the Tariff Advisory Committee was set up.

1972: The General Insurance Business (Nationalization) Act, 1972 nationalized the general insurance business in India. It was with effect from 1st January 1973.

107 insurers integrated and grouped into four companies viz. the National Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental Insurance Company Ltd. and the United India Insurance Company Ltd. GIC was incorporated as a company.

The history of general insurance business in India can be traced back to Triton Insurance Company Ltd. (the first general insurance company) which was formed in the year 1850 in Kolkata by the British

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.LIST

OF INSURANCE COMPANIES IN INDIA
Websites

LIFE INSURERS

Public Sector
Life Insurance Corporation of India www.licindia.com

Private Sector
Allianz Bajaj Life Insurance Company Limited Birla Sun-Life Insurance Company Limited HDFC Standard Life Insurance Co. Limited ICICI Prudential Life Insurance Co. Limited ING Vysya Life Insurance Company Limited Max New York Life Insurance Co. Limited MetLife Insurance Company Limited Om Kotak Mahindra Life Insurance Co. Ltd. SBI Life Insurance Company Limited TATA AIG Life Insurance Company Limited AMP Sanmar Assurance Company Limited Dabur CGU Life Insurance Co. Pvt. Limited www.allianzbajaj.co.in www.birlasunlife.com www.hdfcinsurance.com www.iciciprulife.com www.ingvysayalife.com www.maxnewyorklife.com www.metlife.com www.omkotakmahnidra.com www.sbilife.co.in www.tata-aig.com www.ampsanmar.com www.avivaindia.com

GENERAL INSURERS Public Sector
National Insurance Company Limited New India Assurance Company Limited Oriental Insurance Company Limited United India Insurance Company Limited Private Sector Bajaj Allianz General Insurance Co. Limited ICICI Lombard General Insurance Co. Ltd. IFFCO-Tokio General Insurance Co. Ltd. Reliance General Insurance Co. Limited Royal Sundaram Alliance Insurance Co. Ltd. TATA AIG General Insurance Co. Limited Cholamandalam General Insurance Co. Ltd. Export Credit Guarantee Corporation HDFC Chubb General Insurance Co. Ltd. REINSURER www.bajajallianz.co.in www.icicilombard.com www.itgi.co.in www.ril.com www.royalsun.com www.tata-aig.com www.cholainsurance.com www.ecgcindia.com www.nationalinsuranceindia.com www.niacl.com www.orientalinsurance.nic.in www.uiic.co.in

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General Insurance Corporation of India

www.gicindia.com

INTRODUCTION OF TATA
Tata Group

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The Tata group comprises over 90 operating companies in seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. The group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries. The total revenue of Tata companies, taken together, was $67.4 billion (around Rs319,534 crore) in 2009-10, with 57 per cent of this coming from business outside India. Tata companies employ around 395,000 people worldwide. The Tata name has been respected in India for 140 years for its adherence to strong values and business ethics. Every Tata company or enterprise operates independently. Each of these companies has its own board of directors and shareholders, to whom it is answerable. There are 28 publicly listed Tata enterprises and they have a combined market capitalization of about $103.67 billion (as on November 11, 2010), and a shareholder base of 3.4 million. The major Tata companies are Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels and Tata Communications.

INTRODUCTION OF AIG
AIG history dates back to 1919, when Cornelius Vander Starr established an insurance agency in Shanghai, China. Starr was the first Westerner in Shanghai to sell insurance

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to the Chinese, which he continued to do until AIG left China in early 1949—as Mao Zedong led the advance of the Communist People's Liberation Army on Shanghai. Starr then moved the company headquarters to its current home in New York City. The company went on to expand, often through subsidiaries, into other markets, including other parts of Asia, Latin America, Europe, and the Middle East. In 1962, Starr gave management of the company's lagging U.S. holdings to Maurice R. "Hank" Greenberg, who shifted its focus from personal insurance to high-margin corporate coverage. Greenberg focused on selling insurance through independent brokers rather than agents to eliminate agent salaries. Using brokers, AIG could price insurance according to its potential return even if it suffered decreased sales of certain products for great lengths of time with very little extra expense. In 1968, Starr named Greenberg his successor. The company went public in 1969. Beginning in 2005, AIG became embroiled in a series of fraud investigations conducted by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney General's Office. Greenberg was ousted amid an accounting scandal in February 2005; he is still fighting civil charges being pursued by New York state. The New York Attorney General's investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives. Greenberg was succeeded as CEO by Martin J. Sullivan, who had begun his career at AIG as a clerk in its London office in 1970.

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On June 15, 2008, after disclosure of financial losses and subsequent to a falling stock price, Sullivan resigned and was replaced by Robert B. Willumstad, Chairman of the AIG Board of Directors since 2006. Willumstad was forced by the US government to step down and was replaced by Edward M. Liddy on September 17, 2008.AIG's board of directors named Robert Benmosche CEO on August 3, 2009 to replace Mr. Liddy, who earlier in the year announced his retirement. Business Holdings Further information: Holdings of American International Group In the United States, AIG is the largest underwriter of commercial and industrial insurance, and AIG acquired American General Life Insurance in August 2001. Auto insurance AIG sold auto insurance policies through its subsidiary unit, AIG Direct The policies they offered included insurance for private automobiles, motorcycles, recreational vehicles and commercial vehicles. AIG purchased the remaining 39% that it did not own of online auto insurance specialist 21st Century Insurance in 2007 for $749 million. With the failure of the parent company and the continuing recession in late 2008, AIG rebranded its insurance unit to 21st Century Insurance.In April 2009 it was announced that AIG was selling the 21st Century Insurance subsidiary to Farmers Insurance Group for $1.9 billion.

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CHAPTER-2 COMPANY PROFILE

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TATA AIG LIFE INSURANCE COMPANY
TATA AIG Life Insurance Company Limited is a joint venture that brings together two large forces – TATA India Limited, a multi-business corporate, together with AIG Life International, a global leader who is long experienced in that unique business called life insurance.

Together TATA India Limited and AIG Life aims to become the most admired Life Insurance Company in India. . This vision can be realized through their unique set of values.

KNOWLEDGE : Knowledge leads to expertise; and their expertise is in helping people protect themselves. Perfectly combining global expertise with local knowledge, they are India‘s life insurance specialist. TATA AIG Life believes that for Knowledge to be of value it must be focused, current, tested and shared.

CARING : TATA AIG life is redefining the life insurance paradigm by Focusing on customer first. The service process responsive, Personalized, humane and empathetic. Every individual who represents the company is for them are their brand champion.

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UNITY: We must work cohesively with our colleagues across the group and with our customers and partners around the world, building strong relationship based on tolerance, understanding and mutual cooperation. RESPONSIBILITY: We must continue to be responsible, sensitive to the countries, communities and environments in which we work, always ensuring that what comes from people goes back to the people many times over.

VISION: To be the most trusted life insurance company that values customers’ financial wellbeing, consistently delivering best-in-class solutions and respected by all.

MISSION: Enhance our customers well- being.

HONESTY: Honesty is the heart of life insurance business. It is all about trust. Transparency, integrity and dependability forms the corner stones of TATA AIG life experience. The company ensures that every one who represents the brands carries a promise we care in a word as well as deed.

QUALITY: Excellence at TATA AIG Life implies the ability to perform a consistently high level. Focused on the value of continuous improvement in people, processes and the organization, the company strives higher standard of quality in every aspect of its business.

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INTEGRITY : We must conduct our business fairly, with honesty and transparency. Everything we do must stand the test of public scrutiny.

UNDERSTANDING: We must be caring, show respect, compassion and humanity for our colleagues and customers around theworld, and always work for the benefit of the communities we serve.

EXCELLENCE: We must constantly strive to achieve the highest possible standards in our day to day work and in the quality of the goods and services we provide.

MARKETING INFORMATION: Tata AIG began its campaign with corporate slogan of “With You Always”. Tata AIG life signed up with popular TV commentator Harsha Bhogle and Bollywood icon Naseerudin Shah to be its brand ambassadors. In a changing environment, slogan was shifted to “A new look at life” which meant that Tata AIG would be proactive and anticipate the requirements of customers. In 2009, in an attempt to stand out, Tata AIG created two animated characters- Sukhi & Dukhi to communicate their products. Dukhi voices the concerns in the customer’s mind while Sukhi answers those issues

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DISTINCTIONS:

.Tata AIG Life Insurance Company (Tata AIG Life) has been awarded the LOMA (Life Office Management Association) award for outstanding professional life insurance education of its employees. ( 2004)

The globally renowned Life Insurance Marketing and Research Association (LIMRA) awarded the prestigious International Quality Agent (IQA) award to 61 Tata AIG Life Insurance Company Ltd. (Tata AIG Life) advisors. Tata AIG Life Insurance is the only company in India whose advisors have been awarded this unique distinction. CLAIMS:

As an insurance company it is our priority and assurance to our policy holder's to process their claims speedily and in best possible manner while keeping their well-being in mind always. To service you better in times of emergency, please inform us immediately upon occurrence of the incident or loss. In the unfortunate event of a critical illness, hospitalisation, disability or death, call our Helpline No's 1-800-11-9966 (toll free BSNL & MTNL only) or at 1-860-266-9966 (local charges apply) from 9am-9pm

TYPES OF PLANS

Risk Plans

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• •

TATA AIG Life Raksha TATA AIG Life LifePlus

THE ORGANIZATION STRUCTURE

Home office urgaon

East Zone

West Zone

North Zone

South Zone

ZVP

ZVP

ZVP

ZVP

MP

ZM-Ops CSM & TEAM

ZTM

PARTNER ASSOCIATE PARTNER SALES MANAGER

CSM

TR. MG

AGENCY COORDINATOR

TEAM

ASSOCIATE SALES MANAGER

AGENTS AND ADVISOR

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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY( IRDA)
Insurance Regulatory & Development Authority is regulatory and development authority under Government of India in order to protect the interests of the policyholders and to regulate, promote and ensure orderly growth of the insurance industry. It is basically a ten members' team comprising of a Chairman, five full time members and four part-time members, all appointed by Government of India. This organization came into being in 1999 after the bill of IRDA was passed in the Indian parliament.

POWERS AND FUNCTIONS OF IRDA

It issues the applicants in insurance arena, a certificate of registration as well as renewal, modification, withdrawal, suspension or cancellation of such registrations.

It protects the interests of the policy holders in any insurance company in the matters related to the assignment of policy, nomination by policy holders, insurable interest, and resolution of insurance claim, submission value of policy and other terms and proposals in the contract.

It also specifies obligatory credentials, code of conduct and practical instructions for mediator as well as the insurance company. Apart from this, it also defines the code of conduct for the surveyors and loss assessors involved with the insurance business.

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One of the major functions of IRDA includes endorsing competence in the insurance business. Apart from this, upholding and regulating professional organizations in insurance and re-insurance business is also a major duty of IRDA.

IRDA is also entitled to for asking information, undertaking inspection and investigating the audit of the insurers, mediators, insurance intermediaries and other organizations related to the insurance sector.

It is also concerned with the regulation of the rates, profits, provisions and conditions that may be offered by insurers in respect of general insurance business if it is not controlled or regulated by the Tariff Advisory Committee.

• •

It is also entitled to supervise the functioning of the Tariff Advisory Committee. IRDA specifies the terms and pattern in which books of accounts are to be maintained and statement of accounts shall be provided by insurers and other insurance mediators.

It also regulates investment of funds by insurance companies as well as the maintenance of margin of solvency.

It is also empowered to be involved in the arbitration of disagreements between insurers and intermediaries or insurance intermediaries.

It is meant to specify the proportion of premium income of the insurer to finance policies.

IRDA also specifies the share of life insurance business and general insurance business to be accepted by the insurer in the rural and insurance sector.

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CHAPTER-3 LITERATURE REVIEW

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LITERATURE REVIEW

An article published in IRDA Journal, April 2008 “UNIT LINKED BUSINESS PRODUCT DEVELOPMENT” gave knowledge that there must be clear distinction between traditional products and market linked products.

An article published by OUTLOOK MONEY “WHY INSURANCE POLICIES DON’T MAKE GOOD INVESTMENTS” says that if one drill through the numbers is a bare truth that insurance policies don’t make good investments.

An article published in OUTLOOK MONEY “UNIT LINKED PLANS ARE THE FUTURE” notifies the importance of acceptance of ULIPS among the masses.

An interview published in INDIA INFOLINE “INTERVIEW OF Mr. NEERAJ BASUR V.P. CORPORATE FINANCE- TATA INDIA LTD” visualizes how the servicing, turnaround time and other customer service parameters differentiate TATA AIG Life with others.

An article on “LIFE INSURANCE AS AN INVESTMENT” says that it has been researched that investment in life insurance is a profitable investment as compared to other form of investments.

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Tata AIG Life Insurance Company ties up with Chennai Central Co-operative Bank feb 2010

VOICE survey reveals Tata AIG Life Insurance as a clear winner in the life insurance category may 10 \06 Tata AIG Life Insurance Company introduces Series II of funds under InvestAssure Apex Supreme july 1 \11 Tata AIG Life Insurance Company launches Gyan Kosh june 15\2011 Tata AIG Life Insurance launches two limited-pay unit-linked solutions – InvestAssure Gold Supreme and InvestAssure Maximizer may 31 \2011 The globally renowned Life Insurance Marketing and Research Association (LIMRA) awarded the prestigious International Quality Agent (IQA) award to 61 Tata AIG Life Insurance Company Ltd. (Tata AIG Life) advisors. Tata AIG Life Insurance is the only company in India whose advisors have been awarded this unique distinction. Aksh trivedi (mgr corporate pensions at tata aig life) Won the highest annual recognition Hercules award of the Tata Aig life Insurance Co India for 20102011. • The knowledge about the marketing principles is gained from the book “Principles of Marketing” written by Philip Kotler. • Syndicate Bank ties up with Tata AIG Life Insurance Company to offer group insurance solution to its housing loan customers.

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CHAPTER-4 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY
RESEARCH: Research is collecting the facts or data analyzing the facts and reaching certain conclusions either in the form of solutions towards the concerned problem or in generalisations for some theoritical formulation. TYPES OF RESEARCH

There are two types of research being used in this they are as follows:

1. Descriptive Research: Descriptive Research includes surveys and

fact-findings enquiries of different kinds .The major purpose of descriptive research is description of the state of affairs aas it exists at present. So this research was applied to conduct surveys ad to find out facts.

2. Analytical Research: In Analytical Research the facts or

information already available are analyzed to make a critical evaluation of the material.so this research was used to compare the plans on the basis of information available.

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OBJECTIVES OF THE STUDY

 To find the market share of various life insurers in India  To suggest additions to the current product portfolio  To recognize the popular insurance plans  To showcase the influence of advertising  To suggest ideal policy term and premium for insurance  To showcase the consumers willingness to spend on life insurance  To showcase the factors that motivate purchase of insurance policies  To understand the type of company preferred for investment  To understand the awareness level of consumers about unit linked insurance plans

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RESEARCH DESIGN

INTRODUCTION
A Research Design is the framework or plan for a study which is used as a guide in collecting and analyzing the data collected. It is the blue print that is followed in completing the study. The basic objective of research cannot be attained without a proper research design. It specifies the methods and procedures for acquiring the information needed to conduct the research effectively. It is the overall operational pattern of the project that stipulates what information needs to be collected, from which sources and by what methods.

SAMPLING METHOD

Sampling refers to the method of selecting a sample from a given universe with a view to draw conclusions about that universe. A sample is a representative of the universe selected for study.

Convenience sampling is used in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth. As the name implies, the sample is selected because they are convenient. This non probability method is often used during preliminary research efforts to get a gross estimate of the results, without incurring the cost or time required to select a random sample.

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SAMPLE SIZE

The sample size for the survey conducted was 100 respondents.

SAMPLING TECHNIQUE

Convenience sampling technique was used in the survey conducted.

SAMPLING TOOLS
Tables were used for the analysis of the collected data. The data is also neatly presented with the help of statistical tools such as graphs and pie charts. Percentages and averages have also been used to represent data clearly and effectively.

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METHODS OF DATA COLLECTION

There are two types of data used. They are primary and secondary data. Primary data is defined as data that is collected from original sources for a specific purpose. Secondary data is data collected from indirect sources.

PRIMARY SOURCES

These include the survey or questionnaire method, telephonic interview as well as the personal interview methods of data collection. This data was majorly used for the analysis of surveyed questions.

SECONDARY SOURCES

These include books, the internet, company brochures, product brochures, the company website, competitor’s websites etc, newspaper articles etc. This data was used majorly for the purpose of comparative analysis.

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CHAPTER-5 DATA ANALYSIS

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SWOT ANALYSIS
STRENGTHS:
 The ethics and values have a major role to play in the management.  Motivation is also given to agents for attending the training  Co-operative sales manager to whom the agents can consult anytime.  Motivation of agent advisor by distributing gifts and giving awards and recognitions  Work and culture in TATA AIG is very friendly.  First Indian Life Insurer to be given ISO 9001:2000 certification.  New York Life has been No. 1 in MDRT for 50 consecutive years.  TATA AIG provides world class training for agent advisor.

WEAKNESS:

 Training period consists of 50 hours which is too long and thus difficult for some people to attend regularly .The Company has no alternative as it is ruled framed by IRDA.  TATA AIG is not having any rural presence.

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OPPORTUNITIES:

 Huge population over 1 billion  Insurance penetration significantly below international standards  Limited number of players given the size of the market, and in comparison to other Asia Pacific markets  Pension reform  Insurance regulator is influential and open-minded, permitting all types of products  Regulations are changing in a favourable manner (e.g. surplus distribution, bancassurance)  Well developed banking system enabling bancassurance  An acceptance of unit-linked products on the back of a well developed mutual fund market.  Health insurance is relatively limited. There has been a lack of interest in this area and the IRDA is keen to stimulate this area.

THREATS:

 LIC networking  Nascent industry  Tax relief is long term a big question mark.  Equity boom luring investors to invest in stock market.

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 Agents rebating their commission.

ANALYSIS OF INSURANCE PLANS COMPARISON -UNIT LINKED INSURANCE PLAN
Unit linked insurance plans (ULIPs) are probably the hottest selling product for most life insurance companies today. However, when it comes to evaluating ULIPs from across life insurance companies, individuals find the task arduous and challenging. The table below provides information on ULIPs from three leading life insurance companies.

LIFE MAKER PREMIUM (TALIC) ENTRY AGE
0-65

UNIT LINKED LIFE TIME ENDOWMEN T PLUS (HDFC)
18-65 yrs without riders 18-55 yrs with riders 0-65

SUPER (ICICI)

MAX.

AGE

AT

75 yrs

65-75

yrs

75 yrs

MATURITY TERM PPT PREMIUM MODES
75 yrs Regular, Limited Yearly, half yearly, quarterly,

depending on riders chosen 10 - 30 yrs Regular Yearly, half yearly, quarterly, monthly 10-75 yrs Regular Yearly, half yearly, monthly

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MINIMUM PREMIUM RIDERS PERSISTENCY UNITS

monthly Rs. 20,000 p.a.

Rs. 10,000 p.a.

Rs. 18,000 p.a.

PAB, DD 0.75% of avg. fund value of previous 36 month starting 9th yr & every 3rd

ADB, CI 0.1% of loyalty units every yr

ADB, CI, WoP 4%of annual premium starting from 4th yr & every yr thereafter

FREE SWITCHES PARTIAL WITHDRAWALS

year thereafter 6 Allowed after 3 yrs. Minimum amt. -Rs.10,000.

24 Allowed after 3yrs. Minimum amt. -Rs. 10,000. 6 free

4 Allowed after 3 yrs. Minimum amt. -- Rs. 3,000

3 free

ALLOCATION CHARGE

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6-20 Yr 1 Yr 2

25% 60% 10% 1% 5% 2% 2% 2% 12% 12% 1% 1% 1% 1% Rs. 240 Rs. 240

20% 7.5% 4% 4% 4% 4% Nil Nil

ADMINISTRATIO N CHARGES

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Yr3 Yr4 Yr5

12% 5% 5%

Rs. 240 Rs. 240 Rs. 240

Nil Nil Nil Nil 2%

SURRENDER CHARGES

Yr 6-20 5% Rs. 240 After 3 yrs -- Nil 25% value Nil After 4 yrs -- nil Nil After 5 yrs -- nil Nil Subsequent yrs – nil S of fund

1% Nil Nil

FINDINGS FROM ABOVE COMPARISON

ICICI  From the above ULIPS comparison it can be analyzed that ICICI’s strength lies in its TERM which is longer as compared to TALIC. It also charges premium which is lower than TALIC by Rs.2000. The main strength of ICICI is its nil administration charges. The allocation charges are also lower than TALIC in 1st yr by 5 percent points.

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The weakness of ICICI is that it charges surrender charges even in the 4 th year whereas in case of TALIC in 4th year it is nil. It also do not have quarterly premium mode.

HDFC  From the above ULIPS comparison it can be analyzed that HDFC’s strength lies in its surrender charges which are nil throughout. The administration charges are also low and fixed. It also charges premium which is lower than TALIC by Rs.10000. It also allows 24 free switches which is highest in above comparison. The major weakness of HDFC is that its allocation of funds is very low in the first year. The age at entry is also very high.

COMPARISON-CHILDREN’S PLAN
YOUNG STAR SMART (HDFC)
Min. age at entry

KID SMART STEP (TATA AIG)

(ICICI)

0 yrs child and 20 0 yrs child and 20 91 days child and yrs parent. yrs parent. 21 yrs parent.

Max. age at entry

15 yrs child and 60 15 yrs child and 60 15 yrs child and 50 yrs parent. yrs parent. yrs parent.

Max.

age

at 18 yrs min. 25 yrs 18 yrs min. 25 yrs 16 yrs min. 25 yrs

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maturity (child) Max. maturity Minimum premium Term age at

max. 75 yrs.

max. 75 yrs.

max. 60 yrs.

RP- 10,000

RP- 10,000 SP- 25,000

RP- 20,000 SP- 50,000

10 yrs min. and 25 10 yrs min. and 25 10 yrs min. and 25 yrs max. yrs max. FV/PV/AV Future SA + yrs max. FV/PV/AV Future SA + Future waived Future

Maturity Benefit Death Benefit

FV/PV/AV SA +

Premiums off +

waived Premiums Future off +

waived Premiums Future off +

Premiums paid by Premiums paid by Premiums paid by the company + FV the company + FV the company + FV + [5% FIB + DD (50% of SA or 10 lakh whichever is lower)] Top up Partial Withdrawals Premium Allocation Charge 1st 2 yrs – 30% 3rd yr onwards -2% 1st yr - 20% 2nd to 5th yr – 5% 6th yr onwards 2% 1st yr – 30% 2nd yr onwards 2% Allowed Allowed after 3 yrs Not available Allowed after 5 yrs Allowed– min 5000 Allowed after 5 yrs

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COMPARISON-RETIREMENT PLANS
SMART INVEST PENSION Entry age Vesting age Term Minimum premium Premium options Investment options (TATA AIG) LIFE 18-60 yrs 50-70 yrs 10-52 yrs 10,000 Level/increasing 5 funds/dynamic allocation option where asset allocation is determined by years to vesting resulting in customer having no hassels of switching/redirections UNIT LINKED PENSION (HDFC) 18-65 yrs 50-75 yrs 10-40 yrs 10,000 Level 6 funds LIFE TIME SUPER PENSION (ICICI) 18-65 yrs 45-75 yrs 10-57 yrs 10,000 Level 4 funds

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Free switches Administration charges

6 Rs. 50 p.m. with 5% increase every year

24 Rs. 20 p.m.

4 Rs. 40 p.m. and additional charges of Rs. 40 p.m. if premium

Fund Management Charges

Growth super- 1.35% Growth- 1.25% Balanced- 1.1% Secured- 0.9% Conservative- 0.9%

0.8% of fund value across all funds

not paid in 1st 5 yrs Maximiser II- 1.5% Balancer II- 1% Protector II- 0.75% Preserver- 0.75%

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COMPARISON OF INDIVIDUAL UNIT LINKED INVESTMENT PLAN
SMART ASSURE (TATA AIG) LIFE TIME GOLD (ICICI) Entry age Minimum ATP Term/PPT Maturity age Switch Redirection Partial withdrawal Death benefit Maturity benefit Loyalty units 91 days – 75yrs Rs. 20,000 Term - regular 10-30 yrs 85 yrs 6 free 3 free 6 free Higher of fund value/S.A. Fund value 1%-3% of fund value depending on policy term Administration charges Fund management charge Rs. 50 p.m. increasing at 5% p.a. Dynamic opportunity – 1.6% Flexi growth, RICH – 2.25% 1.25% for all funds 0-65 yrs Rs. 20,000 10-75 yrs 75 yrs 4 free Unlimited Unlimited Higher of fund value/S.A. Fund value 4% of annual premium every 4 yrs at starting end of fourth yr N.A. Rs. 60 p.m. UNIT LINKED ENDOWMENT PLUS II (HDFC) 18-65 yrs Rs. 12000 10-30 yrs 65-75 depending upon riders chosen 24 free 12 free 6 free Higher of fund value/S.A. Fund value 0.1% of units every yr

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Growth super – 1.35%

ANALYSIS OF SURVEY
AGE GROUP OF SURVEYED RESPONDENTS

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Analysis: From the above chart we could find that 28 % of the respondents fall in the category of 20-30 age group as well as 40-50 age group.21% respondents fall in age group of 30-40 and 17% fall in the category of 50-60 age group and rest in the age group of 60-70. Therefore people falling between age group 20-30 can be induced to buy insurance plan by making them aware of insurance as a means of investment with high returns. Contrary to popular belief the younger you are the more insurance you need as your loss will mean a great financial loss to your family, spouse and children (in case the individual is married) who are financially dependent on you. People falling in the age group of 40-50 can be induced to buy insurance by spreading awareness of tax benefit under sec 80C on premiums and under sec 10(10D) on maturity proceeds of the policy.

GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

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Analysis The above graph shows that 77% of the respondent are male and rest 23% are female. The insurance policy is being taken by 77% male and only 23% female take insurance policy.

OCCUPATION OF RESPONDENTS

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Analysis: From the chart above it can clearly be seen that 44% of the respondents are service man, 38% are into business and 9% are housewives, 7% are students and rest 2% are others .Therefore the target market would be working individuals or service man in the age group of 20 – 30 as well as 40-50 years having surplus income, interested in good returns on their investment and saving income tax.

DATA ANALYSIS
QUESTION 1 : Whom do you keep in mind while taking an insurance policy?

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Analysis: The above chart shows that 40% take insurance policy for themselves, 26% for their children, 21% for spouse and 13% for other in the family.

40% of respondent are service people who are aware of the benefit of insurance. They know life is uncertain. So they wanted to secure their family from uncertainty and 26% of respondents take policies for children to secure their future needs like educational and marriage expenses. 25% of people take life cover for their wife; if she is a housewife husband would get a tax rebate as she is not a tax assesse.

QUESTION 2 : How do you rate Life Insurance as a means of investment Vis-a –Vis other forms of investment?

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Analysis:

The above graph reveals that 55% of the masses rate the investment in life insurance as a good means as it provide lot of benefit to the customer.21% rate it as an excellent source, 17% rate it as fair, 7% consider that insurance is a poor investment source as compared to other form of investment. Respondents have rated insurance as a good means of investment because on one part it provides a back up in case some misshappening occurs and on the other side there no risk involved. People also get tax rebate when they put their money in life insurance business.

QUESTION 3 : Where do you want to invest your money?

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Analysis: It is clear from the above chart that 55% of the respondents want to invest in government sector and 45% want to invest in private sector. 55% want to invest in govt. sector because of past experience and trust created by govt. companies. But private companies are behind by just 10% points which means that the orientation of people is shifting towards the private players in the market Private Company advertises regularly and creates brand value for its products and services and most people believe that they get effective return when invested in private insurance company. Moreover the customer service provided by the private companies is far better as compared to the Government Company.

QUESTION 4 : Out of the following you have an insurance policy of which insurance company?

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Analysis: LIC is holding the biggest market share of 54% according to the survey. TATA AIG Life holds the second place having 17% market share followed by ICICI having 13% market share. HDFC, BIRLA and OTHERS have less percentage in the market .LIC has the highest coverage market as compared to other private players.

QUESTION 5 : How important are the following factors while selecting an insurance policy?

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Analysis : From the above graph it can be analyzed that only 15% of the respondents consider additional benefit to very important; the reason behind this is that additional benefits are though important but they are not the factors which people keep in mind while selecting insurance policies. The policies offered by different companies have different features. The benefits may include riders without paying any additional premium. It is clear that 71% of people consider security of money as a very important factor, 24% of respondents say it to be important factor, whereas 5% say it to be moderately important factor. Respondents felt that in whichever plan they invest their money should be secure enough. That was a very important criterion for them. There were people who belonged to high income class for whom security was not that important criterion. Their motive behind selecting the insurance policy was quiet different, as they are looking for the returns that are involved with the policy.

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Further from the graph above it can be analyzed that 57% of the people say that goodwill is very important factor to invest company because it is the reputation of the company which creates the influence on people to invest their money, 38% people consider it to be important factor, 3% say it to be moderately important factor, 2% tell that goodwill is not as important factor. Lastly the above graph reveals that 61% of the people consider return on investment as the most important factor while selecting an insurance policy and just 9% consider it to be moderately important and 29% say it is important only 1% consider it to be not important who are amongst those who want low but assured returns. This is the most alluring factor that induces a person to make their investment in this sector.

QUESTION 6 : Out of the following which plan suits to your need? (A) ULIP PLAN

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Analysis: It is clear from above interpretation that masses consider ULIP as the best plan satisfying the needs of the policy holders, 57% of the people prefer to take ULIP which is the companies most earning profit side. This plan has got both the features of an equity and insurance which encourages the people to invest in this policy. As some of the portion of the policy amount is invested in equity, due to which the returns are also high as well as it also provide the tax benefit. This type of plan is different from mutual fund in one aspect i.e.…, in ULIP plan, the policy holder get the returns as well as the insurance cover but in mutual fund, the investor can get only returns.

(B) WHOLE LIFE PLAN

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Analysis: From the above graph we can conclude that 16% of the respondents are in favour of taking the whole life policy and hence 31% respondents placed WHOLE LIFE PLAN at second position. Only for 2% of the respondent’s Whole Life policy does not match to their needs. Respondents were in favour of whole life policy because in whole life plans all the 8 riders are available which is not available in any other plan and this policy can be surrendered at any time. It is entirely different from the Term plan because in term plan the sum assured can be recovered only on the death of an individual but in Whole life plan the sum assured along with bonus can be recovered after the age of 100 years but in case of death of the life insured (being less than the age of 10 years) all the premiums along with the interest that has been paid will be refunded. (C) ENDOWMENT PLAN

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Analysis: The above graph clearly shows that this plan is not that famous among the respondents. Only one rider are available on this plan and there is no facility of term plan. And hence the respondents have placed endowment plan at third position with 38% favouring it.

(D) TERM PLAN

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Analysis

Respondents were not interested in Term plans as the benefit was available only in case of the death of the individual. Bonus is also not payable in this plan and no loan could be taken on this plan. And hence the analysis shows that term plan is on fourth position with 61% people favouring it.

(E) OTHER PLANS

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Analysis

The above graph reveals that 91% of the people are not satisfied with the current plans they wanted that any other plan should be introduced in the market. Apart from the above four plans there are other plans and policies that attracted the respondents. This included Child Money Back Policy, Life Maker Investment plans and others. From time to time the company comes out with polices with modifications that gained the attention of people.

QUESTION 7 : What motivates you to purchase an insurance plan?

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Analysis: The above graph reveals that 46% of the people consider income security as an important factor of motivating the person to purchase insurance policy. Investing money in shares and equity market is quiet risky. Many people generally avoid investing in this market. They are in look for much better options. In this market neither the amount invested is saved nor is any kind of return assured. Life insurance provides an edge over the equity market. Respondents had considered the income security as a very important factor. Today old age benefit is what people want to get when they don’t have their job. 44% of the people who considered it to be very important were mostly among the age group

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of 40-50. 35% consider it important and 15% moderately important and 6% of the respondents feel that it is not an important factor. People like to invest if they get tax benefit from any investment , 45% of respondents consider tax benefit to be important ,37% consider it to be very important factor, 12% to be moderately important , 6% consider it be not important. Amongst 45% of the people who considered that tax benefit is perhaps the important criteria were young people who were interested in returns rather than rebates. 37% of the people in our survey who fall in very important category belonged to the service class for whom tax saving seems to be very important whereas on the other hand for housewives this was not that important. The above graph reveals that 49% of respondents consider high return to be very important, 37% say it to be important and 14% consider it is moderately important. There was none amongst the respondents who considered it to be not important. Return from a particular policy is an important factor which the respondents keep in mind while investing in insurance policy. Females on the other hand considered return on investment as moderately important factor for the investment purpose. Lastly savings is considered to be highest motivating factor for which respondents take up the insurance plan as 55% people considered it to be very important.38% consider it to be important, 6% consider it to be moderately important and hardly 1% out of 100 consider it to be not at all important.

QUESTION 8 : What is the approximate premium paid by you annually?

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Analysis:

It is clear from the above analysis that 41% of the people pay premium between 500010000, 32% people pay between 10000-15000, 15% people pay between 15000-25000 and rest pay between .The sample which we had taken consisted of people belonging to lower-middle and middle class families. They could pay premium of 5000-10000 pre year. Respondents belonging to middle class could afford a premium of Rs.10000Rs.15000 per year.

QUESTION 9 : Which according is an ideal policy term?

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(Number of years you’ll be willing to pay premiums)

Analysis: According to the survey conducted 43% of the people wanted to pay premium between 6 years – 9 years because they don’t want to carry the policy for long they would like to further invest the money in some other investment , 33% between 10years-15years, 10% of the people would like to pay premium between 16years- 20 years. People now take life insurance policies at a very early age and the amount of premium gets blocked at that very age that enables them to enjoy the benefits of insurance for a longer duration of time.

QUESTION 10 : Typically what kind of return would you look at?

~ 57 ~

(Higher returns involves greater risk)

Analysis: From the above chart we can analyse that 41% of the respondents want to have returns between 11%-15%. This is because the risk appetite of these people is low and hence they do not want to involve in risky ventures Returns depend upon the amount of investment. Greater is the amount invested in a policy greater will be the amount of return because it is said that higher return involves greater risk and they cannot bear high risk and are in the favour of security of their money. Next 17% want to have returns between 16%-20%. Only 6% of the people expect returns of more than 40% as their risk appetite is very high and they are risk seekers.QUESTION 11 : QUESTION 11: Which private co’s advertisement is more informative?

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Analysis: The above chart states that the advertisement of TATA AIG LIFE is more informative as compared to other market players. The reason for this is that this survey was conducted when IPL was at peak and its major share was sponsored by TAIGL. Another reason for TATA AIG Life being most informative is that it has taken Rahul Dravid as brand ambassador which truly depicts the personality of TATA AIG Life. 33% of the people knew mostly of ICICI product and plan as it give the knowledge of the new product in the market and the advertisement is comprehensive in nature which emotionally effect people.14% opted for HDFC. And the rest 8% opted either for AVIVA or BIRLA for giving the most informative advertisement. QUESTION 12 : Any suggestion to improve services offered by various insurers?

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This was an open ended question in which I received various recommendations and advices from the masses regarding ways in which insurers can improve their services. The most common advice is “advertisement and publicity”. The people want that insurance companies shall spread awareness regarding the actual benefits of taking up an insurance policy. These days it has become a mere tool to get rebate on taxes on year end. Other benefits of insurance like old age benefit, investment benefit, risk cover etc should also be brought to notice of people. Other suggestion included  More Ex-gratia payments if claims are totally denied.  Brochures in hindi shall be introduced.  Products for rural people shall be launched by private companies.  Allocation charges shall be reduced.  Claim settlement should be enhanced.  Try to relate policies with people’s emotions.  Returns should be timely informed.  Avoid unethical selling.

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CHAPTER-6 FINDINGS AND CONCLUSION

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FINDINGS

 There was a time when people found Government life insurance companies as a better option to invest their money in. But now times have changed. People are now shifting their focus towards private players as well.  The main purpose of insurance is to cover the financial or economic loss that occurs to the family in case of the uncertain death of the policy holder. But nowadays this trend is changing. Along with protection (life cover), a savings element is being added to insurance.  TATA AIG Life is facing a tough competition from other private players in the market. So the company should bring out more number of plans at a reasonable premium.  People apart from saving their money also expect a fair amount of return on that. So the ULIP plan is gaining popularity day by day and is the maximum revenue generating product of an insurance company.  People now prefer to take insurance policies at a younger age. The amount of premium gets blocked at this age and they can reap the benefits of insurance for a longer duration of time.

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LIMITATIONS

The allotted time period of 8 weeks for the study was relatively insufficient,

keeping in mind the long duration it can take at times, to close a particular corporate deal.  The study might not produce absolutely accurate results as it was based on a

sample taken from the population.  It was difficult getting time and access to senior level Finance/HR managers

(who had to be talked to, to get required information) due to their busy schedules and prior commitments.  A few of the managers refrained from giving the required information as he

considered being from their confidential domains.   Mode of database collection was limited only to cold calling the corporate. Not all the plans available in the market have been covered. It might be

possible that the best selling plan from a particular company might not have been included in the defined category

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RECOMMENDATIONS
 Life Insurance business works on the trust of individuals. For a company like AIG Life it’s really difficult to get into the minds of Indian customers. It has to adopt effective marketing campaigns so that people comes to know about this brand in the market.  The basic purpose for which life insurance industry was set up has been lost. People just consider it as a tax saving instrument. So people should be made aware that life insurance is an instrument that helps an individual in his difficult times  TALIC should try to open more and more number of branches .  In a country like India it is essentially required that the company enters into joint ventures with some rural based chains. This tie up will strengthen TALICS’s rural presence.  The company must try to bring out products according to the need and affordability in the rural areas. The size of rural market is really huge and there is an increasing propensity to save among them. So the potential that exists in the rural market is really enormous.  The agents should be given sufficient incentives so that they feel motivated to do their work.  The agent acts as a link between the company and the insurers. So the selection procedure for agents should be made tough so that only capable people fit into the criteria.  The documentation part of taking a policy should be made simple and flexible. This will enable the people to take more and more number of policies.

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CONCLUSION
Insurance industry in India is witnessing a rapid growth. Players are adopting different strategies for the changing environment and growing competition. The scope for potential growth in life insurance market is contributed by an underinsured market, changing demographic profile, low level of insurance awareness, growth of the economy and changing socio-cultural behavior of the people. 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 basic purpose for which life insurance industry was set up has been lost. People just consider it as a tax saving instrument. So people should be made aware that life insurance is an instrument that helps an individual in his difficult times. Today the acceptance of unit-linked products on the back of a well developed mutual fund market is the greatest strength of an insurance company to prevail in the insurance sector.

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QUESTIONNAIRE
Your fair views are required in order to perform an unbiased analysis with the details provided by the questionnaires filled by you. All the information provided by you will be kept confidential.

PERSONAL DETAILS: NAME: AGE: ……………………………………… ……………………………………....

GENDER: ………………………………………. OCCUPATION: SERVICE HOUSEWIFE BUSINESS OTHERS STUDENT

1. WHOM DO YOU KEEP IN MIND WHILE TAKING AN INSURANCE POLICY? WIFE YOURSELF CHILDREN OTHERS

2. HOW DO YOU RATE LIFE INSURANCE AS A MEANS OF INVESTMENT VIS-À-VIS OTHER FORMS OF INVESTMENT? EXCELLENT GOOD FAIR POOR

3.

WHERE DO YOU WANT TO INVEST YOUR MONEY? GOVT. COMPANY PVT. COMPANY

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4. OUT OF THE FOLLOWING YOU HAVE AN INSURANCE POLICY OF. LIC HDFC AVIVA BIRLA SUNLIFE TATA AIG OTHERS

5. OUT OF THE FOLLOWING WHICH PLAN BEST SUITS TO YOUR NEED? RANK IN ORDER OF PREFERENCE. ULIP PLANS ENDOWMENT PLAN ANY OTHER --------------------WHOLE LIFE PLAN TERM PLAN -------------

6. WHAT IS THE APPROXIMATE PREMIUM PAID BY YOU ANNUALLY? Rs. 5000 - RS 10000 Rs. 15000 - RS 25000 Rs. 10000 - RS 15000 Rs. 25000 - RS 50000

7. WHICH ACCORDING TO YOU IS AN IDEAL POLICY TERM? (NO. OF YEARS YOU WILL BE WILLING TO PAY PREMIUM) 6 YEARS – 9 YEARS 16 YEARS -20 YEARS 26 YEARS -30 YEARS 10 YEARS -15 YEARS 21 YEARS -25 YEARS MORE THAN 30 YEARS

8. TYPICALLY WHAT KIND OF RETURN WOULD YOU LOOK AT 5% – 10% 21% – 25% 41% – 50% 11% – 15% 26% – 30% MORE THAN 50% 16% – 20% 31% – 40%

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9. WHAT MOTIVATES YOU TO PURCHASE INSURANCE PLAN?
FEATURES VERY IMPORTANT Saving High return Tax benefit Old age benefit Income security IMPORTANT MODERATELY IMPORTANT NOT IMPORTANT

10. HOW IMPORTANT ARE THE FOLLOWING FACTORS WHILE SELECTING AN INSURANCE POLICY?
FEATURES VERY IMPORTANT Returns on investment Goodwill Security Additional benefit IMPORTANT MODERATELY IMPORTANT NOT IMPORTANT

11. ANY SUGGESTION TO IMPROVE SERVICES OFFERED BY VARIOUS INSURERS. …………………………………………………………………………………..

**********THANK YOU*********

BIBLIOGRAPHY

Books such as:

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 Financial Instruments and Market – L.M.Bhole and Jitendra Mahakud  Financial Management- Sudhindra Bhatt Internet  www.economictimes.indiatimes.com  www.tataaiglifeinsurance.com  www.thehindubusinessline.com  www.wikipedia.com “historical perspective”  www.lic.com  www.irdaindia.org  www.insuranceindustry.com  http://business.mapsofindia.com  http://www.tata.com/company/releases  Information from TATA AIG office and training session.

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